How does the size of your company affect options for California group health insurance?  The number of employees you have in your company not only affects the health plans available to you and it can and will affect your rates as well.  It is important to understand how your company size affects group health coverage for your company.  First, what is Small Group health insurance versus Individual/Family or Large Group

Small Group health insurance in California

California is unique in that it passed AB 1672 in 1999.  AB 1672 has important rules and regulations for companies with 2-50 employees.  Essentially, within AB 1672, there are protections for this size group in regards to guaranteed issue, guaranteed renewal, and rate increase limits.  Larger than 50 employees is deemed "Large Group" and the plan options are completely different than those with 2-50 employees.  One note...by 2-50 "employees", this includes owners and officers as well.  In California, these protections do not apply to 1 person groups.  Keep in mind that the majority of companies in California have an average of 3-5 employees.  Small Groups are the base for our economy.  There are also many single person groups (sole proprietors for example) but the group market options are not extended to them. 

A quick synopsis of the three main protections provided by AB 1672 for Small Group with Employees of 2-50 employees/owners

Guaranteed Issue.  Basically, this states that a company cannot be declined or denied coverage if they meet the eligibility requirements regardless of health or type of industry.

Guaranteed Renewal states that a California group health insurance carrier must renew a group health plan for a small business, as long as two conditions are met: 1. There has been no fraud with the policy and 2. All the premiums have been paid.

Rating protection.  This allows a limit to the amount a health carrier can increase a particular company's rates based on the health of the group.  This RAFF or Risk Adjustment factor is 10% higher or lower than the standard rates provided  to the State's regulators. 

Group size with Small Groups and its effect on plan options and rates

The size of your company can affect your rates through the RAFF or Risk Adjustment factor.  A simple rule is that the larger the company, the better the RAFF (which means a discount in rates).  Most carriers will automatically give smaller company's the highest 1.1 rating which reflects a 10% increase over the standard rate.  Anthem Blue Cross will actually look at the health of the employees but smaller companies with 2-5 employees will probably have a higher RAFF.  It's pretty common for the carriers to compete with RAFF offers.  For example, they may offer a .90 rating for companies with 15 or more employees enrolling regardless of health.  These offers really only affect the first year the group is enrolled as RAFF's can be adjusted each year at anniversary or group renewal.  This swing in rates is a total of 20% so company size can have a large impact on your costs. 

Some carriers have the option to offer multiple group health plans to each employee in a group.  For example, Anthem Blue Cross's Employee Elect allows Small Groups to offer most of suite of plans to each employee all the way down to 2 employees.  Other carriers only offer this flexibility for certain size groups.  Employee Elect has really been hard to beat on the market as it can provide a fixed budget for the employer and complete flexibility and choice of health coverage to each employee based on his/her health needs.

Other important concepts to help you understand your California group health insurance quote are:

Small Group RAFF
Why offer Small Group health insurance
Guide to Group health insurance in California
Group health anniversary date
California group health insurance