Are You In Compliance With California's Health Insurance Regulations? Answer These Simple Questions To Find Out

Compliance with California's health insurance law isn't tricky, but it is nuanced, and failure to follow the rules could cost you a lot of money. There are no criminal penalties for failing to offer health insurance. However, regulators can assess a fine against your company if you fail to provide health insurance or provide a sub-standard plan.

For this article, the definition of an employee is a full-time employee. A full-time employee is defined as somebody who works more than 30 hours per week, is considered a W-2 employee, and has an employer-employee relationship with your business. Additionally, part-time employees can count as a full-time employee if their combined hours equal a full-time employee. Freelancers you hire do not qualify as full-time employees.

Are you self-employed?
If you are a freelancer or the only member of your company, you can obtain insurance from the individual marketplace.

Do you have 50 or more employees?
If you have 50 or more employees and one of those employees received a tax benefit or subsidy from California's Health Benefit Exchange, then you must pay a fee. If you fail to provide any coverage, you could face a fine of up to $2000 per employee, excluding the first 30 employees.

What if I have fewer than 50 employees?
If you have fewer than 50 employees you aren't required to provide insurance. However, you might want to consider offering coverage because you might be eligible for tax benefits. Plus, offering a benefits package is a surefire way to improve employee engagement, recruitment, and retention.

If you do offer a plan, does it cover at least 60% of health care costs?
If your healthcare plan doesn't cover more than 60% of costs, you could face a fee of $3000 per employee. This fine can't exceed the amount of $2000 times the number of full-time employees you have, minus the first thirty. Compliance with California's healthcare law requires you have insurance that is comprehensive, affordable, and will adequately pay for costs.

Do your employees have to pay more than 9.5% of their income for health insurance?
Employees who have to pay more than 9.5% of their income for health insurance can buy their insurance from Covered California and receive a tax benefit. However, you will pay a fine of $3000 per employee, minus the first 30 employees.

Compliance Also Means Offering Comprehensive Coverage
The plan you offer your employees has to provide ten essential benefits:

1. The plan must provide pediatric care including dental and vision care.
2. It must cover preventative care such as screenings and vaccinations.
3. It must cover laboratory tests.
4. The plan must offer services for ongoing treatments such as psychiatric rehabilitation and occupational therapy.
5. There needs to be prescription medicine coverage.
6. Mental health and psychotherapy must also be covered by the policy.
7. Outpatient care must be delivered from a doctor's office and not a hospital.
8. The plan must cover pre- and post-natal care.
9. The policy must provide coverage for emergency room visits.
10. The insurance must cover the in-patient treatment if the employee is admitted to the hospital.

If you're getting ready to offer medical insurance to your employees, or you want to make sure your program complies with the law, we encourage you to contact us.

Culture Insurance has extensive experience with helping businesses stay in compliance with the law, and in building benefits packages that help with the recruitment and retention of top employees.