The CA Health Insurance Exchange Will Begin January 2014

Los Angeles-based insurance agency Benefit Packages has announced a reminder to Californians that as of January 1, 2014 the healthcare mandate under the Affordable Care Act will require that all Americans carry health insurance. To help individuals and small businesses with less than 50 full-time employees afford coverage under the new mandate, California will begin a health insurance exchange program. The exchange will be known as Covered California, or SHOP (Small Business Health Options Program).

A number of carriers will offer insurance plans through the exchange, ranked as bronze, silver, gold and platinum, and each carrier will offer around ten plans; this will make for an approximate total of 40 plans per carrier. Rates can only be increased due to geography, smoking, and age, with a maximum ratio of 3 to 1-for example, if the current premium for a 20-year-old is $200, the maximum premium for a 60-year-old cannot exceed $600.00 through the exchange.

Under the new law, employers with more than 50 full-time employees who do not offer insurance to their employees may face a penalty of $2,000 per employee. Since premiums per employee typically exceed $2000 a year, some employers may find it beneficial to discontinue offering health coverage to their employees and pay the penalty. However, employers should also consider whether their employees qualify for a subsidy to help pay for coverage through the exchange; if not, the employer would need to increase salaries to make to make up for the loss of benefits.

Small businesses (employers with less than 50 employees) won't be required to offer benefits under the new law, nor is it likely that small businesses who currently offer a benefit package to their employees will have much incentive to cancel existing employee health plans in favor of having employees purchase coverage through the exchange. This is because most employees won't qualify for a subsidy based on their income, and since health insurance is tax deductible to the employer but not part of the employees' taxable income, employers would need to increase worker pay in order to compensate for discontinuing employer-sponsored health insurance.

Finding an affordable, comprehensive plan will be essential in order for individuals and many employers to avoid penalties under the new mandate. Benefit Packages is a Blue Cross Premier Agency with 25 years of experience helping individuals, seniors and employer groups find affordable health insurance. The agency is equipped to help individuals and businesses of all sizes determine whether to purchase health insurance within or outside of the exchange.

About Benefit Packages
Since 1987 Benefit Packages has been helping individuals and employer groups of every size obtain comprehensive health and dental insurance. The Better Business Bureau-accredited agency prides itself on personalized service and on helping clients find coverage at the most reasonable rates. As an exchange certified agency, Benefit Packages will be ready to help individuals and businesses find coverage under the 2014 healthcare mandate. For more information please visit, www.benefitpackages.com.