About Employee Health Insurance in California

Regarding employee health insurance, California employers may recall the recently proposed California Health Insurance Act of 2003. While legislators approved it, fortunately voters thought differently and voted to reject it. The legislation would have required that all employers contribute to a state healthcare fund (pay) unless they agreed to offer their own qualifying health insurance coverage (play): the pay-or-play plan.

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Although there is currently no mandate on provisions for health insurance for employees, many firms choose to provide this benefit voluntarily. This only makes sense. Not only it is an important benefit for workers, the current climate of healthcare reform is ripe for producing new legislation which will ultimately get passed. Such legislation will likely make it mandatory for employers to participate in the solution to the increasing numbers of California residents without insurance.

There are several good reasons to provide this benefit and many different available health plans; California insurance agents are the greatest resource in deciding where to begin and what to choose. To give a bit of background before contacting your agent, we will examine some of the benefits of employee health insurance California workers most enjoy and several options for lowering the costs of such insurance.

Benefits of Providing Health Plans

Employees contract illnesses; it is a fact of life. Companies who do not offer health insurance benefits to their workers ultimately pay the price in the form of lost work days, employees’ decreased satisfaction with their jobs, and less productivity which occurs when staffers attempt to perform their duties while ill.

By providing employee health insurance, California employers will attract skilled workers and will be better able to retain them after hire. Health insurance benefits are a key factor in the decision of recent college graduates when deciding for which company they choose to work.

As well, employees who are offered the option of receiving medical benefits often do so and they will use this benefit for annual physical check-ups as well as treatment when an illness is contracted. By reducing the number of staffers who show up to work sick, you will also reduce the number of employees who catch an illness from their co-workers.

Types of Plans

As previously noted, many California workers are not adequately covered by insurance. Many politicians and citizens alike believe the onus of providing insurance coverage should lie with employers. Of course, the cost to do so can be quite prohibitive, especially for smaller firms. Your insurance agent can help find the best options for your company at the lowest cost. You may also be able to realize some savings by varying the level of employer contribution and deductible amounts.

One option which is becoming more popular in recent years is a consumer-directed health plan. This term includes health savings accounts and health reimbursement accounts. Employers who make the larger monetary contribution to these plans is also allowed to use this as a tax deduction. Sometimes it is not best to offer a consumer-directed health plan, but may be beneficial if offered as an additional option to a more traditional plan.

Traditional coverage includes HMOs, PPOs, or POSs.

A further option is to institute a cafeteria plan whereby employees receive the benefit of medical coverage on a pre-tax basis. Savings to the company is realized through decreased federal and state taxes which must be paid on an employee’s salary.

When it comes to employee health insurance, California agents are prepared to offer their professional advice and expertise to help your company select the option which is best and you can call your agent today to discuss which plan is right for you.