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Alternatives to Offering Group Coverage
 Individual Coverage
Other Ways to Obtain Group Coverage
Discount Medical Programs
Public or Subsidized Health Insurance
Obtaining Care Without Insurance
Once you've learned about health insurance basics for small businesses, you may decide that purchasing group coverage is simply not an option for your business right now. If so, it's important to understand that there are several alternatives for you to explore that may protect your employees at little or no expense to your business. The sections below offer an overview.
Individual Coverage
Even if your business doesn't offer a group plan, your employees might be able to obtain coverage on their own, as individuals. With individual coverage, insurers typically require a detailed medical history and sometimes a medical exam of the individual and any family members applying for coverage. The individual's rates will depend on his or her medical condition; in some cases, the insurer may exclude coverage for pre-existing conditions for up to 12 months. Individuals in less than perfect health may be denied coverage altogether.
Under California law, if small firms pay insurance carriers directly for any portion of their employees' coverage, then the insurance carrier is subject to specific rating rules and issue requirements. For all practical purposes, these rules make it impossible for an employer to directly pay for employees' individual coverage.
To explore the possibility of reimbursing your employees for the cost of premiums for individual coverage, consult a tax professional.
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In the tool box, see "Tax Implications" for more information. |
Other Ways to Obtain Group Coverage
Being an employee isn't the only way to be part of a group, for insurance purposes. Some associations, professional groups, and other organizations also offer group health insurance options for their members. If you can't afford a group plan for your business, you might encourage your employees to explore this possibility. Be aware, however, that fewer groups are offering this option these days, and premiums may be quite high. Still, employees who might find it difficult to obtain individual insurance may find it worth looking into.
Finding a group with the right membership criteria—and that actually offers group coverage—simply takes some research. Brokers aren't usually much help in finding these types of opportunities. One reason for this is that each association is likely to have an established relationship with a broker or benefits consultant, so independent brokers may not have an incentive to seek out these arrangements.
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See "Selected Trade/Professional Organizations" in the tool box for contact information. |
Discount Medical Programs
Some health care providers and insurance carriers offer discount programs instead of, or as a complement to, insurance coverage.
- For individuals who are uninsured, a discount program may help offset the costs of basic and specialty care that is obtained through a limited set of providers or facilities. To participate in such a program, individuals must pay a monthly or annual fee in order to obtain a discount card.
- For individuals with insurance, discount programs can complement existing coverage by lowering costs for out-of-network or uncovered services, such as laser vision correction, in-vitro fertilization, or alternative/complementary medicine. Often this type of discount program is available through a health plan at no additional charge to the employer or employee.
An important limitation of these programs is that it can be very difficult to assess their value. Because "list" prices vary considerably and are not always readily available, it can be hard to know how much savings discounts really offer. Also, the providers that accept discounts may change, so that enrollees may find that by the time they use services, some providers are no longer available at the discounted price.
Public or Subsidized Health Insurance
State and federal programs such as Medi-Cal and Healthy Families provide coverage for many low-income children, their parents, and aged, blind or disabled individuals. These programs provide comprehensive benefits at low or no cost for those who qualify, but often have extensive, complicated rules about who qualifies.
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In the tool box, see "Public and Subsidized Insurance Programs" for contact information and details about program eligibility guidelines. |
Programs for Low/Modest-Income Individuals and Families
Medi-Cal. Medi-Cal is California's version of the federal Medicaid program. It provides comprehensive publicly funded health insurance coverage to low-income Californians who meet specific eligibility criteria. Individuals may qualify for fully subsidized Medi-Cal if they meet income guidelines and fall into one of the following categories:
- Aged, blind, or disabled according to Social Security rules.
- Children and pregnant women.
- Individuals with specific health care needs including dialysis, tuberculosis services, intravenous nutrition services, and short-term nursing home stays.
Individuals who exceed income limits may still be eligible for Medi-Cal, but are required to pay a share of the cost of their health services. Undocumented immigrants do not qualify for Medi-Cal, except for emergency and pregnancy-related services and some nursing home care. Like other Medicaid programs, Medi-Cal is jointly funded by the state and federal governments.
For those receiving Supplemental Security Income/State Supplemental Payments (SSI/SSP) or CalWORKs, Medi-Cal coverage is automatic. Others may apply for Medi-Cal at their local county welfare office or at one of the many hospitals and clinics where county eligibility workers are outstationed. Pregnant women and children may also apply for Medi-Cal by mailing in a form.
Healthy Families. The Healthy Families Program is a state and federally funded health insurance program for children with family incomes above the level eligible for no-cost Medi-Cal and below 250 percent of the federal income guidelines (in 2003, $38,150 for a family of three).
Access for Infants and Mothers (AIM). AIM is part of California's efforts to increase medical coverage of pregnant women and their infants. AIM provides low-cost insurance to women and newborns whose family income is too high to qualify for no-cost Medi-Cal.
Health Insurance Premium Payment (HIPP) Program. Under HIPP, the State of California pays private health coverage premiums for some Medi-Cal beneficiaries. By purchasing health coverage premiums for Medi-Cal beneficiaries, the Medi-Cal program defers the cost for medical care to private health insurance carriers or private health plans. To enroll in this program, employees must meet all of the following criteria:
- Be eligible for Medi-Cal and have a Medi-Cal share-of-cost of $200 or less.
- Have a high-cost medical condition (pregnancy, HIV/AIDS, organ transplant, and so on).
- Currently have private medical coverage or be covered under an employer-sponsored medical plan (including COBRA or CalCOBRA).
- Have filed an application in a timely manner allowing sufficient time to process the application and start payment of premium.
Programs for Low-Income Children
CaliforniaKids. CaliforniaKids provides preventive and primary medical coverage for children aged 2 to 18 from working families regardless of immigration status. To qualify, children cannot be eligible for Medi-Cal or Healthy Families, nor have access to workplace medical insurance.
Kaiser Permanente Cares for Kids. Kaiser Permanente offers the Child Health Plan-1 for uninsured children from families with incomes between 250 and 300 percent of the federal income guidelines, and who do not qualify for government-sponsored programs. Kaiser's Child Health Plan-2 is a pilot program providing subsidized coverage to children in parts of Los Angeles, regardless of immigration status.
Programs for "Medically Uninsurable"
Major Risk Medical Insurance Program. The Major Risk Medical Insurance Program, better known as MRMIP, provides medical insurance for Californians who have been denied medical coverage in the last 12 months because of a medical condition. This program was developed to provide health insurance for Californians who are unable to obtain coverage on the open market. Participants pay premiums on their own behalf and the MRMIP supplements those premiums to cover the cost of care. Medical insurers contract to provide MRMIP recipients with a comprehensive benefit package.
Programs for Seniors
Medicare. Individuals over 65, regardless of income, qualify for coverage under the federal Medicare program. Medicare also covers some disabled people under 65 years of age.
Obtaining Care Without Insurance
No question—if you or your employees are uninsured, there's good evidence that you'll have a tougher time finding and paying for care than if you had coverage. But if you've ruled out the possibility of obtaining health insurance right now, you should know that some health care providers, such as community clinics and public hospitals, provide services to uninsured and underserved populations as part of their mission. These organizations, sometimes referred to as the health care "safety net," receive government funding and often charge on a sliding scale basis, depending on income.
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See "Health Care Services for the Uninsured" in the tool box. |
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