California Group Health Plans and Out of State
Employees
There are generally two situations for people
researching out of State employee and health
insurance:
- Companies in other States want to offer coverage to their California
employees
- Companies in California want to offer coverage to their employees in
other States
Let's look at both of these situations in
detail.
First, a few notes....
All rates for small business (1-100 employees)
will be based on zip code of company.
It is very common for California small companies
to have employees outside the State.
As state lines blur and offices or off-site
employees continue to trend upwards, providing
benefits for all employees, including those
outside the State is becoming an important
consideration.
There are even many areas along the California
border where being across State-line might be a
matter of miles for some employees.
These areas will continue to grow as California
does.
Let's take a look at the important consideration
to take into account with employees out of the
State and California group health insurance.
Setting up a California Office for Out of State
Company
Typically,
we'll see a company enquire about covering a
branch office of a major company where their
coverage does not work well (or at all) in
California.
This gets tricky and it's best to discuss the
details (i.e. separate employer TIN, waive group
members in other State, etc).
There are ways to address this need but it's
specific to the company's current insurance
set-up.
Small Group health coverage qualification
with Out of State employees
The main requirement by State Law is that in
order for group health plans to be Guaranteed
Issue according to AB 1672 is that the majority
(51%) of all eligible employees must be employed
in the state of California.
Residents of Hawaii are generally not
eligible.
If this is an issue, it probably makes sense to
look at the State where the majority of
employees reside to establish a group plan with
carriers in that State.
Keep in mind that a carrier looks at the DE6 or
Quarterly payroll report to determine group
eligibility according to payroll.
Some carriers have taken a more laxed approach
to this rule and we may be able to get 25% in
State employees through.
Check with us at 800-320-6269 or by email
to see if there are special circumstances we can take advantage of.
If employer coverage is not possible, individual/family coverage for the
employees in California can be quoted/enrolled here:

Group insurance networks and out-of-State
employees
Choice of plans and/or doctors is probably
the most important consideration when covering
employees out of the State.
HMO plans will typically not offer any benefits
outside the State. This can be an issue with
strong HMO carriers like Kaiser.
Kaiser has rolled out PPO plans but they tend
to be more expensive with this model.
For PPO plans, Anthem Blue Cross and Blue Shield
of California have worked the best because they
participate in the Blue Card program.
Blue Card essentially extends an employee's PPO
benefits to Blue Cross Blue Shield providers in
other States.
This offers pretty seamless coverage across the
country and has worked well for our Small Group
clients with employees in other States. This
works while traveling in other States or
residing there.
You can get more information including doctor
directories
here.
The Blue Card program is as close we get to a
true Nationwide network.
UPDATE: The Blue Shield Individual Family PPO plans will not have access to
Blue Card in 2019
When an employee submits a claim in another
State, the claim goes through that State's Blue
Cross Blue Shield, who then processes it through
to Blue Card and the parent State (California in
our case).
Since the Blue's tend to be the dominant
(sometimes the only) real health carrier in the
other states, this is a major advantage to
choosing Anthem Blue Cross or Blue Shield of
California if you have employees in other
States.
Equally so, it works well for employees that
live right on the California border where
providers (including hospitals) might be on
either side of the State border.
How rates are determined for out of State
employees
Health insurance is primarily driven by area and
age with age having the largest impact.
Area, however, can swing rates quite a bit as
each region's underlying health care costs
differ.
Each carrier will establish rating area's which
typically fall along county lines.
If an employee lives outside California, most
carriers apply the actual company's region as
the default rating area for those employees.
Some carriers apply a separate out of State
rating which tends to be more
expensive...sometimes much more expensive.
This is another reason to consider Cross or
Shield when looking at out of state Employees in
your California small group insurance plan.
Other important concepts to help you
understand your California group health
insurance quote are:
Tax Credits for California Small Businesses
Guide
to Group health insurance in California
You can quickly Request your
Group Health Quote for all options and we'll get right to work.
Call 800-320-6269 with any questions!
Again, there is absolutely no cost to you for our services. Call
800-320-6269 Today!