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 does not have access to Blue Card

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!