California businesses with small group health insurance got some good news last week when Governor Jerry Brown signed SB 1446 into law. The legislation allows so-called “grandmothered plans”- plans from before the 2014 ACA changeover that are not ACA compliant but were allowed to be kept anyway- to be renewed for another year and kept through 2015.
This is a win for small business owners concerned about the rising costs of health insurance due to ACA mandates in place that would force them from their older plans onto a newer block of programs that account for the changes mandated by the ACA. In many cases, business owners are saving double digit percentages on what they would be paying had they switched to an ACA compliant plan when they were first released on 1/1/14.
This law only applies to existing groups with coverage already in force. New groups or companies that want to switch their coverage must still access care via the new ACA compliant plans. This can be done either traditionally direct with a carrier like Blue Cross, Blue Shield, etc. or it can be done through the newly created SHOP program run by the state of California. SHOP allows businesses to simply choose one tier of plan and let their employees shop across multiple carriers, while signing up traditionally allows only one carrier but multiple plan tiers, if desired.
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