California SHOP Premiums To Increase by an Average of 5.2%

On Monday, Covered California announced that premiums for health plans purchased through the state's Small Business Health Options Program likely will increase by an average of 5.2% for 2015, KPCC's "KPCC News" reports (O'Neill, "KPCC News," KPCC, 11/3).

Background on SHOP

In December 2013, Covered California formally launched SHOP, its health insurance exchange for small businesses with 50 or fewer employees.

Under the Affordable Care Act, the SHOP portal allows small businesses to offer either a single plan to all of their workers or select a benefit level and allow employees to choose among several plans offered at that level. In June, Covered California Executive Director Peter Lee announced that the state's SHOP exchange would expand to allow employers to offer health coverage in two benefit levels beginning Oct. 1.

In September, officials announced that California's SHOP exchange would retain the same six participating insurers in 2015 that it had this year:

• Blue Shield of California;
• Chinese Community Health Plan;
• Health Net;
• Kaiser Permanente;
• Sharp Health Plan; and
• Western Health Advantage.

Officials also announced that SHOP plans will include additional coverage options and more flexibility. Further, they said that work-based plans in 2015 can include adult dental plans to be paid for by the employee with no additional cost to the employer (California Healthline, 9/22).

Details of Premium Increases

Proposed 2015 rates for SHOP plans have been submitted to state regulators.

While premiums for SHOP plans will increase by an average of 5.2%, some consumers will see increases lower than 2%, according to exchange officials (Covered California release, 11/3).

In comparison, premiums for individual plans sold through Covered California will be a weighted average of 4.2% higher for coverage starting in 2015 (California Healthline, 10/6).

Lee said the state's SHOP exchange will provide both "choice and competitive rates." He added, "These rates will help give those businesses added incentive to offer their employees health coverage and give the companies the ability to remain competitive with their larger counterparts" (Covered California release, 11/3).