Covering Your Out-of-State Employees With California Group Health Insurance
The good news is that you've decided to offer the employees you depend on California group health insurance benefits. But, you happen to have a manufacturing operation in a different state. How do you cover those employees you count on remotely ensuring they are taken care of in a medical
Will we qualify for coverage with so many of our workers out of state?
It depends. The key issue here is participation requirements imposed by State of CA bill AB 1672 governing Small Business Health Insurance. The regulation allows the California health insurers to demand 51% of the total employee population to maintain permanent residence in California. This is not taken from the full time w2 payroll eligible enrolling pool, but the total employee population.
What type of plan do they enroll? All plans offered may not be available to foreign state employees. HMO's, or Health Maintenance Organizations for instance will often not be able to support as the employees, providers, locations, and contracts for services are based on local coverage zones with sufficient population to support the expenses. Quantity, or volume, of members is a necessity to support the insurance model. Standard practice is for the same PPO, or Preferred Provider Organization, plan option(s) available. Or, sometimes a specific 'Out-of-State' or 'Indemnity' plan is made available if the California health insurance carrier does not have a provider contract to utilize in the foreign state.
What about pricing?
Pricing can either be based on the rate the employee would assume in the zip code of the company headquarters, or if the health insurance carrier happens to be national and has group insurance plans registered in the state you can see the local registered premiums for your employees. This is not always a good thing as it can lead to confusion having to manage two sets of pricing.
What doctors and hospitals do the out of state employees utilize?
The number of available 'in-network' providers will vary greatly depending on the health insurer. Anthem Blue Cross of California and Blue Shield of California use the BlueCard Network which is the national association contract list for all Blue Cross Blue Shield proivders nationally. This situation is unique to Blue Cross, Blue Shield, & a minority of national carriers like Aetna and UnitedHealthCare. The other option you may see is where a health insurance company like Health Net of California, who is incorporated and plan registerd to offer coverage in several states, contracts with a national physicians network to ensure their members have 'in-network' doctors and hospitals to visit in every state. Lastly, if you offer your employees an HMO with no PPO plan coverage your out of state employees can be left without health coverage because the HMO will not cover anyone outside the coverage zone.
Can we set up a separate plan for our foreign state locations?
This is a big maybe. Many health insurers will offer carve-out populations to be insured based on location but often a minimum number of enrolling employees is mandatory and the insurance coverage is not guaranteed to be issued.