Pegasus Capital & Insurance Services inc. ©
CA Insurance #0E86560
550 S. Hope street suite #2170
Los Angeles, CA 90071
(213)622-6202

GROUP BENEFITS

California Group Health Insurance Introduction

There is power in numbers, especially when it comes to finding affordable health insurance. If your health insurance coverage is offered through your employer, you are a part of roughly 160 million Americans who have a group health insurance plan, according to the Center for Disease Control’s National Center for Health Statistics.

Generally, a key benefit to group health plans is cost. When you are a part of a group health plan, "risk" is spread among coworkers. In other words, the healthy individuals in the group subsidize those who have health-related problems

Another key benefit of group health insurance is that insurers cannot reject you for health reasons. Employers that have 2 or more eligible employees are eligible to buy group coverage.

Large and small group health plans are subject to different laws. Most states define a "small group" as 2-50 eligible employees; large groups are defined as those with 51+ eligible employees.

PPO Insurance

A Preferred Provider Organization (PPO) provides a list of contracted "preferred" providers from which to choose. You receive the highest monetary benefit when you limit your health care services to those providers on the list. If you go to a doctor or hospital that is not on the preferred provider list referred to as going "out-of-network", then the plan covers a smaller percentage of your health care expenses or may cover none of your health care expenses based on the contract wording of the plan. Always check with your PPO or consult your list of preferred providers before you seek health care services to make certain your physician or hospital is a contracting provider (part of the network). Make sure that your doctor refers you to health care providers within your PPO network, if applicable.

HMO Insurance

Membership in a Health Maintenance Organization (HMO) requires plan members to obtain their health care services from doctors and hospitals affiliated with the HMO. It is common practice in HMOs for the plan member to choose a primary care physician who treats and directs health care decisions and who coordinates referrals to specialties within the HMO network. The doctors and hospital personnel may be employees of the HMO or contracted providers. Since HMOs operate in restricted geographic regions, this may limit coverage for plan members if medical treatment is obtained outside the HMO network or coverage area. California HMOs are required to cover medically necessary emergency services even when outside of their coverage area. The intent of managed care products is to create less costly delivery of health care services while maintaining quality health care by specifying provider choice. HMOs offer access to a comprehensive package of covered health care services in return for a prepaid monthly amount (premium). Most HMOs charge a small co-payment depending upon the type of service provided

Small Group Insurance

companies from 2-50 eligible employees are eligible to have a small group health insurance plan in the state of California. There are a few key differences in small group plans in respects to their large group counterpart.

One key difference with small group plans is that all plan rates are required to be filed & approved with California Department of Insurance. All small groups are guaranteed-issue & all carriers must accept the group(if all criteria are met) even if serious medical conditions exist.

Small group rates are only underwritten after the submission has been received by the carrier. The carrier must then assign a risk adjustment factor(RAF) to the group. This RAF has to be a multiplying factor to the State's pre-filed rates & must be from .9-1.1. In other words a $100 filed rate with the State and an assigned RAF of 1.1 will bring the final premium to $110. A group with an assigned RAF of .90 and a filed rate of $100 dollars will result in a $90 premium.

One other important feature you will find on small groups is that rates are different with age & geographics. Employees within the same group are subject to different prices depending on their age & where they reside.

Large Group Insurance

Companies from 51+ eligible employees are likely to have a large group plan. There are a few fundamental differences in large group plans.

Large group plans are underwritten prior to the groups inception. A complete submission is required by the carriers' underwriters in order to sufficiently and correctly determine their appetite for quoting that group. Without sufficient data, insurance company can not calculate the rates precisely.

The most cost effective part of large group program is that all employees would take advantage of composite rates. This means regardless of age or geographical zip code, all employees will have the same premium for the same plan.

Another difference is the fact that each company will have rates that are specific to their demographics so no two non-affiliated companies will have the same pricing intentionally.

The renewal process is a bit different than the small group insurance programs. Large group plans are reviewed by the renewal department's underwriters annually to determine the rate changes. The percentage of claim dollar amounts versus premium paid as well as percentage of participation are among many factors that derive renewal premiums.

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GROUP BENEFITS