Group health insurance at the speed of a handshake.

In California, you need at least one eligible W-2 employee other than the business owner or their spouse to qualify for a small group health plan. Under the Affordable Care Act, small group is defined as 1 – 100 employees. Sole proprietors with no W-2 employees must purchase individual coverage instead.

California carriers typically require: (1) at least 70% participation among eligible employees, and (2) employer contribution of at least 50% of the employee-only premium. We help structure your eligibility rules to meet these participation thresholds. Source: Covered California for Small Business, California Health Benefit Exchange eligibility rules.

Based on 2025 California small group market rates, employers can expect to pay approximately:

• HMO plans: $520 – $680/employee/month (employer share)
• EPO plans: $580 – $780/employee/month
• PPO plans: $680 – $920/employee/month

California law requires employers to contribute at least 50% of the employee-only premium. Most competitive employers contribute 75 – 100% for employee-only coverage. Rates vary significantly by ZIP code, employee age distribution, and plan design. Source: Kaiser Family Foundation Employer Health Benefits Survey 2024; California DOI market data.

HMO (Health Maintenance Organization): Members must choose a primary care physician who coordinates all care. Referrals required for specialists. No out-of-network coverage except emergencies. Lowest premiums. Best for cost-conscious employers in areas with strong HMO networks (LA, Bay Area, San Diego, Sacramento).

PPO (Preferred Provider Organization): No PCP requirement. Members can see any doctor, specialist, or out-of-network provider without referral. Out-of-network care is covered but at higher cost-share. Highest premiums. Best for employers whose employees value maximum flexibility or travel frequently.

EPO (Exclusive Provider Organization): No referrals required, but no out-of-network coverage except emergencies. A middle-ground on both cost and flexibility. Roughly 10 – 15% cheaper than a comparable PPO. Growing in popularity for California tech and professional services firms.

Yes, with some rules. California carriers permit employers to offer multiple plan options, and a defined-contribution strategy (employer contributes a fixed dollar amount toward any plan the employee selects) is fully permitted. You can offer plans across different tiers using a reference contribution model.

What’s not permitted: offering richer plans only to highly compensated employees or discriminating based on protected characteristics. However, you can define different contribution levels by legitimate employee classes (full-time vs. part-time, hourly vs. salaried) as long as the classes are applied consistently and do not discriminate on protected grounds. Source: IRS Section 105(h) nondiscrimination rules; ACA nondiscrimination provisions.

California does not have a state employer mandate for businesses with fewer than 50 full-time equivalent employees. The federal ACA employer shared responsibility provision requires applicable large employers (50+ FTEs) to offer minimum essential coverage that is affordable and meets minimum value, or face IRS penalties.

For small employers (under 50 FTEs), offering health insurance is voluntary — but California’s individual mandate means employees without employer-sponsored coverage face a state penalty of $900+ per adult per year. This makes employer-sponsored coverage a significant retention and recruiting tool even without a legal mandate. Source: IRS Publication 974; California Franchise Tax Board, Form 3853 instructions.

New businesses can establish a group plan and enroll employees at any time. Existing groups conduct annual open enrollment during the 30 – 60 days before their plan anniversary date. Outside open enrollment, employees may enroll only during a Special Enrollment Period (SEP) triggered by a qualifying life event: marriage, birth/adoption, loss of other coverage, or moving out of a network’s service area.

New hires may generally enroll within 30 days of their hire date (or 60 days, depending on plan terms). Employers set the waiting period before new hire coverage becomes effective — California allows up to 90 days. Source: ACA Section 2708; California Insurance Code Section 10198.7.

Yes. Kaiser Permanente offers small group health plans (2 – 100 employees) throughout most of California through its Northern California and Southern California regional plans. Kaiser is available in all major California markets — LA, Bay Area, San Diego, Sacramento, Fresno, and the Inland Empire.

Kaiser’s integrated model means members receive all care at Kaiser facilities from Kaiser-employed physicians. Premiums are typically 15 – 25% below comparable PPO plans. Employers in rural areas or with employees spread across multiple CA regions should verify Kaiser network adequacy for their employees’ ZIP codes. Source: Kaiser Permanente California group enrollment guidelines; NCQA Health Plan Accreditation data.