20350 Ventura Blvd. Suite 200
Woodland Hills, CA 91364
RGEB Insurance Agency
#0D60724
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Small Group Health Insurance and AB1672
In California small group health insurance is governed by a state: AB1672 law. AB1672 protects businesses with 2-50 employees. The major provisions of this law are:
- Guaranteed Issue
Companies cannot be turned down for group health insurance regardless of
- Industry,
- Health status of any employee,
- Age of any employee
- Any other risk factor
- Guarantee Renewal
Companies have the right to renew group health coverage regardless of:
- Changes in employee health status
- Changes in use of services
- Change in any other risk factor
- Risk Adjustment Factor (RAF)
Carriers have a standard rate for every health plan in every geographical area and age and may adjust the premium based on the RAF
- Rates may be up to 10% higher than standard rate or may be reduced by up to 10% based on:
- Employee health history
- Utilization and claims experience
- Industry
- Size of Company
Under AB1672 providing coverage is voluntary, however, if an employer offers coverage, it must offer it to all eligible employees
An employer may offer part-time employees coverage as long as it is the same coverage
Employers must pay at least 50% of the premium for the lowest offered product
Carriers require at least 70%-75% of employees to participate
Employers may offer multiple plans
The minimum group size is 2 and may consist of eligible officers of a corporation, managing members of a LLC, general partners of a partnership, or employees
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