Choosing the right health coverage for your small business is about attracting and retaining great employees while staying financially smart. With a variety of employee health plans on the market, California employers often struggle to decide which one offers the best value.
Our guide will walk you through how to compare your options effectively, what to watch for, and how insurance brokers can make the process smoother.
Why Comparing Employee Health Plans Matters
Health coverage is often one of the most expensive investments a small business can make. If done right, employee health plans can increase job satisfaction, reduce turnover, and even improve productivity. That’s why taking time to compare plans is crucial.
You’ll need to evaluate how each plan handles provider access, deductibles, premiums, preventive care, prescription drugs, and compatibility with accounts like HSAs (Health Savings Accounts).
Pro Tip: Don’t just ask, “What does this cost?” Ask, “How well does this meet our team’s needs?”
What to Compare in a Health Insurance Plan
Every employee health plan is made up of several key components. Below is a table outlining the key plan features and what you need to consider for your business.
Key Features to Compare
| Plan Element | What to Consider |
| Monthly Premium | The amount you and your employees pay each month |
| Deductibles & Copays | How much employees pay before insurance kicks in and for services |
| Network Type (HMO vs PPO) | HMOs restrict provider choices, PPOs offer more flexibility |
| Prescription Coverage | Are generics, brand-name, and specialty drugs included? |
| Out-of-Pocket Maximum | The cap on what employees pay each year before full coverage kicks in |
| HSA Compatibility | Can the plan be paired with a tax-advantaged Health Savings Account? |
When comparing, aim to match the plan design to your team demographics—consider age, family status, and preferred healthcare access.
How Insurance Brokers Can Help
If you’re not an expert in healthcare law or insurance plan design, working with insurance brokers can save you time, money, and legal headaches. Brokers are licensed professionals who:
- Provide side-by-side comparisons of different carriers
- Explain the pros and cons of each plan
- Handle plan setup and renewals
- Keep you compliant with state and federal regulations
- Guide employees through onboarding and questions
Many brokers are paid by the insurance provider, not by the business owner, so their services are often available at no extra cost to your company.
For more details on licensing and broker requirements, visit California Department of Insurance.
Making Group Benefits More Valuable
Offering group benefits isn’t just about ticking a box on a job posting. It’s about maximizing their impact. Here are a few ways to get more value from your offerings:
- Offer more than one plan: Even offering just two employee health plans gives workers more flexibility.
- Supplement with dental, vision, or life insurance: These are affordable and valued by employees.
- Educate regularly: Don’t just hand out a PDF during open enrollment. Host Q&A sessions, send out simple benefits explainers, and check in post-enrollment.
Remember: Employees are more likely to appreciate benefits they understand.
Enrollment and Onboarding Tips for a Smooth Process
Your benefits offering only works if employees actually enroll—and that starts with smart onboarding.
Here’s how to make it easier:
- Start early: Send plan options 1–2 weeks before an employee’s eligibility date.
- Keep it simple: Provide side-by-side comparisons of employee health plans.
- Use digital platforms: Tools like Ease, Gusto, or Rippling help streamline document collection and compliance.
- Educate on timelines: Make sure new hires know about enrollment windows, how to add dependents, and how life events (like marriage or having a baby) trigger special enrollment periods.
Typical Enrollment Timeline
| Event | Enrollment Window |
| New Hire | Within 30 days of start |
| Open Enrollment | Annually (timing varies) |
| Qualifying Life Event | 30 days from the event |
Don’t Just Compare—Maximize
Selecting employee health plans for your business doesn’t have to be a guessing game. By comparing features carefully, involving a trusted insurance broker, and implementing a smooth onboarding experience, you’ll offer benefits that truly matter.
When done right, you can maximize your employee benefits package. In turn, it becomes an essential recruitment and retention tool that grows with your team.
At Regency West Insurance, we specialize in helping California small businesses compare employee health plans, find trusted insurance brokers, and build group benefits programs that meet compliance standards and keep your employees happy.
Schedule your free consultation with Regency West Insurance.
Frequently Asked Questions
1. What health plan options can California small businesses choose from?
California small businesses can access a variety of employee health plans including HMOs, PPOs, EPOs, and High Deductible Health Plans (HDHPs) that are compatible with Health Savings Accounts (HSAs). Each plan type varies in terms of provider access, out-of-pocket costs, and premium structure. As mentioned in the blog, comparing these features side by side helps determine which best suits your team’s needs. Group benefits packages often include medical, dental, vision, and supplemental coverage—all of which can be tailored based on your company size and workforce demographics.
2. Is my business eligible for Covered California for Small Business?
Covered California for Small Business is designed for companies with 1 to 100 eligible employees who receive W-2 wages and work at least 30 hours per week. If you’re a small employer looking to provide CA employee coverage, you may qualify as long as you contribute to employee premiums and offer coverage to all eligible employees. This marketplace is a great place to compare plans and stay in line with California compliance rules—especially if you’re not yet working with a licensed insurance broker.
3. How much will small business health insurance cost for me and my employees?
Costs for employee health plans can vary widely depending on the type of plan, coverage level, and how much of the premium the employer decides to contribute. Typically, small businesses cover 50%–80% of the monthly premium for employee-only coverage, while employees pay the remainder (plus any dependents they add). Offering multiple options—such as a high-deductible plan and a PPO—can help control costs while giving employees flexibility.
We recommend working with insurance brokers to model different cost scenarios so you understand your monthly obligations under various plan choices.
4. Are there tax credits available for small businesses offering health insurance?
Yes! If you have fewer than 25 full-time equivalent employees, pay average wages under $63,000 annually (as of 2024), and contribute at least 50% of the premium, you may be eligible for the Small Business Health Care Tax Credit through Covered California. This credit helps offset the cost of providing group benefits and encourages businesses to offer coverage even if they’re not legally required to under the ACA.
A qualified insurance broker can help you evaluate your eligibility and ensure proper tax reporting. For official details, visit IRS.gov.
5. What’s the process for enrolling my business in a health insurance plan?
To get started, gather basic company information (like your tax ID, employee roster, and estimated payroll), decide which employee health plans you want to offer, and choose your contribution level. If you’re enrolling through Covered California or working with a broker, they’ll guide you through submitting documents, selecting plans, and setting up employee onboarding.
As mentioned in the blog, using digital tools can make onboarding easier for employees and help streamline your compliance with California group benefits regulations.
6. When is the right time to get my business health insurance?
You can enroll your business in a new health insurance plan at any time of the year. However, many businesses align enrollment with their fiscal calendar or hire dates to simplify onboarding. If you’re switching carriers or setting up health plans for the first time, make sure to plan your launch at least 30 days before your preferred start date to allow time for paperwork, plan selection, and employee education.
Open enrollment for employees typically occurs annually and gives them the opportunity to make changes. Outside of that period, changes can only be made during qualifying life events unless you’re enrolling a new hire.