Rules Governing California's Small Group Health Insurance Market

Publication Date: June 2003

Publisher: California HealthCare Foundation

Author(s): Debra L. Roth

Research Area: Health

Type: Brief

Coverage: California

Abstract:

California's small-group health insurance market is regulated by a special set of rules designed to strike a balance between the broad social goal of allowing small employers fair access to health coverage and the needs of insurance carriers to avoid unpredictable costs. This issue brief describes the rationale for having such laws, summarizes the rules that applied to California's small-group market at the time, and places small group rules in the context of other market forces. California law affords several key protections, including guaranteed issue, rating protections, portability, and fair marketing provisions. The issue brief defines these protections and discusses their implications. Rating terminology is also defined and some sample rating calculations are provided.