California defines small groups as 1 to 100 employees, runs its own small business marketplace, and adds its own continuation coverage law. Here’s what’s different for employers here.
Quick answer: In California, businesses with 1 to 100 full-time-equivalent employees buy small-group health plans. Employers generally pay at least 50% of employee-only premiums, and at least 70% of eligible employees must enroll. Covered California for Small Business is the state’s marketplace, and it’s the route to the federal small business tax credit for California employers.
California treats businesses with up to 100 full-time-equivalent employees as small groups, compared with 50 in most states.
Covered California for Small Business lets employees choose among plans while you set a fixed contribution, and it’s how California employers claim the small business tax credit.
Cal-COBRA covers employers with 2 to 19 employees and allows continuation coverage for up to 36 months.
| Topic | California rule | What to know |
|---|---|---|
| Small-group size | 1–100 full-time-equivalent employees | Owners and their spouses don't count toward the total, and at least one other employee is required. |
| Employer contribution | At least 50% | Of the lowest-cost employee-only premium in the tier you choose, under Covered California for Small Business rules. |
| Participation | At least 70% of eligible employees | Waived for groups that enroll between November 15 and December 15 for a January 1 start. |
| Continuation coverage | Cal-COBRA for 2–19 employees | Up to 36 months. Federal COBRA applies at 20 or more employees. |
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In California, a small group is an employer with 1 to 100 full-time-equivalent employees. That’s broader than most states, which cap small groups at 50. Owners and their spouses don’t count toward the total.
It’s California’s small business health insurance marketplace. Employers choose a metal tier and a contribution, and employees pick a plan within it. It’s also how California employers claim the federal small business health care tax credit.
Cal-COBRA is California’s continuation coverage law for employers with 2 to 19 employees, who aren’t subject to federal COBRA. It lets departing employees keep group coverage for up to 36 months, and it can also extend federal COBRA to a combined 36 months.
Any time of year. Small groups can start coverage on the first of any month. If you can’t meet participation or contribution minimums, enrolling between November 15 and December 15 lets you start January 1 anyway.
No. California has no state requirement for employers to offer health coverage. The federal employer mandate applies at 50 or more full-time-equivalent employees, and California’s coverage requirement applies to residents, not employers.
One of our licensed agents compares small-group plans, including Covered California for Small Business, for your team’s ages, location, and budget.
