Group Health Plans ยท California

How small-group health insurance works in California.

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.

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California Rules

What's different about group health insurance in California

Small groups go up to 100

California treats businesses with up to 100 full-time-equivalent employees as small groups, compared with 50 in most states.

A state small business marketplace

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.

Longer continuation coverage

Cal-COBRA covers employers with 2 to 19 employees and allows continuation coverage for up to 36 months.

Key Rules & Numbers

California small-group rules at a glance

TopicCalifornia ruleWhat to know
Small-group size1โ€“100 full-time-equivalent employeesOwners and their spouses don't count toward the total, and at least one other employee is required.
Employer contributionAt least 50%Of the lowest-cost employee-only premium in the tier you choose, under Covered California for Small Business rules.
ParticipationAt least 70% of eligible employeesWaived for groups that enroll between November 15 and December 15 for a January 1 start.
Continuation coverageCal-COBRA for 2โ€“19 employeesUp to 36 months. Federal COBRA applies at 20 or more employees.

Find Your City

Each city page covers the local workforce, nearby health systems, and the questions employers there ask us most.

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San Diego County
Carlsbad
San Diego County
San Marcos
San Diego County
Vista
San Diego County
San Diego
San Diego County
Los Angeles
LA County
Riverside
Riverside County
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Santa Barbara
Santa Barbara County
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Common Questions

What California employers ask us about group health insurance.

What counts as a small business for health insurance in California?

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.

What is Covered California for Small Business?

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.

How does Cal-COBRA work?

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.

When can a California business start a group health plan?

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.

Does California require employers to offer health insurance?

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.

Reviewed by Anthony Howe, Licensed Insurance Agent
NPN #20649362 ยท Rock Meadow Insurance Services ยท Last updated

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