New California laws bring promising changes to the state’s insurance industry

Governor Jerry BrownCalifornia Governor Jerry Brown signed into law a number of health care legislations this month. Many of the laws were designed to bring affordable health insurance to those in greatest need. The new legislations are expected to make some major changes to the state’s health insurance industry as they introduce stiffer regulations concerning rates and practices. Small businesses in the state will be afforded a number of benefits from the laws in the hopes of ensuring employees are able to keep their insurance benefits.

Of note, Senate Bill 51 will require all health insurance companies in the state to adhere to a federal provision outlined in last year’s Affordable Care Act. That provision mandates all insurers throughout the nation to spend no less than 80% of the money they collect from premiums on health care. The federal mandate does not take effect until 2014, but California lawmakers have chosen to enact the provision early.

Small businesses – those employing fewer than 50 workers – will receive monetary benefits to help them keep hold of their employee insurance plans. This is an attempt by lawmakers to help stimulate growth in the economy by encouraging small businesses to spend more money on their own operations.

Another law extends the accessibility for government subsidies for low-income Californians. The subsidies will enable more people to gain access to health insurance through the use of the state’s health insurance exchange, which is scheduled to be operational by 2014.

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