The rules that matter in California
| Rule | What it means |
|---|---|
| Small group definition | Employers averaging 1–100 employees buy in the small group market, with ACA rating rules. Most states stop at 50. |
| Cal-COBRA | Employers with 2–19 employees get COBRA-like continuation through their carrier for up to 36 months. Employees who use up federal COBRA can extend to 36 months total. |
| Individual mandate | Residents must have qualifying coverage or pay a penalty to the Franchise Tax Board. Employer coverage counts. |
| Stop-loss limits (SB 161) | Stop-loss sold to small employers must have a specific attachment point of at least $40,000, which makes traditional self-funding harder for small groups. |
| Covered California for Small Business | The state's SHOP marketplace, required for the federal small business tax credit. |
What California employers pay
California premiums vary widely by region. In the Bay Area quotes we see, platinum-level coverage through a PEO or carrier often runs about $1,200 per employee per month, and PEO plans that start near $550–600 in year one tend to climb steeply at renewal. Nationally, KFF put the 2025 average employer premium at $9,325 for single coverage and $26,993 for family coverage.
Prices inside the system are wild too. Using UCSF's own published price data, a brain MRI lists a gross charge of $5,730 and a cash price of $1,719, while one large PPO's negotiated rate is about $698. A plan that routes people to fairly priced care saves real money.
Self-funding in California
SB 161 sets minimum stop-loss attachment points for small employers, so a small California company can't buy the thin stop-loss layers that make traditional level-funded plans cheap elsewhere. If you're comparing level-funded quotes, check how SB 161 affects them.
How a Prescience plan works in California
At Prescience, we design and run your company's health plan, from setup and enrollment to claims, compliance and COBRA. What your team gets:
- An effective $0 deductible, so the plan helps from the first visit.
- Simple copays shown before a visit, capped by a low out-of-pocket maximum.
- A broad national PPO network, plus providers we contract with directly.
- 24/7 physician-led care navigation: a care team that finds the right provider, books appointments and explains costs up front.
What your company gets: one monthly cost set in your quote, usually 10–20% below comparable fully insured coverage and fixed before the plan starts, with no admin fees. You keep your payroll provider, and the plan can start mid-year.
We work with California employers of 2 or more employees, and with distributed teams that have employees in California and other states.
See what your team would pay with Prescience
Answer a few questions about your team and get a quote in about 60 seconds, or talk it through with one of our benefits experts.
