California Employer Resource · Plan Structure
🧭 Can Employees Choose Between Multiple Carriers?
Instead of locking your whole team into one carrier’s one plan, you can hand them a budget and let each person pick the plan — and the carrier — that actually fits them.
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Looking for the full employer rulebook — the 50-employee mandate, penalties, and tax credits? See the full guide →
🧭 What is a multi-carrier, defined-contribution plan?How It Works
Instead of picking one plan from one carrier for the whole company, you set a fixed dollar (or percentage) contribution per employee. Each employee then applies that contribution toward whichever plan they want from a menu that can span several different carriers — not just different tiers of one carrier’s plan. If someone picks a plan that costs more than your contribution, they simply pay the difference themselves through payroll deduction.
🏢 How does this actually get set up — through CCSB or a private exchange?How to Access It
Two main paths in California: Covered California for Small Business (CCSB), the state-run small-business exchange, or a private multi-carrier exchange. Both let you set your contribution once, publish a menu of plans across multiple carriers, and give employees an online enrollment portal to pick for themselves — while you still get one consolidated monthly bill rather than managing several carrier relationships yourself.Source: Covered California for Small Business
💵 Does this cost more than just picking one carrier’s plan?Cost
Not inherently — your contribution is locked in for the plan year regardless of which plan each employee picks, so your budget is just as predictable as with a single-carrier plan. The cost difference, if any, falls on employees who choose a pricier plan than your contribution covers; they pay that gap themselves. You still need to clear the same minimum contribution and participation rules that apply to any small-group plan.
✅ Is this a good fit for my business?Fit
It tends to shine for a team with genuinely different needs — some employees near an HMO medical group who love their HMO, others who want to keep an out-of-network specialist on a PPO, a few who’d rather have a lower premium and an HSA. It can be a weaker fit if your team is small and relatively uniform in what they want, where picking one solid plan is simpler to administer. Either way, it’s worth comparing side-by-side against your current single-carrier setup at renewal. See how to benchmark your plan at renewal →
🥊 Do You Really Need a PEO?
👨⚕️ “Thinking about a PEO? Many lock you into one benefit structure, with admin fees built in.”
👩⚕️ “Here you get the HR tech, the compliance support, the Professional Suite at no additional cost, and full freedom to choose across the open market. What made a PEO sound appealing in the first place?”
🔍 Compare Before You Commit: Keep Your Freedom of Choice