Via an Interview with Ron Lang, By Phil Calhoun
As CalCPA Health celebrates its 66th anniversary, its story stands as a testament to the power of community-driven solutions in the often-turbulent world of health insurance. In this first installment of a three-part series, California Broker Media CEO Phil Calhoun sat down with Ron Lang, CEO of CalCPA Health, to explore the unique structure, mission, and value CalCPA Health brings to California’s financial professionals. This article also incorporates insights from industry sources and regulatory data to provide a broader context.
A Unique Legacy Born From Necessity
CalCPA Health was founded in 1959 by the California Society of Certified Public Accountants (CalCPA) to address a persistent problem: small employers, especially in financial services, had difficulty obtaining and maintaining health insurance. According to the U.S. Small Business Administration, small businesses have historically faced higher premiums and fewer choices than larger employers, due in part to limited bargaining power and risk pools (SBA, 2023). Ron Lang, who has led CalCPA Health for 13 years, explained, “Not very many businesses make it 66 years, especially in the health insurance business where we’ve had the government trying to put us out of business for the last years.
So, it’s quite an accomplishment.” The organization’s model was to pool together small firms—often with fewer than 100 employees, and sometimes just three or four partners and staff—to create the critical mass needed for large employer-style benefits and rate stability. Lang emphasized, “The whole idea behind CalCPA Health was to bring together a large volume of these smaller firms, to create critical mass to be able to provide them with large employer-style benefits and spread that risk out to provide rate stability and a really large group product to these small employers. And it’s worked for decades, obviously, we’re still around.”
Not-for-Profit and Standalone: A Different Kind of Carrier
Unlike many association health plans, CalCPA Health is a licensed, admitted, not-for-profit insurance carrier domiciled in California. This distinction is significant. While association health plans have drawn scrutiny from regulators for sometimes lacking transparency or sufficient consumer protections (Kaiser Family Foundation, 2022), CalCPA Health operates under strict state oversight. Lang clarified, “We are an insurance carrier. We’re domiciled in the state of California, we’re licensed, we’re an admitted carrier. Although we are married to the CalCPA, the society, we are a standalone entity. We’re a not-for-profit. So, our loss ratios and things are much better than what the national commercial insurance companies put out there.” This not-for-profit status allows CalCPA Health to focus on long-term rate stability and value-added services, rather than maximizing shareholder returns. “We’ve been able to offer long-term rate stability, products that are tailored to the industry, and a lot of additional value adds—what we call non-premium value adds—to the mix. We give a good value proposition to these employers,” Lang said.
Leveraging Anthem’s Network for Nationwide Access
A key feature of CalCPA Health’s offering is its partnership with Anthem, one of the largest provider networks in the country. According to the California Department of Managed Health Care, broad network access is a top priority for employers and employees alike (DMHC, 2024).
Lang explained, “We rent Anthem’s large group provider network, and there’s a couple reasons for that. One is that we wanted to give the best access to our members to providers in the state of California and nationally, because a lot of firms are domiciled here but have employees scattered around the country. That provides us with that national network.” He added that this arrangement also streamlines the member experience: “When they walk in with our logo and the Anthem logo on that card, the doctor immediately knows how to get access to the benefits and if there’s authorizations or deductibles. That’s all immediately accessible to the docs because we’ve partnered with Anthem.” This partnership has been in place since at least the late 1960s, giving CalCPA Health members reliable access to care for decades.
Plan Design and Transparent Underwriting
CalCPA Health designs and rates its plans internally, using in-house actuaries and external consultants. This is a departure from many association plans, which often rely on external carriers for plan design and pricing. “We design and rate the plans from scratch ourselves. We have in-house actuaries and then we have an actuarial consulting firm to sign off on things. So, we create the plans, design the benefits, and then we do the ratings on all of our plans,” Lang said. Membership eligibility is broad, encompassing not only CPAs but also a range of financial professionals, including wealth managers and insurance agencies. For partnerships and S-corps, at least half the ownership must be CalCPA members; for publicly traded companies, the executive teams qualify.
“Our data has shown that people tend to go to the doctor around their home rather than necessarily their place of work”.
On the underwriting side, CalCPA Health has always been 100 percent community rated, even before the Affordable Care Act (ACA) required it. Community rating, as defined by the ACA, means that premiums are not based on an individual group’s health status but rather on broader risk pools, promoting fairness and stability (Healthcare.gov, 2024). Lang noted, “Whether it’s a large group or small group, we community rate across the entire book of business and we’ve always had to file all of our rates with the Department of Insurance. It’s all very transparent as far as what our rates are.”
CalCPA Health also rates employees based on their home zip code, which often results in more competitive rates. “Our data has shown that people tend to go to the doctor around their home rather than necessarily their place of work. By rating at the employee zip code, we’re segmenting better and it tends to make us a little bit more competitive,” Lang shared.
Rate Stability: A Key Value
CalCPA Health’s record of rate stability is especially important for small businesses. According to a 2023 survey by the National Federation of Independent Business, unpredictable health insurance costs remain a top concern for small employers. Lang explained, “The last time we were in double digits was coming out of the Affordable Care Act when we had total chaos. Over the last eight or nine years, if you add up each of the increases, we come out below four percent over that period of time.”
He continued, “If you’re running a business, particularly a small business, and you get hit with a 15 or 20 percent rate increase, I’m just not sure how you run your business while you’re doing that. For most of these financial services and CPA firms, their health plan costs are usually higher than IT, higher than rent. The only cost that’s more than that is salaries. So, it’s a big number.”
Looking Ahead
As CalCPA Health continues its mission, its not-for-profit model, transparent practices, and commitment to member value remain its guiding principles. In the next installment of this three-part series, Ron Lang will discuss the evolving challenges facing California’s financial professionals and how CalCPA Health is adapting to meet those needs in a changing healthcare environment.
Part 2 Coming Next Month
CalCPA Health: 66 Years of Service & Stability for California’s Financial Professionals
Via Interview with Ron Lang By Phil Calhoun
The new California Law, SB 1375, was signed by Governor Brown on September 22, 2018 and will affect many small firm’s group health insurance. SB 1375 changes the Health Insurance Code to reclassify certain small employer groups as individuals. The affected firms will have to obtain individual health insurance in 2019, rather than the small employer group plans they currently have. Individual health insurance is typically more expensive with less provider network and benefit plan choices than small group plan offerings.