So, what is the difference between group and individual health insurance? What options are there?
Uncertainties in the economic market alongside the options available through the Affordable Care Act have led to many people calling me over the years about switching their health insurance plans. This could be a voluntary change, where someone is looking for a more affordable option, or maybe it’s involuntary due to the loss of a job (which also means loss of employer-provided health insurance).
The Main Difference
The main difference is cost. Individual (or family) insurance places the total cost on you. Group insurance shares the cost between the individual and the employer.
When an employee is covered at work through a group, the overall price for all employees is an average of the age and risk of the group. The plan usually accepts everyone but factors health issues into the final rate, and then the employer is responsible for paying a portion of the total cost. The employer portion is usually 50%.
Leaving Employment
When you leave a job, there are usually two options to continue with your current insurance. The options are state continuation coverage or COBRA.
If you are with a small company with less than 20 employees, state continuation coverage may be an option for you. If the company has more than 20 employees, you should qualify for COBRA. In both cases, you are now responsible for the entire cost instead of the normal 50% you were probably paying.
Sometimes, employees leaving a job will try to save money by switching to an individual health insurance plan. This doesn’t always work because individual coverage is hard to procure if someone or their dependent has a prevailing health issue. In those cases, the employee should be able to receive state continuation coverage or COBRA for a time before procuring a guaranteed-issue plan.
How Do I Find the Best Product?
When people call me about losing their coverage or just looking for something more affordable, I look at products from as many insurance carriers as I can in that person’s state to find the best product for the price. Every situation is unique, but in every case we look at several options from multiple insurance carriers.
Since I am independent, I am not tied to offering products by just one company like many other agents are. If you are switching jobs and need health insurance, please be sure to give me a call.
*disclaimer – rules vary state by state. Check the rules in your state.
