Whether you’re a small business owner trying to determine the best benefits to offer your employees or an individual in need of health insurance coverage, it’s important to understand the two basic types of insurance options so that you can make the choice that is right for your business’ bottom line or your family’s bank account. There are so many different plans and coverage options available in the health insurance industry that it’s easy to get overwhelmed and confused. The following guide can help you determine which type of insurance is best for your employees or for yourself.
Health Insurance Basics
Health insurance plans provide coverage for medical care for individuals and families. The insured pay monthly or annually for their insurance coverage. These premium payments go toward general medical care, including checkups and emergencies. Without health insurance, people have to pay out-of-pocket for medical care, which can be very expensive. This can make even the most basic checkups difficult to pay for, and some people even avoid visiting the doctor when they are ill and uninsured.
What Is Group Health Insurance?
Today, most people obtain health insurance through their place of work. Employers offer group health insurance as part of their benefits packages, which can help attract and retain employees as well as keep those same employees healthy and thriving. Employers pay a portion of their employees’ insurance premiums, typically through a monthly paycheck deduction.
While costs for group health insurance plans vary based on coverage options, most group plans can help make health care much more affordable. Because insurance premiums can be high, having a percentage of those costs covered by an employer can be helpful for the policy holder.
Group health insurance plans offered through an employer often have annual enrollment periods. New employees may experience waiting periods if they’re hired between enrollment periods, but they can usually get temporary coverage until they are officially enrolled.
Those participating in group insurance plans only have the coverage offered by the plan, which is usually chosen by the employer. This may result in reduced coverage options, but it is also typically lower than an individual plan. Sometimes, employees can purchase add-on coverage to fill in the gaps on their group plan.
What Is Individual Health Insurance?
Unlike group health insurance, individual plans are paid for completely by an individual. Some businesses do not have the budget to offer health care plans, leaving families to find their own health insurance.
Because the costs of premiums are not spread amongst multiple group members, individual health insurance can cost a bit more than group health insurance. However, insurance agents can help individuals find the most affordable plan options that still offer the necessary coverage.
Like group insurance, individual insurance usually follows an annual enrollment period. Those who will need to purchase their own insurance should plan and prepare for the open enrollment period so that they do not miss out on the chance to sign up. There are a few cases in which another enrollment period may be opened, especially for those who recently lost health coverage.
One of the biggest benefits of individual health insurance is the ability to choose individualized coverage options. There is often an increase in flexibility that is not available when taking part in group insurance coverage, but that flexibility may come at a cost, as additional coverage may end up being more expensive.
Group vs. Individual Health Insurance… Which Is Right for You?
There are many variables at play when determining whether group or individual health insurance is the best option. Consultation from a professional broker or agent can help businesses and individuals find the right plan for their unique needs.