Individual Versus Group Policies

Individual Health Insurance Policies can be purchased for yourself or your entire family. These policies can often be cheaper than Group Policies which you get through your employer. I if you have the option of a Group Policy then the issue is which one is right for you.

Advantages of an Individual Plan:

  • You can select the health insurance company and the plan that works best for you.
  • You can change the plan and/or Health Insurance Company during the annual Open Enrollment period.
  • Your plan is not attached to your job, so you can switch or lose a job without causing a gap in your coverage.
  • You can select a plan that allows you to visit the doctors you want to see.
  • You might be able to get a subsidy from the government to help pay for your premiums.

Group Health Insurance Policies are purchased by your employer. These polices can sometimes be cheaper than Individual Policies.

Advantages of a Group Plan:

  • Your employer pays all or a portion of the premiums.
  • You save time and energy not having to shop for plans.
  • You and your employer’s premium contributions can be made pre-tax, lowering your taxable income.

In 2016, the average cost of an Individual Health Plan was $4,632.00 while a Group Plan was $6,435.00. This difference in costs can be traced back to the fact that with Individual Health Insurance the risk to the insurance company is spread among millions of people while the risk with Group Health Insurance is spread among the people in a given company.  That means if one or two employees have major medical costs one year, the premiums could increase significantly the next year.

You should do the research if you have an option to get health insurance with your employer but more often than not the Individual Health Insurance Marketplace will land you a more affordable plan that is built around your unique medical needs.