So, what is the difference between group and individual health insurance? What options are there?
Economic uncertainty, combined with the options available through the Affordable Care Act, has led many people to contact me over the years about changing their health insurance. Sometimes the change is voluntary—perhaps they’re looking for more affordable coverage. Other times, it’s unavoidable, such as when someone loses a job and, along with it, their employer-sponsored health insurance.
The Main Difference Between Group and Individual Health Insurance
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 has coverage through an employer-sponsored group plan, the cost is generally based on the overall makeup of the group, including factors such as age and health risk. Group plans typically provide coverage to eligible employees regardless of their individual health conditions, while the employer pays a portion of the premium. In many cases, the employer contributes around 50% of the cost, with the employee paying the rest.
Group and Individual Health Insurance When Leaving Employment
When you leave a job, there are usually two options to continue 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 who leave a job consider switching to an individual health insurance plan to save money. However, that isn’t always an option. If the employee or a dependent has a significant health condition, finding affordable individual coverage can be difficult.
In those situations, state continuation coverage or COBRA may provide a temporary bridge, giving the employee time to transition to a guaranteed-issue plan without leaving a gap in coverage.
Group and Individual Health Insurance: How Do I Find the Best Product?
When people call me because they’ve lost their coverage or are simply looking for something more affordable, I compare options from as many insurance carriers as possible in their state. Every situation is different, so I take the time to look at multiple plans and carriers to find the best fit for their needs and budget.
Because I’m an independent insurance agent, I’m not tied to one insurance company or limited to offering only its products. That gives me the flexibility to compare options and help you find coverage that makes sense for your situation.
If you’re switching jobs and need health insurance, give me a call or grab a spot on my calendar. I’d be happy to help you explore your options.
*disclaimer – rules vary state by state. Check the rules in your state.
