Differences between group health and individual health insurance

Uncertainties in the economic market as well as the recent healthcare reform changes have lead to many people calling me recently about switching their health insurance plans.  This could be a volunteer change, where someone is looking for a more affordable option, or maybe because they have left their group plan and are looking at an individual health insurance plan.  So what is the difference between group and individual plans?  What options are there?

Leaving a job
When you leave a job, there are usually two options to continue with your current insurance.  If you are with a small company with less than 20 employees you might be able to get on state continuation coverage.  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 that are 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 harder to procure if someone or one of their dependants has a prevailing health issue.  Hopefully in that case the employee can get on state continuation or COBRA for a time and then get onto a guaranteed-issue plan.

What are the main differences between group and individual health insurance plans?
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 to pay a portion of it, usually 50%.

What I do to find the best product?
When people call me about leaving 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 isunique, 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