Group vs. Individual. Which type of health plan is right for you?

Health insurance can be expensive and often restrictive making which type of coverage to choose a difficult one. If you are not eligible for a group plan, Individual Coverage may be your only option. On the other hand, those covered by a group plan may find it to be their only choice, especially if you employer is paying the majority of the cost.

Employers looking to decide whether to offer group or individual plans may want to consider the following advantages and disadvantages of each type of coverage as illustrated below.

   Advantages and Disadvantages of Individual vs. Group Coverage.

Advantages - Individual

 Broad range of companies and plans available.
 The use of Medical Savings Accounts (MSA's).
 Potential deductibility for self-employed and qualifying business.
 Better rates than some small group plans with healthy applicants.

Disadvantages - Individual

 Strict medical underwriting applies for standard policies.
 Additional options like vision and dental may not be available.
 May not qualify for employer deductibility.
 Rates are likely to change more frequently.

Advantages - Group

 Broad range of options and cost saving programs.
 Full deductibility for both employer and employee on qualified plans.
 Guaranteed coverage for new applicants.
 Better pricing for medium to large businesses.

Disadvantages - Group

 Employer must pay 70% of employee cost for qualified plans.
 Depending on employer contribution, total cost may be prohibitive.
 May be difficult to administer for some employers.

Individual Health Insurance Plans

  Researching your options

If your are an employer, you may want to review the differences between individual and group plans by going here.

To help you get started, make sure you have considered the following:

  What’s is the likely term of coverage?  

How long to you wish to be covered for? If this is temporary coverage, be sure it will be in force long enough for permanent coverage to kick in.

  Do you want an HMO, PPO, or both?  

Health Maintenance Organizations or HMO's offer comprehensive affordable coverage. In contrast, Preferred Provider Organizations or PPO's offer more flexible options regarding referrals and available medical services, but usually at a higher cost.

  Deductible and co-payment options.  

How much are you willing to pay out of pocket in order to lower the premium cost?

  What is your current health condition?  

Are you likely to be turned down by traditional carriers. If so, this is important to consider upfront so only those companies most likely to accept you are contacted.

  Choosing a policy

How do you compare health plans? Consider these factors in choosing the policy that’s right for you:

  What is the premium vs. out of pocket cost?  

If you are not able to afford high out of pocket costs, then HMO coverage is probably your best option. Although the monthly cost may be higher, you will never be faced with overwhelming deductible costs. Those who can afford higher out of pocket costs may want to consider a Medical Savings Account or MSA which allows you to put aside money tax free to pay out of pocket costs.

  How does the specific policy coverage compare?  

What’s the lifetime cap? Are maternity, mental health, and other specific disorders included within the coverage form.

  Who will be providing the medical services?  

Be sure to check out the available physicians and medical facilities of any plan your are considering. Limitations on medical services is one of the most common reasons individuals are unhappy with their medical coverage.

  Is the insurance company financially stable?  

Since you may be relying on this coverage for a lifetime, be sure the company you choose will be around just as long. All companies have the ability to change pricing at will. The cheapest carrier today may not be tomorrow.

The bottom line is that getting good individual health insurance coverage requires work, but it can be time well spent. No matter how healthy you may feel, you still need to consider what would happen if you were in an automobile accident, or hospitalized for an extended period, and had to pay those costs yourself. Individual health insurance can help relieve some of those worries and we can assist you in this difficult selection process. Please contact us for more information and a free quote.

Group Health Insurance Plans

  Researching your options

If your are an employer, you may want to review the differences between individual and group plans by going here.

To help you get started, make sure you have considered the following:

  Who is most likely to enroll in the plan?

Employees each have different ideas as to what is adequate health coverage. Be sure when considering coverage that the plan and it's various options will meet their expectations.

  How many different plans and options do you want to offer?

Your employees will appreciate a variety of coverage and premium options, but too many may be difficult to administer.

  How much are you willing to contribute to the cost?

In order to become a "qualified" health insurance plan, you must cover at least 70% of the employee cost or 50% of the employee and dependent costs. There are many cost saving options to ease the employers financial burden as it relates to this rule.

  Choosing a policy

How do you compare health plans? Consider these factors in choosing the policy that’s right for your business:

  What plans are being offered?  

Be sure that the range of plans, from large co-pay HMO coverage to low deductible PPO plans, are included as needed to meet both employer and employee needs.

  How will the proposed coverage be administered?  

Some plans do more of the payroll administration for you than others. Select a company that does not leave you with more responsibilities than you are comfortable with.

  Who will be enrolling and informing you and your employees?  

Be sure to know how these services will be handled before signing up with a new plan.

  Is the insurance company financially stable?  

Since you may be relying on this coverage for a lifetime, be sure the company you choose will be around just as long. All companies have the ability to change pricing at will. The cheapest carrier today may not be tomorrow.

Obtaining coverage that provides both the desired benefits as well as stays within your companies financial limitations is a difficult process. Our agents are trained to both select and explain group health policies so that you can make an educated informed decision. Please contact us for more information and a free quote.