Since the vast majority of Americans get their health insurance through a group, either an employer or the Medicare/Medicaid programs, in general really never have to consider searching around for our own insurance. I am discovering that many Americans simply go without coverage between jobs simply due to the complexity of the health insurance industry.
They assume that the risk is minimal over that 30-90 period between policies and they are correct. That is quite a small window of risk to assume considering the time and money involved in securing their own coverage, so it makes sense. Of course some would never consider being uninsured for any amount of time, but that is a personal choice, the subject of another article.
However, when someone is in a situation where they need health insurance on their own far too many people really have no idea where to start or what to look for to begin with. When you are insured at work you are under a group policy. That means that your employer purchased a plan to cover everyone at the company. When I say “everyone” that just means any employee with a particular employment status and who enrolls.
Senior executives or board members may have other options to choose from versus what the rank and file employee has – and not everyone will enroll. A spouse may already have coverage at their own employer and thus the other spouse can opt out. Sometimes the rates are too high despite the employer contribution so others may also opt out of the plan.
But, for anyone that does want to participate in the coverage provided by the employer they would be able to enroll and receive the same benefits and rates as others on the plan. This is a “group” policy. Everyone has the same plan, network and company. For the most part it’s the same plan. You may have options like choosing a higher deductible to keep the premiums down or you may add dental or disability insurance to your plan. But, the core medical coverage is essentially the same.
The insurance company can reduce its risk by insuring a large number of people on the same policy. Thus the “group” part of a group policy. Everyone insured under that policy would receive a certificate of insurance and other relevant paper work when they enroll. But, they are not independently insured.
Rates can change based on the group size, claims experience and percentage of enrollees. When the terms and benefits change everyone under that policy would see the same changes.
When you start looking for insurance for you or your family you are looking for an individual policy. That just means it is not a group plan. It is for one person or family. Individual is not meant to imply only one person. One person can get an individual health insurance policy, but so can a family of 6.
Just as a note: in some states individual policies are issued as “group” plans. Yes that seem contradictory, but here me out. Everyone in the state is technically part of a group plan. You can still buy it on your own, but you are part of a group insurance policy that applies to everyone in your state. This is just a legal matter and will not affect your coverage. I am mentioning this here since you may see some language regarding this aspect of your insurance on your paperwork from your insurance company.
There are major differences between a group plan and an individual plan. Most of the differences is in the management of your benefits.
- You will have direct access to the insurance carrier. Unlike with an employer where you went through HR for assistance. This can be good and bad. Good if you do not understand insurance and how it works. Bad if you need a quick answer about cancelling or extending your policy or getting needed changes done by a deadline.
- You will be paying the full premium on your own. This can be bad if you could only afford coverage with the aid of employer contributions. It can be good because some employer plans can be too expensive and you can do better finding coverage for your healthy family.
- You can enroll or leave the plan anytime. With group plans the insurance company can control costs by requiring a minimum time for someone to be enrolled, like 12 months. And you can only join or leave during a small window during the year. This is bad since things change in people’s lives and because the insurance company draws the payments right from your checks it is hard to cancel out side of their enrollment periods.
- You have many more choices for coverage. You can choose from the very inexpensive “short term” plans to the pricy “Major Medical” policies. You can customize your coverage, choose your doctor and network and more.
I am sure there are more differences between the two policies, but those are the major ones that you would be immediately concerned with.
Individual plans are sometimes called “private” plans since it is yours and yours alone. There is no other party on the plan with you or your family. So if you are ever in the need of coverage due to losing employer benefits you would be looking for an “individual” policy. You can search for “private” insurance as well. You can search the internet for local agencies, but I suggest not submitting your information to a random internet site. You may suddenly get bombarded with calls and emails from complete strangers.
If you want to play it safe with your personal information I recommend asking family and friends who they have as an insurance provider and if they are happy with the coverage and benefits. Getting a referral is always the best place to start. Then check with local agents. You can easily find a list from an internet search. Make sure they have a local office and a local phone number. If you are sure they are local and they have the option on their website, schedule and appointment or request a call.
Show Comments (0)