Differences Between Group and Individual Health Insurance
In the past, having health insurance through your job was the way to go. However, there have been certain changes in the landscape of the health care world that have shifted that mindset. Employers are now having to cut the number of benefits they can supply due to the bumpy economy. There is also an increasing financial burden put on the employee as employers can no longer assist with the rising costs of health care. Technological advances have resulted in the cost of services rising. These changes have prompted more and more people to just find individual health plans for themselves and their families.
Whether you believe group or individual health plans are best for you, it is always beneficial to understand the differences between both.
Group Health Insurance
With group health insurance, your employer would take care of everything. They choose the provider and the plan options. One of the greatest benefits of group health insurance is that the employer typically pays for a portion of the monthly premium. It also removes the stress of trying to search for a plan when you do not know too much about health insurance. The final benefit is that premium payments are deducted from pre-tax pay. Meaning that you pay your insurance before federal and state taxes are deducted, which lowers your taxable income.
Individual Health Insurance
Individual health insurance is entirely up to you. You do the research, with the help of a qualified agent, and find the perfect plan for your needs. Purchasing a plan can be done in one of two ways. The first is through the Marketplace which is operated by the government. Depending on your household size and income, you may qualify for a subsidy that will help you pay for your insurance. The second way is by purchasing private insurance straight from the insurance carrier, or through agents, brokers, and online. An advantage to an individual health insurance plan is that there is no loss of coverage when changing or losing jobs. You can also choose a plan that covers the doctors and hospitals you trust, and you may qualify for more affordable coverage.
There is a difference in cost, however. In 2020, the average cost of a group health insurance plan for a single person was $7,470 a year and an that for an individual health plan was $5,472 a year. Individual plans are seeing a downwards trend in terms of cost, while group plans have been rising.
Overall, having health insurance should be the ultimate goal. Whether that is through your employer or an individual plan, just make sure that it suits your needs for health coverage.
Health Insurance Questions?
We hope this information on differences between group and individual health insurance is helpful.
Empower Brokerage wants to help you understand the insurance coverage you need and how to save money getting it. Stay on top of your health and give us a call at (844) 410-1320
See our other websites: