Health insurance is a must-have for everyone, especially as paying for medical bills entirely out of your pocket has become less and less feasible over the years. As an employer, not only do you have a legal obligation to provide health insurance, but you have to offer it, as employees are likely to turn to your competitors if they’re not given the right perks.
But there’s some confusion between individual health insurance and group insurance. Here’s what you should know:
Understanding Group Health Insurance
The employer picks the group health insurance pack from an insurance agent and an insurer provider, offering it to their employees for purchase. Depending on their industry, budget, and various other aspects, the employer can choose from a variety of packages to offer as remuneration to their workers. The premium costs for the group health insurance are divided among the employees that opt for the insurance package. The more people join the group insurance, the lower the cost per individual opting for the insurance.
Understanding Individual Health Insurance
On the contrary, an employee will opt for individual health insurance on their own by working with an insurance agent that will find them an option from a reliable insurance provider. In essence, individual health insurance works the same way as group health insurance. Even if you have group health insurance, you can get individual health insurance if you feel it is necessary. In some cases, an employer can provide an individual coverage health reimbursement arrangement (ICHRA) and reimburse the employee’s premium payments.
Purchasing the Insurance
Group Health Insurance
In most states in the US, employers are legally required to provide insurance if they hire at least two employees. Because of this, an employer with even one employee can purchase group health insurance plans. In some states, sole proprietorships are also considered a group of one, allowing them access to group health insurance. The business owner provides group insurance. The employer can work with an insurance agent to go through various policies, understand their differences and, based on their industry’s needs, opt for an option that works best for them. One drawback here is that the employees don’t have a say in the employer’s insurance policy, so it might not be sufficient for some people with additional needs.
Individual Health Insurance
Individual insurance is purchased by a consumer or an employee on their own. If you opt for individual health insurance, you have the freedom to purchase an option that suits you. Instead of settling for group health insurance from your employer, you can work with an insurance agent to find a specific option that meets your needs. It’s also common for people to opt for individual health insurance if they have any particular needs that their employer-provided insurance does not fulfill.
Health insurance costs depend on various factors. These include:
- The deductible
- Your health conditions
- Where you live
- Coverage amount
- Use of alcohol and tobacco.
If we compare the cost of both options, group policies are always cheaper than individual health insurance policies. When the cost for premiums is split between the consumers, the per-head premium is much more cost-effective.
Add-ons or riders are available for group health insurance in some policies. These are supplemental and provide some features that might not be available in general group coverage plans. These can vary between insurance companies, and you’d want to look into this beforehand. For example, you can opt for a maternity coverage add-on if you plan on starting a family.
Generally, if you apply for a health insurance policy within the first 15 days of the month and the enrollment is accepted, you don’t get coverage until the 1st of the next month. But if you applied for it after the 16th, you won’t receive coverage until the 1st after the next two months. It’s important to figure out when you’re applying for your plans as it can increase the waiting time from anywhere to 8 weeks. If you’re searching for employer group insurance for your business, you can work with Covered California Certified Agent. We’ve assisted many companies, and individuals find reliable insurance services in California. For concerned individuals, we also provide options for individual health insurance and dental insurance. We’re aware of how it can be difficult to navigate the insurance landscape and offer dedicated resources for the job. Contact Covered California Certified Agent today to work with a reliable insurance agent in California.