Individual vs. Group Health Insurance

Comparing Individual and Group Health Insurance

If your job offers group health insurance, chances are you can get better coverage at a better rate than you can with individual insurance. This is because the larger a company is, and the more people it can sign up for health insurance, the more a health insurance company will want their business. That means that the insurance company will be willing to offer better deals at a discount. That means that the health insurance benefits you receive through your company is usually better than individual insurance at a comparable cost.

However, because a lot of times a group health insurance policy is a one-size-fits-all, there are individuals who don't quite fit the mold and may do better going with individual coverage.

Reason #1 To Go With Individual Health Insurance - Family Coverage

Often times a group health insurance plan will be limited as far as family coverage goes. In this case, you might end up finding a better deal purchasing a family plan and dropping your group insurance. Often, group insurance plans allow you to add other members of a family for an additional fee, so before dropping the group health insurance, do some investigation as to what the possibilities are.

Reason #2 To Go With Individual Health Insurance - You Prefer a Provider Outside the Network

Most group health insurance plans limit which health care providers you are able to visit. This is a normal part of any insurance plan, but because you don't have any say in who your company chooses to provide health insurance to their employees, you may end up with a network that just doesn't work for you or your family. In this case, you will need to compare the costs of individual coverage with your group plan to find out if the extra cost will be worth it to you.

Reason #3 To Go With Individual Health Insurance - Alternative Treatments

Because your company decides who your health insurance provider is, they may not cover alternative medical treatments. If you require alternative treatments for your conditions or would like to have the option in the future, you will need to explore your options with other health insurance providers.

Reason #4 To Go With Individual Health Insurance - Portability

When you are on a group health insurance plan, your insurance is tied directly to your job. If you lose your job or decide to move on to another job, you will lose your insurance. There is a plan called COBRA, which is a government-regulation that requires that there be health insurance coverage for individuals between jobs to help prevent the lose of insurance. If insurance is lost between jobs and you have to sign up with another health insurance provider, they may not cover your pre-existing conditions. If you move directly from one insurance company to another, or use COBRA, pre-existing conditions usually do not pose an issue.

However, COBRA is limited and you only have a certain amount of COBRA coverage. By having your own individual or family health insurance plan, you prevent the loss of insurance via the loss of a job from being an issue. That extra control might be important, especially for those who switch jobs often.