Group vs. Individual Health Insurance – Compared


In the past, most people only had employer health insurance. The company would do the research and choose a certain plan for their employees. But, a lot has changed of late. Tough economic situations have caused many companies to cut costs and healthcare has become more expensive, making it more difficult for people to meet the costs of medical care, with employer-sponsored coverage alone.

Due to this, an increasing number of people have begun to opt for individual health insurance plans. If you’re not sure how these two types of plans are different, this article is for you. Here’s a look at the difference between individual and group (employer-sponsored) plans.

Individual Medical Insurance

Individual medical, or health, insurance is a plan that you can buy for yourself or your family. Most people purchase these plans online or by contacting an agent. The advantage of individual insurance is that you get to choose the plan and customize it so it suits your exact needs. Further, you can renew your plan or switch to a new plan, or upgrade it.

The biggest perk is that your insurance coverage is not linked to your job. So, whether you lose or change your job, you can be certain that you won’t have to go without medical insurance as long as you pay the premiums. You can opt to pick a plan that includes the hospitals and doctors you trust the most. Some people may also be eligible to receive a subsidy from the federal government to pay for their insurance.

Group Health Insurance

Group health insurance, or employer-sponsored health insurance, is a medical insurance policy that is selected and bought by an employer and provided to eligible employees and their dependents. The employer will usually share the cost of the premium with eligible employees.

The advantages of an employer-sponsored plan are that you don’t have to bear the cost on your own and your employer does all the groundwork and research for you. Also, premium contributions from your employer are not subject to federal taxes, and your contributions can be made pre-tax, thus lowering your taxable income.

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