With the many recent changes to the health insurance industry many people are finding themselves in a plan that they don’t like or just don’t know enough about. When it comes to the basics we know that Group health insurance coverage is coverage that is offered through an employer and that Individual health insurance coverage is coverage that we buy on our own – but how do we know which one is right for us and what really is the difference between the two types of plans?
Let’s take a closer look at the differences between employer group health insurance coverage and individual health insurance coverage and help you determine the plan that is going to best fit your personal needs.
Under the Patient Protection and Affordable Care Act, better known as the Affordable Care Act or Obama Care, minimum standards for health insurance coverage were set for both individuals and employers. Most employers with more than 50 employees must offer group health care plans coverage, and individuals who do not have access to group health insurance coverage are responsible for purchasing individual health insurance coverage for themselves. Employers can face a fine if acceptable coverage is not offered and individuals can receive a penalty at the end of the tax year if they did not carry acceptable coverage. Many people do not realize that even if their employer offers group health insurance coverage that they are still able to purchase an individual health insurance plan on their own if they prefer, and they may even still qualify for the subsidy to help with the cost of the plan depending on the amount of their income.
WHAT TO EXPECT FROM EMPLOYER SPONSORED GROUP HEALTH INSURANCE COVERAGE
According to Healthinsurance.org out of everyone who carries some sort of health insurance coverage 60% of those people are covered by an employer-sponsored group health insurance plan. This means for the majority of people carrying health insurance coverage:
- Their employer may include a range of plan options to choose from, including Health Maintenance Organizations (HMO) plans and Preferred Provider Organizations (PPO) plans.
- Their employer may also offer additional ancillary coverage options such as dental, vision, and life insurance coverage.
- Their employer may also offer Flexible Spending Accounts (FSA) or Health Savings Accounts (HSA) to help the employee off-set out-of-pocket costs from the health plan coverage such as deductibles and co-pays.
- Their employer should be responsible for a significant portion, or all, of their monthly premium for their health insurance coverage.
- Their employer typically will deduct the employee’s share of the monthly premium, if any, from the employee’s pay check each pay cycle.
- Their employer may have additional resources available to the employee through their Human Resources department, where you can access documents relevant to your plan and ask any questions you have related to coverage.
WHAT TO EXPECT FROM INDIVIDUAL HEALTH INSURANCE COVERAGE
If your employer does not offer employer-sponsored group health insurance coverage, then you are still responsible as an individual to purchase your own individual health insurance coverage through the marketplace. For the remaining 40% of individuals covered by health insurance plans this means:
- The individual chooses a plan that covers themselves and their families and pays the monthly premium payments.
- The individual may receive advanced payment of tax subsidies to help pay the cost of their monthly individual health insurance plan premium, however if they subsidy amount is overestimated the individual will have to pay the incorrect amount back at the end of the tax year.
- The individual must plan on enrolling in or making changes to their health insurance coverage choices during the Annual Open Enrollment Period. The individual can only enroll or make changes to their plan’s coverage at other times during the year if they qualify for a Special Election Period.
- The individual must choose their plan coverage level. They may choose from Bronze, Silver, Gold, or Platinum plans through the health insurance marketplace, through a broker, or directly from the insurance carrier if they are not eligible for a subsidy to help pay the monthly premium.
- An individual may qualify for a Special Election Period if they experience certain life events such as getting married, having a baby, or losing other health insurance coverage.
Understanding your options when it comes to health insurance coverage is important to make sure you have the proper coverage for yourself and your family. Although health insurance coverage can be confusing there are a lot of resources available to help you get the information you need. Working with an experienced and licensed health insurance agent or broker can help you navigate your different plan options and determine which plan is right for you.