Health Insurance Individual or Group Health Insurance?

Most people believe that the individual health insurance and group health insurance are essentially the same thing and that the only difference is that he is sold to individuals and the other is sold to employers and organizations other groups (such as clubs) to cover the employees or members of the organization. It really is not as simple as that, and individual and group health plans differ in several significant ways.

One of the most significant differences is that a group plan usually has fewer limitations and do not generally require those covered under the plan to provide evidence of insurability. In other words, the mere fact that you are a member of the group to which the plan applies means they are eligible for coverage.

Another important difference is that the contract for a group plan is made between the insurer and the employer, union, trust, club or other and it is not done directly with you as in the case of an individual plan . This means that they have no power to negotiate changes to the plan to suit your specific needs, and that when such changes are made between the employer and the insurer, which has no real power to intervene.

The big advantage for most people looking for health coverage through a group plan is that it has fewer restrictions and is generally cheaper than an individual plan. However, a significant drawback is that your registration of the project is linked to your group membership and, in the case of employment, a change in employment status will affect your coverage. For example, if you retire, get fired, quit, or simply experience a reduction in hours, you may suddenly discover that you and your family lose your health insurance.

Now obviously there is some protection for people who lose their job through no fault of their own and the Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to maintain the insurance coverage group for a while '(usually 18 months) while you make alternative arrangements. The disadvantage, of course, is that you still have to pay for the coverage and this can be very expensive because you must pay not only the contribution of employees who were paid, while in the workplace, but also the contribution by the employer since are no longer in payroll. The benefits they are entitled is under the COBRA coverage may also be reduced in many cases.

Another key difference between group and individual health insurance, which is worthy of note here comes from age discrimination in Employment Act This essentially means that when a group plan is in existence that covers a group of twenty or more employees, the employer must make insurance available to all employees, including spouses and dependents. Consequently, there is no age limit imposed to cover and this can be particularly beneficial to older workers.

These are obviously only some of the main difference between group and individual health insurance, but still represent a good starting point to help you decide between the two. What course you choose should be a personal decision, but an important thing to remember is that health insurance becomes increasingly difficult to obtain and more expensive the older you get, and even if you decide to 'shelter' under an employer plan work, the day will surely be on their own and forced to seek shelter outside the system of your employer.

Scheme, your employer may go well today, but do not forget to see him not only in terms of current needs, but also in terms of needs in the longer term....