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When shopping for health insurance, there are a plethora of important questions you'll need to ask and find the answers to (perhaps, with the help of an experienced health insurance agent), including what kind of deductible to choose, how to minimize out of pocket expenses, and how to calculate your likely healthcare needs for the year ahead.
But one fundamental decision that often needs to be made is whether to use employer-based insurance, individual insurance, or a combination of both.
Benefits of Employer-Based Health Insurance
Not everyone has the opportunity to get a health plan through their employer, but most do. Under ACA, companies that employ 50 or more people must by law offer health insurance - and many smaller businesses may even choose to do the same.
The first thing to realize is that you will almost always be eligible for a group-rate discount when you opt to buy insurance through your employer. That's what makes it an attractive employee benefit, after all, and it's usually worthwhile to take advantage of it.
If you want to also benefit from an HSA (health savings account) in connection with your work, then you would need to buy a high deductible plan. But for greater coverage, you may want a low deductible plan.
Your health condition and history will not impact premiums when under a group-rate. With individual insurance, it could - although you can't be refused coverage for preexisting conditions either way. Employers and insurance companies negotiate group rates and renegotiate them every year. They give lower rates in order to gain a guaranteed high volume of customers, while employers use the lower rates to woo top talent. Insurers, employers, and employees all win.
Also, with employer-based policies, you generally don't have to undergo any medical exam or underwriting process. You work there, so you're approved. It's as simple as that.
Benefits of an Individual Health Insurance Policy
There are many individual health plans that you can also get at very competitive rates - and it is even possible to qualify for group rates by other means than employment (such as AARP membership, for example). Plus, you may qualify for a government subsidy could greatly reduce how much you pay per month in premiums.
You may have more freedom in customizing your own plan with individual policies, and you can get coverage for everyone in the family instead of just for yourself on the same policy.
Oftentimes, it makes sense to use the opportunity for an employer-based plan for yourself but also get an individual plan for your spouse - and a Medicaid plan (if possible) for any kids you have. If you are over the age of 65, Medicare and an accompanying "Medigap" plan may be the best option.
Thus, it's not necessarily an either/or choice. There may be a place in the grander scheme of things for both employer and individual policies in your health insurance repertoire.
Additionally, consider adding accident insurance, dental and vision plans, an indemnity policy, and other types of secondary insurance (whether through your employer as a benefit or individually) to fill in the gaps left by primary policies and further reduce potential out of pocket expenses.
Are you in the market for a new health plan? Not sure how to navigate the details of plans offered through your employer versus direct from insurers, or to combine health insurance plans for the best overall coverage? Talk to the experts at Summerlin Benefits Consulting today for some timely and helpful advice!