In the past, most people had health insurance from their employer. His company did all the research, chose the insurance company, and chose the plan options for the employees. this is also called group coverage or group insurance. but a lot has changed in recent years.
- Tough economic times have forced many employers to cut costs.
- rising health care costs have made it harder for businesses to pay for health insurance.
- New and more expensive technologies, treatments, and drugs have emerged, driving up costs.
- You can choose the insurance company, plan and options that fit your needs.
- You can renew or change health insurance plans, options, and health insurance carriers during the annual open enrollment period.
- Your plan isn’t tied to your job, so you can change jobs without losing your coverage.
- You can choose a plan that includes the doctors and hospitals you trust.
- You may be eligible for a subsidy from the federal government to help pay for your insurance.
- Your employer often splits the cost of premiums with you.
- Your employer does all the work when choosing plan options.
- Your employer’s premium contributions are not subject to federal income tax, and your contributions can be made on a pre-tax basis, reducing your taxable income.
Because of these and other factors, a growing trend is for people to partially or fully pay for their own health insurance. Even if employer-based group health insurance is still an option for you, you may be wondering whether you should buy health insurance on your own, by buying what’s called individual health insurance or personal health insurance. /p>
To help you understand your options, we’ll take a look at individual and employer-sponsored plans, explaining and comparing them.
individual health insurance
Individual insurance is a health policy that you can buy just for yourself or your family. individual policies are also called personal health plans. If you want, you can work with an insurance agent to help you review different plans and costs.
You may be eligible for a government subsidy to purchase an individual plan that complies with the Affordable Care Act. this can help you save money on your health insurance. You may be eligible for a subsidy if your employer does not offer affordable health coverage and your household income is no more than 400% of the federal poverty level. You can see if you can qualify and review health plans eligible for mutual subsidies here.
advantages of an individual plan:
medical mutual offers many affordable individual health plans that can meet your needs.
employer-sponsored health insurance
Employer-sponsored health insurance is a health policy selected and purchased by your employer and offered to eligible employees and their dependents. these are also called group plans. your employer will normally share the cost of your premium with you.
Advantages of an employer plan:
comparing individual and group health insurance: should you buy health insurance on your own?
Deciding whether to enroll in a health insurance plan through your employer or to purchase an individual major health plan on your own can be confusing. there may be significant differences in flexibility, benefit options and costs.
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The table below summarizes some similarities and differences that can help you figure out what best suits your needs.
comparison of employer group plans and individual health plans
Which costs less, personal health insurance or coverage through work?
The costs of an individual plan versus an employer-sponsored group plan can vary based on a number of factors. These include your income, where you live, and whether your employer offers a group health insurance plan. Here are some average annual premium costs for individual and employer plans:
average costs for 2016 plans
While averages can give you an idea of typical costs, the real story is often more complex. in many states, individual plans are less expensive. That’s because individual health insurance spreads the risk across a large group, possibly millions of people, depending on the plan and the insurance company. Additionally, as noted above, you may be eligible for a subsidy from the federal government to help pay for your individual insurance policy.
With employer-sponsored health insurance, the cost of the premium is usually split between you and your employer, helping you save money. On average, employers paid 82% of the premium for individual coverage in 2016.2
Ultimately, choosing the best path for you will depend on your unique circumstances and what your employer can offer you.