What are the differences between group health insurance and individual health insurance?

You’ll have many decisions as you shop for health insurance. One of them is deciding between a group health insurance policy and an individual health insurance policy. Are they really that different? What are the major differences between the two types of policies?

Group health plans are generally offered by companies or organizations, allowing them to provide health coverage to their employees at a reduced price. The company may even share the cost with their employees. When the group health plan is purchased through an organization, paying for the policy is typically solely the individual’s responsibility, but because it is purchased through a group, it is usually available at a reduced price.

Personal health insurance policies are purchased by an individual. The cost is wholly the individual’s responsibility, but the policy owner is also able to personalize the benefits and premium unlike with a group policy. Qualifying for a personal health plan can be more complicated than qualifying for a group health plan.

Other differences between group and individual health insurance plans may include the following:

• Premiums. If you choose individual insurance, your premiums will likely be based solely on factors such as your medical history and lifestyle choices. Group insurance is based on the plan’s assessment of the entire group. Your premiums may be lower through individual or group plans, depending on your own or the group's risk factors.
• Payments. Group plan premiums are frequently paid through payroll deduction, while the policy holder is responsible for ensuring the individual plan is properly paid, either through electronic funds transfer or check.
• Medical exams. Group insurance tends to offer guaranteed coverage without requiring medical examinations. Individual plans may require a medical exam before your policy will be approved.
• Plan administration. Group plans tend to have a plan administrator who will monitor benefits claims and payments of the plan’s various members.
• Family health insurance. You will need to present documentation to add your wife, children, domestic partner, or other family members onto your group health policy, and your premium will likely be increased. You will need the same information to add your family members to your individual policy, and you may need to undergo a reassessment of your application.

 

Source: Health Insurance Los Angeles

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