What’s Best For You: Employer Health Insurance Or Individual Plans?

If the company you work for offers health insurance, it may seem like a no-brainer to accept it, but is it in your best interest?

Also known as group coverage, employer health insurance alongside the economy has gone through the wringer, forcing employers to scale back money allocated to benefits.

It doesn’t help that the cost of healthcare is also rising.

Sometimes, group coverage isn’t the best option; so how do you find the best coverage for you and your family?

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Group Health Insurance, Explained

Let’s face it, prospective employees are attracted to jobs that offer health benefits, so it makes sense that 49% of American’s have health coverage through their work. Full-time employees and businesses with over 50 people are eligible for health coverage.

Employer health insurance is sponsored by your employer, who contributes a minimum of 50%, while the remaining balance is paid by the employee — coming off their paycheck. Each employee is responsible for their own coverage.

These are some of the features of group health insurance:

It’s guaranteed coverage
You don’t have to do any research, just pay into it, and you’re covered
You have coverage so long as you’re with the company
Your contribution comes off pre-tax
Typically, group insurance is a cheaper alternative to individual coverage

Individual Health Insurance, Explained

If you’re self-employed or not eligible for group health insurance, there’s always the option of getting individual health coverage; under 10% of Americans find their own health insurance, making it the least common method of health insurance. This is the perfect option for you if you want a say in your health plan coverage. The biggest drawbacks to individual coverage are that most people don’t want to dedicate time to researching what’s available and they don’t want to pay for it exclusively. Some of the benefits to individual health insurance are:

You have the freedom to choose what’s best for you
There are two modes of individual insurance to select from:

ACA (Affordable Care Act) Marketplace: Launched in 2014, the ACA was created to make healthcare more affordable and, therefore, more readily available to everyone. The federal government runs it, and you can apply for it during Open Enrollment (usually November 1 — December 15). This coverage gives members:
- Access to 10 essential health benefits (e.g., prescriptions)
- It’s inclusive to those with existing medical conditions
- Has no coverage cap
- Won’t overcharge those with health conditions

Direct From Insurance Providers: Private health insurance comes from your insurance provider and allows you to select the insurer and policy options right for you, like the hospital or doctor of your choice.

The Differences Between Employer And Individual Coverage

One of the best ways to determine the best healthcare coverage for you is to compare employer vs. individual healthcare insurance features side-by-side to determine which insurance works best for you.

	Term	Permanent
Cost	The employee pays pre-tax: - Individual: $1,200+ - Family: $5,500+ The employer foots the remaining 50% or more	Varies depending on income, location and family size: - Average: $7,000+ - Tax-Credit: $1,000+ You’re on the hook for tax
Purchaser	You’re insured so long as you’re at your job	You have the choice of insurer or ACA coverage
Coverage Options	- Your plan is chosen by your employer; you can opt for individual or family care - You’re stuck with the coverage provided	- Your choice of coverage options and preferred locations (doctor, hospital) - You also have the flexibility to add supplemental coverage
Eligibility	No questions asked acceptance, even if you have existing health concerns	Subject to medical exams, so if you have medical concerns, this could reduce your coverage options

Do I Have To Accept Group Coverage?

You have the right to decline group health insurance coverage, but before you do, make sure you’re turning it down for the right reasons. Some of the most common reasons for opting out of employer health insurance are:

It’s too expensive
You’re eligible for ACA Marketplace coverage
You decide to use your spouse’s plan
You’re eligible for military-sponsored health insurance

If you plan on going with alternative coverage, ensure that you’re covered under, e.g., Marketplace insurance, before you officially opt-out.

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Selecting The Best Healthcare Insurance For You

Ultimately the most important thing is that you have health insurance because life happens; if you get sick or injured, protect yourself from rising healthcare costs by having some form of medical insurance.

Whether this means going with employer coverage or striking out on your own and getting individual insurance, figure out what you need from your health insurance and pick the best option for you!

Claire Smith Claire is a creative entrepreneur with a variety of marketing and content creation skills, including blog and web copy writing, research, and strategy. She has a Masters in Cultural Studies from Queen's University and is known for thinking laterally about marketing, based on her deep knowledge of people and behavior.