How is individual health insurance different from group coverage?

Individual health insurance and group coverage have several distinct differences. If you’re making the switch from one type of health insurance to the other, it’s important to understand what changes to expect.

Facts About Group Coverage

Group coverage is typically available through your employer. Depending on your employer’s budget, you may pay some of your premiums or your employer may cover them entirely. In almost every circumstance, however, the employer will pay at least a portion of the cost.

With group coverage, a human resource representative or other executive does the health insurance shopping for you. Once this person picks an insurance carrier, you choose a health plan from the options provided. In a large company, you may have several choices. In a smaller company, you may have one or two. If you want a particular type of coverage that’s not an option with your employer, you must shop for it and purchase it completely on your own.

It’s unusual that a person with group coverage will opt out of an employer-sponsored plan for an individual health plan. This is because an employer typically pays for a portion or all of the health care premium.

Facts About Individual Health Insurance

Any eligible individual can apply for individual health insurance. The premium and application approval is based on a process called medical underwriting. During this process, the health insurance application is sent to an underwriter. The underwriter looks at the application and medical records to find out the health status of the applicant. Premium amounts are then calculated from the person’s health status as well as the person’s coverage and deductible choices.

With individual health insurance plans, you’re in charge of shopping for health insurance. You choose the health plan you want from the company you choose. This may mean more coverage options for you and your family.

The Main Difference

The primary distinction between group coverage and individual health insurance is selection. People who receive health insurance through an employer-sponsored plan pick their plan from a short list of options. On the other hand, people familiar with purchasing health insurance on their own are used to choosing a health plan from a wide range of companies and policies.

For those with group coverage, the thought of shopping for a plan from a variety of insurers with multiple policy choices can be overwhelming. However, individual health insurance plans can offer more flexibility. For some, individual health insurance may be the only option. Plus, you can select individual health insurance optional benefits to meet your needs,¹ and most plans are guaranteed renewable once you are accepted.

To better understand these differences, check out the following chart.

Group Coverage	Individual Health Insurance
Available through a person’s employer	Available to any eligible individual who applies
Employer usually pays for a portion of the insurance premium	Applications go through medical underwriting to find out the health status of the person applying
Choose a plan from what a company offers	Pick the plan you want from the insurance company you choose

Which is Better?

Is individual health insurance or group coverage the better option? The truth is, it depends. For many with employer-sponsored health insurance, group coverage is the best fit. For others, the flexibility of individual health insurance is the best option.

If you’re shopping for health insurance, contact us at (901) 300-0091 and speak with a licensed Health Insurance Advisor. Your Advisor will answer your questions and recommend a health plan based on your needs and budget. Your Advisor would also offer you a free plan anaylsis of your existing plan.