Affordable Care Act
In this lesson, you will learn how individual and group insurances differ. You will also learn the pros and cons of each. Afterwards, you can decide which one is right for you.
Insurance for Individuals
The purpose of this lesson is to help you better understand and choose between the two types of health insurance you can get when you are working. One category of insurance is individual health insurance, available for purchase by individuals and their families.
As of 2014, all individuals are guaranteed acceptance into such plans, regardless of any pre-existing health conditions. Before this law was implemented, those with health issues or less-than-perfect health could be denied coverage. However, since the Patient Protection and Affordable Care Act was passed by President Barack Obama, it is now mandatory for everyone to have health insurance and coverage is guaranteed for all.
Insurance for Groups
A second type of health insurance is group health insurance. For most employers, eligible employees are those who work full time. This kind of insurance is purchased by your employer and provided to eligible employees. Employees have a limited range of health insurance options to choose from.
Most of the time, your employer will also pay a portion of the monthly premiums as well.
The Pros and Cons of Each
Pros of Individual Health Insurance
- Health insurance company choice
- Plans available to choose from
- When the plan is active, you are always covered
- Doctors’ choices
- Plans can be changed at any time
- Anyone can purchase coverage
Pros of Group Health Insurance
- A portion of the monthly premiums is paid by the employer
- There is a tax deduction for your premium portion
- Your paycheck is automatically deducted from your premiums
- Dependents may also be covered if they are eligible
- You are chosen by your employer for your health insurance plan
- Manages your health insurance paperwork
It is clear from reading through these benefits that individual health insurance gives you more control and more choices when it comes to your health insurance coverage. Group health insurance, on the other hand, requires you to pay a tax-deductible premium and your employer pays a portion of the entire premium as well.
Cons of Individual Health Insurance
- All premiums are paid by you
- Tax deductions may not be available for premiums
Cons of Group Health Insurance
- When you stop working, your coverage ends
- Only available through your employer’s health insurance plan
- Employer-sponsored health plans only
When it comes to individual health insurance, the biggest con is that you have to pay all the premiums, whereas group health insurance has the disadvantage that your choices are limited and you will lose coverage if you stop working for your employer.
Summary of the Lesson
Individual health insurance is health insurance you purchase as an individual and for your family. Group health insurance is health insurance provided by your employer.
It’s great to be able to choose a health insurance company and plan to suit your needs. But, individual health insurance isn’t all that great because you’re responsible for paying all of the premiums.
As a result of group health insurance, your employer pays a portion of your premiums and the amount you pay is automatically deducted from your paycheck. You lose your coverage if you stop working for your employer, so group health insurance isn’t that great.