Individual and Family

Is Group Health Insurance Better than Individual Health Insurance?

Updated on December 09, 2019


Is group health insurance better than individual health insurance? 

There is a difference when considering individual health insurance vs. group health insurance, and if you want to choose the right one for you, it’s important to understand the value of both. While one is not necessarily “better” than the other, there are definite differences. These can help you decide whether to choose one option over the other, so you can get the health insurance coverage that is right for your needs.

Here’s what you should know about individual health insurance vs group health insurance, so you can choose the best option for your situation and the kind of coverage you’re most likely to use.

Group health insurance usually comes from an employer

In most cases, group health insurance plans are handled by an employer, union, or other organization. These plans are often provided only to full-time workers, and there you might not be eligible for coverage until you’ve worked a certain length of time. That isn’t always the case, though, and your employer may do things differently. Some workplaces don’t have waiting periods, and some may also let part-time employees buy into these insurance plans.

Many group health insurance plans offer:

  • Thorough and comprehensive coverage
  • A number of doctors to choose from
  • The chance to add dental and vision coverage, if it’s not included in the basic plan
  • Discounts for family members
  • Choices that individual coverage may lack
  • Pre-existing condition coverage

Because of these options and selections, many people feel group health insurance is the right choice for them. It might not be best for everyone, but if group health insurance is offered to you, there are plenty of good reasons why you may want to buy it instead of finding your own, individual insurance plan.

Choosing group health insurance can save you money

One major reason to consider individual health insurance vs. group health insurance is to discover which one is going to be more affordable. With group health insurance, you’ll generally see that there are cost-saving benefits such as:

  • A larger risk pool for the plan
  • An employer contribution toward your premium (often 50%)
  • Employer-based tax incentives

When there are larger risk pools, the price comes down because more people are in the pool (group). That means there are usually a lot of healthy people who can offset the cost of the medical care for the people who aren’t as healthy. Also, having your employer pay half of your health-care premium can make things a lot more affordable to you.

Your employer might get a tax break for helping insure you and other employees. But that still doesn’t mean that you wouldn’t be better off with individual health insurance in some cases.

Other ways to qualify for this health care option

If you don’t have an employer to provide group health insurance for you (you’re self-employed, for example, or your employer doesn’t offer it), there may still be other ways you can have a choice of individual health insurance vs. group health insurance. These ways can include:

  • Being part of a group or organization
  • Being an employer yourself, with at least one employee
  • Searching for state-specific options that might apply to your situation

You might still be able to get group insurance. Some people who are part of a group, such as a freelancer’s union or an actor’s guild, may have more choices for group health insurance even though they don’t have an employer offering it to them. It’s worth looking into, in case there are options you’re not aware of that could really benefit you.

Minimum essential coverage may be a requirement

If you’ve thoroughly checked out the individual health insurance vs group health insurance information and determined that you need to get individual coverage, that can also work well. Depending on your income and other information, you may qualify for tax subsidies and other perks that can help you get affordable insurance on your own.

If you can’t get group insurance, check your state department of insurance to see what your options are.
You might want to consider short-term health insurance that may protect you if you get sick or have an accident. Enter your zip code on this page to start comparing plans.

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