Group health insurance is the most common type of health insurance purchased. Those who are employed with a company that offers health coverage are insured at the group rate, meaning their premiums will generally be lower.
Group health insurance plans offer coverage for injuries and illnesses that are the most common. Employers have the option to pay part of the cost out of their pocket with the remainder of the premium being deducted from the employee’s paycheck, which is the most common set-up. The employer also has the option to pay all or none of the premium.
Individual heath insurance coverage is purchased by the individual being covered and is more expensive than group coverage. The advantage to individual coverage is that policies can be customized to include options based on the needs of the applicant. Individual coverage is purchased by the self-employed and by those whose employer provides no coverage.
Exploring Options
When purchasing coverage, group or individual, it’s imperative to explore the various options available. With group coverage, options are limited based on the provider chosen by the company. Group coverage options may include a choice between two or three levels of coverage. When looking at coverage options, determine whether or not the lower out-of-pocket expense or deductible is worth the increased price per pay period. An added discount is available to those who insure their whole family under the group plan.
Private or third party insurance has more options than group coverage, though the price is significantly higher. Riders can be added to private coverage to pay out for events that aren’t typically covered in a basic policy. Riders may include catastrophic event coverage or an increased death benefit.
Other options for coverage include health savings accounts (HSAs) and flexible spending accounts (FSAs). These plans are not actually insurance products, but savings accounts. Employees have a certain amount of money set aside each year, which goes into a special account. Money placed in this account can be used to cover deductibles, co-payments, prescriptions or any other medical expense. These plans are often used in conjunction with group health insurance plans and are a good investment for individuals who do not make frequent trips to the hospital or doctor’s office. When deciding how much money to put into a FSA or HSA account look at past medical bills and consider upcoming events such as a pregnancy that may cause more visits in the near future.
Tips to Get Coverage
Coverage is not granted to all who apply. Certain conditions, past or present, may be seen as too high of a risk to insure an individual. Many policies will disallow treatment of a pre-existing condition for a certain time period and may later allow the treatment while others never allow for coverage of that particular condition or ailment. In the event that a pre-existing condition is present, an HSA or FSA can alleviate some of the upfront out-of-pocket coverage.
Honesty is important when dealing with health insurance. A provider should know as much as they can about your current health situation, diet, and past illnesses. Leaving out this information from the application process can lead to a hospital stay or illness not being covered in the future. There are several resources that insurance companies use to determine the insurability of an applicant. Don’t assume that in leaving out something pertinent you can get coverage.
Taking care of yourself will not only help you get coverage it will keep your premium low. Smokers and those who are overweight pay higher premiums than others because their chances of early death and illness are higher than a non-tobacco user. The good news is that if you are rated as a tobacco user and stop smoking you will most likely be able to pay a lower premium in the future for coverage.