Group Insurance vs. Individual Insurance
Most people have two choices when shopping for health insurance. 1. “On-Exchange” Nevada Health Link plans, and 2. “Off-Exchange” private health insurance plans. You might be a small business owner with a third option – 3. Group Health Insurance or small business health insurance. The differences between group insurance vs. individual insurance continue to change with the new healthcare law. I can help clients with all 3 (on the exchange, off-exchange and group health insurance). Here is a quick summary of some of the larger differences between Group and Individual Health Insurance.
This is a great option for individuals who have steady, predictable incomes between 138% and 400% Federal Poverty Level. You can find the full chart here. If your family income falls between this range, you may qualify for money from the federal government to buy health insurance. This Advanced Premium Tax Credit reduces your monthly cost. The exact amount of your tax credit is based on a sliding scale. People who are close to 138% of the poverty level might get 90% of their plan paid for by the government. Alternatively those around 400% of the poverty level might only receive a fraction paid for. There are several other factors which go in to applying for the tax credit (married filing single = ineligible, offered other affordable coverage = ineligible…) but this is the general idea. All plans on Healthcare.gov in 2014 are HMO’s (expected to change in 2015) and the billing can be much more difficult than sending payments directly to insurance companies.
This is the best option for those individuals who are either ineligible for a tax credit or don’t want to deal with Nevada Health Link. Off-Exchange plans can be either HMO’s or PPO’s, and they usually include a larger selection of doctors. Assurant, Hometown, Humana, and Sierra Health & Life are all offering plans direct to consumers but you cannot buy them through Nevada Health Link. Billing is usually easier. After the plan is setup you’re dealing directly with the insurance company, meaning information doesn’t get lost in translation. The biggest disadvantage of off-exchange products is you won’t get money from the government to buy these plans. You will be able to avoid the fine for not buying the insurance and these plans are still subject to all of the same requirements as any Group and Individual Health Insurance plan (preventative care covered 100%, no health underwriting, guaranteed issue…)
3. Group Health Insurance:
The advantage to having a Group Insurance vs. Individual Insurance plan is something completely different than what you’re finding with individual health insurance. Group Health Insurance attracts, motivates and retains employees. As of today, you cannot use pre-tax money to pay for individual health insurance plans. Group Health Insurance plans CAN be paid for pre-tax. Additionally, group plans are usually cheaper and include better benefits than individual plans in the form of larger network lists, lower copays, more wellness benefits and so on. The disadvantage to group health insurance – it’s more difficult to start up a new plan.
I hope this helped clarify the differences between Group Insurance vs. Individual Insurance for small business owners. If you have any questions feel free to contact any of us at Health Benefits Associates, Inc.