Editor's Note: This article was updated with the latest information reflecting the 2014 data This post was originally published 11/04/2013.
individual health insurance is more affordable than group health insurance. And from 2014, individual health plans must cover all individuals regardless of health and new grants are available to eligible employees. With these advantages, why not a small business structure their health benefits with individual health insurance? It extends health benefits dollars further. Here is a look at how the two types of health insurance works, and why individual health insurance is more affordable than group health insurance.
Insurance Individual Health vs Medicare Group
individual health insurance is a policy type health that a person buys for himself and / or his family. individual health insurance policies are often purchased with the advice of an insurance agent to help navigate choice of plan and premium costs. From 2014, all individual health plans must cover employees regardless of health. For example, to a plan identical to 40 years employed in good non-smoking health will pay the same as a non-smoking employee of 40 years with a medical condition. With individual health insurance, the risk is spread over a large group of people - hundreds of thousands, even millions, according to the plan and the carrier.
group health insurance coverage is a type of health policy that is purchased by an employer and is available to eligible employees of the corporation and eligible dependents of employees. At present, the majority of non-elderly Americans (56%) have a group health insurance coverage through their employer or the employer of a family member. With the collective insurance, the employer chooses the plane (or planes) to offer employees. These days, the premium cost is usually shared between the employer and the employee, and there is a minimum percentage rate, the employer must contribute to the premiums. The premium paid by employers to their group policies is usually increased annually based on healthcare costs of the group of employees in the previous year. With group insurance, the risk is spread on society -. The number of employees that you are covering
Individual Health Insurance vs. Group Health Insurance - Cost
This is a view that the national average annual premium costs in 2014 were for group health insurance plans compared to individual health insurance.
| Single | family | |
| individual health insurance plan | [4152 $ / year | $ 8004 / year |
| group health insurance plan | $ 6025 / year | 16834 $ / year |
data Source :. Employer health insurance Facts
When considering the health reform that took effect in 2014, there are two things to remember:
-
from 2014 individual plans are required to cover the ten benefits of essential health (more than many indoor shots pre-2014), and are required to cover all individuals, regardless of health benefits (while pre-2014 insurers could not accept the healthy individuals and / or pay more for unhealthy individuals). These two new changes will cost individual premiums increase over current averages. In most states, however, individual rates are even cheaper than the coverage of health insurance in small groups. Look at the exchange rate of health insurance here.
-
Second, if employees meet the income requirements (earning less than ~ $ 46 / year individually or under $ ~ 94k as a family of four), so they will be eligible for subsidies for health insurance premiums to reduce the cost of their premium more. To be eligible, employees may not have access to a group health insurance plan. If companies offers a defined contribution health plan pure (aka a health insurance allowance), the company may reimburse employees for the unsubsidized part of their health insurance premium.
A common question is whether employees will pay more or less than their current coverage of individual health insurance in 2015 if the cost of employees will rise or fall depends few factors:
-
Location (rates vary by state and county)
-
they can keep their current plan individual health
-
the type of coverage of employees previously (was it full or bare-bones ?)
-
health status (they were in a high-risk pool?)
-
the employee income (will they be eligible for subsidies or Medicaid expansion?)
Why the individual health insurance is more affordable the group health insurance
for the majority of small groups, individual health insurance is more affordable than group health insurance because of the size of the risk pool. As mentioned above, individual health insurance spreads risk over a much larger group. Using individual health insurance as the foundation benefits to the health of employees is also less risky financially for small businesses. With a group health insurance plan if an employee has a baby, surgery, or is diagnosed with a chronic illness, you are likely to see a sharp increase in the contribution rate at the time of annual renewal. Using an approach to pure defined contribution (where employees purchase individual health insurance), the company has cost predictability.
small companies with defined contribution Paired with the individual health insurance
Because of the affordability of individual health insurance, compared to the group health insurance, most small businesses use a pure defined contribution approach paired with individual health insurance to provide health benefits for employees. With this type of strategy, the company offers its employees a health insurance allowance that employees can devote to buying individual health insurance. With health reform, all employees are guaranteed coverage and access to health insurance subsidies. Employees purchase the plan that best fits their family's health needs. Employers have the complete cost predictability and no amount of minimum or maximum contributions. With the new benefits and affordability of individual health insurance, why health insurance small group company offer?
0 Komentar