Group Health Insurance vs. Individual Health Insurance Plans

Group Health Insurance Policies: You will need to get group health coverage through your job or the job of a family member. Or, if you own your own small business with at least 2 employees, you may qualify to set up a group health plan for your company.

Many employers allow you to join or change health plans once a year during open enrollment. A new hire will typically need to wait for a specified length of time before they are eligible to be covered under the employer's group health plan. The addition of dependents on your group health plan can usually only be done once per year, unless the dependent is a newborn child or a new spouse.

In most cases (depending on the size), group health plans are "guaranteed issue." This means that the insurance company can't deny coverage to persons eligible for coverage on the group health plan, regardless of the current or past health conditions. Because of this fact, group health insurance for small groups can be more costly than individual health insurance.

Individual Health Insurance Policies: If you are self-employed or if your company does not offer group policies, you may need to buy individual health insurance. With so many options to choose from, this can be confusing for most consumers.

Unlike group health plans, an individual applying for individual health insurance must meet health and eligibility requirements to obtain coverage with a health insurance company. The regulations that monitor what an insurance company can and can't deny is state controlled, so this could vary from state to state. In most cases, certain medical conditions, or history of medical conditions, can prevent you from obtaining individual health insurance coverage. In other cases, the insurance company may approve you for coverage but can exclude from your benefits the treatment for any pre-existing medical condition.

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