Should You Cancel Your Current Family Policy?

You may already have family health insurance at the time you are offered medical insurance by a new employer. Perhaps you have the family insured under an individual policy or you are covered under COBRA from the group plan of a previous employer. If this is your situation, you will need to decide if it is best to keep your family members on their existing health insurance or move them to your new group plan as dependents. In making this decision, there are several factors that you will want to consider.

Compare the Costs - Family Health Insurance Quotes

First you will want to compare the cost differences between keeping your family members on their current coverage versus moving them to your new group plan. A big factor in this decision is the percentage that your employer has agreed to contribute towards your family's premiums. You will want to compare this with the adjusted premium from your current coverage. Remember that the premium for your current coverage will decrease if you are removed from the policy, leaving only your dependent family members. Most insurance companies will allow this to occur without having to re-apply for coverage or become subject to reset waiting periods. If you are the primary applicant on your existing policy, the insurance company should remove you and make your spouse the new primary insured member. Review the example below for a better understanding.

Example

Joe, his wife Sue and their three children are all insured under an individual family medical insurance policy. They are currently paying a premium of $500 per month for the entire family. If Joe is removed from the policy, the insurance company will adjust the rate to the "Subscriber and Child" rate and make Sue the new primary on the policy. In doing so, the new premium will drop to $350 per month. Joe is offered health insurance through his employer. The company will be paying 100% of Joe's premium, but they will only contribute 25% toward the dependent coverage for any family member. Joe's new group health plan is similar in benefits to their existing coverage. For employee only, the premium on the new group plan is $200 per month. For "employee and family" the total premium is $700 per month. The employer pays 100% of Joe's premium ($200) and 25% ($100) of the additional cost for adding the family members, which would leave Joe a balance of $400 (the $500 difference - the $100 employer contribution). Joe would save $50 per month by keeping his family on their existing health insurance.

For other factors to consider in "splitting" coverage, review Section 5: Splitting Family Members to More Than One Policy

Note: The information and advice provided in this Guide to Family Health Insurance may not provide the best advice for every situation. The best options for your family's medical insurance may be unique and require the advice of a local advisor. We highly recommend that you consult with more than one insurance broker in your state to gather and compare alternative opinions. The owners of HealthInsuranceFinders.com are not responsible for any decisions you make in regards to your family's health insurance through the information provided in this guide.