Family Health Insurance

Disadvantages of a Group Health Plan for Your Family

Employer Paid

This is considered a positive benefit of group health insurance if you are the employee, but not so for the employer. If you are the business owner, the cost to you will be greater than purchasing separate individual insurance for your family, but you will be providing a valuable benefit to your employees that may make them more loyal to working for your company. As the employer, you will be able to determine the percentage of the employee premium that you are willing to pay, as long as it meets the guidelines of your state and insurance carrier minimum requirements. If you are considering setting up a group health plan for the primary purpose of providing health insurance to your family, keep in mind that you will need to offer this to all of your eligible employees and you will be responsible for paying a portion of the premium for those employees that choose to accept coverage.

Loss Of Benefits if Terminated

One of the more common concerns we hear from consumers is what happens if they have become ill and are no longer able to work. An unexpected lay-off or termination from your job may also result in the loss of your health care benefits. When this happens, you may be given the option to continue coverage for yourself and your family members under federal COBRA laws. This allows you and your family members to remain insured under the group plan for a specified period of time, but you will be fully responsible for paying the premium amount that was previously being paid by your employer. Federal COBRA only applies to companies with 20 or more employees. If you work for a smaller company, your state may have COBRA laws that also apply. You need to know and understand this prior to accepting group insurance through a smaller employer.

If you do accept coverage under COBRA, it is only valid for a specific period of time, which is 18 months under federal COBRA regulations. Once your COBRA option expires, you and your family members may be left without health insurance. Finding replacement coverage for any family member with a pre-existing medical condition could be difficult and costly.

Limited Choice

When reviewing the family health insurance options offered by your employer, you may find that your choices are somewhat limited. There may be only one plan choice available to all employees through the same insurance company. You will have no choice but to accept what is being offered to you. Larger companies may provide more choices, but they will still be limited in comparison to what you will find when looking for private family health insurance. One of the biggest concerns faced with limited plan options is the availability of participating family physicians. If your family has a regular doctor that you wish to continue using, make sure in advance that he is part of the network of providers available through the health insurance company with whom your employer has group insurance. If you are able to enroll in a PPO plan, you may still be able to see this doctor, but your share-of-cost and co-payments will be considerably higher if he is not part of the insurance company's network.

Employer Makes Decisions

When you enroll your family in your employer's group health plan, you are at the mercy of any future decisions made by your employer. An employer may elect to no longer offer health insurance as an employee benefit. This occurs ever more frequently due to the increasing costs of health care and health insurance. Rates can increase to a level that the employer is simply no longer able to afford. Your employer may also change the insurance company and plan options at any time in an attempt to lower costs. You will have no choice but to accept coverage with this new insurance company, even if that insurance company does not provide the level of coverage you need for your family or is not accepted by your family physician. You can always elect to unenroll from the group plan, but this will affect your COBRA eligibility and make it difficult to find insurance for any family member that has a pre-existing medical condition.

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.