The Guide

Family Health Insurance

Comparing Costs Under A Group Health Plan

If you are fortunate enough to have health insurance benefits provided to you through your employer, the comparison process is greatly simplified. Your employer has already done the comparison shopping for you and selected the insurance company or health insurance plan options that they feel best meet the needs of their staff. In some cases, your company may have a choice of plan options available to you through the same insurance carrier. In rarer cases, the employer may even have options available to their employees from more than one medical insurance company. Regardless of the options that are available to you, your choices will be considerably more limited than if you were shopping for private family health insurance.

Decide Who To Add Initially

You and all family members that you wish to add to your group health insurance policy will be eligible for enrollment on the same date. Your enrollment date will depend on the agreement that your employer has with the medical insurance carrier and is usually the first day of the month following your new hire waiting period. Most companies require that a new employee work for the company for a specific period of time before they can join the group's health plan. This can range from 0 days to 6 months, but is most commonly set at 90 days. Prior to your enrollment period you will be presented with the options available to you. You are not obligated to enroll yourself or any family member in the group coverage and have the right to refuse coverage altogether. You may also choose which, if any, of your family members that you want to include on the group policy as your dependents.

It is important to understand that if you decline to add any family member to your group policy when it is initially made available to you, there will be a waiting period before you can add them in the future. The length of this waiting period depends on your employer's "open enrollment" date, which is typically the anniversary month of when the group policy was first established. If your initial enrollment period is February and the group's open enrollment date is August, you will need to wait 6 months before you can add a family member to your group coverage.

Know Your Options

Once your medical insurance plan options are presented to you, it is time to choose the best option for you and your family. Under a group health plan, all family members must be insured under the same plan choice that is selected by the employee. You may not split family members on to various plans if more than one plan option is available to you. In choosing the right plan option you will need to compare your share of the cost for each plan option and compare that to the benefits offered under that plan. Your share of cost will depend on the percentage of the premium that is being paid by your employer for both the employee premium and the dependent premium. The percentage paid by the employer usually differs for the employee and any family members that are to be added to the policy as dependents. For example, an employer may agree to pay 100% of the employee's premium, but only 50% of the additional cost of adding family members.

In order to make the best decision for adding family members to your group medical insurance plan, make sure that you receive a full premium break-down for all possible combinations for your family. This will assist you in determining if it is beneficial to insure your family under separate policies, as explained in the next section; Splitting Family Members to More Than One Policy.

Compare Plans

If you have multiple plan options to choose from, your share of cost my be considerably higher on the more comprehensive plans, or your employer may only offer to pay a certain percentage for a lower cost plan, which means you will be responsible for 100% of the difference if you choose a plan that is more expensive than the standard plan that is being offered by the employer. For example, let's assume that you want to add your entire family to the group health plan and your employer is offering you three different plan choices. Your employer pays 100% of the employee premium and 50% of the dependent premium.

• Plan A - Employee Premium $100, Family Premium - $300
• Plan B - Employee Premium $200, Family Premium - $600
• Plan C - Employee Premium $300, Family Premium - $900

Your employer has further explained that they are offering Plan A as the standard policy option. You may upgrade your coverage, but you will be fully responsible for the additional cost. Your share of cost would break down like this:

• Plan A - $200 Paid By Employer / $100 Paid By Employee
  This is calculated by taking 50% of the difference between the employee premium and the family premium. Your employer pays 100% of the $100 employee premium and only 50% of the additional $200 that would be required to add your family to the policy.
• Plan B - $200 Paid By Employer / $400 Paid By Employee
  Since Plan A is the standard plan being offered, the employer contribution will not vary if you choose to upgrade your family to a more expensive health plan. You will pay the $600 premium, less the $200 employer contribution.
• Plan C - $200 Paid By Employer / $700 Paid By Employee
  Since Plan A is the standard plan being offered, the employer contribution will not vary if you choose to upgrade your family to a more expensive health plan. You will play the $900 premium, less the $200 employer contribution.

You should not need to manually calculate your share of cost for each plan offered to you, since it should be included with the employee benefits package presented to your prior to your enrollment eligibility date. If it is not clearly defined, ask your employer for a complete breakdown, using the options listed above. Make sure that your employer knows you are not sure which of your family members you want to add to the group's health plan and that your decision depends on the cost variances for the various combinations available to you. You will want to have this information available in order to determine if it is more beneficial to insure one, or all, of your family members under an individual health insurance plan, instead of including them on your group 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.

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