EnrollMe-Logo-780-PNG
Insights PEO professional employer organization small business insurance group insurance

Individual vs. Group Health Insurance: What's the Difference?

Ariel Thorne | August 06, 2021

Once upon a time, most people had employer-sponsored health insurance. But the world seems to change more and more quickly with each passing year, and the COVID-19 pandemic certainly gave that pace of change a good kick.

The end result? People are looking at insurance differently. Some employees are forgoing employer-provided group insurance and purchasing their own plans. And now, thanks to the recent passage of ICHRA, hybrid models that combine the consistency of group-based coverage with the flexibility of individual health insurance are a possibility to consider. 

If you’re looking to make a decision about your own coverage, then it’s best to have an in-depth understanding of your options.

Individual Health Insurance: The Basics

Individual healthcare plans are just as the name implies: instead of receiving employer-sponsored coverage, you shop and choose your own plan. 

Benefits of Individual Plans

Immediate benefits include:

  • Choosing the company and the plan that best suits your needs 
  • Knowing that your plan is not tied to your job, so you can change jobs without losing coverage 
  • Being eligible (in some cases) for federal subsidies that help pay for your plan 

Another potential benefit is that costs for individual insurance plans continue to trend downward. That said, there are a few caveats to that statement. HealthInsurance.org observes:

“The annual rate changes for these plans have been making headlines for the last several years, but the actual rate changes that apply to each enrollee’s premiums differ significantly because there are so many factors involved.”

- healthinsurance.org

Some of those factors include:

  • Premium subsidies,  which can make a huge difference in terms of how much people actually pay for their coverage and how much their after-subsidy premiums change year-over-year

  • The state in which you live

  • The type of plan you purchase

Disadvantages of Individual Plans

Of course, there’s a downside. Individual plans require you to be hands-on. You’re responsible for each monthly premium payment, meaning you have to budget for it. 

Although you can switch jobs without losing coverage, if you face unexpected expenses and can’t meet the monthly premium, you might have trouble with your insurance company even without losing your job. That’s worth thinking about if you’re living paycheck to paycheck. 

 

Plan Type

Individual Health Plan

Group Health Plan

Single Coverage Annual Premium 

$5,472 

$7,470

Family Coverage Annual Premium

$13,824

$21,342


(Sources: ACA Index Report on Unsubsidized Consumers in the 2020 Open Enrollment Period and KFF 2020 Employer Health Benefits Survey)

Group Health Insurance: The Basics

Group health insurance, or employer-sponsored coverage, is provided to employees through their job.

How It Works

The employer allows employees to choose from a few pre-selected insurance plans and often pays all or some of the employee’s monthly premium. Employers may deduct any part of the premium that is the employee’s responsibility from the employee’s paycheck. 

Screen Shot 2021-08-13 at 9.16.14 AM

Advantages of Group Plans

Here are a few advantages of group insurance plans for employers and employees:

  • For employees, insurance is basically on autopilot, with no additional budgeting required or premium payments to make..
  • Any premium contribution made by an employee is not subject to federal taxes.
  • Small businesses may also be able to benefit from tax credits for offering insurance to their employees.
  • Group plans spread risk across of pool of insured individuals, which may result in lower premiums.

Disadvantages of Group Plans

But there are some disadvantages for employers and employees with group health insurance plans too.

  • Employees are limited to choosing among the plans that the employer offers, none of which may be ideal for the individual employee.
  • The average cost of group health insurance continues to rise.
  • When employees leave the organization, they may lose their health coverage.
  • Because the premium amount is the same for all employees, some employees may end up paying more than their health circumstances warrant.
  • Employers are tasked the the labor-intensive work of selecting and administering the health plan, from onboarding to open enrollment to COBRA administration for employees who leave the company.

EnrollMe: A Better Choice for Insurance

If you’re having trouble deciding whether to go with individual insurance or group insurance, there is a better option available. 

EnrollMe takes a different approach to corporate health insurance, offering an easy-to-use digital marketplace solution that gives employees more freedom of choice and employers freedom from the burden of healthcare plan administration. 

Why EnrollMe is Better

Our innovative hybrid model benefits employers and employees alike. 

For employees, EnrollMe offers:

  • Greater choices, freedom, and flexibility to control their own plan selections and health
  • Education resources and tools to help employees make the right choices for them
  • A way to manage their own health journey in one centralized place
  • Plan portability to ensure the plan goes with the employee if after losing or switching jobs

For employers and brokers, EnrollMe:

  • Reduces the administrative burden on HR departments
  • Helps HR staff to play an active role in controlling health insurance costs
  • Provides a clear competitive advantage for recruitment and retention
  • Reduces compliance risks
  • Automates payroll deduction and carrier settlements
  • Simplifies ACA reporting

EnrollMe is purpose-built to fix what’s wrong with healthcare insurance today. Want to see it at work for yourself? Request a demo today!

 

7[89]

 

Subscribe Now

Related Content

What Is PEO? An Employer's Guide

If you’re looking at insurance options for your employees, you might be trying to decide if PEO is right for your business. You may wonder if it’s cost-effective and will satisfy your employees.

Read More

HRIS vs HCM vs HRMS: Understanding the Alphabet Soup of HR Systems

If you have the difficult task of choosing an HR system for your company, you have likely done quite a bit of research regarding one solution or another. During your research, you may have

Read More

Small Business Health Insurance Costs: A Look at the Stats

Everybody knows that health Insurance isn’t cheap. What everyone doesn’t know is the state of various trends within the industry. Are costs rising? Are they falling? Are trends the same for employers

Read More

Level Up Your Benefits

Let us show you all the ways EnrollMe can positively impact your business

Group 1742

EnrollMe

Copyright ©2018-2021 EnrollMe, a SureCompanies product. All rights reserved.