For many people, employer-sponsored health insurance is a key benefit of their employment.
In fact, some Americans put off retirement so they can continue their insurance coverage with their employer. But is employer-sponsored coverage really the only option for health insurance?
Employer-sponsored health insurance
Employer-sponsored health insurance is made available through an employer who chooses the insurance provider and the plans that their employees can select.
Typically, employers pay a portion of the plan’s monthly premium (often 50%). This usually makes employer-sponsored health plans less expensive for employees than private plans.
Another benefit of this type of insurance coverage is that if you meet the requirements of your employer (hours worked, etc.), you are automatically eligible for coverage. There is no individual underwriting needed, and even if you have pre-existing health issues, you should be able to get the coverage you need.
One major downside to this type of health insurance is that rates are renegotiated on a yearly basis and can change based on the costs of the entire group over the previous year. This means that even when you do not use your health insurance a lot, if other employees do, your costs can go up.
Private health insurance
Private health insurance is a plan that you purchase on your own, without employer contributions or a group policy. It can cover you as an individual or your immediate family.
Due to the recent legislative focus on health insurance laws, there is a lot that is up in the air in regards to private coverage. While the Affordable Care Act sought to prevent insurance companies from denying coverage or up-charging for it when applicants have pre-existing conditions, it is not clear how long these protections will be in place.
Overall, this type of health insurance is used by those who are not eligible for employer-sponsored health insurance. However, some people who are eligible for employer-sponsored health insurance opt for private policies either to supplement their primary policy or to gain access to specific features or care providers that are not covered by the policy available through their job.
As private health insurance is not contingent on your employment status, it can cover you as you change jobs, move into self-employment or retire.
What is right for you?
Consider any pre-existing conditions, desired flexibility, the care providers you want to have covered and the stability of your job. Could your hours be reduced to the point that you are no longer eligible for employer-sponsored coverage? Are you unable to go to your preferred doctor or clinic?
Contact an insurance broker if it seems like a private policy might be beneficial to your situation.
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