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eLearning Series:
Your Most Popular Insurance Questions
Answers For Health and Home
Insurance
( 50 articles
in this series )
Job Based Health
Insurance Coverage
vs. Individual Coverage
Many of us are fortunate enough to be employed
by mid-sized or large companies that offer comprehensive benefits
packages. These packages almost always contain job based health
insurance coverage in addition to life insurance, long- and
short-term disability, and flexible spending accounts. Unfortunately,
rising health insurance premiums are causing more and more
companies to cut this important benefit, or they may require
employees to dig deep into their pockets to share the mounting
costs. Nonetheless, it has long been held that individual coverage
is not the best route to go when job based coverage is available,
but is this true?
Job based coverage may be just what the doctor ordered, unless
it is too costly. Employee spending for health insurance
coverage, deductibles, and co-pays has risen sharply, and there
are times
when individual coverage will actually cut the cost of insurance
for an employee. For example, a single insurance customer in
good health and without dependants to cover will be able to
purchase less comprehensive coverage than a married consumer
with children in the house. Granted, many a job based plan
offers a scaled back version of their plan, but realistically,
these options still may cost more money since the financial
insurance risk is spread out amongst the plan participants.
An individual plan will only take the applicant’s health care
history and needs into consideration, and it may thus be a
lot more cost-effective.
Individual
coverage may be a wonderful idea, but it depends largely
on where the individual lives! It is important to remember
that individual health insurance coverage is regulated at the
state level, and thus may vary widely from state to state.
If a consumer lives in a favorably regulating state, then such
a policy may be rather advantageous and offer a host of benefits.
If, however, an employee lives in an unfavorably regulated
state, it might be wiser to stay with job based coverage which
is, after all, regulated by the federal government, and thus
endowed with numerous protections for the worker. In addition
to the foregoing, if a worker anticipates a move to another
state, this becomes an important consideration when opting
for benefit portability or perhaps starting over with a new
health insurance company.
Job
based coverage is quite often somewhat limited in which
selections the company will offer its employees. Usually, the
plans that offer the most freedoms are also the most expensive
and thus the most likely to get cut by the company when the
renewal date arrives. If an individual is happy with a more
limited coverage option, then job based coverage will be adequate.
Yet, if someone desires extensive coverage with the freedom
to choose providers, and services offered, a PPO might be a
good choice. If this is not available through the employer,
then an individual plan will be most likely the best route
to choose. The important point to remember, however, is that
PPO coverage is expensive, and thus a worker who has access
to such a benefit from an employer will almost always to financially
better by signing on with the job based plan, rather than seeking
to purchase such a policy on an individual basis.
Workers with pre-existing health conditions will quite often
enjoy the ability to sign up with an employer based plan rather
than having to go through the waiting periods that individual
plans will dictate -- if the worker can qualify as a new enrollee.
Additionally, insurance premiums of job based plans
will not skyrocket because of any pre-existing condition, while
an individual
plan will take into account these conditions when selling a
policy. For this reason, if you or any dependants you wish
to cover under your policy have pre-existing conditions, and
you have the choice to sign on with job based coverage, it
may very well be a fiscally sound move. It is obvious that
there is no “one size fits all” template when it comes to individual
insurance needs, and consumers will do well to not only shop
around different plans in addition to their job based benefits,
but also do some soul-searching prior to signing on for any
coverage, so as to truly ascertain what the needs are and who
may best fill them.
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SolveYourProblem.com : 2005
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