Group vs. Individual Health Insurance

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Health insurance in the United States is unlike any other type of insurance. Have you ever been hired for a job that offered car insurance as a benefit? Homeowners insurance? General liability? Probably not. The one exception is health insurance, which is commonly provided by employers as a way to attract and retain employees.

This is done through what’s known as a group insurance plan.

Group insurance plans originated in wartime America during the 1940s and have since evolved to meet the changing needs of employees, employers, and insurance companies alike. These plans offer significant advantages:

• For employees: Lower premiums, reduced deductibles, and coverage options that may not be available with an individual plan.
• For employers: The ability to negotiate better rates and benefits for their staff.
• For insurance companies: A broader pool of insured individuals, which helps spread financial risk.

Since group plans cover a diverse range of employees—varying in age, gender, and health status—the insurance company can balance its risk. Younger, healthier employees might rarely use their benefits, while older employees or those with chronic conditions may require more frequent care. This risk distribution helps insurers maintain stable rates and benefits.

While employer-sponsored group plans are generally favorable, not all are created equal. Some businesses offer excellent coverage at little to no cost to employees, while others provide limited benefits due to budget constraints.

In fact, many families opt to replace their employer-provided coverage with an individual policy because they find better benefits, lower costs, or more flexibility elsewhere.

With group insurance, employees receive a certificate of coverage, but they are subject to any policy changes affecting the entire group. These could include:

✔️ Rate increases
✔️ Network modifications
✔️ Changes in covered services (e.g., cosmetic procedures being excluded)

Currently, about 59% of Americans receive health insurance through an employer-sponsored group plan. Another 20% get coverage through government programs like:

• Medicaid
• Medicare
• Tri-Care (for government and military employees)

That leaves approximately 21% of Americans purchasing their own individual health insurance.

If you’re not part of a group policy, you’ll need an individual health insurance plan. Despite the name, "individual" does not mean it only covers one person—you can purchase a plan for yourself or your entire family.

There are two main ways to get individual insurance:

1️⃣ Directly from an insurance company (often with the help of a licensed agent)
2️⃣ Through the Affordable Care Act (ACA) marketplace

Both options offer a variety of coverage levels and additional benefits such as dental, vision, life insurance, and disability coverage.

You may also hear the term "private insurance", which simply refers to policies purchased directly from an insurer rather than through an employer or government program.

Surprisingly, yes. Even though ACA plans are regulated by the government and subsidized for eligible individuals, they are still purchased directly from private insurance companies.

• You receive a policy number just like any other private plan.
• You contact the insurance company’s customer support for assistance.
• The government controls pricing and oversight, but the plan itself is still issued by an insurer.

  Feature Group Plans (Employer-Sponsored) Individual Plans     Who Provides It? Your employer Purchased directly from an insurer   Enrollment Limited to employer’s open enrollment period Can enroll at any time (except ACA plans, which have an open enrollment period)   Coverage Customization Limited to employer’s selected options More flexibility in choosing coverage and benefits   Premium Costs Often lower due to employer contributions Can vary, but subsidies may help lower costs   Who Pays? Employer + Employee Paid entirely by the individual (unless ACA subsidies apply)    

✔️ If your employer offers a solid group plan at an affordable rate, it’s often the best option.
✔️ If your employer’s plan is too expensive or lacks key benefits, an individual plan might be a better fit.
✔️ If you don’t have employer-sponsored coverage, exploring ACA or private individual plans is essential.

Health insurance can be complex, but you don’t have to navigate it alone. Whether you’re considering switching plans or enrolling for the first time, our team is here to help.

📞 Call us at 615-852-8464
📩 Email us at brian@exclusivehealthcoverage.com
💻 Schedule a consultation online

Let’s find a health insurance solution that works for you and your family.