F.A.Q. Individual & Family

How do Group and Individual Health Insurance plans differ?

Group health plans is coverage for group of employees of a company, non-profit or governmental entity. Group coverage is guarantee issue, which means a policy will be issued regardless of medical conditions of the employees. However, if there was no prior coverage, there may be a waiting period of up to 12 months for preexisting conditions. A group’s health plan’s rate will be determined by the age and health conditions of the group; location; industry. Group plans generally include maternity coverage. The plans are frequently more expensive than individual plans, but the coverage tends to be more comprehensive. Finally, group health plans have significant tax advantages to both the employer and employees. For the employer the premium is tax deductible. In addition for smaller groups there may be an additional tax credit, subject to certain restrictions. For the employees the group health coverage is not taxable.

An individual health plan includes and individual and can include a spouse and children. However, they differ from group plans in that companies are able to deny coverage based on an individual's medical conditions at time of application. Thus, they are limited to individuals in by and large in good health. If one has preexisting conditions most individual plans will either exclude (known as a rider) the condition, increase the premium or both. In certain circumstances a company may decline to coverage. In addition, depending on the carrier. maternity coverage is either optional (generally rather expensive) or is not offered. Since the passage of healthcare reform companies have tended to increase their underwriting standards. Finally, except for self employed individuals health insurance premiums are generally not tax deductible.

How do individual and family insurance plans differ from group plans through my employer?

Individual and family plans are individually underwritten and thus the insurance company can accept the applicant, reject the applicant; exclude or rider certain medical condition and rate up the premium (charge a higher rate due to medical conditions).

What is a Limited Benefit Plan?

Limited Benefit Plans are an option for individuals and families that have (i) preexisting medical conditions and would not be able to qualify for or (ii) may not be able to afford traditional major medical plans. Limited benefit plans are generally have no or limited underwriting or are guaranteed issue They generally will not cover preexisting conditions for 12 months, but after that time those conditions will be covered.

Limited Benefit plans differ from traditional plans in that they pay a set dollar benefit for a medical service. For example, a plan may pay $75 for a doctor’s office visit, $1,000 for a surgical procedure and $1,000 per day for hospital stays.

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