Unlike other forms of insurance, which are required by law in many states for their protective purposes (see “All About Auto Insurance), or optional insurance for valuables and material possessions (“Policies for Personal Items” gives details), health insurance optional but extremely important. It provides protection of the policyholder in case of the “cough you can’t get rid of” or a major injury, or at least that annual physical. 

 

It is important to know the types, plans, and terms of health insurance in order to best meet your health needs.  Overall, there are two plan structures for health insurance--group and individual. Knowing this can help you lower your insurance costs, or obtain insurance when you otherwise though you could not through an employer. 

 

Additionally, many terms related to insurance coverage may vary depending on the type of health insurance plan you obtain (see “Understanding Types of Health Insurance), so knowing what they mean will help you decide on the appropriate amount of coverage for you.

 

Group Insurance

 

Many people have insurance coverage through their employer, and are able to get coverage for spouses or dependents.  Insurance provided by employers is known as group insurance, as they are purchasing insurance for you, other employees, and themselves at once.  This is far less expensive than individual insurance (see below).

 

You may think if you're self-employed or your employer does not offer insurance that you may not have group insurance options.  However, you may be able to obtain insurance through professional, alumni, or trade organizations or unions.

 

Additionally, some people are fearful of leaving or losing a job because of the health insurance benefits.  But if you find you are dissatisfied with a position or are laid off from work, your former employer may be required by COBRA regulations to continue your coverage for up to 18 months if the business employs 20 or more people.

 

Individual Insurance

 

More expensive than group insurance plans, individual insurance is an alternative in the event that your employer does not offer health insurance benefits, or they are severely limited.  Often, coverage is not as comprehensive as in group plans, and is more expensive. Even with these disadvantages, an individual policy is still a way you can ensure you have health coverage, and is less expensive than paying full cost for health services.

 

In order to understand the variations in limits, costs, and protection provided by your health insurance policy, please see “Terms, Tricks and Traps of Health Insurance” for more information.

 

References

 

United States Department of Health & Human Services. Checkup on Health Insurance Choices

 

U.S. Department of Labor Employee Benefits Security Administration. An Employee’s Guide to Health Benefits Under COBRA

 

Author, Unknown. Types of Insurance