What’s Right for You: Individual or Employer-Sponsored Health Insurance?

Is your employer provided health insurance always the best choice?

Many workers default to this option as the path of least resistance. The plans are chosen for you and your payment is automatically deducted from your paycheck.

However, rising healthcare costs have made choosing between an employer’s plan and an individual plan a little more complicated.

Your employer may now offer fewer plans, or cheaper plans with less coverage.

If you’re thinking about abandoning your employer plan for individual coverage provided by the Affordable Care Act, here are some things to consider:

You’ll Probably Save Money with Your Employer

Employers participate in group plans. With group plans, your employer shares the cost of your health insurance premium with you. The big advantage is that the portion you contribute is made pre-tax, thereby reducing your taxable income.

With an individual plan, you will no longer pay with pre-tax dollars. However, you might qualify for government subsidies.

…But Not Necessarily

Even if you have access to health insurance through your workplace, it may not be the most affordable option.

Family plans in particular can get very expensive. Employers are required to meet minimum guidelines for affordable coverage, but family plan premiums can rise above what’s considered “affordable.” In this situation, you may want to explore and compare options on the individual market.

Cost Isn’t the Only Factor

One of the big disadvantages of employer sponsored coverage is it ends if you lose your job. Individual plans, on the other hand, keep you covered if you’re laid off, or switch to a company that offers a plan that you can’t afford or fails to meet your needs.

The Power to Choose

Remember that your preferred doctors and hospitals are important as well. If an individual plan is a little more expensive than your employer plan, but allows you to see a physician that you really like or go to a facility close to home, the trade-off may be worth it.

Selecting the right health insurance plan is a personal decision based on your individual circumstances. No matter what you choose, make sure you do your research first and consider factors like cost, convenience, and peace of mind.

BALANCE