Group health insurance is an excellent option for most employees since those plans can offer much greater benefits than plans in the private market, but these plans do come at a cost. If you don’t need the extra benefits, you may want to purchase an individual or family health insurance plan instead.

Since the costs are typically split between you and the employer, you can usually extend that coverage to your spouse and/or kids. Here’s the rub: The employer is normally only required to pay for 50% of the employees’ portion and required to pay for none of the cost of the spouse and/or kids. They have the option to contribute to their portion, but with the state of the economy, employers are severely cutting back benefits and you’ll be hard pressed to find that kind of deal. You’ll normally find that they are now only willing to pay for one half of the employees’ portion and that’s it. You’ll make up the difference of your portion and pay for the entire premium on everyone else.

There can be some advantages though: 1) Group health insurance plans typically have no pre-existing condition clauses and cannot use exclusions to avoid paying for pre-existing conditions 2) Group plans, especially with large employers, normally provide maternity benefits and 3) Group plans are required to carry severe mental health coverage.

How would the scenario change if you already purchased a health insurance policy on your own or if you are covered under your spouses’ plan?

The employer will only be able to force you to take their health insurance coverage when they pay for the entire monthly premium themselves. They cannot take a payroll deduction from your salary to help defer the cost.

Why would they do that? It’s simple. If most employees in your company are on the older side, severely overweight, use tobacco, etc, you bring down the average cost for the employer. Younger, healthier employees help bring the costs down for everyone.