Are there Pricing Differences between Individual/Family Health Insurance and Group Health Insurance provided by an employer? The short answer is no, but it may certainly seem so depending on your circumstances.

If you’re employed with a company that provides health insurance to it’s employees, the rate that the company will charge you as an “employee” to participate in it’s group health insurance plan may seem relatively inexpensive when compared to an individual health insurance plan outside the employer. On the other side, the rate the company may charge the spouse and/or kids can seem excessive when compared to the private market for a similar plan.

This can be for several reasons including, but not limited to the following:

1) The employer must generally pay for a minimum of 50% of the Employees’ premium for the employee. This can give the appearance that the insurance is inexpensive, but that’s simply because the employer is covering at least half (and in many cases much more) of the monthly premium.

2) The employer generally will not contribute toward the Spouse/Dependents’ portion of the monthly health insurance premium as they are not required to by law. Spouse/Dependent health insurance coverage can normally be much less expensive in the individual/family market rather than through the group health plan.

3) Group health plans are normally offered at the same monthly rate for each employee, employee/spouse and family so that the company may be fair to all. This will result in your older employees (when compared to the age of the average employee) having a very good deal and your younger employees receiving the short end of the stick. Younger people can almost always find coverage outside of the group health plan in the individual/family market at lower prices. Older people (especially those with certain health issues) and smokers will generally find the coverage with the employer group to be a better deal.

4) The group coverage with the employer will normally include maternity coverage which is not available in the Texas individual/family health insurance market. These plans can also include substantial benefits for substance abuse and certain mental health disorders all of which will greatly affect the premium.

To summarize, if you are younger than the average employee at your firm or you don’t need maternity or other expensive mental health benefits, Selected Benefits can normally find you coverage for a fraction of the cost of your employers group health insurance plan. We can also generally find less expensive coverage for the Spouse/Kids in most all cases.