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{ business solutions } by Missouri Dental Insurance Services


Group vs. Individual Health Insurance: What Are My Options?


O


pen enrollment is right around the corner, and with that comes the daunting task of reviewing new health insur-


ance options and picking a new plan for the upcoming year. Whether you’re an employer or an employee, we all need health insur- ance and knowing the difference in benefits can be very confusing. With both group and individual plans, there are vast differences in networks, benefit options, premiums and carriers available. Age, location, tobacco use and plan type play a huge roll in all medical premiums, and depending on your location, you may only have one carrier option avail- able in your area. Let’s break down the differ- ence between group and individual plans.


GROUP PLANS • Group health insurance benefits are a great way to maintain and attract new employees.


• Group medical plans typically have richer networks and richer benefits than individual plans.


• Group plans are selected and offered by the employer, who is in control of the benefits offered.


• Plan type options are Affordable Care Act (ACA) plans and self-funded style plans.


• Deductible options can range from $0 to $7,900.


• Small group ACA plans are generally age banded, whereas self-funded plans generally use composite rating (average age within the group).


• PPO networks with small group plans are broad and include out-of-network coverage. However, smaller and more limited EPO (Exclusive Provider Or- ganization) and POS (Point of Service) networks also are available, which can save significant premium dollars.


22 focus | SEP/OCT 2020 | ISSUE 5


• Several plans and networks can be of- fered within one group policy (depend- ing on group size)—such as a base plan, a buy-up plan and a buy-down plan—or let the employees pick a plan to fit their needs.


• Reference-based pricing also is available with some self-funded plans. This pric- ing does not use networks, but instead pays a percentage of Medicare-allowed amounts.


• Group plans can be formed anytime throughout the year and are not bound by open enrollment.


• Eligible employees have specific enroll- ment periods to join the plan.


GROUP ELIGIBILITY


Depending on the carrier, group eligibility re- quirements will vary. With many carriers, the employer would be responsible for 50 per- cent of the employee-only premium, which means significant savings to an employee. The employer is not responsible for depen- dent premium. Eligible employees must average 30 hours or more per week to qualify for the plan. Each eligible employee must be offered the plan. Eligible employees may waive coverage if they have current coverage they wish to keep. Employees have specific enrollment periods if electing coverage.


Employees may opt for a subsidized individ- ual marketplace plan if their employer plan premium is deemed unaffordable to the em-


ployee. If the employee’s share of employee- only premium is greater than 9.78 percent of income, the employer plan is considered unaffordable and the employee can then ap- ply for a subsidy through the marketplace.


Employers not interested in offering group coverage can elect an HRA (Health Reim- bursement Arrangement) to help employees with individual plan premiums or out-of- pocket expenses. HRA plans have caps on the allowance an employer can offer.


INDIVIDUAL PLANS • ACA plans are the only option for pur- chasing individual major medical plans.


• Individual plans are purchased either on or off exchange (Marketplace), depend- ing on subsidy eligibility. Subsidies and cost-sharing reduction further reduce premiums and out-of-pocket expenses for the insured.


• Individuals earning less than $51,041 may qualify for a subsidy if purchased on exchange.


• Subsidies are on a sliding scale—so the less an individual earns, the more sub- sidy they receive.


• Plans purchased off exchange are not subsidized and do not qualify for tax credits.


• All individual plans use an EPO net- work, which can be limited and do not include out-of-network benefits unless in an emergency situation. Members


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