Insurance - individual vs. group (plan, hospital, doctor, surgery)

[NJDevil]

I have individual health insurance, with preexisting condition waiting periods and exclusion riders. My new employer told me I can talk to insurance companies, and they will contribute some money towards it, if that's what I want. None of the other employees were interested. If I get on health insurance thru work, but I'm the only one on it, is it any different from what I have now? It wouldn't be considered a group plan right? If one other employee got on, would it then be a group plan? This is what confuses me. Thanks!

[AnonChick]

If -you- are picking the insurance company outside any list provided by your empoyer, then it's individual insurance, and your employer is just giving YOU money to cover a percentage of the premium. If the insurance company works with the employer to create a plan for its employees, AND the employer meets all the requirements of the agreement, then it's a group plan. Usually a group plan would require at least 2 people.

In summary: you find insurance on your own, and boss gives you money to cover the cost = individual plan. Your boss finds insurance and offers it to you at reduced cost = group plan.

[NJDevil]

Thanks. What types of requirements do employers have to meet?

[AnonChick]

It depends on the insurance company and the selection of plans being offered to the employer's group. A group would typically be required to have at least 2 people in it. Some plans are offered for larger groups only - generally, the more people in the group, the lower the cost for whatever benefits are provided AND the more options for benefits.

For example, Company Q offers only 2 plans to groups of 4 or less: The typical 20/80 plan where the Insurer pays 80% of the approved costs, and the employee pays 20% AFTER $2000 out of pocket deductible is met. Hospitalization falls under a different category, which is paid out 75%, with the employee paying 25% of in-patient expenses. The insurer will only cover what's on their schedule: 2 day maximum for normal delivery of a child with no complications, 2 day maximum for emergency appendicitis, 8 day maximum in-patient treatment for cardiac surgery, or whatever else. Any hospital, any doctor, anywhere in the USA, with arrangements available for out-of-country care.

The OTHER plan is an HMO plan, where the employee pays $20 for doctor's visits, $100 for hospital outpatient services, and $200 hospital inpatient services. The plan itself is 50% more expensive than the first plan, and the employer pays half that expense with the other half being paid by the employee. There is no deductible; everything except the co-pays are covered 100%. All services must be performed in-network by a list of participating doctors and specialists; if you go outside that list, you pay the bill yourself and the insurance plan won't cover you at all.

HOWEVER

If your group is 15 people, you get a THIRD plan offered, at 20% less than the HMO, that allows for out-of-network physicians being covered at 80%, with the employee paying only 20% and a $5000 total yearly out of pocket deductible for out of network services. In-network would be exactly the same as the regular HMO plan, but you would get an added pharmacy benefit of only $3 per 90-day supply of any approved prescription via mail-order.

If the group is 100 or more, you'd get two more plans offered to the group, which includes comprehensive preventative care, 50% discount on local gym memberships, basic dental and eye care, your first pair of subscription eyeglasses or 1 month's worth of disposable contacts, a free pricker and month's worth of blood strips for diabetics, and the total cost to the group would be around 10% less per person than the plan for the group of 15.

That's SORT of how this stuff works. The bigger the group, the more options the insurance company will usually offer, for a lower price. The smaller the group, the fewer options, and the higher cost. There are exceptions but that's a very basic general idea of it.