How to Buy Individual Health Insurance Coverage at Group Rates
Buying health insurance as part of a group plan when you’re fully employed is normally at a lower rate than independent coverage. If you’re between jobs, and can not continue with your former plan, a new group health plan may not be an option. If you decide to work as an independent consultant between full-time jobs, you’ll notice a sharp rate increase if/when you buy individual health insurance coverage.
While individual health insurance plans are purchased directly from carriers, leaving out the employer middle man, they do not offer the fuller range of benefits and lower rates associated with the typical workplace group plan. However, individual plans may cover you, your spouse, and your children. The two other main methods to get an individual health insurance plan when you’re not fully employed with a group health plan are to obtain either “short-term” and/or “catastrophic” coverage.
Individual plans are “medically underwritten”, which means the insurer may reject your application, if you have existing health problems. Some states don’t allow this practice and require that insurance carriers offer you a policy, no matter what your medical condition. A list of “Guaranteed Issue Laws” has been published by the Kaiser Family Foundation, so do your homework before you let a carrier reject your desired policy application, or make exclusions to it.
Even though people enrolled in individual health insurance plans pay more as they grow older and more prone to illness, don’t let that tempt you into to going without coverage. Even if you’re healthy you could have a serious or near-fatal accident and be forced in “medical bankruptcy” as so many millions of others are each year.
Keep in mind, if you go without insurance for 63 days or more, a time period set by the Health Insurance Portability and Accountability Act (HIPAA), you’ll lose your rights to coverage of pre-existing conditions.
Already sick with a “pre-existing condition”? If you’re uninsured, it may seem to be impossible or too costly to buy health insurance. But there are practical ways you may be able to get coverage This will require researching a few basic situations.
Remember to do your homework, because in some states, the self-employed, sole proprietor can be eligible to buy health insurance as a “group of one” – even a home-based businessperson – just as long as you’ve been in business for at least 30 days.
Do some research to find out if you qualify for a group rate, even if you live in a state that does not offer these “group of one” insurance policies. For example, if you own a business, even a home-based business, and have at least one partner or employee, even your spouse who may be doing secretarial work for you; this situation qualifies you as a two-person business, eligible for a group-rate policy.
Before planning to leave an employer with which you have a group health plan, call and inquire as to whether their insurance carrier can convert it to an individual health plan for you. Even though the rate will be higher than your employer’s group plan, it’s your best option, for the time being, to secure health insurance. This is most important for those with existing medical conditions. Also inquire as to whether your spouse has a group plan at their work, and if they can add you on.
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