Indivdual vs. Group Health Insurance: Which is least expensive?

A small business group health plan is generally more expensive both now and in the future. Everyone thinks health insurance is like going to a warehouse club where you can save money by buying a a 10 gallon tub of peanut butter. For health insurance, the reverse is almost always the case. Why? State most state law requires that group plans MUST accept everyone regardless of their health. This applies to current AND future employees that you may hire. You could hire someone with hundreds of thousands of dollars worth of medical bills facing them and put them on your group plan and the insurance company is required by law to accept them and pay all their bills. An individual plan would not accept that person. An individual plan keeps the rates down by only accepting healthy people.

In addition, with a very small group, your renewal rates are based on your claims history of just your group. Individual plans renewal rates are based on the collective claims history of everyone that has purchased an individual plan from a particular insurance company. If you have large claims under a small group plan they are going to try to get rid of you by raising the rates to the maximum allowed by law.

You would not want to handcuff yourself to a small group plan with skyrocketing renewal premiums because one of your employees has medical problems. It would be tough to cancel your plan or fire your employee with medical problems at that time so you'd be stuck with a plan costing thousands of dollars per month.

We deal with a lot of group coverage and will be happy to get you quotes, but we strongly recommend individual plans.