It's a myth to believe that if an employer offers you health insurance coverage, you have to take it. On the surface, it might seem crazy not to -- after all, the unemployment rate is still around 8 percent, and many people would love to have a job that offers insurance. But you have to look at the details of the policy before you decide if it's a good deal for you and your family. Health insurance costs have gone up 60 percent in the last decade, to the point where a family of four can pay $25,000 a year for health costs alone. The cost of your health insurance premium will depend on your age, your health, and the size of your household. But there are a few variables you have to consider if you're thinking about signing a waiver to refuse your company's health care and striking out on your own for private, individual care. Is the difference between individual and group plans worth it?
Small business owners are able to write off the cost of health insurance premiums, which is why you're much more likely to get reasonable insurance coverage if you don't work for a large corporation, where employees will typically pay more. But the percentage of premiums that employers cover still varies. Some can pay 75 to 80 percent of the coverage. If that's the case, you likely want to stick with your company plan, because you probably won't find anything cheaper than that. Some employers pay about half the cost, in which case it depends on your policy and your individual needs. But there are some employers out there who pay less than 20 percent of costs, or even nothing at all. In that case, you'll be getting thousands of dollars taken out of your check for a health insurance plan you could easily shop around for yourself.
If you have chronic health problems such as a heart condition, cancer, or diabetes, you might have a harder time being approved for private health insurance. Usually, you will be able to find a plan that offers extra coverage for these conditions at a higher premium. Maternity coverage for you or your spouse is another area not automatically covered by private insurance, and you'd have to look for plans where you can add it on if you're thinking of expanding your family. But if you're relatively healthy, especially if you're under 50 and don't smoke, your employer plan can potentially charge you much higher rates than you would be paying elsewhere -- as much as twice the amount. The argument about whether individual or group plans are cheaper mostly depends on you and your needs.
It comes as no surprise that the main drawback to employer insurance besides the potential for unfair costs are the limitations in your network of approved doctors and specialists. If you or someone in your family gets sick, there are hundreds of reasons why you might look for a doctor with expertise that you trust, and your options for finding the right care are severely limited when your insurance will only approve a handful of people. With private insurance, you can shop for many different kinds of plans which will allow you to go outside the network, through companies like Briggs and Butler. PPOs and POS insurance still covers a portion of the cost for out-of-network care, while Fee for Service plans have no network at all. These options are rarely offered by an HMO, which is what most employers use, especially the larger corporations.
Statistically, around 80 percent of workers claim they would like to start their own business someday, but only about 12 percent of those take steps to actually make it happen. What's the number one reason people avoid becoming self-employed? Fear of losing their health benefits. Even if you launch a successful career as an entrepreneur, there is still a nagging fear that you won't be able to afford the cost of someone in your family getting sick. But if you're already in-vesting in private health insurance, your coverage won't change when your career does. If you get laid off from your job for any reason, or you change jobs, you won't automatically lose coverage, and you can keep your current doctor. Many people prefer having a policy that goes where they do, especially in today's market.
Most people believe that individual plans for health insurance are always more expensive than employer plans, but this is not necessarily true. So before you sign up for your company's health insurance, do a little shopping to find out your options. Your health and the health of your bank account don't have to be mutually exclusive.