California: Group Health Insurance Coverage vs. Individual Health Insurance Coverage

Although health insurance isn't required in the state of California, having the benefits for your employees not only promotes loyalty, but also provides a healthier employee base. For families, health insurance is a cost effective way of making sure your loved ones are taken care of, for whatever the health reason.

California coverage can be difficult to decipher, however. Different plans provide varying degrees of coverage at different costs. If you're looking for health insurance, whether for yourself, your family or your business, a little clarity may help.

Group Health Insurance vs. Individual Health Insurance

Insurance carriers differ on the types of coverage they offer. However, many offer both group and individual insurance, each type with its own set of rules, regulations and standards:

Individual health insurance, as the name implies, can be provided
for individuals and families. It's a single policy dealing with one person or family. Generally, individual health insurance coverage is for those not covered through employment, or those that aren't eligible for publicly subsidized coverage. Many individuals also choose this type of coverage when their group coverage through employment runs out.

Individual insurers can deny you medical coverage based on whether you or your family is considered "high-risk". High risk includes pre-existing conditions such as cancer or immunodeficiency diseases, someone who smokes and/or drinks and many others. The definition of "high-risk" depends completely on the insurer, who will expect the insured to go through a health exam to determine whether the high risk factors are there.

Premium payments are usually expected on a monthly basis. How much those premiums are depends on the coverage you need, as well as the insurer you choose. In addition, depending on the insurer, you may have to pay additional costs for medical treatment. You might pay a portion or a fixed amount for any hospital visits.

If you're filling out an insurance quote, make sure you pay special attention to the policy, any medical problems you may have, what primary physicians and specialists are in the insurance network, the amount of deductible and the out-of-pocket costs. All of these points will factor into how much your individual health insurance coverage will cost, as well as what you can do with it.

Group health insurance provides coverage for groups, such as to a company for their employees or a specialized set of freelancers. Compared to individual coverage, group health has an entirely different set of rules.

The main point at which individual and group insurance differs is that insurers can't deny group coverage because of medical issues. In fact, it's a California law that small employers (2 to 50 full time employees) be guaranteed group health insurance coverage if they choose to purchase it. The health status of the employees can't be held into account.

Likewise, the insurers calculate risk differently. While individual insurers calculate the risk of the individual, group insurers spread the risk over the entire group. This also applies to how they determine the price of the premium. Rather than an in depth medical exam, insurers use risk factors such as age and gender - general demographic information - to determine premium costs.

Several insurers carry a wide variety of group plans. If you choose to offer health insurance to your employees, make sure you investigate both the insurers and the available insurance plans to get the best quotes for your business.