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Who Should Consider An Individual Policy

At Progressive Benefit Solutions we're not only a leader in employee benefits but a leader for those who have a need to purchase coverage on their own. With the economy still recovering, individuals and families are still looking to save where they can without sacrificing coverage.

Perhaps you own a small business or are self-employed.  If you can't get enough of your employees to participate in the plan or don't meet the carriers eligibility requirements an individual plan is a great option.  There will usually more flexibility in plan designs and since the coverage is not sponsored by the company the coverage is portable, meaning the policyholder can continue coverage as long as premiums are paid.

Maybe you're an employee who covers a spouse or child under their employer sponsored health plan.  In many cases, depending on plan design and whether or not the employer contributes to the dependents premium, it's likely that an individual policy can offer similar or better benefits at a lower premium.

For those that have ever been offered or enrolled in COBRA this may be your first experience as to what it really cost your former employer to offer health insurance since you are now responsible for the full premium.  COBRA is a great benefit but there are time limits on how long you can maintain the coverage, usually 18 months unless another qualifying event occurs. I strongly encourage anyone who has been offered or is currently enrolled in COBRA coverage to explore what an individual policy can offer you in benefits and premium.

So what are some of the positive aspects of an individual policy?  First, you can choose the benefit design that meets your health needs and budget.  Second would be portability.  Remember you own the policy so as long as the premium is paid the policy remains in effect.  Third and most important is guaranteed renewability.  This means an insurer cannot single you out for cancellation or a rate increase due to a change in your health.  Keep in mind most plans will experience a premium adjustment when the plans renew each year.  So if you were to receive an increase in premium, everyone in the plan will have the same increase as well.

There is one downside to an individual policy I want to make you aware of and that is underwriting.  Anyone wanting to enroll in an individual policy will need to submit an application and go through the underwriting process.  This will allow the insurer to review the medical history of each applicant and assess their level of insurability, and if approved for coverage what the premium will be for the plan.  Unfortunately a person can be declined coverage due to their health however, that will no longer be the case beginning January 1, 2014.

The Affordable Care Act has already brought some changes to the individual market and more will take effect on January 1, 2014.  Today all children under the age 19 who apply for individual coverage cannot be declined or have waiting periods imposed before a pre-existing condition is covered.  Also anyone who purchased an individual policy after March 23, 2010 has their preventive care covered at 100% when performed in-network without having to pay a co-pay or meet a deductible.  Beginning January 1, 2014 anyone applying for an individual policy will be guaranteed issue regardless of health.  There will also tax credits and subsidies available, depending on income, to help with the cost of those who buy their own health insurance.

If you feel an individual policy is an option for you, don't hesitate to contact me directly.  There is never a charge for my services and the premium is the same whether you purchase a policy direct through the insurer or use a knowledgeable local agent like myself.  Check back in late August for my next post as we prepare Medicare beneficiaries for the upcoming Annual Election Period.

Posted February 24, 2012

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