Why individual health and dental plans can cost more than your old group plan

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Lay-offs, changing employers, consulting, moving from full time to part time, retiring. Everyone goes through job changes. That’s the time to review your health insurance.

Both group and individual health and dental plans can protect you against out-of-pocket costs for healthcare, like prescription drugs, dental care, physiotherapy or chiropractic care, eyeglasses and more.

But when you compare the premium costs there can be big differences. Here’s why.

Your cost for Group Health Insurance

Generally speaking, group health insurance is coverage provided by an employer to their employees and the eligible dependents of the employees.

Having group health benefits is convenient. Once you meet your employers’ eligibility criteria you automatically have coverage. You will also have premiums deducted from your pay cheque for the coverage (so you may not really notice how much you pay for it).

Here are some facts about the cost of your group health insurance:

  • Group health insurance plans provide coverage for a group of peopleWhile this may be obvious, this fact impacts the premium cost of the insurance. If you work for a large public employer, the cost of coverage is pooled among a large number of individuals, and premiums will be relatively low and stable year after year. If you work for a small private employer, the health of that small group of people impacts the cost of coverage, and just a few high claims can result in higher premiums and big premium increases over time.
  • Your employer controls the ‘one size fits all’ benefit selectionInsurance can vary in quality and price, just like any product. Group health insurance plans and providers are selected at the discretion of your employer. To please employees, they may choose a plan with all the bells and whistles. But what may work for your colleagues may not be the best choice for you.

    On the other hand, to keep costs down, your employer may have selected a no-frills plan with high deductibles. The problem then is that you don’t get to choose what benefits you receive. Are they really the ones you want?

  • Premium payments are split between you and your employerMost employers pay for at least half the premiums for your group insurance and some even pay for all of your health insurance premiums. If your employer doesn’t pay all, you typically will pay anywhere from a few hundred dollars a year to a few thousand dollars for family health benefits.

Your cost for personal Health and Dental Insurance

Individual health insurance, also known as supplemental, personal, or private health insurance, is health coverage a person purchases for themselves and their immediate family members such as children and spouses.

Here’s why it may seem more expensive.

  • You pay for it from your bank accountYou may track the payments more readily, because they are paid from your bank account instead of your pay cheque. Individual health insurance premiums are charged every month (or annually), whereas the cost of your group coverage was likely taken more frequently, every two weeks or so. One hidden advantage of paying for personal health insurance is that you may be able to earn points on your credit card if you choose that payment method.
  • You have the freedom of option choicesThere are more benefit options available to you in an individual health insurance plan. The plan you choose may include benefits you didn’t have with your group plan, and the premiums can be higher. On the other hand, you can tailor your plan with benefits that best fit your family’s needs, which means that you may select coverage that is cheaper than group health insurance.
  • You have ‘long-term’ coverageGroup coverage is more of a short-term plan because it is dependent on the number of years you work for a given institution or company. Normally, your benefits start shortly after you begin full-time employment. The benefits, however, end when you resign, retire, or your job comes to an end.

    Individual insurance is long term. The coverage only ends if you decide to shift to another health insurance company or stop paying their premiums—and it is not affected by factors like a change of jobs or retirement.

The reality of Group versus Individual Health Insurance Costs

Individual health insurance can be more expensive, but if you do your homework to decide what benefits you and your family need and compare rates, you may be surprised at how affordable individual health insurance plans really are.

In today’s work world, where many face frequent job changes, an individual health insurance policy is the absolute best way to get adequate and consistent coverage.

Importantly, individual policies are portable: if you change employers or your company cuts costs and health benefits are one of the perks to go, you can sleep well knowing your policy is not affected. At the end of the day, you—and not your employer— have complete control of your policy.

When is the right time to get your own health insurance?

Right now! Job changes can happen any time. The sooner you review your health insurance needs, the better. Secure this vital protection for your family and your finances. Individual health insurance also works alongside group coverage to supplement or increase your benefits.  And, the duplicate benefits between the group and individual plans can be combined to make your maximum coverage higher.

Visit our website to see all that SBIS has to offer. We have dozens of plans to choose from, some with low premiums and several levels of coverage, to more robust plans that cover a large array of services, including both health and dental. Through Green Shield and Manulife, you can find a plan for just about anybody.

Some of our plans can guarantee coverage for vision care, prescription medication, therapies such as physiotherapy or chiropractic care, travel, and much more.

Want help choosing the coverage? Call us.

Often, people have never had to purchase individual health coverage before and may find the terminology, options and process very confusing. While a new individual health insurance plan will not be identical to the group plan you had, there are many different health insurance product choices. That’s why talking it over with an expert is a good place to start.

At SBIS, we are experts in health, dental and travel insurance—so you don’t have to be. We are happy to answer any questions you have and set something up for your protection—the difference is that we base it on your needs and your budget.


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