Individual Policies

A Personal Plan for Your Personal Needs

If your business is extremely small (fewer than 5 employees), you might be well-served to offer assistance with an individual policy for your employees. Some business owners, rather than paying for a group plan, instead opt to offer their employees a monthly stipend in their pay to help offset the cost of an individual insurance plan that the employees acquire on their own. Another reason that some small businesses take this route is it saves them the paperwork of having to manage a group plan, and they don't have to deal with enrollments for their employees and making sure that enough of their employees accept the insurance to maintain their plan and rate.

Individual Policy Basics

Going for an individual insurance plan yields the absolute greatest range of possible plans and options. These plans can range greatly in their various features and premium options, from including maternity coverage to no maternity, but extensive well-child examination options. Very customizable, individual health insurance policies offer the highest level of freedom in choosing your health insurance coverage. Individual policy types come in many formats, including:

• Fee for Service Plans: Fee for service means that the insurance company will pay part of the expense for you to visit any doctor or specialist you choose, you will be responsible for the rest. This type of coverage comes with a monthly premium that must be paid to keep the plan active.
• HMO Plans: HMOs, or Health Maintenance Organization plans are also known as prepaid health insurance plans. This is because with an HMO, you pay a regular premium every month whether you are sick or well. When you need to see a doctor, you will go to a specific hospital and doctor who is the only one that can refer you to a specialist or testing. These plans usually include a small co-pay such as $5.00 for each doctor's visit or $25.00 for hospitalization.
• PPO Plans: A PPO, or Preferred Provider Organization is a combination of the HMO and a traditional fee for service. Like an HMO there are a limited number of in plan doctors that you can visit, and if you do, most if not all of your care will be covered by the plan. You also have the option of seeing a doctor or specialist on your own without receiving a referral. If you visit a physician who is not in the network, you will receive only partial coverage from the plan for your expenses.

Despite their high-level of customization and options, individual health plan policies are not without their drawbacks when compared to employee-sponsored group plans. For one, if you have a pre-existing condition, your chances of being approved for an individual health plan are slim, whereas with a group plan, those with pre-existing conditions are much more readily accepted. Another possible drawback is expense. While individual health plans offer great flexibility in being able to save money on buying back a greatly scaled-down plan for less, when it comes to the value-loaded plans that offer coverage for many situations, the group plans will tend to offer the lowest rates.

If you have questions that have not been answered yet, see if the answer can be found in the frequently asked questions.