Understanding Group vs. Individual Health Insurance

Getting health insurance coverage is essential for you and your family. Without insurance, you risk not accessing proper medical care or depleting your finances to pay medical bills. According to the experienced insurance agents at Fringe Benefit Analysts (FBA), there are two common types of health insurance: group and individual. Below, we’ll discuss the differences between the two to help you choose the right plan for your situation.

What Is group health insurance?

Group health insurance plans are offered by employers or an organization to a group of people, like employees or members of an association. Most people in the U.S. get group health insurance through their employer. Here are the characteristics of group health insurance.


After getting group health insurance, your employer will pay monthly premiums. The premiums are usually lower than individual health insurance because the risk is spread by more people. The employer can pay fully for the coverage, pay partially or the employees pay the full amount. When employees pay for their insurance, the employer will deduct their portion from their salary and pay the insurer.


As an individual, you do not have control over how much coverage you get. You get as much as everyone else. However, group health coverage usually provides comprehensive coverage, and you can purchase add-ons.

What Is Individual Health Insurance?

If your employer is not offering health coverage or you are unemployed, you’ll have to purchase individual health insurance coverage. You buy this directly from an insurance provider as an individual or a family. Here are the characteristics of individual health insurance.


You are responsible for the payment of your coverage. The monthly premium may be higher than you would pay in a group health plan because the risk is concentrated on a single person.


Unlike group health coverage, where you have no control over the coverage you get, an individual plan can be customized to meet your specific healthcare needs. You can choose a plan based on your budget and health requirements. Moreover, you have more control and can select deductibles, copayments and coverage limits as you wish. You are also not tied to a specific insurance company, so you can shop around to find your preferred company.

What Is the Difference Between Group and Individual Health Insurance?

The coverage offered by both group and individual health insurance can be similar. However, who is eligible to enjoy each policy makes these plans different. Here are a few differences between group and individual health insurance.

  • As stated above, a group insurance plan covers a group of individuals related to one another by at least one aspect, such as employees of the same company. On the other hand, an individual health insurance policy only covers one person: the policyholder.
  • Group health insurance is normally purchased by an employer, while the individual insurance plan is purchased by the policyholder.
  • The actual cost of health insurance depends on several factors like deductible and area of residence. However, the cost of individual health insurance is usually higher than group health insurance due to the number of people covered by the policy.

Which Is the Best Health Coverage? Group vs. Individual Health Insurance

According to the experienced insurance agents at FBA, the right health coverage will depend on your specific situation and needs. Accepting the coverage is the best idea if you are employed and your employer offers a group coverage plan. Consider purchasing a rider if the coverage doesn’t cover all your medical needs. However, individual health coverage might suit you if you are unemployed or want tailored coverage. Keep in mind all insurance coverage is not equal. Choose an experienced insurance agent to help you find the best coverage based on your needs.