Employers Rarely Have The Best Health Insurance Deals

Armen Hareyan's picture

If you are looking for affordable health insurance, it's a good idea to look somewhere other than your employer to find it. Here is why the employers rarely have the best deals when it comes to providing affordable health insurance to employees.

Employers Cover Everybody (by Law)

Do to existing laws, employers are required to cover everyone who meets their requirements (the most common is that they work full time for the company who is providing the health insurance). They must cover all employees that meet these requirements, regardless of current medical problems or health history. If someone has cancer, diabetes, or other conditions they are able to get coverage on an employer plan. The way the insurance company can do this is by raising the monthly rates for the insurance for every employee in the group. So, even the healthiest employees have high rates, to help pay for the expected claims of the not so healthy employees.

Private Insurance Companies Can Discriminate (Systematically and Legally) When Choosing Who to Insure

Many people don't know that there are health insurance companies in the private market that offer insurance to individuals and families who aren't offered insurance through their employer, are self employed, or are unemployed. They are governed by different laws and are allowed to pick and choose who they will insure, based on each individuals or families health history and current health conditions. With few exceptions they only insure applicants without serious, or any, pre-existing conditions. This allows private companies to keep the rates very low for each applicant they approve. If you are healthy and have only minor pre-existing conditions, you can get a great price through a private plan.


Exceptions to a Private Health Insurance Plan Being a Better Deal

There are a couple of exceptions to this rule.

If your employer pays for a huge portion of your premium, you might be better off (price-wise) sticking with your employer sponsored coverage, than going out on your own, through a private insurer.

If you have pre-existing conditions, expensive medications, are in the middle of medical treatments, or utilize your plan often, you will almost certainly be better off sticking with your employers plan. Even if the price is higher, you may not be able to get more affordable coverage elsewhere.

The bottom line is that healthy people, with little or no pre-existing conditions can almost always find a better deal in the private health insurance market than through their employer.

Written by Jared J. Balis