Health Insurance Articles

Knowing When To Opt Out Of Your Employer Health Insurance Plan

2010-03-24

Health care has been an issue in the forefront over the last few months. As average families cope with a declining economy and growing costs, it is not surprising many are asking themselves if it may be more economical to opt out of a employer-provided health plan and seek coverage of their own. There is no question that more and more of the cost for employer health insurance is being passed on to the worker as premiums have continued to rise at a rate nearly triple that of the rate of inflation. Many employees are essentially giving up their well-deserved yearly raises as they are asked to contribute increasing amounts of their salaries to cope with the surging cost. But is opting out the right choice? As dire as the circumstances may seem, statistics show that very few consumers benefit from declining employer-sponsored benefits.

Keep in mind that, as prices rise for employers, they are also rising for the average consumer. This means that individual insurance, which is already on average more costly than a group plan, is very unlikely to be a more economical choice. An employer saves on coverage by buying in volume, the way you would save when buying bulk items from a "big box" retail store. Buying light-bulbs, or in this case health insurance coverage, in large quantities minimizes the cost.

That is not to say that there are no affordable individual insurance plans available to consumers. Research into health insurance quotes will reveal that there are many plans with lower premiums, but be sure to carefully examine the type of care covered under such plans. Often plans that have lower monthly premiums will severely limit benefits or disallow certain services altogether in order to be more "affordable." Add to this very small yearly maximum payout amounts, and an individual's out-of-pocket expenses can sky-rocket. When applying for an individual insurance policy, you may even be turned down outright should you have a pre-existing health condition. Having continuous employer health insurance coverage generally protects employees from the risk of being dropped by an insurer.

The final issue to consider is one of need. Group coverage necessitates that employees participate in a "one size fits all" health plan. Frequently younger employees and those in good health may rightfully determine that they do not need coverage as comprehensive as that offered by an employer. Be sure to thoroughly investigate the options available to you before you decide to drop your employer-issued benefits. As the cost for emergency services continues to rise, you may find that having more coverage than you need is far less financially devastating than not having enough.