Learn 5 Advantages of Individual Health Insurance

3. Individuality

While most employees appreciate the group health insurance plan provided by their employer, they have no influence on the type of plan they receive. That means they’ll be forced to enroll in a one-size-fits-all plan with no say over their network, coinsurance, or premium cost.

Instead, by reimbursing your employees for their own health insurance, they can create a customized plan that works with their present doctors, healthcare providers, and budget. Employees who require chronic disease management or special medical equipment can select the plan that best meets their needs.

4. Flexibility

Traditional group plans have stringent restrictions that small and medium-sized business owners may find difficult to meet. Many insurance providers, for example, require a certain number of employees to be enrolled in the plan.

If you have employees who are on a spouse’s or parent’s plan, registered in Medicare or just do not want the coverage, you may not meet the participation standards, preventing you from offering the plan to those who do.

Furthermore, group health insurance plans have minimum contribution requirements, which typically require employers to fund at least 50% of employees’ premiums. If you can’t afford to cover that much, you won’t be able to offer the plan.

You can circumvent these onerous group requirements by paying your employees’ individual health insurance premiums. This allows you to contribute what you can afford and provide the benefit to as many employees as you like, depending on the plan you choose.

5. Portability

Individual health insurance coverage, unlike group health insurance, is completely portable, which means your employees can keep their policy even if they quit your company. You can provide a formal health benefit that cares for your employees while also allowing them to make their own healthcare decisions that aren’t dependent on their employment by using an HRA to compensate them for their private health insurance. 

Conclusion

There are various advantages to paying for employees’ individual health insurance coverage rather than a group plan. Offering a tax-free HRA for individual health insurance to employees is a terrific way to contribute to their healthcare while allowing them to select a plan that works for them.