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Insurance
Group and Individual Policies
By the Ohio Department of Insurance
There are two basic ways to buy health insurance: as an individual or through a group. How you buy your health coverage will affect your rights and responsibilities. This article describes some of the basics of each way to buy and some of the things to expect after you're enrolled.
Individual coverage
- You contract directly with an insurance company just like insuring your home or car.
- You are the policyholder.
- Your individual policy can cover your entire family and each family member would be an insured.
- HMOs call the policyholder a subscriber - the insured is a member or enrollee.
- The company needs approval from the Department of Insurance to raise rates.
- Any premium increase affects everyone who has the same kind of policy.
- The company cannot cancel your policy because of your health or claims as long as you pay premiums on time.
Group coverage
A group insurance policy may cover thousands of people but it is still only one policy. It's called a master policy and your employer or trade association is the master policyholder. The master policyholder negotiates the terms of a group policy with the insurance company.
The master policyholder can:
- Reduce or change the benefits and coverage
- Or increase your share of the premium
- Or switch to another insurance company
- Or even stop providing coverage completely
You and the other members of your group are certificate holders.
- Certificate holders have the right to receive health care benefits under the terms of the master contract.
- Each family member covered under your certificate is insured.
- As a certificate holder you will receive a summary of benefits or a benefits handbook instead of a policy.
Policy vs. handbook:
The master policy is the contract. The benefits handbook is a summary and might not include every detail.
Compare the differences
The policy:
- Individual health: Insures you. Your policy may also include members of your family.
- Group health: Your employer or organization negotiates terms with an insurance company and becomes the master policyholder.
Premiums:
- Individual health: Premiums are regulated by the Ohio Department of Insurance. Rates can be increased only if the Department approves an increase for everyone with the same kind of policy
- Group health: Rates for large employer groups (see below) are negotiable and are not regulated by the state.
Required benefits:
- Individual health: Must include specific minimum benefits.
- Group health: The policy must include specific minimum benefits required by state law. Others are negotiated by the master policyholder.
Cancellations and changes:
- Individual health: Can't be cancelled as long as you keep paying premiums, unless you have made false statements on your application or filed fraudulent claims.
- Group health: The master policyholder does not need consent of certificate holders to change companies or policies, cancel the policy, or agree to new premiums or benefits.
- If you leave an employer group health plan, you may have the right to convert to an individual policy or continue group coverage for a temporary period of time.
What is a "large" employer group?
- Large employer groups are defined as having more than 50 employees. Large employer group policies usually:
- Cover more but cost less than individual policies
- Have more generous benefits
- Cannot reject your application because of your poor health
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