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Types of Health Insurance

The two main ways that people obtain health coverage are by paying into a group or buying individual insurance.

Ø Group Health Plans

Ø Individual Insurance Plans

Group Insurance Plans

Most Americans get health insurance through their jobs or are covered because a family member has insurance at work. This is called group insurance. Group insurance is generally the least expensive kind. In many cases, the employer pays part or all of the cost.

Some employers offer only one health insurance plan. Some offer a choice of plans: a fee-for-service plan, a Health Maintenance Organization (HMO), or a Preferred Provider Organization (PPO), for example. Employers with 25 or more workers are required by Federal law to offer employees the chance to enroll in an HMO.

What happens if an individual or his family member leaves the job? He will lose employer-supported group coverage. It may be possible to keep the same policy, but he will have to pay for it himself. This will certainly cost him more than group coverage for the same, or less, protection. A Federal law makes it possible for most people to continue their group health coverage for a period of time called COBRA (for the Consolidated Omnibus Budget Reconciliation Act of 1985), the law requires that if an individual work’s for a business of 20 or more employees and leave the job or are laid off, he can continue to get health coverage for at least 18 months. He will be charged a higher premium than when he was working.

He / she also will be eligible to get insurance under COBRA if their spouse was covered but now he /she is widowed or divorced. If an individual was covered under his parents group plan while he was in school, he can also continue in the plan for up to 18 months under COBRA until the individual find a job that offers individual health insurance.

Not all employers offer health insurance. Individual might find this to be the case with his job, especially if he work’s for a small business or work part-time. If the employer does not offer health insurance, he might be able to get group insurance through membership in a labor union, professional association, club, or other organization.

Individual Insurance Plans

If the employer does not offer group insurance, or if the insurance offered is very limited, one can buy an individual policy. One can get fee-for-service, HMO, or PPO protection.But an individual should compare the options and shop carefully because coverage and costs vary from company to company. Individual plans may not offer benefits as broad as those in group plans

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