Your Employer-Sponsored Health Insurance Isn’t Necessarily The Best Deal
There is a tendency in America for people to depend on their employer for health coverage in much the same way Europeans and Canadians depend on their governments. I don’t want to get dragged into a debate about which system is better, but suffice it to say that from my perspective, they are far more similar than most people realize with large corporations taking the place of the government (i.e. I don’t believe there’s much real competition in the industry).
I am sure many of you have been admonished, much as I have, to seek full-time employment as much for the health coverage as the money. Thinking of striking out on your own? “But you need health insurance!” is likely the first thing you will hear. Never mind the extra potential income of running a successful business more than compensates for the cost of purchasing your own insurance. Nope, the assumption is that employer-provided health coverage is tops and replacing it in the private insurance market costs a fortune.
Individual Coverage Is Sometimes Less Expensive
Sure, some large corporations offer great coverage, but guess what? In 2004, small businesses employed over 50% of the American workforce with medium-sized business accounting for much of the rest. Those much-ballyhooed killer health plans supposedly available through employers? Only a small, tiny minority of Americans have access. The rest of us have to fend for ourselves.
An Example
At my current place of work, the company pays 100% of the employee’s premium but doesn’t pay a dime towards coverage for spouses or children. This works out great for me because I’m not married and don’t have any dependents. Even though the coverage is mediocre at best (at the very best), it beats paying for it myself. Free crappy coverage is better than no coverage at all. For my coworkers with a family, however, this poses a problem. Under the current plan, an employee with a wife and three kids could easily wind up paying $600-700 per month for health insurance alone! Maybe that wouldn’t be so bad were the coverage top-of-the-line or didn’t require co-pays, but this plan has a relatively low life-time per-person maximum, high deductibles, few perks, and unusually high co-pays for every visit. For such poor coverage, the premiums are outrageous!
A coworker of mine (married with children), went to the trouble of actually comparing the cost of company-provided health coverage to several individual plans in the private market (eHealthInsurance is among the best places to do this) and found he could save several hundred dollars per month buying private coverage for his wife and children and get better coverage to boot.
Comparison Shopping Online Is A No-Brainer
In the dark ages before the internet, comparing health insurance costs between employer-sponsored plans and private plans required at least a moderate amount of effort. At the very least, you had to get out the phone book and play phone tag with several large, bureaucratic insurance companies that seemed more interested in shuffling papers than answering your questions.
Those days are gone. The magic of the internet allows you to compare quotes from literally hundreds of reputable insurance providers in just a few minutes. You really have no excuse not to spend a few minutes to at least check it out for yourself. Chances are, you work for a decent employer who subsidizes your health coverage to the point you’d be hard-pressed to find a better deal elsewhere. Great! You’re one of the lucky ones! The rest of us owe it to ourselves and our families to seek out the best deal possible.
*****
RSS Feed
Email
Good to know. Thank you.
FYI – In Georgia, more than 95% of all businesses have fewer than 200 employees.
It’s true. My wife has coverage through her job. Much like yours, they don’t pay a dime toward spouses/children. So we take her coverage, then we buy mine through ehealthinsurance. It’s about $40/month less expensive, and with a deductible half the size as it would be if we bought coverage for me through her employer.
The U.S. politicians and policy-makers allowed the greedy financial barons to destroy the entire global financial system at U.S. tax-payer expense. Very interesting! A must-read for every U.S. voter so that we can hopefully avoid these same mistakes in the future. The author also tells us exactly what needs to be done to get the U.S. out of this mess, which is exactly the opposite of the actions the politicians are currently taking.
I love reading this article, a very informative one. Nice article.
The government should remove the tax benefit that large organizations take advantages of – that was McCain’s plan.