Medical Insurance Blog

Group Medical Insurance And Splitting Family Members

When you are obtaining medical insurance from your employer they may actually offer to allow you to add your family members to your coverage. Some larger companies may elect to help you pay for the additions, but they are not required to by law and many smaller companies will not offer to pay any of the added cost which will mean you will incur the added premium. They are however required to pay for part of your coverage and this is known as the employer contribution. The amount that is left over after your employer has paid the employer contribution is known as the employee contribution and is the amount that you will be responsible to pay to ensure coverage.

Determining whether or not to add your family members to your work policy starts with some comparisons. If your employer will actually pay part of your family member's premium, such as 50 percent, then it is more than likely in your best interest to go ahead and add your family members to your work policy. However, you should always compare the rates that you will pay by adding your family members to that of insuring your family members on a separate insurance policy. While this rate may not be less than what you will pay through your job should your employer elect to pay part of the added premium, if your employer is not paying any part of your family's premium then many times it will in fact be cheaper to insure your family members on a separate policy. The reason is that group rates tend to be higher than many individual rates in the same market place. This is due to the fact that group rates are determined using such factors as overall group health, overall average group age, and geographical location of the group.

Once you have determined your medical plan options and prices through work, you will then need to figure out how much each family member will cost to add to your plan. Once this is determined you will easily be able to go out into the market and see if there is a better rate you can obtain for the same coverage. Here is what you need to ask your employer to provide for you in regards to cost:

• Employee Only: This will be the price that you will pay when it is only you on the policy.
• Employee and Spouse: This will be the price you will pay for you and your spouse and will not include your children.
• Employee and Children: This will be the price you will pay to insure yourself and your children, but not your spouse.
• Employee and Family: This will be the price you will pay for yourself and your entire family.

Having these options broken down for you will let you see how much extra you will be required to pay when adding certain family members to your medical insurance plan. Some providers will only give the option of Employee Only or Employee and Family in which case you cannot break down the individuals of your family. However, if you are provided with a full breakdown you can calculate your family's added cost using the following formulas:

• Spouse: Employee and Spouse - Employee Only = Price Difference
• Children: Employee and Children - Employee Only = Price Difference
• Family: Employee and Family - Employee Only = Price Difference

Once you know for sure what each family member will cost you on your policy you will want to obtain quotes from various insurance providers and compare rates. Be sure that the options are the same as those being offered through your work to ensure your coverage will be adequate.

Another factor you will need to consider is the out-of-pocket maximums. These annual amounts represent the most you will need to contribute towards your deductibles. Most medical insurance plans will have out-of-pocket maximums, but some providers will have it on an individual basis and others will have it on a two person or three person basis. Once you have reached your out-of-pocket maximum you will not have to pay any more for the remainder of the year so it is important to know the exact amount of the provider's out-of-pocket maximums and how it applies to those on the policy. The out-of-pocket maximums that you find through searching the market place should be compared to the out-of-pocket maximums you are being offered at work. Remember that you will already have an out-of-pocket maximum with your work policy and if your family goes onto a different policy then you will have another out-of-pocket maximum to deal with.

The bottom line with medical insurance for you and your family is that it has to not only be affordable, but adequate as well. Before you do decide for certain which policy you will add your family to, you must be sure that your family's needs will be met and that you and your family will be prepared should life bring about an unexpected event.

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