If you or your spouse are working, you may have the chance to join a health insurance through an employer-sponsored group health plan. However, that’s not your only option for coverage. Buying your own health insurance is not only doable but might even be that smartest option for your wallet. This could be the case if you are self-employed and running your own gig as a freelancer, the owner of a small business, or an employee of a business that either does not offer health insurance as an employee benefit or offers group health insurance but at a higher cost than feasible for you. So, if finding your own health plan sounds like it could be a better fit for you, it’s worth exploring.

Providing employer-sponsored insurance (ESI) is a crucial advantage for both employers and employees, yet the expense associated with it has become almost unsustainable. This has led to a growing number of people looking elsewhere to get health coverage. If you are interested in comparing individual and family health insurance plans, eHealth can help you navigate your health insurance options and find an affordable plan that meets your needs.

Key Takeaways

You can buy your own private health insurance.

To be eligible to enroll in health coverage through the Marketplace, you:

• Must live in the United States
• Must be a U.S. citizen or national (or be lawfully present). Learn about eligible immigration statuses.
• Cannot be incarcerated in prison or jail

Purchasing private health insurance offers personalized coverage and flexibility, but there are three critical aspects to keep in mind:

• Navigating the Marketplace: The Health Insurance Marketplace is a pivotal resource, offering a range of plans and potential subsidies based on your income level.
• Balancing Cost and Coverage: It’s essential to weigh the monthly premiums against the deductibles and out-of-pocket expenses to ensure the plan meets both your healthcare needs and budget.
• Special Enrollment Opportunities: Life changes such as moving, losing other coverage, or family events can open Special Enrollment Periods, allowing you to buy insurance outside the standard Open Enrollment period.

There are advantages to choosing your own health insurance plan, including:

• Tailored Coverage: Personalize your plan to match your specific health needs and lifestyle, ensuring you’re only paying for what you truly need.
• Flexible Options: Access a wide array of plans, from comprehensive to high-deductible options, allowing for flexibility in coverage and cost.
• Control Over Providers: Select plans that include your preferred doctors and healthcare facilities, giving you control over who manages your health.

During the Marketplace open enrollment period each year, you can:

• Choose a plan for the first time
• Continue in your current plan
• Make changes to your current insurance plan
• Choose a new plan to replace your current plan

What are the advantages of individual health insurance?

With employer-sponsored health insurance, your employer shops and chooses health coverage for you. Your employer also decides your share of the total premium cost for group health coverage. Your employer’s decisions are usually based on delivering health insurance that meets the needs of most employees and falls within the company’s budget. 

When you are buying your own individual health insurance, you’re in charge. You are free to choose health insurance that fits your personal preferences and circumstances.

• You choose the insurance company and the plan that best suits your healthcare coverage needs and budget. You may be less likely to pay for benefits you don’t need or pay out-of-pocket for health care you routinely get but that is not covered by your plan.
• You can verify your preferred hospitals, healthcare providers, and medications are included in your health plan choice prior to enrollment. And when you see a match between your preferences and an HMO plan’s network, you may well opt for the HMO, which generally costs less than a PPO plan.
• Your coverage is not tied to your job, so you can change jobs without potentially losing your health insurance.
• You may qualify for Affordable Care Act (ACA) subsidies and other cost reduction saving that help lower the cost of your health insurance. 

What are the advantages of employer-sponsored health insurance?

Several advantages of purchasing employer-sponsored health insurance include:

• Your employer selects your plan options and may engage benefits consultants or insurance brokers to identify the most suitable plan for the employees overall that meets the company’s budget.
• Your employer will typically share the cost of your premiums with you, thereby reducing your out-of-pocket premium costs.
• The premium contributions your employer makes are not taxed and your contributions can be made on a pre-tax basis. This will lower your taxable income.

If you are the owner of a small business with more than 1 unrelated employee, you may want to look at small business health insurance options before you decide to purchase individual coverage. eHealth can help you explore your options and select the right plan for your business and personal needs. eHealth works with highly rated insurance companies that specialize in individual and small group health plans. By using eHealth’s online tools, you can evaluate small group plans with ease and consult with eHealth’s licensed insurance agents at no cost to you.

Which option is less expensive: individual health insurance or group health insurance?

Cost is a deciding factor for many when it comes to health insurance. The cost for both an employer-sponsored health insurance plan and an individual health insurance plan varies significantly, depending on such factors as age, location, coverage type, the number of individuals who are included under your coverage enrollment.

Employer-sponsored group health insurance and the average cost to enrollees

If you have access to employer-sponsored group health, the primary factors that may influence the monthly cost of your health insurance are income, location, size of family, and perhaps most significantly, the percentage of the premium your employer pays, if any portion of it. According to the Kaiser Family Foundation (KFF), the average annual premiums for employer-sponsored health insurance was $8,435 for single coverage and $23,968 for family coverage in 2023. 

About 30% of covered workers at small firms are enrolled in a plan where the employer covers the entire premium for single coverage. In 2023, covered workers on average contributed 17% of the premium for single coverage and 29% of the premium for family coverage. 

Average cost of buying health insurance on your own

The national average unsubsidized health insurance premium for a benchmark plan in 2024 is $477, according to the Kaiser Family Foundation. A benchmark plan is the average premium for each state’s second lowest cost Silver plan. The average monthly premium for a family of 4 is $1,506. Actual premium cost varies by state, age, tobacco use, and plan type.

You may be eligible for Affordable Care Act (ACA) – also known as Obamacare – subsidies to help pay your monthly premium for an individual health insurance plan that provides minimum essential coverage. 

For 2024, the provisions introduced by the American Rescue Plan Act (ARPA) of 2021 continue to significantly influence the affordability of ACA (Affordable Care Act) health insurance plans. The Inflation Reduction Act, enacted on August 16, 2022, extended these enhanced ACA tax credits through 2025, maintaining their relevance for consumers in 2024.

Under these provisions:

1. Elimination of Income Cap for Premium Tax Credits: ARPA removed the upper-income limit for subsidy eligibility, which was previously capped at 400% of the federal poverty level (FPL). This change allows more individuals and families, regardless of higher incomes, to qualify for premium tax credits.
2. Increased Premium Tax Credits: The amount of premium tax credits offered was increased, reducing the proportion of income that individuals need to contribute toward their health insurance coverage.
3. Premium Cost Cap: The cost of premiums was capped at 8.5% of an individual’s household income, making health insurance premiums more manageable for a wider range of income levels.

If you make less than 138% of the FPL, you may also be eligible for subsidies or other government programs, such as Medicaid, Children’s Health Insurance Program (CHIP), and programs that help cover the cost of prescription drugs. To see the most affordable health insurance options in each state, check out affordable health insurance plans by state.

How do I buy health insurance?

Choosing the best health insurance plan involves assessing your budget, your current health, what you expect in the next year in terms of healthcare services and changes in your personal life or lifestyle (e.g., marriage, childbirth or adoption), and what cost-sharing arrangement and benefits you want from your plan. If you routinely take medications, for example, you should prioritize prescription drug coverage and ensure your medications are covered by your plan of choice. 

If you decide not to obtain health insurance through your employer, you can shop online on your state’s Marketplace, directly from an insurance company, or through a brokerage firm or private exchange such as eHealth.

eHealth offers a private exchange where you can compare a large range of coverage options, including ACA plans offered on the government Marketplace. You may also qualify for premium tax credits and other cost sharing reduction if you buy a Silver plan and meet the income level eligibility rules and if you do not have access to affordable coverage through an employer’s group health plan. 

When can I apply for a health insurance plan?

Annual Open Enrollment Period

The best time for most people to apply for health insurance is during the annual Open Enrollment Period that runs from November 1st, 2023, and run through December 15th, 2023, for coverage starting January 1, 2024. During the annual Open Enrollment Period you can buy health insurance on the marketplace or change plans if you bought health insurance on the marketplace last year.

Qualifying Life Event

If you have experienced a qualifying life event, you may be eligible for a special enrollment period to purchase health insurance on the marketplace outside the annual open enrollment period. Some qualifying life events may include a loss in coverage due to job loss or change, getting married or divorced, or becoming ineligible for coverage because of a change in income. Special enrollment periods generally last for 60 days.

Buying health insurance is an important and often complex undertaking. For most of our customers, health insurance is not a routine consideration. But for eHealth, it is our business. Our aim is to help you make the right health coverage decision for your personal needs.

We invite you to use our online tools to compare benefits, cost, provider networks, and covered prescription drugs. And if you have questions about coverage, cost, or your eligibility for ACA subsidies that can reduce your healthcare expense, we can answer those questions. 

eHealth customer service staff are happy to provide technical assistance. Our licensed agents and brokers are readily available to answer your health insurance questions online or by telephone. eHealth online tools and consulting services are available to you free of charge.

This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.