Understanding private health insurance

What is private health insurance?

“Private health insurance” may sound like a complicated term, but it’s just any health coverage that is not provided by the government. Insurance like Medicaid and Medicare is government-run and isn’t private. However, many people get their insurance from a private company, such as UnitedHealthcare. That’s private health insurance.

You can get one of these plans in several different ways. You might get private insurance through your employer or directly from the insurance company.

Health insurance is an important investment in yourself and your family. When you understand all the options available, you can make the best choice for you and your family.

Types of private health insurance plans

Employer-sponsored plans

You’re probably familiar with these plans, even if you don’t know them by name. Employers usually offer their employees benefits as part of their compensation package, including health insurance. When you buy one of these plans, you have employer-sponsored health insurance.

In most cases, this is the least expensive option because the employer covers part of the monthly cost. Also, some employers are able to get better rates with insurance companies because they buy for so many people.

Many employers offer a few different plans, so you can choose what’s right for you. For example, you may choose a Preferred Provider Organization (PPO) plan with a low deductible. Or you might opt for a High-Deductible Health Plan (HDHP) with a lower monthly premium. Employers often offer tools or services that can help you choose the best plan for you and your family.

While an employer-sponsored plan is a great choice for many people, they may not work for everyone. For example, self-employed individuals like freelancers, contractors, and small business owners don’t have access to employer-sponsored plans. They need other private health insurance options. Even if you have access to insurance through your work, you may want to compare your other options to be sure you get the best plan for you.

Individual & Family ACA Marketplace plans

Individuals and families can purchase private insurance plans from insurance companies without an employer. There are two categories of these plans based on whether you purchase them on the health insurance Marketplace (also called the Exchange): on-exchange and off-exchange.

You can purchase on-exchange ACA Marketplace plans either through the health insurance Marketplace or directly from an insurer, like UnitedHealthcare Individual & Family ACA Marketplace plans. With on-exchange plans, you may qualify for tax subsidies, which make the plans cost less each month. While the government is involved in creating the Marketplace and paying subsidies, these are still private insurance plans that private companies administer.

You can buy off-exchange ACA Marketplace plans directly from an insurer or through a broker. You’ll typically need to choose an off-exchange plan if your income is too high to qualify for subsidies, or if your employer reimburses your healthcare costs through an Individual Coverage Health Reimbursement Arrangement (ICHRA) or a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). While off-exchange ACA plans are private health insurance plans not connected to the Marketplace, they provide the same minimum coverage and essential health benefits as on-exchange ACA plans.

Short term health insurance

Short term health insurance provides temporary coverage for a limited period. In some states, these plans can cover you for up to nearly 3 years with TriTerm Medical plans. These plans can help you get coverage quickly, sometimes the next day.

However, short term plans may not be the best option for people with chronic medical needs, as they typically do not cover pre-existing conditions. Check the plan you’re considering to understand the benefits offered.

Supplemental insurance options

Even the most comprehensive health insurance plans don’t cover everything. Supplemental insurance options can bridge the gap. Some popular supplemental coverage options include dental, vision, and life insurance plans.

You could also choose a fixed benefit health insurance plan that works by paying you or your provider a present amount for specific, covered medical services. The benefit paid out stays the same no matter what the total bill for the qualified service was and no matter what other insurance pays, helping ease concerns from extra medical costs.

Like private health insurance plans, you can purchase supplemental plans through an employer or directly from the insurer.

Benefits of choosing private coverage

If you do not qualify for government health insurance, such as Medicaid or Medicare, private insurance offers you many opportunities for health coverage. When you shop for private health insurance, you get to choose from a variety of options, all with different monthly costs, copays, risks and benefits. You can choose what’s best for your specific needs.

When you choose a private health insurance plan, you can access many important benefits that you may not get without insurance. Depending on the plan, you may get:

Access to a large network of healthcare providers in your area
Coverage for essential health benefits, such as prescriptions, lab services, pediatric care and more
More financial security in the face of a medical emergency.
Access to telemedicine and other convenient benefits.
Wellness benefits such as incentives for health behaviors.

Every plan is different. It’s important to understand the unique benefits of a plan before signing up.

How to choose the right private health insurance plan

It's essential to review plan details carefully and consider individual or family needs before signing up for a private health insurance plan. However, shopping for insurance is unlike shopping for any other product. As you consider your options, consider each plan’s:

Premium - the monthly cost to be a member of the plan
Copays or coinsurance - what you pay to receive a service or medication
Deductible – how much you pay in copays or coinsurance before additional benefits kick in
Out-of-pocket maximum – the most you will pay for covered services in a year
Coverage – what services and medications are covered
Network – which health care providers you can see

Each of these factors plays a role in choosing the right plan for you, but only you can decide which is the most important. For example, if you are relatively healthy and rarely use your insurance, low premiums may be the most important factor. However, if you rely on insurance to help you manage a chronic condition, the plan’s coverage and network may be more important.

Enrollment: when and how to sign up for private health insurance

What is open enrollment?

Open enrollment is a period, usually once a year, when individuals can enroll in or change their health insurance plans. For ACA Marketplace plans, this time is November 1 to December 15, in most states. Many employer-sponsored plans follow the same schedule. However, some employers offer open enrollment at different times of the year, so it’s important to check with your employer.

Can I sign up for private insurance outside of open enrollment?

If you have had a qualifying life event (QLE), you can only make changes to your employer-sponsored or Marketplace plan outside of open enrollment. QLEs include major life events like marriage, the birth or adoption of a child, or job loss. A QLE begins a special enrollment period, typically 30 days, in which you can make changes to your coverage.

Short term insurance and TriTerm Medical plans have year-round enrollment, whether or not you've had QLE. You can sign up at any time. It can serve as a bridge if you lost your coverage and missed the special enrollment period after your