With the cost of company health plan on the rise, many people are looking for cheaper alternatives to their group health plans. Last week, one of my callers asked this question: “Should I keep my spouse and children on my company’s group policy or put them on their own plan?”
He, his wife, and their two children are currently covered by his company’s health insurance plan. The company pays his cost but charges him for the rest of the family. This is costing you a pretty penny. With open enrollment fast approaching, he wanted to know if he could save money by putting his wife and children on a separate health insurance plan instead of keeping them on his company’s plan.
Yes, most of the time you save money, but the answer is not as easy as yes or no. Here are some considerations:
Current health condition – If someone has had an illness, surgery, or is prescribed medication, they may need to stay on their current coverage. DO NOT cancel any coverage until you are sure you have new coverage.
Deductible – In a family situation, most policies in Texas will have a limit of 2 deductibles, so the maximum family deductible will be twice the deductible amount. If you put the family on a separate policy, you will lose this benefit.
Payment options – The fact is, it’s easier to have your health insurance deducted from your paycheck than it is from your checking account. Many people forget to keep the extra funds in their checking account and the policy ends up expiring.
It makes financial sense to consider this option as long as you weigh the pros and cons. Several of my clients have taken this approach because it has saved the family budget hundreds of dollars each month. By understanding the risk they have chosen to save the money.