What Is Individual Health Insurance?: A Complete Guide

HealthPlans of NC

When it comes to overall health and well-being, an individual health insurance plan may be the right option for you. While it may seem expensive with potential out-of-pocket costs, it is worth having. With a proper health insurance plan, you can rest assured, as you will be covered for a variety of services and procedures. But what is individual health insurance, and what does it cover?

With the help of a knowledgeable insurance agent, you can find a plan that is both affordable and provides extensive coverage.

The Importance of Receiving Health Insurance in North Carolina

Just like in any state, it is quite important to have health insurance if you live in North Carolina. First off, accidents happen. Even if you are young and active, you should be insured. Therefore, if anything were to happen, you wouldn’t suddenly face a mountain of medical expenses. Your insurance plan would provide coverage and lessen those fees. 

In addition, having insurance increases your access to proper care. With a wider range of options, you may find the treatment and plan that works best for you.

At Health Plans of NC, we can help you find the right plan that accommodates both your lifestyle and financial situation.

What is Individual Health Insurance?

Individual Health Insurance is a plan that you can purchase by yourself from a legal entity (private insurance company). This is not sponsored or offered through your employer. In addition, it is not operated through the federal government like Medicare or Medicaid. These plans can provide you with extensive and comprehensive coverage.

Many individual insurance plans are Affordable Care Act compliant. This means that they follow a list of guidelines set by the ACA.

5 Benefits of Having an Individual Health Care Plan

Understandably, there are specific benefits to having an individual health care plan. Typically, one would not receive these benefits if they had employee-sponsored insurance or government-funded insurance.

Freedom to Choose a Plan

With individual insurance, you can choose your own plan. Your options will not be limited to what your employer offers you. 

You can also choose which tier of health insurance coverage you want. The standard options are Bronze, Silver, Gold, and Platinum. Each has its own unique benefits and coverage options. 

For example, the Bronze tier has the lowest monthly premium but the highest coinsurance percentage. 

Customized Benefits and Health Plans

In addition to choosing your own plan, you have the ability to customize your own benefits. You can find an insurance plan that is tailored to your financial circumstances. 

Everyone has different health needs, so it’s important to choose a plan that can accommodate those. You may not have this opportunity with insurance offered by an employer, though.

Along with tiers, there are four different types of plans: 

  • EPO (Exclusive Provider Organization)

  • HMO (Health Maintenance Organization)

  • POS (Point of Service)

  • PPO (Preferred Provider Organization)

If you want to stay with your preferred primary health professional, you have the ability to choose a PPO plan.

Health Insurance Subsidies or Premium Tax Credits

Health Insurance Subsidies, otherwise known as Premium Tax Credits, is a form of tax subsidy established by the United States government. The goal is to ease the costs of health insurance by offering discounts for eligible individuals or families.

Previously, one’s annual income needed to be 100% to 400% of the federal poverty level to qualify. However, the American Rescue Plan (ARP) made recent changes so that people with incomes over 400% of the poverty level are now eligible for subsidies.

Usually, the calculation of tax credits is inversely proportionate. Meaning, the closer you are to the federal poverty line, the larger percentage of tax credit you’ll receive. Depending on your annual income, you could receive a health insurance subsidy of up to 9.5%. Other factors such as place of residence and lifestyle choices (tobacco usage) can impact your premium tax credit.

Open Enrollment Period

An open enrollment period is a duration of time (November 1 to January 15) when you can enroll or change your current plan. This is a critical time, as you can adjust your plan based on new changes to your financial and medical situations. 

For example, you may require certain medications that aren’t fully covered under your current healthcare plan. You may also have an improved financial situation and wish to upgrade your existing plan.

Costs Less than Group Health Plans

Typically, an individual health insurance plan will cost more than a group health plan. This is because it spreads the risk across fewer people; only the policyholder and their family members are covered. 

With an individual health insurance plan, you will receive dedicated coverage.


What Is The Difference Between Individual and Group Health Insurance?

There are several key differences between Individual Health Insurance and a Group Health Plan. 


Individual Health Insurance

Group Health Insurance


It should be noted that certain people may not be eligible for an individual health coverage plan if they have pre-existing conditions. This would depend on the insurance company they are purchasing from.

You will be eligible for group health insurance even if you have a pre-existing medical condition. 

Choice of Plan

You will have full freedom to choose the plan that you believe is best for you. However, it is your responsibility to do proper research on the coverage and benefits.

This is the more restrictive option. A group health coverage plan is determined by the employer. Therefore, your choice of plans will be limited.


Generally, individual health insurance will be more expensive compared to group health insurance. 

Group Health Insurance is typically less expensive because the fees are spread across all employees on the plan. Furthermore, employers will partially cover the cost of monthly premiums.


This type of plan will provide coverage to you and your family.

This plan will provide coverage to all qualifying employees of a company.


With this, an individual can keep their current insurance plan even if they change jobs.

You may no longer be insured if you leave your job.

Individual Insurance

With an individual health insurance coverage plan, you can maintain the proper flexibility. Due to the Open Enrollment Period, you can find a plan that is most suitable to you and your family’s needs. You can also adjust your plan to meet your current financial circumstances. 

In addition, individual insurance plans can be quite affordable. By speaking with an experienced insurance agent, you can choose a plan that fits your budget.

There are also greater coverage customization opportunities.

Group Insurance

Group Health Insurance plans are offered by your employer. They cover all the eligible employees in your company. While they can be slightly more affordable, there are certain limitations. Yes, the costs are spread over each employee, and your company may partially cover your monthly premiums. But, there is a caveat.

You will have less flexibility since your employer decides your coverage options. In addition, if you were to leave your job, you may also lose your health insurance.

Does Individual Health Insurance Cover Everything?

Due to ACA (Affordable Care Act), each marketplace health insurance plan must provide specific coverage.

These are the 10 Essential Health Benefits:

  • Laboratory Services

  • Prescription Drugs

  • Rehabilitative and Habilitative Services

  • Emergency Services

  • Pregnancy and Maternity Care

  • Preventive and Wellness Services

  • Ambulatory Services

  • Hospitalization

  • Mental Health and Substance Abuse Services

  • Pediatric Services

Depending on your plan, you may also receive adult dental and vision services.

Young woman using laptop with terrier in sunny room.

The Average Price and Costs of Individual Health Plans

You may feel concerned about not having employer-sponsored insurance. However, on average, the costs of individual health plans are decreasing. In addition, qualifying members who receive premium tax credits from the federal government can have more affordable insurance.

Understanding Individual Insurance Coverage by Employers

Although many employers only offer group health plans, certain companies may offer an ICHRA plan. This stands for Individual Coverage Health Reimbursement Arrangement. With this, your employer will provide a tax-free monthly allowance. Employees can use this money to purchase their own health insurance plans. Under this option, an individual has greater freedom to find a plan that meets their personal requirements.

How Licensed Health Insurance Agents Can Help You

A licensed health insurance agent can assist you in finding the most effective health care plan. They can show you different coverage options and explain the costs you have to pay.

Health Plans of NC has an excellent staff who would love to help you.

Frequently Asked Questions

What is the disadvantage of individual health insurance plans?

The primary disadvantage of individual health insurance plans is cost. It is the policyholder’s responsibility to fully cover monthly premiums as your employer won’t contribute. Furthermore, since they are offered through a legal entity, they can determine your costs.

Which is the best individual or family health insurance?

Based on whether or not you have dependents, one might be a better option for you.

In addition, your lifestyle can also play a factor. For some, short-term plans match up with their needs. Short-term plans provide temporary coverage for up to 1 year. Family plans typically cost less per individual. When you choose an individual plan for a larger group of people, you may end up paying more per person.

Should one go for personal medical insurance apart from corporate insurance done by the company?

With an individual health insurance plan, one will have greater freedom and flexibility. Certain plans allow individuals to stay with their preferred health professional even if they are not in-network. These factors may influence someone towards choosing a personal medical insurance plan.

What is the best health insurance for an independent contractor (1099)?

For independent contractors, personal and general liability insurance can be important. Regarding health insurance, this will depend on the individual’s medical and financial circumstances.

Can I convert my individual health insurance into a family floater plan?

Yes, you can convert your individual health insurance into a family floater plan with the same insurance company. You will need to inform your insurance provider you wish to change plans and follow their processes to convert the policy. Make sure you understand policy changes before making any changes.

What are the potential risks of porting group insurance coverage from an employer to an individual health plan?

You will need to pay the monthly premium in full. You should also contact your group insurance company to understand any policy changes.

What does it mean when an employer only offers individual health insurance plans?

This means that your plan will only provide coverage for an individual, not a larger family. 

Still, Have Questions About Individual Health Insurance?

If you want to learn more about Individual Health Insurance Plans, contact us at Health Plans of NC. Our phone number is 800-797-0327. Or, you can receive a free quote today from one of our licensed professionals. We’re here for you.

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