First, in the world of individual or group health insurance, it is important to understand that brokers can be your best allies. True, they need to get paid, but it will never be by you. The insurance companies price into the health insurance the cost of using a broker. That commission is something that is imbedded into the cost and can never be changed. Even if you tell the insurer that you do not plan on using a broker, the cost cannot be taken out. Therefore, given that brokers are paid by the insurers and not by you, they can be your best allies in terms of choosing a plan as well as assisting you with claims issues.

Therefore, the question is then, how does one choose a broker. You must interview your broker or agency to find out how they can best help you, their experience as well as added value services they can offer you. If, as time goes by, you do not like working with your broker, you can always switch brokers with what is called a “Broker of Record” (“BOR”) letter. For a group, it is written on company stationary and tells the insurance company that all you want to do is switch brokers; everything else is to remain the same. The same holds true for individual insurance.

It is also important to understand the difference between individual insurance and group insurance coverage. For example, in the State of California, small group medical insurance coverage is defined as a group of people, no less than two (2) and no more than Fifty (50). It is possible to have a husband and wife form a “group” for purposes of medical insurance. However, you would need to go through the formalities of proving employment or ownership, which is more than just saying we are married and of course, she owns half of the business. Nevertheless, the question is why would want to be considered a “group” as opposed to getting insurance as an individual? First, in the State of California, small group insurance is guaranteed, meaning that you may have 101 critical illnesses, nevertheless, the insurer is obligated to give you the insurance and cannot “rate” you above and beyond a certain point. Now, contrast that with individual insurance, where if you apply for that same coverage and have the same 101 critical illnesses, you will be denied. In fact, I have seen cases where individuals were on just two (2) minor prescriptions and they were denied coverage. Further, there are benefit coverage differences and price differences between individual and small group coverage. It is important to check your particular State as to the “guaranteed” issue. That is a huge difference and is a major factor as to why one is better off with “group” coverage as opposed to individual coverage, at least in the State of California.