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Different Types of Pennsylvania Health Insurance

Types of Health Insurance

Health insurance is available through two types of plans: group or individual. Group plans are offered through an employer or association; individual plans are purchased directly through an insurance company. (For purposes of this brochure, "individual" refers to you and, where applicable, your dependents).

If you work for a company that offers a group insurance plan, or even a choice of plans to its employees, obtaining health insurance may not be a problem. However, if you are not covered by a group plan, or if you want different or additional coverage other than that offered by your employer, you may want to consider buying individual health insurance coverage for yourself or your family, or determine your eligibility for association or government sponsored health insurance.

Employer Sponsored Group Insurance: Employer Sponsored Insurance is group health insurance coverage offered by your employer. The group health insurance coverage purchased by the employer can be through a private insurance company or coverage that is "self-funded" or "self-insured," meaning that the employer will use its own money to pay for the health care expenses of its employees. It is important to know whether the health insurance coverage under your employer's group policy is purchased through an insurance company or whether it is self-funded. While self-funded plans may provide excellent health coverage, they are regulated by the federal government and are not required to offer the same benefits as private insurance plans that are regulated by state insurance laws.

Individual Insurance: Individual insurance includes health insurance coverage you can purchase on your own directly through an insurance company. Many health insurance companies offer individual health coverage to people who either are self-employed or work for a business that does not offer health insurance.

All Pennsylvania residents can buy individual health insurance through the Blue Cross and Blue Shield plans on a guaranteed issue basis. However, your choice of health plans may be limited and you may face a pre-existing condition exclusion period.

Other insurers that offer individual health insurance coverage can medically underwrite applicants and do not have to offer coverage to everyone who applies. You have limited guaranteed access to individual health insurance in most other states.

Franchise Insurance: Franchise insurance is individual insurance. This type of insurance coverage is optional and the insurance policy is issued to the employee of an employer or a member of an association where the employer or association agrees to collect the policy premiums on behalf of the employee or member and pay them to the insurer. For employees, this option may allow them to purchase coverage through payroll deduction.

Association Sponsored Insurance: Association sponsored insurance includes health insurance coverage that may be offered to you or a member of your family through a fraternal or professional association. Association sponsored insurance usually costs less than individual insurance because, similar to employer sponsored insurance, you may be able to purchase health insurance at a group rate.

Government Sponsored Insurance: Government Sponsored insurance includes health insurance coverage that provides medical benefits to senior citizens, disabled persons, and the economically disadvantaged. Examples include Medicare and Medicaid. Government sponsored insurance also may be available to those with conditions related to military service.

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