Individual Health Insurance to Supplant Group Coverage?

Doctor Bills: USA Today notes a possible new trend emerging in how companies provide employee benefits. Rather than provide annual group coverage, some firms instead are switching to individual coverage in which employees receive a monthly stipend to be used for purchasing their own health insurance. The newspaper cites the “controversial approach” as one solution employers are considering as they seek to curtail the soaring costs of providing health benefits. “The shift is touted as a lower-cost way for employers to offer workers some kind of health coverage, while making smaller and more predictable financial contributions toward that coverage,” USA Today reports in its January 29 edition. However, the newspaper also notes one of the obstacles toward broad adoption of this approach—namely that it “removes a key protection in group health insurance” that prevents insurers from rejecting members of group plans for health reasons, as well as enabling all group participants to pay the same premium.