Many schools and organizations come to us trying to figure out how to best manage their insurance plan. Deciding whether an individual or group insurance plan is best for your students can be difficult, and will depend on your process, how much control (and how involved) you want over the insurance, ease of administration, and various other factors. Your answers to these, and other questions, will help you make the final decision as to whether a group or individual insurance plan would be more suitable.
This blog is designed to provide schools and organizations with an overview of the differences between a group or individual plan and will evaluate the main issues to help inform your decision about how to best implement your insurance plan.
1. Payment Method – The main difference between group and individual insurance plans are how the insurance premiums are paid and settled. With a group plan, the cost of insurance is covered by the school or group, typically through a monthly or one-time invoice. This allows the cost of the insurance plan to be built into the trip cost or student’s tuition. With an individual plan, on the other hand, the cost of the insurance plan is paid for by the participants directly, thereby relieving the school or organization from having to collect insurance premium and make payment.
Note: If students are paying monthly on an individual plan, it’s important to know that billing issues could arise where there could be a lapse of payment. The insurance will typically notify the student and provide a grace period to make the overdue charge. If payment is not received, however, the policy will end and you may not even know! To prevent this, it is suggested that students always pre-pay for the required period, or you institute a group plan to avoid this happening.
2. Benefits & Cost – Group insurance plans typically have richer benefits and are typically offered at a lower cost, since they are able to rely on the law of numbers and a random pool of participants to outweigh the risk. With this in mind, group insurance plans can often be customized to include coverage for maternity, pre-existing conditions, etc. in ways that individual plans cannot. This is because with individual plans, insurance carriers have to be wary of adverse selection, making sure that not only the people who are in need of the insurance, buy it, but those who don’t need it buy the plan as well. In some cases, group insurance plans are less costly as group discounts may be offered depending on the number of participants enrolled.
3. Knowing Your Coverage – One of the advantages of having a group plan is that you know what coverage your participants have, and you are also familiar with the process to seek treatment, file a claim, and get help when necessary. You can make sure that the insurance benefits will be well designed to meet the needs of their international experience (i.e., include sports coverage, maternity, etc.), and don’t have to worry about students being enrolled on sub-par plans. With individual plans, you would not have this same control as students would be able to purchase the coverage they want, and benefits, claims processes, etc. could vary quite considerably. If you would like an individual plan for your students, here are the most common ways to manage this:
- Leaving students on their own
- Require minimum coverage
- Mandating one or more insurance options
4. Duration of Coverage – Group plans allow the plan administrator to ensure all participants/students are covered for the exact coverage dates they need. Typically groups coincide the dates of coverage with their travel dates or with the academic term, making sure students are fully covered during their time abroad or while enrolled in their courses. On an individual plan, the participant is the one that selects the start and end date of their insurance, and while many schools and organizations require that students have coverage during a specified period of time, students may not always purchase the correct period of coverage. This can create extra administration, as you would need to check each participant’s coverage to make sure they have the correct coverage dates.
5. Account Management – Most group plans offer a higher level of customer service through a dedicated account manager who is assigned to help you every step of the way. This point person can assist with all aspects of your insurance plan so that things are quickly and easily resolved. If students are purchasing their coverage on their own, you might not have an account manager in this setup, as plans could be purchases from a wide variety of providers. You may, however, be able to establish a good relationship with one insurance company if you are referring all your students to purchase coverage there, so that could be something you could explore.>>Learn more about service and support options
When it comes to deciding whether an individual or group insurance plan is right for you, there is a lot to think about! If you are in the process of deciding how best to implement your insurance, please feel free to contact us directly as we’d be happy to walk you through the process and determine which option is best for you. You can also check out our Best Practices Guide which provides even more details about important considerations of your insurance plan.