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May 21, 2011 11:45PM
An individual policy will be much, much more expensive. There are at least three reasons for that:
1. As a member of the group, you get the benefit of a group rate (based on the underwriting for the entire group). A non-profit law firm may be getting its insurance through a collective of similarly placed employers, which would spread the risk (for the insurer) even more, making the rates even lower. As an individual, they're going to underwrite the risk they have on you, as an individual. They may not be willing to underwrite an individual policy for you at all.
2. Many employers subsidize the underwritten rate for their employees as an employee benefit. If you're paying anything less than $300 a month or so for an indivdual policy, they're probably subsidizing your insurance. If you decline the insurance, they are unlikely to pay you the difference between the unsubsidized and the subsidized rate, you will simply be forgoing the difference. If you have a so-called "cafeteria plan" where you get to choose which benefits you want to use your pre-tax dollars to pay for, you're still not paying "market" price for your coverage.
3. Employer-sponsored group policies are paid for with employer dollars, instead of your "after-tax" income dollars. So you will need to gross the price of the individual policy up by your tax rate to make a fair comparison with the unsubsidized group rate.
Finally, you may not be able to get an individually underwritten policy at all (I couldn't) so you would then have to look to either your state's high-risk pool, or (if your state has one) it's mandated cover group. Qualification for the mandated cover group (at least in my state) usually is based on exhaustion of COBRA benefits, no group coverage & no lapse in coverage.
And by the way, my unsubsidized, employer sponsored policy (for me only) was $280/month. My policy wasn't subsidized, but our clerical staff's was subsidized, so that they paid something between $25 and $50 for the same policy. It's the loss of the employer subsidy that makes people think COBRA coverage (which is the same price as the unsubsidized policy + a 1% or 2% administative fee) is expensive.
My mandated group cover policy (which is only oftered in a high-deductible policy) is $648/month. That means my costs (for premium & deductible) are $13,000/year for insurance before the insurer pays anything.
All that is another way of saying, please reconsider keeping your group policy!