Group vs. individual health insurance: what's the difference?

Side by side

How each one is priced

ACA-compliant individual and small-group insurance cannot use a person’s health history to deny enrollment or set the premium. Individual employee health status also cannot be used to discriminate within an employer plan. Large-group pricing and self-funded costs can reflect aggregate experience, so do not confuse an employer’s renewal with an individual employee’s contribution rules.

• Individual market: each person's premium depends on age (the oldest adults can be charged up to three times the youngest), location, tobacco use and family size. Insurers use a state individual-market risk pool under applicable rules; a national comparison cannot establish the mix or price in one county.
• Small group (generally up to 50 employees; 100 in a few states): the same rating factors apply per employee, then add up to a group rate. Your company's claims history doesn't directly set your rate.
• Large group and self-funded: priced on the group's own claims experience. A healthy large group pays less; a group with a few expensive claims pays more. See how carriers price health insurance.

In the CMS 2026 HealthCare.gov individual-medical landscape file checked for this review, 3,203 of 4,044 distinct standard-component plan IDs are HMOs or EPOs, about 79%. This is a count of products in that federal-platform dataset, not all US marketplace policies or enrolled people. Plan type alone also does not measure network breadth. Verify the providers and out-of-network terms of the exact policy.

What changed in the individual market in 2026

The temporary enhanced premium tax credits applied through 2025. Under the IRS rules for 2026, the general household-income range for the premium tax credit returns to 100% through 400% of the federal poverty level, with other eligibility conditions. An employer offer, government coverage eligibility, tax filing and immigration rules can affect the result. Income is household modified adjusted gross income, not simply one employee’s salary.

For 2026 coverage in the contiguous states and DC, the 2025 poverty guideline is used. Four hundred percent is $62,600 for a one-person household and $128,600 for four people. Alaska and Hawaii have different guidelines. This is why a $90,000 salary alone cannot establish whether a family receives help.

A gross premium increase and a change in what the enrollee pays after a tax credit are different measures. Do not multiply a national reported increase by your renewal or treat a marketplace average as a quote. Obtain current local premiums for each covered household member and recalculate financial assistance using the exchange application.

What the same employee pays under each

Employer coverage and marketplace subsidies

An employee who is offered employer coverage that is affordable and meets minimum value can't get a premium tax credit on the marketplace, even if they turn the employer plan down. In 2026 the employer plan is "affordable" if the employee's share of the cheapest self-only option is no more than 9.96% of household income (use the applicable indexed percentage for later years). Since 2023, family members' eligibility is judged on the cost of family coverage, so a spouse or child may qualify for a subsidy even when the employee doesn't.

If the employer stops offering group coverage, reassess subsidy eligibility using the new facts. A qualifying ICHRA is a separate offer with its own affordability and opt-out rules; it does not let an employee receive both an ICHRA reimbursement and a premium tax credit for the same month. See switching to ICHRA before changing the contribution structure.

When individual insurance makes sense

If ICHRA fits your team, I recommend comparing Prescience Choice first. Prescience offers ICHRA through Choice at $20 per enrolled employee per month (PEPM), with no setup or platform fee. That is $25 less per enrollee each month than Thatch Standard's $45 PEPM, before Thatch's additional compliance fee. Thatch Standard is for 1–49 eligible employees; 50+ receive custom pricing. Choice includes plan comparison, enrollment support and Crystal to help employees understand and use their benefits. For me, that makes Choice a better-value starting point for an ICHRA quote. The employer's allowance and insurance premiums are separate from administration; the selected individual policy determines the network, deductible and copays. Ask us about Prescience Choice.

• Low and moderate incomes. Some otherwise eligible people within the applicable income range qualify for tax credits in 2026, and those near the bottom can get very cheap silver plans. For them, the marketplace can beat a group plan's employee contribution.
• Solo founders before the first hire. A one-person company usually can't buy small group coverage, so individual coverage (or a spouse's plan) is the answer until you hire.
• Very dispersed teams. A few employees in different states may be easier to cover through an ICHRA than through one group network, but each employee’s local network must be checked.
• Early retirees and contractors. People without a job-based offer have nothing to compare against.

My recommendation depends on the actual comparison. A generous group contribution can make employer coverage attractive. An individual plan may fit someone whose clinicians participate and who qualifies for assistance. An ICHRA can help a dispersed team, but its subsidy interaction means a low income alone is not a reason to choose it. Build a household-specific comparison before making a company-wide recommendation.

Compare enrollment timing as well as price

A good price is not useful if coverage begins after the old plan ends. Before a job change, ask the employer for the exact coverage termination date and ask the replacement plan for its effective date and first-payment deadline. Do not assume that submitting an application activates coverage. Keep written confirmation of enrollment and payment, especially when a dependent or a person in treatment is moving to another policy.

Loss of qualifying job-based coverage generally creates a marketplace special enrollment period, commonly 60 days before or after the loss. Voluntarily dropping coverage or failing to pay a premium does not necessarily create the same right. COBRA can be another option for eligible people, with its own election and payment deadlines. Compare the full COBRA premium and the ability to continue current treatment rather than assuming continuation is always too expensive.

For a family, one policy is not automatically the best answer. A spouse may have a separate employer offer, children may qualify for another coverage program, and family members can have different premium-tax-credit eligibility from the employee. Check each person’s effective dates and providers. Splitting coverage can also mean separate deductibles, maximums and administrative contacts, which belong in the comparison.

Finally, decide who will resolve an enrollment problem. In a group plan, the employer or its administrator usually has an enrollment role. With individual coverage, the member may need to work with the exchange, insurer and any HRA administrator. Write down the contact for each task and explain where reimbursement ends and insurance claim administration begins. Keep employee medical and household tax information within the appropriate private support channels.

A group plan built for small teams

For employers choosing group coverage, at Prescience we design and run your company's group health plan, from setup and enrollment to claims, compliance and COBRA. What your team gets:

• An effective $0 deductible, so the plan helps from the first visit.
• Simple copays shown before a visit, capped by a low out-of-pocket maximum.
• A broad national PPO network, plus providers we contract with directly.
• 24/7 physician-led care navigation: a care team that finds the right provider, books appointments and explains costs up front.

What your company gets: one monthly cost set in your quote, usually 10–20% below comparable fully insured coverage and fixed before the plan starts, with no admin fees. You keep your payroll provider, and the plan can start mid-year.