How Can a Consumer Purchase Health Insurance?

A consumer may obtain health insurance from an employer (or other group) or individually from another source.

From an Employer or Other Group
Some consumers obtain health insurance plans offered by employers to their employees and their employees’ dependents as fringe benefits. When employees obtain health insurance through their employer, the cost of the health insurance plan often is shared between the employee and the employer. In addition, other groups whose members share a common bond, such as labor unions and some other associations, can offer members an opportunity to purchase health

insurance through the group.

If an employee purchases insurance offered through his or her employer (employer-sponsored
insurance, or ESI), the employee enrolls in a plan through the employer without interacting with
salespeople and other representatives of health insurers. ESI is therefore relatively easy to obtain.
If an employee does not want to accept an offer of group insurance, he or she is free to purchase
health insurance from another source.

Not from a Group
Consumers who are not offered or who do not purchase group insurance may use insurance brokers and agents, including web-based brokers, to learn about health insurance plans. Brokers and agents are licensed by the states and generally are paid on commission by insurers. Agents work with one insurer, whereas brokers can work with more than one insurer. Consumers may purchase health insurance policies either directly from insurers (perhaps represented by brokers and agents) or from exchanges, which sell the insurers’ plans. Insurance exchanges serve as marketplaces for health insurance plans in that they facilitate transactions between the buyers of insurance (consumers) and sellers of insurance (insurers). In general, consumers must use exchanges in their states of residence.