What’s the Difference Between Individual and Group Health Insurance?

In Canada, health insurance comes in two main forms beyond public coverage — individual plans and group plans. Both are designed to supplement provincial health benefits by covering common out-of-pocket costs such as dental care, prescription drugs, vision, and therapy.

Understanding how individual and group insurance differ helps you make better decisions about your coverage, especially if you are changing jobs, self-employed, or preparing for retirement.

What Is Group Health Insurance?

Group health insurance is coverage provided through an employer, association, or union. It offers a set of health benefits to all eligible members, with costs often shared between you and the sponsoring organization.

Because risk is spread across a large group, these plans tend to have:

Lower premiums than individual coverage
Employers negotiate group rates with insurers, making monthly costs more affordable. Your employer may also cover part or all of the premium.
No medical underwriting
You are accepted automatically, regardless of your age or health history. This can be especially valuable if you have pre-existing conditions.
Broad coverage options
Most group plans include a combination of dental, vision, drug, and paramedical benefits such as massage therapy or physiotherapy, though coverage limits vary.

Tip: If you are covered under a group plan, review your policy at least once a year. Even generous plans may exclude some services or have limits on specific benefits such as orthodontics or counselling.

What Is Individual Health Insurance?

Individual health insurance is purchased directly from an insurer. It is typically used by people who are self-employed, between jobs, or retired and no longer have access to group benefits.

These plans allow more customization but come with a few considerations:

Medical questionnaires or exclusions may apply
Unlike group plans, individual coverage may require you to disclose your health history, and some conditions might not be covered.
Premiums are typically higher
Since risk is not pooled across a group, monthly costs can be higher, especially if you want extensive or specialized coverage.
Plans can be tailored to your needs
You can select coverage for specific needs such as prescription drugs, mental health support, travel medical insurance, or catastrophic care limits.

Note: If you are self-employed, premiums for an individual plan may be partially tax-deductible depending on your income and how you structure your business.

Comparing Group and Individual Coverage

Feature	Group Health Insurance	Individual Health Insurance
How it is obtained	Through employer, union, or association	Purchased directly from insurance company
Eligibility	Based on employment or group membership	Based on application and sometimes medical review
Premium costs	Often lower, shared with employer	Usually higher, paid entirely by the individual
Flexibility of plan design	Standardized for group members	Customizable based on personal needs
Underwriting requirements	None (guaranteed acceptance)	May include medical history or condition exclusions
Portability	Ends when you leave the job or group	You keep the plan regardless of employment status
Tax advantages	Employer contributions may be tax-free	Premiums may be deductible if self-employed

When Each Type Makes Sense

Group insurance is ideal if you are employed and your workplace offers a plan. It tends to be more cost-effective, convenient, and inclusive, especially for those with pre-existing conditions or dependents.
Individual insurance is a strong option if you are:
- Self-employed and want predictable health care costs
- Transitioning between jobs and need temporary protection
- Retired and no longer eligible for group coverage
- Looking for specific types of care not included in your group plan

Caution: Group coverage ends when your employment or group membership does. If you rely on it for prescription drug or dental benefits, it is wise to have a transition plan ready in case your circumstances change.

Choosing the Right Approach for Your Needs

Both individual and group health insurance serve valuable purposes. The key is knowing which one aligns best with your life stage and financial situation.

If you currently have group benefits, understand your coverage and start planning for future transitions. If you are exploring individual insurance, take time to compare plans, look at annual limits, and assess how well the policy matches your health care needs.