Individual vs group health plans for small teams (2 to 20 people)

Individual vs group health plans: what is the difference?

When a small company decides to offer health cover, one of the first questions is whether to choose individual vs group health plans. With 2 to 20 people, both options can work, and the right answer depends on your team, your budget and how you expect to grow.

• Individual plans: each employee has their own international health insurance policy. The company can pay the premium directly, reimburse it, or contribute through an allowance.
• Group plans: the company takes out one policy that covers all eligible employees, and sometimes their families, under the same contract and renewal date.

Neither is always better. Below, we compare them on the points that matter most to founders and HR managers.

When do individual plans make sense for a small team?

Individual plans are often a good fit when:

• The team is very small, for example two to five people, and some insurers' group conditions are not yet available or attractive.
• People have very different needs: one employee wants maternity cover, another wants a high deductible to keep the premium low, a third lives in a different region.
• Portability matters: an individual plan belongs to the person, so they can usually keep it if they leave the company, subject to the insurer's terms. This can be a real benefit for employees.
• Staff are spread across very different locations and you prefer each person to have a plan tailored to where they live.

The main drawbacks are administration, which grows with every new hire, and the fact that each person usually goes through individual medical underwriting. Existing health conditions may then be excluded or covered with conditions, depending on the insurer. Our guide on pre-existing conditions abroad explains the main approaches.

When is a group health plan the better choice?

A group plan often becomes the better option as the team grows, or when the company wants a consistent benefit for everyone. Its main advantages are:

• One contract: one renewal date, one invoice, one set of rules. Adding and removing employees is usually simpler.
• Consistency: everyone gets the same level of cover, which helps with fairness and with explaining the benefit to the team.
• Potentially more flexible joining terms: depending on the insurer and the group size, group plans can offer more favourable treatment of medical history than individual plans.
• Employer branding: a company plan is easy to present in job offers as a clear, valued benefit.

On the other hand, a group plan is designed around the company. If an employee leaves, their cover under the group plan usually ends, although some insurers offer a way to continue on an individual plan. Minimum group sizes and conditions vary from one insurer to another.

Our guide to group health insurance for SMEs explains in more detail how company plans work.

Comparing cost, admin and cover

Cost

It is tempting to assume that a group plan is always cheaper. That is not necessarily true for very small teams. Premiums depend on ages, locations, the area of cover and the level of benefits, for both types of plan. The only reliable way to know is to compare quotes for your actual team.

Administration

With individual plans, you or your employees manage several policies with different renewal dates. With a group plan, everything is centralised. For a team that is hiring regularly, this difference grows quickly.

Medical history

Individual plans usually assess each person's health. Group plans may be more flexible, but small groups often still go through some underwriting. Compare the exact terms, not just the price.

Flexibility of benefits

Individual plans let each person choose their own options. Group plans let the company set a standard, sometimes with different levels for different categories of staff.

Portability

An individual plan stays with the employee; group cover is tied to employment with your company.

Two examples of small teams

To make this more concrete, here are two typical situations. They are simplified examples, not rules.

A team of three, spread across three countries

A small agency has a founder in Indonesia, a designer in Portugal and a developer in Thailand. Their ages and needs are very different, and the founder already has an individual plan she is happy with. Here, individual plans paid by the company can be a simple, flexible solution, at least until the team grows.

A team of twelve, mostly in one region

A growing start-up has twelve employees, most of them in Southeast Asia, with several new hires planned this year. The founders want everyone to have the same benefits and do not want to manage a dozen separate renewals. A group plan is likely to be easier to run and to explain, and it may offer more favourable joining terms, depending on the insurer.

A practical way to decide

1. Describe your team: number of people, ages, countries of residence and dependants.
2. Look ahead: how many people do you expect to hire in the next one or two years, and where?
3. Set your priorities: lowest cost, simplest admin, best cover for existing conditions, or maximum flexibility for each person.
4. Compare both routes: ask for individual quotes and a group proposal based on the same benefits, so the comparison is fair.
5. Review every year: what suits a team of four may not suit a team of fifteen. Many companies start with individual plans and move to a group plan later.

If you choose individual plans for now, each employee can get a personalised comparison through our instant quote in about two minutes.

Get help choosing the right option

Be Protected Abroad is an independent advisor. We compare individual and group plans from 20+ international insurers, and our advice is free: you pay the same premium as going direct. For companies, we prepare tailor-made proposals; see our Company & SME insurance page.

Not sure which route suits your team? Talk to one of our advisors by WhatsApp, video call or message, and we will compare both options for you.

Useful resource: International Labour Organization: safety and health at work