What Is Individual and Family Plan (IFP) Insurance?

Understanding Individual and Family Plans

Individual and Family Plan (IFP) insurance provides health coverage for individuals and their families who do not receive health benefits through an employer, government programs like Medicare or Medicaid, or other group plans. Purchased directly from an insurance company or through a health insurance marketplace, IFP serves as a primary option for self-employed individuals, early retirees, those working for companies that do not offer health benefits, or individuals who may not qualify for government-sponsored health programs. IFP plans differ from employer-sponsored plans because the individual, not an employer, is responsible for selecting and paying for the coverage. This direct purchase model offers flexibility in choosing a plan that aligns with specific healthcare needs and financial situations. The availability and structure of these plans are largely shaped by federal regulations, ensuring a baseline level of coverage and consumer protections.

Core Components of IFP Coverage

Health insurance plans, including Individual and Family Plans, incorporate several financial elements that determine how much a policyholder pays for medical services. A deductible is the amount an individual must pay out-of-pocket for covered healthcare services before their insurance plan begins to pay. For example, if a plan has a $3,000 deductible, the policyholder is responsible for the first $3,000 of covered medical expenses incurred in a plan year.

After meeting the deductible, copayments and coinsurance come into play. A copayment is a fixed dollar amount, such as $30, that a policyholder pays for a covered healthcare service, like a doctor’s visit or a prescription, at the time of service. Coinsurance is a percentage of the cost of a covered service that an individual pays after their deductible has been met, such as 20% of the bill for a hospital stay.

An out-of-pocket maximum is the most a policyholder will pay for covered healthcare services in a plan year. Once this limit is reached, the insurance plan pays 100% of the cost for covered benefits for the remainder of the year. IFP plans often utilize provider networks, which are groups of doctors, hospitals, and other healthcare providers that have contracted with the insurance company to provide services at a discounted rate. Plans like Health Maintenance Organizations (HMOs) typically require individuals to choose a primary care provider within the network and obtain referrals for specialists, while Preferred Provider Organizations (PPOs) offer more flexibility to see out-of-network providers, often at a higher cost.

What IFP Plans Cover

Individual and Family Plans that comply with the Affordable Care Act (ACA) are required to cover a comprehensive set of services known as Essential Health Benefits (EHBs). There are ten distinct categories of EHBs that all ACA-compliant IFP plans must include, providing a broad safety net for policyholders.

These categories include:
Ambulatory patient services, which are outpatient care services that do not require an overnight hospital stay.
Emergency services.
Hospitalization, including surgery and overnight stays.
Maternity and newborn care, covering services before and after birth, as well as care for infants.
Mental health and substance use disorder services, including behavioral health treatment.
Prescription drugs.
Rehabilitative and habilitative services and devices, which help people recover or gain skills after an injury or disability.
Laboratory services.
Preventive and wellness services, along with chronic disease management.
Pediatric services, including oral and vision care.

How to Obtain IFP Insurance

Individuals seeking an Individual and Family Plan can obtain coverage through two primary avenues: the Health Insurance Marketplace, also known as the exchange, or directly from an insurance company. The Health Insurance Marketplace, operated by the federal government or individual states, provides a platform where individuals can compare and enroll in various health plans. Purchasing directly from an insurance company, often referred to as “off-exchange,” involves buying a plan outside of the Marketplace.

Enrollment in IFP plans generally occurs during specific periods. The annual Open Enrollment Period (OEP) is the primary time when individuals can enroll in a new health plan or change their existing plan for the upcoming year. This period typically occurs in the fall, with coverage beginning on January 1st of the following year.

Outside of the Open Enrollment Period, individuals may qualify for a Special Enrollment Period (SEP) if they experience a qualifying life event. These events can include marriage, birth of a child, adoption, moving to a new area, or losing other health coverage. SEPs usually last for 60 days from the date of the qualifying event, allowing individuals a limited window to enroll in a new plan. Financial assistance, such as premium tax credits and cost-sharing reductions, may be available through the Health Insurance Marketplace for eligible individuals and families based on income levels. These subsidies can significantly lower the cost of monthly premiums and out-of-pocket expenses, making coverage more affordable.