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Family Health Insurance

What Is Family Health Insurance?

Family health insurance is a health insurance plan that keeps you and your family protected. It is managed similarly to individual health insurance plans and is purchased to keep you and your family financially secure in the event of medical emergencies.

How Family Health Insurance Work

Family health insurance works similarly to health insurance you would buy as an individual. Your family signs up for coverage and pay a monthly premium. In return, your family policy will provide financial assistance for the medical bills you receive. The main difference between individual health insurance plans and health insurance for your family is the structure of your deductible.

How Family Health Insurance Deductibles Work

In the simplest sense, health insurance deductibles refer to the amount of money you have to pay out of your own pocket towards your medical bill before your health insurance plan kicks in to cover any remaining balance. Health insurance deductibles can be a bit confusing, but you can learn more about the out-of-pocket cost here.

With individual health insurance plans, deductibles are a bit more straightforward because there is only one person on the policy and you only need to worry about one deductible. What happens with family health insurance plans that have multiple people on the same policy?

Graphic how family deductibles work

Family health insurance deductibles are a bit more complex because there will typically be two separate deductibles to track. The first would be the individual deductible for each family member on the policy, and the second would be the total family deductible. Here’s a breakdown of each.

  • Individual Only Deductible: Each member of the policy will have an individual deductible that needs to be met before benefits kick in unless the family deductible has already been met. Each time an individual deductible payment is made, it counts towards the family deductible.
  • Family Deductible: The combined deductible for all members of the policy. Once you meet the family deductible, your health benefits will kick in to cover remaining medical costs for each member of the policy regardless of it they have met their individual deductibles.

Example Of Family Deductibles

If family deductibles are still a bit confusing, here’s a real-world example to clear things up.

A family enrolls in a health insurance policy which covers all 5 members. The monthly premium is $530, and the policy comes with an individual deductible of $750, and a family deductible of $2,000.

Currently, this is where the family deductible stands:

  • Family Deductible: $2,000
  • Member 1: $750
  • Member 2: $750
  • Member 3: $750
  • Member 4: $750
  • Member 5: $750

During the first month of the policy, Member 5 breaks their arm. The doctor’s visit and the cast come out to a total of $500. Here is where the deductibles stand after the $500 deductible is paid:

  • Family Deductible: $1,500
  • Member 1: $750
  • Member 2: $750
  • Member 3: $750
  • Member 4: $750
  • Member 5: $250

The $500 payment went towards Member 5’s individual deductible, and towards the family deductible. For Member 5, benefits will kick in to cover medical costs after another $250 has been paid towards the individual deductible.

During the fourth month of the policy, Member 1 is in a car accident and needed medical attention. After a night stays in the hospital, Member 1 receives a bill for $1,500. After paying the individual deductible of $750, the policy benefits kick in to cover the remaining $750. Member 1 has now paid all of their individual deductibles and will be covered for all medical costs for the rest of the year. The $750 payment will also be applied to the family deductible. Here’s where all of the deductibles stand now:

  • Family Deductible: $750
  • Member 1: $0
  • Member 2: $750
  • Member 3: $750
  • Member 4: $750
  • Member 5: $250

Halfway through the year, Member 3 has an allergic reaction and needs to be rushed to the hospital. The total bill for treatment comes out to $1,000, which means after paying $750 for treatment, both the individual and family deductible has been met. So even though not every member of the policy has met their individual deductible, health benefits will cover the cost of medical costs for each member for the remainder of the policy duration.

Which Is The Best Family Health Insurance?

There is not a single best family health insurance plan or company. When looking for the best plan, the first thing you want to do is determine what your family needs are, and the budget you are working with. However, the following are highly rated health insurance companies that offer a variety of family health insurance plans that will surely fit your needs.

Picking Family Coverage That Fits Your Needs

When picking family coverage, you want to make sure it covers all your current needs, potential needs, and fits your budget. Here are some questions that you want to ask yourself:

Graphic picking family coverage

  • Does anyone in your family has a pre-existing condition?
  • Do you or your partner have any genetic conditions that you may be susceptible to?
  • Do you want to keep your current doctor
  • Do you plan on growing your family in the near future?
  • Do you travel a lot? Or will you be taking any family trips in the next year?
  • Do you need vision, dental, or any other supplemental health insurance plans?
  • What can you afford to pay for coverage each month?

Once you have an idea of the coverage you want, it’s time to start your shopping. You can either wait for the Open Enrollment Season, and get coverage through the marketplace, or you can look for family health insurance at any point outside the marketplace. If you opt to choose a plan outside the marketplace, you will not be eligible for any federal subsidies, but may end up finding a cheaper family plan.

It’s recommended that you begin your search for family coverage with an agent because they will help you navigate the complex world of health insurance. They will also compare health insurance quotes for you, which eliminates a lot of the work.

Average Cost Of Family Health Insurance

Depending on the health coverage you are looking for, the number of people in your family, and the area you live in, the cost of your coverage will vary. Depending on your income level, you may also qualify for federal subsidies through the marketplace. The most accurate way to find the cost of your coverage will be to get family health insurance quotes.

According to the Milliman Medical Index, the average cost of health insurance for a family of 4 was about $26,944 in 2017. This number was about a 4.3% increase from 2016.

Graphic family health insurance cost factors

How To Get Cheap Family Health Insurance

To find the cheapest family health insurance plan, you will need to compare your options. If you qualify for a subsidy, your cheapest health insurance option may be through the marketplace. If you don’t qualify for a federally subsidized marketplace plan, your cheapest option will probably be a family plan outside the marketplace.

Can You Get Family Health Insurance For Free?

It is possible to get fully subsidized, or free health insurance for your entire family. Depending on your income level, your children may be eligible for the Children’s Health Insurance Program, and you and your partner may be eligible for Medicaid.

If you make too much money, or you are not eligible for federally funded health programs, you won’t be able to find health insurance for free, but you may be able to sign up for cheap family health insurance plans that don’t offer comprehensive coverage, but will keep you protected in the event of a medical emergency.

What Is The Penalty If Your Family Doesn’t Have Health Insurance

If you and your family aren’t covered this year, you may be paying a hefty fine this tax season.You can easily calculate your tax penalty with First Quote Health Obamacare Penalty Calculator, but you can expect to pay one of the following:

Graphic family penalty no insurance

  • Percentage of Income: 2.5% of your household income, with a maximum of the average price of a bronze plan through the health insurance marketplace.
  • Per Person: $695 per uninsured adult, and $347.50 per uninsured child, with a maximum of $2,085 per household.

Unless you qualify for an exemption, you will be liable to pay whichever penalty is higher.

How To Avoid The Health Insurance Tax Penalty

The easiest way to avoid a tax penalty this season is to get covered by a qualified health plan. It doesn’t matter how cheap your family plan is, as long as it meets the minimum essential benefits, you will be exempt from paying a fine.

If purchasing a health plan for the family is completely out of the question, there are ways to qualify for an exemption, which you can learn more about here. However, it is highly recommended to find some kind of health coverage, and if money is an issue, you may qualify for cheap family health insurance through the marketplace, Medicaid, or the Children’s Health Insurance Program.

Where To Find Family Health Insurance

You can find family health insurance plans through the health insurance marketplace, or privately outside the marketplace. Both choices will provide you an option that will be sure to fit your needs.

Comparing Family Health Insurance Quotes

If you are looking to compare family health insurance quotes, you can start your search with First Quote Health. First Quote Health easily lets you compare the best family health insurance quotes in your area within minutes. Talk to licensed agents, and you can even enroll today.


Is there a maximum number of people you can put on your family plan?

No, there is no maximum to the number of people you can add to your policy. However, there are limitations to who you can put on your plan.

Can you use your family health insurance to pay for a family member, not on the plan?

No, in order to receive benefits from your family plan, the beneficiary must be a policy member. Using your health insurance to pay for someone else is considered health insurance fraud.

Can you enroll in family coverage through the marketplace?

Yes, the health insurance marketplace carries coverage options for both individuals and families.

What counts towards your family deductible?

Any out-of-pocket cost paid for by a policy member will count towards the family deductible. Premiums don’t count towards the annual family deductible, and in most cases, medical services (cosmetic surgery for example) not covered by your policy won’t count towards your deductible either.