Factors to Consider When Buying Family Health Insurance

Factors to Consider When Buying Family Health Insurance

Before purchasing a family health insurance plan, you need to check a few factors that will help you make the best choice. These factors include cost-effectiveness, tax benefits, and the ability to include your parents-in-law. Read on to find out how to get started and learn more about the different family health insurance plans available.

Tax benefits

While tax benefits on family health insurance can be valuable, they are also a drawback. They can lead some people to spend more on health insurance and use it less efficiently. Moreover, the tax benefits often increase the demand for health care. Higher-income individuals may save up to $3,500 yearly on health care costs. For instance, a security guard with a 15 percent tax bracket would spend about $1,500 less on health care costs.

Another benefit to purchasing health insurance for your family is the ability to claim medical expenses. Health insurance costs can be deductible on your federal and state income tax returns. In addition, some companies offer flexible spending accounts that allow you to deduct some of your medical expenses.


Health insurance for a family can be expensive. Cost-effectiveness is a factor that influences how much a family pays for its health coverage. For example, a healthy family of six could pay less per year in doctor bills than a married couple with chronic health problems. Another factor influencing cost-effectiveness is the number of people covered by a health insurance plan. Adding a spouse or child to a family health plan increases the monthly payment. Adding more children will result in even higher monthly payments. Families with more than three children will usually only pay for the oldest three.

To assess cost-effectiveness, researchers conducted three-step methods:

  1. They conducted regression analyses on nationally representative data, modeling the effects of clinical and sociodemographic factors on health care costs.
  2. They applied these analyses' results to the uninsured population's characteristics.
  3. They applied Markov modeling to calculate incremental cost-effectiveness ratios.

Option to add parents-in-law

Adding parents-in-law to your family health insurance is available with some insurers. But you need to check the terms and conditions of the policy carefully. You can add them as dependents only if they meet certain criteria. For example, they must live with you and support you financially. These requirements may vary from company to company, but most will allow you to add them.

Adding a parent-in-law to a family health insurance plan may be viable, even if Medicare or Medicaid does not cover them. Your HR department can help determine if your parents qualify for an added family member benefit. The criteria may include:

  • Living in your home.
  • Claiming them as a dependent on a tax return.
  • Being financially responsible for an adult child.