Examples of commercial health insurance include employer-sponsored group plans, individual and ACA marketplace plans, COBRA continuation coverage, short-term limited-duration policies, and high-deductible plans paired with a Health Savings Account. Within those categories, most plans are built on one of four managed care structures: HMO, PPO, EPO, or POS. Commercial means the plan comes from a private insurer rather than a government program like Medicare or Medicaid, and about 165 million Americans get coverage through an employer while another 16 million buy individual plans through ACA marketplaces.1U.S. Government Accountability Office. Private Health Plans – Comparison of Employer-Sponsored Plans to Healthcare.gov Marketplace Plans
Employer-Sponsored Group Plans
Group coverage through a job is the most common form of commercial insurance. The business negotiates rates with a private insurer and splits the premium with the employee. As of 2025, employers pay about 81 percent of the premium for single-employee plans on average, leaving the employee with 19 percent.2U.S. Bureau of Labor Statistics. Employee Benefits in the United States – Medical Plans: Share of Premiums Paid by Employer and Employee for Single Coverage Adding a spouse or children usually raises the employee’s share. Because the risk pool is large, per-person costs tend to run lower than individual market rates.
Federal law sets the floor for what these plans must do. The Affordable Care Act requires businesses with 50 or more full-time employees to offer coverage that meets minimum value and affordability standards, or pay a penalty.3Internal Revenue Service. Affordable Care Act Tax Provisions for Employers ERISA separately requires employers to give participants a written summary plan description explaining what is covered, how to file a claim, and how to appeal a denial.4U.S. Department of Labor. Reporting and Disclosure Guide for Employee Benefit Plans Coverage typically includes preventive care, hospital stays, prescription drugs, and specialist visits, and most employers offer a few tiers so you can trade premiums against deductibles.
Individual and Marketplace Plans
People without access to a workplace plan buy coverage directly from insurers or through ACA marketplaces. That includes the self-employed, early retirees, gig workers, and anyone between jobs. Marketplace plans are grouped into four metal tiers that describe how the plan and the policyholder split costs: Bronze covers about 60 percent of costs on average, Silver 70 percent, Gold 80 percent, and Platinum 90 percent.5HealthCare.gov. Health Plan Categories Bronze Silver Gold and Platinum Higher tiers mean higher monthly premiums and lower costs when you actually use care.
Every ACA-compliant plan must cover ten categories of essential health benefits, including hospitalization, prescription drugs, maternity care, mental health treatment, preventive services, and pediatric care.6Centers for Medicare & Medicaid Services. Information on Essential Health Benefits (EHB) Benchmark Plans Insurers cannot deny you coverage or charge you more for pre-existing conditions. For the 2026 plan year, out-of-pocket costs are capped at $10,600 for an individual and $21,200 for a family, after which the insurer covers 100 percent of qualified expenses.7HealthCare.gov. Out-of-Pocket Maximum/Limit
The premium tax credit helps lower the cost. For 2026, eligibility is limited to households earning between 100 and 400 percent of the federal poverty level. The enhanced subsidies that removed the 400 percent income cap in 2025 were not extended by Congress and expired on January 1, 2026, so some households that previously qualified will now pay more or lose subsidy eligibility.8Congress.gov. Enhanced Premium Tax Credit and 2026 Exchange Premiums The credit itself is calculated on a sliding scale, with larger subsidies going to lower-income households.9Internal Revenue Service. Eligibility for the Premium Tax Credit
Beneath the four metal tiers sits a fifth option: catastrophic plans. Premiums are the lowest in the marketplace, but the deductible equals the annual out-of-pocket maximum, which is $10,600 for 2026. The plan covers three primary care visits and preventive services before the deductible; almost everything else is on you until you hit the limit. Eligibility is generally restricted to people under 30, with a hardship or affordability exemption available for those 30 and older. Starting in 2026, CMS expanded that exemption to include people whose income makes them ineligible for premium subsidies.
COBRA Continuation Coverage
When you leave a job, have your hours cut, or go through a divorce, COBRA lets you keep the same employer group plan for a limited time by paying the full premium yourself. Because the employer is no longer contributing, you can pay up to 102 percent of the total premium, which includes a 2 percent administrative fee.10U.S. Department of Labor. Continuation of Health Coverage (COBRA)
COBRA applies to employers with 20 or more employees. Qualifying events include voluntary or involuntary job loss (except for gross misconduct), a reduction in hours, divorce or legal separation from the covered employee, the covered employee’s death, and a dependent child aging out of the plan.10U.S. Department of Labor. Continuation of Health Coverage (COBRA) You have 60 days after a qualifying event to elect coverage.11U.S. Department of Labor. Health Benefits Advisor for Employers – COBRA Election Period Before that window closes, it’s worth comparing COBRA premiums against a marketplace plan with potential subsidies.
Short-Term Health Plans
Short-term plans are sold by private insurers to bridge gaps, such as the months between jobs or while waiting for employer benefits to start. They are not ACA-compliant, and the differences are significant. Short-term plans can deny coverage based on pre-existing conditions, exclude essential health benefits like maternity and mental health care, impose annual and lifetime dollar limits, and set premiums based on health status and gender.12Federal Register. Short-Term, Limited-Duration Insurance and Independent Noncoordinated Excepted Benefits Coverage They are not required to include an out-of-pocket maximum.
Under federal rules, the initial contract runs less than 12 months, with renewals and extensions pushing total coverage up to 36 months. Some states impose stricter limits or ban these plans entirely. The premiums look appealing on paper, but if you develop a serious condition while covered, treatment may not be covered and renewal is not guaranteed.
HMOs, PPOs, EPOs, and POS Plans
Whether you buy coverage through a job or the marketplace, the plan is almost always built on one of four managed care structures. The insurer contracts with a network of providers at negotiated rates, and your out-of-pocket cost depends on whether you stay inside that network.
Health Maintenance Organization
HMO plans ask you to pick a primary care physician who coordinates everything, including referrals to specialists. Outside of emergencies, out-of-network care is not covered. That restriction keeps premiums and copays lower than other options, and HMOs tend to cover routine checkups and screenings at no additional cost. You save money and give up some freedom to pick your own doctors.
Preferred Provider Organization
PPOs offer the most flexibility. You can see any doctor or specialist without a referral, and out-of-network care is still partially covered. Premiums and deductibles are typically the highest of the managed care options. PPOs make sense if you travel often, see multiple specialists, or want the option to go outside the network. The gap between what the plan reimburses and what the provider charges for out-of-network care can be large, so check the reimbursement rates before you assume the coverage is generous.
Exclusive Provider Organization
EPOs sit between HMOs and PPOs. Like an HMO, they limit you to a network and generally won’t cover out-of-network care outside of emergencies. Unlike an HMO, you don’t need a referral to see a specialist. Premiums are usually lower than a PPO and slightly higher than an HMO. These plans suit people who are comfortable staying in-network but want direct access to specialists.
Point-of-Service
POS plans borrow from both ends. You pick a primary care physician who manages your care and provides referrals, as in an HMO, but you can also see out-of-network providers at a higher cost, as in a PPO. In-network care carries lower copays and deductibles; going outside shifts more of the bill to you.
High-Deductible Plans With an HSA
High-deductible health plans trade lower premiums for a bigger upfront spending threshold. For 2026, the IRS defines an HDHP as a plan with a deductible of at least $1,700 for individual coverage or $3,400 for family coverage, with out-of-pocket expenses capped at $8,500 and $17,000.13Internal Revenue Service. Rev. Proc. 2025-19 – 2026 Inflation Adjusted Amounts for Health Savings Accounts and Excepted Benefit Health Reimbursement Arrangements You pay for most medical expenses out of pocket until you reach the deductible, after which the plan picks up a share of costs. Preventive services like annual physicals and recommended screenings are covered at no cost before the deductible, as required under the ACA.14HealthCare.gov. Preventive Health Services
The real appeal is pairing an HDHP with a Health Savings Account. You contribute pre-tax dollars, grow the money tax-free, and withdraw tax-free for qualified medical expenses. For 2026, the contribution limit is $4,400 for self-only coverage and $8,750 for family coverage, with an extra $1,000 catch-up if you’re 55 or older.13Internal Revenue Service. Rev. Proc. 2025-19 – 2026 Inflation Adjusted Amounts for Health Savings Accounts and Excepted Benefit Health Reimbursement Arrangements HSA balances roll over indefinitely and stay with you if you change jobs or retire. HDHPs work best for people who are generally healthy and can absorb the deductible if something unexpected happens.
Protections That Apply Across Commercial Plans
One protection worth knowing about regardless of which type of plan you have is the No Surprises Act, which took effect in 2022. It prohibits balance billing in three situations: emergency care at any facility, non-emergency services from out-of-network providers at in-network hospitals and surgical centers, and air ambulance services from out-of-network providers.15Centers for Medicare & Medicaid Services. No Surprises Act Overview of Key Consumer Protections When the law applies, your cost-sharing cannot exceed what you would have paid for in-network care. The protections cover job-based plans, marketplace plans, and other individual commercial coverage. They do not apply to ground ambulance services or situations where you voluntarily choose an out-of-network provider and sign a consent waiver in advance.