One of the biggest challenges faced by those who are self-employed is finding affordable health insurance. For some, not having that benefit from work can be a real budget killer. You know that health coverage should be a financial priority, so finding something affordable can be especially frustrating. In fact, I know of quite a few people who are still working just because of their employer’s solid healthcare benefits. The good news, though, is that you do have options when you are self-employed. Here are some things to consider as you look for affordable health insurance if you’re self employed.
Your Spouse’s Insurance Coverage
The easiest and simplest way to get coverage is through your significant other. You might be self-employed, but your spouse may be working for someone else. If that’s the case, then you might be able to get coverage through your spouse’s job. Go through your benefits options, and take the time to see if there is an affordable and viable option through your spouse’s work. If you can get coverage going that route, you might not have to worry so much.
Group Insurance For Self Employed People
Another option is to look online for health insurance quotes. If you go through popular aggregate sites, like HealthInsurance.org, you can get access to group plans that lump you in with other self-employed people and families. I found an insurance plan a few years ago through such a web site and it was a good experience. In fact, my premium were lower than the premiums some of my working friends pay, even though they have health insurance plans from their jobs.
Speaking of friends, talk to those who are working in the same industry. Many self-employed folks belong to professional groups that provide group insurance. My friend, who is a realtor, come to mind. He is self-employed, but he gets his healthcare through the group plan setup by the realtor association. Another friend works as a sound director in the entertainment industry. He’s self-employed too, but his healthcare benefits are so good that he and his wife are on his plan instead of the plan his wife’s employer offers.
Don’t assume that you can’t take advantage of group rates just because you don’t have a traditional job.
Christian Healthcare Ministries
Those who are Christians should seriously consider giving these healthcare ministries a shot. Why? Because we are paying a monthly premium of roughly $250 instead of $800 right now. A Christian Healthcare Ministry is a cost sharing plan and those who run these plans are careful to remind you that they aren’t the same as insurance. Still, in practice, they act like insurance in that you submit your bill to them and they pay for the costs through every member’s monthly premiums. There are quite a few options out there and each one has slightly different rules, but they all seem to be cheaper than the insurances options in the marketplace today.
The Healthcare Exchange
Finally, there’s the healthcare exchanges that were setup as a result of the Affordable Care Act (also known as Obamacare). A good place to start looking for options there is through the Federal website Healthcare.gov. Every state has its own exchange, so you can also Google healthcare for your state and you can easily go straight to your state’s exchange too.
The way it works is that you pick coverage options (Bronze, Silver, Gold, or Platinum). The gist of the plans is that you get increased coverage by paying a higher premium. Then you get a subsidy as a premium tax credit from the Federal government based on how many people are in your household and how much you make. Each state can provide an additional subsidy and the income thresholds may be different.
Basically though, the more you make, the higher your monthly premiums end up being.
High Deductible Health Plans Paired with a Health Savings Account
So, what can you do to reduce healthcare cost if you make good money as a self-employed individual? One way is to cut your health care costs by raising your deductible. You can choose a high deductible plan that focuses mostly on catastrophic coverage, or you can get a “regular” health insurance plan with a higher deductible. On the healthcare exchanges, choosing a bronze plan will have a lower monthly premium than a platinum plan. When you do this, you are sort of self-insuring part of the cost.
Then, you pair your health insurance plan with a Health Savings Account. These accounts are great ways to save up for health care costs. Plus, the money remains yours unless you use it to pay for medical costs.
I have an HSA and I love it. I pay less to the insurance company, and keep more of my own money. The contributions are tax-deductible, which also provides a financial benefit to my family. Plus, the earnings grow tax free as long as the money in the account is used for qualified health care costs. And, if you don’t use the money for those costs, the account operates under the same rules as a Traditional IRA.
Consider Your Self Employed Insurance Options
Carefully consider your options. Realize that everyone will have options that work differently for them. A high-deductible health plan might not be the best option for a large family with a lot of health care needs. However, for a self-employed person with few healthcare costs, the “regular” plan might be a waste. Evaluate your needs, and then shop around. With a little effort, there is a reasonably good chance that you can find affordable health insurance.
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