There are many periods in my life where I have been self-employed. While that may sound carefree and glamorous to some, there are disadvantages, including being responsible for your own health care premiums. Buying health insurance if you’re self-employed can seem complicated and expensive, but not to worry – Niconail’s got you covered.
Here are 6 ways to find health insurance if you are self-employed.
- Your spouse / domestic partner’s plan: If you have a spouse that is employed and eligible for benefits, this is most likely your cheapest option. Typically the covered member can choose from adding a spouse or electing an entire family plan. It will cost more, but it is almost always cheaper than buying individual health care coverage for yourself. Keep in mind that some policies will only allow you to be added on during open enrollment months a couple of times a year, so make sure you find coverage elsewhere until then.
- An individual policy: When I was single, in my twenties, and acting full-time, I found a great policy that was just for people like me. It had a low monthly premium (around $50 at time time), but a really high deductible ($5000). This worked because I was young, healthy, and not doing anything crazy like skydiving on the weekends – the likelihood I would need a doctor was low. Many providers are taking this approach – customizing polices based on your age and lifestyle. There are several insurance comparison websites like esurance.com, ehealthinsurance.com and gohealthinsurance.com that will help find the best coverage for you and give you insurance quotes. As a part of the US’s Affordable Care Act, starting October 1, 2013, you can shop for coverage at the Marketplace, which guarantees you won’t be denied coverage or charged more because of a pre-existing condition. Things to keep in mind when browsing are premiums, deductibles, co-pays, coinsurance, out-of-pocket limit and preferred in-network doctors.
- COBRA: If you’ve recently left your full-time job, it’s likely you will receive a letter in the mail offering Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage. Your former employer is legally obligated to offer this “gap” health coverage for up to 18 months for you and your dependents when you leave your job. While this can be a good option so you can stay covered during a transition period, COBRA is expensive – while your former job is required to offer it, they are not required to pay any of it. This leaves the entire cost up to you.
- Associations: Various national and local groups and associations like the Chamber of Commerce, AARP.org, alumni associations and bar associations offer group health plans. If you are involved in any interest groups or even a church, ask if you are eligible. And if your group doesn’t offer anything – ask why!
- Work part-time: I know, I know…working part-time defeats the purpose of being self-employed. However, when I was in college I worked as a barista 20 hours a week and was eligible for better benefits than my parents could offer me! In some cases, slinging drinks or scanning fruit a few hours a week might give your wallet the extra padding it needs to stay covered. Keep in mind, my mocha making days have come and gone and it’s rare to find a company that offers coverage to part-timers these days. They do exist though, so keep searching.
- Prescription Discount Card Program: I realize that for some, purchasing health care coverage is just not an option financially. That doesn’t mean you can stop taking your medications. But you can reduce your health care bills, and that is where a prescription discount card program can come in handy. The card gives discounts on prescriptions for those who are uninsured or underinsured. Visit NACORx.org to see if your county offers the program. *Please note this program is not a substitution for health insurance – if you are able, get covered!
Health Insurance Deduction Tip: At the time of this writing, if you’re self-employed and pay health insurance premiums, you can deduct the cost from your income when calculating your federal income taxes. The deduction amount varies based on income and other factors, so ask your tax preparer or visit IRS.gov for details.