Americans are making the conscious decision today more than ever to be self-employed. The American dream of climbing the corporate ladder is becoming obsolete with the value of flexibility greatly outweighing that of stability in a job. In just 10 years, between early 2005 and late 2015, the amount of self-employed workers rose from 10.1% to 15.8%.
Thousands of people with traditional and non-traditional jobs participated in a survey conducted by FreshBooks, an accounting and invoicing software catered to self-employed professionals. The results showed that those with non-traditional jobs, the category under which being self-employed falls under, want more control over how and when they work. Most also agreed that they had no plans of returning to work at an organization. It is now projected that 27 million Americans will leave their full time jobs now through 2020.
What are the Best Insurance Options for the Self-Employed?
While the pros of working for yourself can outweigh the cons, there is one major downside to consider: sourcing your own health insurance. The benefits and perks from a corporate job are no longer handed to you in a package deal when you are self-employed, leaving you not only to fend for yourself to find the best health insurance, but for possible dependents as well. Footing the bill is no small expense. Consider the following options when deciding which insurance route is best for you:
The Health Insurance Marketplace provides great coverage options for those who are self-employed. You are eligible to enroll through the marketplace if you are an independent contractor, consultant, freelancer, or other type of independent worker who does not have any employees. There are several categories of coverage to choose from with plans containing low premiums. Your savings will depend on your projected net income for the year you are applying for coverage.
Higher Deductible Plans With Lower Premiums
This type of plan is most affordable when it comes to monthly costs. While paying higher deductibles, you pay lower monthly premiums which may be extremely beneficial in the case that you and others on the plan are in good health and not prone to unexpected accidents or traumas.
Millions of Americans are given low cost or free coverage through Medicaid including those with low income, disabilities, the elderly, and families. Even if you don’t qualify for Medicaid based on solely your income, it is worth applying for as you may be eligible in your state. There is no open enrollment period, therefore you can apply at any time.
Family Coverage Plan (If Your Spouse Is Employed)
Even if you are not legally married, you may qualify as being in a domestic partnership. If you and your partner share a home and live a domestic life together, you may be eligible for coverage under a Family Coverage Plan, as long as you and your partner are not married to anybody else.
The Consolidated Omnibus Budget Reconciliation Act guarantees you allowance to temporarily remain under your employer’s health insurance plan after being let go or having a reduction in employment. According to the U.S. Department of Labor, there are still eligibility requirements. COBRA would not be an option for you if you were not previously employed.
Some of us are more likely to utilize healthcare coverage more often than others depending on anything from chronic illness to keeping up with regular doctor visits. Looking into getting coverage through a private insurance company is worthwhile if you are willing to go the extra mile in terms of cost. In the long run, you will be able to figure out down to every detail exactly what you would like out of health coverage.
Special Interest Groups
The National Association for Self-Employed is an organization catered to providing day to day support for the self-employed. Some great member benefits include access to Health Savings Accounts and life insurance policies. There is an annual membership fee of $25 for students and $120 for general members, with health insurance premiums included in the cost, which varies based on state and personal plan. Freelance business owners can also save at big name stores such as Office Depot, Quickbooks, and many more.
The National Association of Health Underwriters is representative of over 100,000 health insurance agents within the United States. They provide local agents who are there to assist you in finding a plan in affordable healthcare that best fits your needs. You are also given access to many benefits and savings that you otherwise would not through other organizations. Some benefits include business and marketing tools, personal development and training, client management apps, and wellness programs.
The Freelancer’s Union strives to keep costs low by grouping members together rather than providing on an individual market. They offer great health insurance options as well as a ton of other member benefits. It is free to join and browse resources, health insurance costs, and other insurance needs.
Things to Consider When Choosing Insurance
With so many available options, consider the following when narrowing down your choices:
Using a Broker or Agent to Compare Plans
There are often several tiers when it comes to health insurance plans. For example, there can be Platinum, Silver, or bronze, all which offer different coverage at different costs. Utilizing a broker or agent is a trusted resource with a great understanding. All that is needed from you is information regarding your budget and needs, and they will assist you in finding the best health insurance for self-employed workers. The best part is, there is little to no fee to use one.
See What Subsidies you Qualify for
Depending on your income bracket, you may be eligible health insurance at a reduced or no cost. It is useful to know what subsidies you qualify for while finding the best plan for you.
An increase in income will result in an increase in how much you pay for health insurance. Be mindful that if your income varies from one fiscal year to another, it will have to be reported accordingly. You may be subsidized if you overestimate your income from one year to the next. Conversely, if you made more than you estimated you would in a given fiscal year, your subsidy may be reduced.
Where you Live
Where you live has a big effect on premiums you may pay for healthcare. Differing competition, federal, state, and local rules, and cost of living affect this. Population per capita may also cause an increase in healthcare premiums.
Price of Plans
Breaking that bank on a health insurance plan as a self employed person is obviously not ideal, but it’s also something to pay close mind to. You don’t want to cheap out on your healthcare coverage in order to invest your money in other parts of your business. Don’t get coverage in order to avoid a penalty, get it and use it for all that it is worth. You never know when you may need it in case of an emergency.
A good rule of thumb is to know that the lower a plan’s deductible is, the higher the premium will be each month. It may sound like bad news, but it is helpful in reaching your deductible faster.
Length of Coverage
Getting a long term plan is much more safe than getting one that is short term. Short term plans may be cheaper to come by, but they do not meet the standards required by the Affordable care act meaning you may receive discriminatory treatment.
Insurers can charge more for healthcare plans that include more than just one individual. If you have a spouse, it is beneficial to find out the cost being a dependent on their plan prior to getting a new plan altogether.
Why You Don’t Want to be Uninsured
Opting to go uninsured can result in a handful of negative outcomes. Consider downsides to going uninsured include:
If you generate enough income to afford health insurance and are not exempt, you will face a price to pay known as the individual mandate penalty. The penalty becomes payable when you file taxes for the fiscal year that you were not insured. Although the penalty is based on your individual situation, you may end up paying more than you thought you would save by opting out of health insurance. The penalty is based on the greater of the following:
- 2.5% of household income
- Total yearly fee of a bronze plan health insurance
- $695 per adult, $347.50 per child under 18 to a maximum of $2,085 in 2016/2017
Out of Pocket Costs
Those who are insured have a cap on the amount they will ever pay out of pocket by Affordable Care Act if they are ever in an accident. People without insurance have no limit when it comes to out of pocket costs in the case of an accident. Uninsured people can face a bill of tens or hundreds of thousands of dollars if they suffer from something such as a heart attack or life threatening accident. The point of having health insurance is not to save money, but to insure against losses in the case of the unexpected.
Let SingleCare Help
With Singlecare, you can save up to 80% on prescriptions of 50,000 at over 35,000 pharmacies nationwide, including CVS, Target, Walmart, Duane Reade, and many more. Saving is easy as 1, 2, 3. Simply find your prescription, compare pricing, and save at the pharmacy.
SingleCare works with over 200,000 dentists nationwide and can help you save up to 55% on your visit. Membership is free with no hidden fees, no premiums, and no deductibles. Not only is a regular cleaning at the dentist covered, but so much more.
You can save up to 75% on eyecare at over 1,500 Walmart Vision Centers across the country with a SingleCare Membership. All you are responsible to pay for is the service you receive. By showing your SingleCare card at your visit, you will be charged through your membership account.
For Doctor’s Visits
Getting to a doctor’s appointment has never been easier than with SingleCare. SingleCare works with doctor’s who are on call at anytime, anywhere, allowing you to have a consultation at a time that works for you at a low cost of just $45. Not to mention the optimal convenience in having the consultation from the comfort of your own home via video.
We are able to provide you with pricing for every procedure offered through our provider partnerships. Following your visit, your provider will charge your method of payment on file in your SingleCare account, at which time you will see the price, along with savings, for every service you received.
Even if you are trying to cut costs with the expenses that come with being self-employed, health insurance is not something you should risk not having. In the worst case scenario, you may even end up spending more than you save if you remain uninsured.
With options when it comes to coverage, some of the best health insurance for self employed individuals may vary depending on where you live and your income. Take the time to do your homework and consider the many ways you can save on coverage through deductibles, demographics, and many other qualifications.