How to Get Health Insurance If You’re Self-Employed
Self-employment gives you the freedom and flexibility to be your own boss. However, one of the major disadvantages of being your own boss is securing your own affordable health insurance.
We all know that the healthcare system in our country is perfect – no comments! But let’s pretend that sometimes, hypothetically, deciding on health insurance is a hellish shitscape . Even with all the obstacles, living without health insurance is not worth the risk. Let’s look at the basics of providing yourself (and your family) with health insurance if you’re self-employed.
How to Get Health Insurance If You’re Self-Employed
Self-employed health insurance is individual health insurance that you buy for yourself and your family. This means that instead of a group plan (usually offered by an employer), you need to find private insurance. Here’s how to get started.
Shop at the market
This is your first stop, and ideally a one-stop shop. The marketplace (or “exchange”) offers plans that meet minimum coverage standards at a variety of price points. To start searching for private plans, visit the federal government’s health insurance marketplace , HealthCare.gov . The website provides information about private plans that can be purchased outside of the marketplace.
With open enrollment starting in a few days on November 1st , now is the time to start shopping. The numbers vary depending on your age, health, location and the type of plan you choose, but a recent eHealth study found that the average monthly premium for individual insurance was $484. Moreover, here is my formula for calculating the amount you need to budget for healthcare expenses .
Explore Association Health Plans
Depending on your job, consider joining a professional association that offers group health plans. Some groups, such as chambers of commerce or freelance organizations, provide insurance options for their members. Prices are often cheaper when purchased within an association.
Likewise, you can look into health care ministries. These nonprofit, religious organizations bring together members who share the cost of health care. The important thing to keep in mind here is that these plans are not full coverage.
Consider an HSA too
A Health Savings Account (HSA) is a smart way to keep extra money tax-free for qualified medical expenses. It is essentially a personal savings account that can only be used for medical expenses.
Combining a high-deductible marketplace plan with an HSA can provide significant tax savings. While the option to open an HSA is usually offered by your employer, you still have options even if you don’t have insurance through your employer. Here’s our guide to opening an HSA without an employer .
Consider options through your spouse or family
If your spouse has employer-provided insurance, you can join their plan. If you are a young adult and your parent’s plan covers dependents, you can usually continue to participate in or be added to their parent’s health plan until you turn 26. Ultimately, access to an employer plan often provides more options at better rates.
Apply for a short-term insurance plan
If you don’t plan to be self-employed long-term, these plans provide temporary coverage while you move between jobs or while you wait for another coverage to start. They have less insurance coverage but also lower premiums.
If you are not already self-employed but have recently left an employer, you may qualify for COBRA , which temporarily continues your previous employer-sponsored coverage.
Bottom line
If you’re self-employed, finding individual coverage takes more effort, but options do exist. Weigh costs, coverage levels and subsidies to get the health insurance that suits your needs. Contacting an insurance agent or broker can also help you navigate your choice.