The Self-Employed Person’s Guide to Buying Health Insurance
5 min read •
30 sec brief
Being your own boss has a ton of benefits: your time is flexible, you’re working on what you want to work on, the only drawback is when it comes to health benefits, you’re on your own. Which means you’re paying for 100% of the monthly premium, plus your deductible and any other out-of-pocket expenses.
Being your own boss has a ton of benefits: your time is flexible, you’re working on what you want to work on, the only drawback is when it comes to health benefits, you’re on your own. Which means you’re paying for 100% of the monthly premium, plus your deductible and any other out-of-pocket expenses. In the past, this may have made it tempting to go without health insurance, but now, there are multiple avenues to buying affordable coverage as a self-employed person.
Step 1: Determine the Type of Coverage You Need
When you’re paying for 100% of your healthcare costs, you don’t want to pay for something you don’t need. If you’re young and healthy, you might not care about covering brand named prescription drugs. Conversely, if you have a condition that needs monitoring, you want to make sure all of the services you need are covered by your plan.
So ask yourself who you’re covering. Is it just you? You and your family? You and your employees? The Affordable Care Act (ACA) requires employers with 50 employees or more to offer health insurance and has strict requirements on what that insurance has to cover. Although not required, some employers with fewer than 50 employees choose to offer care through plans targeted to “micro-businesses” (companies with between 1 and 50 employees).
Whichever camp you fall into, you want a healthcare plan to cover your needs.
Step 2: Find the Right Source of Health Insurance
Individual and Family Health Insurance
As an individual, you have two options in terms of buying health insurance: an individual plan purchased through Healthcare.gov or private insurance broker, or a group plan purchased by a trade organization or an organization for the self-employed. On Healthcare.gov you can also find out if you qualify for Medicaid, which might be a good option since the ACA expanded the pool of candidates that government-funded health plan covers.
If you don’t qualify for Medicaid and choose a plan through Healthcare.gov, you could be eligible for a tax credit to help lower your out-of-pocket cost. If you don’t belong to a professional trade organization that offers healthcare, try the National Association for the Self-Employed. They have health insurance options for freelancers, entrepreneurs and some small business owners (SMBs).
Small Business with less than 50 Employees
The ACA set up a marketplace for micro-businesses called Small Business Health Options (SHOP). Employers who choose to offer health insurance can purchase a SHOP plan either through Healthcare.gov or we can also recommend Wellthie, you can see health plan options here. Choose a plan based on the number of people covered, the company’s budget, and the benefits the company wants to offer. You may also qualify for a tax credit in order to lower your premium costs.
Small Business with more than 50 Employees
Small businesses with more than 50 employees can go to a private insurance broker to secure employee benefits. Wellthie's network of licensed brokers can also assist with larger groups in certain cases via email, phone, and chat.
Step 3: Choose the Best Plan
Individual health plans typically have higher premiums than group plans but the group plan offered by an organization may not cover everything you need, and end up costing you more in the end. So it’s important to look at all of your options and calculate their total costs. If you’re cost-sensitive, to finding inexpensive health insurance.
For a small business with fewer than 50 employees, the tax credit alone might not be enough to make a group plan affordable. If it’s not doable for your company, offer your employees information about how they can find affordable individual health plans on Healthcare.gov.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.
About the author
Lauren Hargrave is a writer from San Francisco who focuses on technology, finance and wellness. She follows comedians like most people follow bands and believes an outdoor sweat session can cure almost any bad mood. She’s also been writing her first novel for so long, her mom doesn’t ask about it anymore.
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