Friday, September 13th, 2019

How to Get Health Insurance When Self Employed


It can be difficult to be self-employed, but there are also so many other benefits to this way of earning a living that most people are willing to deal with any hardships.

Unfortunately, one of the major “downsides” to self-employment is the lack of a standard “benefits” package from a traditional employer. This means that a retirement fund and a health care plan are unavailable or not part of the income earned through daily work.

Fortunately, there are many ways that the self-employed might seek out health insurance. The simplest and most obvious is to scout out a traditional HMO or PPO plan that offers coverage to individuals or small businesses.

These are usually comprehensive plans that can include treatment for everything from childbirth to hospice, but they can be quite expensive too. It is usually necessary to shop around a bit to get the most affordable rates.

Before heading into such an option it is probably a good idea to consider if there are overall financial implications of this choice too. For example, some people cannot use the monthly payments as a tax-deductible expense.

Alternately, the self-employed individual could opt to enroll themselves in what is known as an HDP (high deductible plan), which will have the same array of treatments and coverage available, but for which the individual assumes a much higher out of pocket financial obligation.

For example, in addition to the monthly rates, the customer will have to hit a fixed dollar amount in out of pocket costs before the plan takes care of the rest. This might mean that something like a $50 office visit payment is required, along with higher prescription costs and higher payments for specialized care until the annual deductible is reached.

Many people also combine an HDP with a HSA (health savings account) which allows them to deposit pre-tax dollars into a medical account to use towards unreimbursed health expenses.