Securing an affordable health insurance for self employed is not easy and not cheap. Yet, health insurance is as important for the self employed as it is for the otherwise employed. According to statistics of the Employee Benefit Research Institute of the 27 million working people in the US who are insured, about 63% are either self employed or work for small business.
Self employment trend seem to typically rise with age. Interestingly, many of the seniors are self employed, as this becomes an important career option for people in their middle ages. People aged 50 and above account for 40% of all self employed workers, and this can be construed as part of their transition to retirement. Baby boomers also often choose self employment.
Health insurance options for self employed
A sizable number of self employed adults in the US do not have health insurance. This is significant because health insurance for the self employed does not come very cheap. Since insurance rates are least expensive for large group of people, it becomes costlier for the self employed who do not fall under the common category. The cost could rise if the business consists of only a couple of others.
With the growing number of health care insurance options, where the elements of fee-for-service and managed policies are combined, there is less need to choose between good cost and good care.
As the gamut of businesses and incomes does not fit under any one size for this category of insurers, individual evaluation becomes necessary when it comes to the question of choosing a health plan.
Four common situations can be construed under self employed health insurance category
- It could be a one man/woman show and there is no employee roaster for at least the near future. This self employed category could go for a standard individual policy. A decision need be made between an indemnity and a managed care plan.
- If the self employment is only temporary, and there is possibility of either hiring more help or be hired by some large organization, then a temporary policy could be a better option. These plans are fairly inexpensive and there is no necessity to make a firm commitment.
- If the health insurance cover is for the self employed and a few other additional employees, this has to be carefully arrived at, as there are chances that a group health insurance plan could be considered.
- There is yet another health insurance plan for the self employed who falls somewhere between, for instance, a business run by an individual and his/her spouse. These special situations have to be evaluated on a case to case basis.
Self employed health coverage Plans
There are certain tips that should come in handy for those who are planning to start a business on their own immediately or after their retirement.
- It would be wise to continue to keep the health insurance for a while, even after one leaves a corporate job for self employment.
- There are insurance agencies that offer plans which help keep current coverage for up to 18 months at group rates. But this can be kept only if the company the incumbent leaves had employed 20 people or more and he/she was not fired for gross negligence or incompetence.
- A self employed individual has to incur more, that is pay 'full cost' of the coverage which is likely to be higher than the amount normally paid by an employee. Normally, workers pay only 28% of their insurance costs.
- Under the law, an individual is guaranteed access to health insurance as long as they find a new policy within 63 days after which they reach the end of their benefits. Therefore it should be ensured that time does not slip by and an appropriate new policy is arranged well in time.
- For those married to a working person, there should be a good chance to join the spouse plan which will cost less than most other options.
- It is imperative to learn the health insurance rules that apply to individual situations and follow them. This becomes more relevant if someone in the family has chronic health problems or a pre-existing condition.
- A high deductible plan with a tax-free health savings account can help lower self employed health insurance premiums.
- Once the business of the self employed grows and more employees are hired in the business, chances are health insurance through a professional employers association can be obtained. There are many such professional organizations that provide services including health insurance for small businesses. The National Association of Professional Employer Association can help to find a group that meets with the needs of such self employed persons.
- If the health insurance bills of the self employed are high then there are various options to make insurance premiums cheaper. One would be opting out of certain coverage, the next would be to increase the amount one pays out of pocket for expenses, and yet another option would be discount health plans which offer cheaper fees for services one can use.
- In case the person is healthy and has very few prescriptions and no children a 'catastrophic health insurance policy' can be the coverage. The premiums in the event an unexpected illness or accident occurs is among the most economical one can find.
- If the individual prefers, a cheap rated health insurance policy by making a payment full year can be bought.
- It is always recommended to choose a plan which can provide adequate benefits for the family and the individual assets. Unexpected medical emergencies can cause major financial bankruptcies and it is imperative to choose a right plan.
- The Self Employed Insurance Group (SEIG) provides self employed health insurance solutions for the individual and covers major medical and catastrophic coverage.
Affordable health insurance plan for self employed
As such there are a number of HMO insurance plans with various types of coverage. These could also be inexpensive. HMO also offer rates lower than the traditional health insurance. By using a networking of care providers, insurance companies can afford to provide quality health insurance at a lower price.
The High Deductible Health Insurance Plan (HDHP) is another type that is gaining popularity. As this plan uses a network of care providers, cost is considerably reduced. Cost is also reduced with a high deductible amount. Complete coverage for accidents and illness with a higher deductible rate can be had under this package.
A thorough research of the different insurance companies and plans can help the self employed find an economical health insurance. Realizing the need for everyone to come under health insurance, new types of cost plans are being developed by major insurance companies to provide coverage for all at affordable cost.
Also, most of the major insurance companies have health plans available online. The discerning can go shopping for such plans and find economical individual and family health insurance quotes.
An association or a professional society often sells cut-rate health coverage to members. Joining such an association should definitely help to cut the health coverage costs.
self employed health insurance and tax benefits
According to the recent tax laws in the US, the self employed can deduct the cost of their health insurance premiums from their federal taxable income. This also indicates that one cannot use health insurance premiums to show loss for any business.