If you’re self-employed, you probably have a few questions about how health insurance can work for you. This may be especially true if you are newly self-employed and have only received health benefits through an employer. The good news is that you do have options. The better news is that we’re here to answer some of your top self-employed health insurance questions!
What are my health insurance options as a self-employed person?
Freelancers, entrepreneurs, and other self-employed workers have several coverage options:
COBRA coverage: COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) is a federal law that dictates that employers that have 20 or more employees and offer health care benefits must provide the option to continue that health care coverage when an individual would otherwise lose those benefits. A person might be at risk to lose those benefits because of a reduction in hours, termination of employment or other certain reasons. With COBRA, that individual (and their family) have the right to remain on the same health insurance plan offered by the employer for up to 18 months.
Health Insurance Marketplace: The Marketplace offers several different options for the self-employed. If you have recently left a job for any reason, you can enroll in an insurance plan outside of the open enrollment window, which typically occurs from November 1 and ends December 15. Most plans through the Marketplace are more affordable than COBRA coverage, so this can be a good alternative for freelancers who are on a budget. If you are enrolling after leaving a job, you can enroll in a plan up to 60 days after your current employer-sponsored insurance ends. If you have recently experienced another qualifying life circumstance, you may also be able to enroll outside of the open enrollment period.
Medicaid: Another option for those who are self-employed and may be operating with little income, you may qualify for low-cost coverage through Medicaid. You can find out if you qualify for Medicaid by completing this questionnaire.
The National Association for Self-Employed (NASE): If you are a member of the NASE, you have access to insurance options. Many of the plans offered by the NASE enable the self-employed to get access to insurance plans that are typically only available through large corporations. These can usually be obtained via monthly or annual membership fees.
The Freelancers Union: The Freelancers Union supports advocacy for freelancers and offers several different resources for the self-employed, including options to purchase health insurance coverage.
Decent: For self-employed individuals in the Austin, Texas area, Decent offers several affordable options. All of these plans include free primary care, which means you pay $0 to visit your doctor. Each plan caters to the unique circumstances of self-employed people. The Pathfinder Bronze Plan is ideal for those who are looking for coverage in case something bad happens. The Lonestar Bronze Plan is a great option for those who expect to use their insurance from time to time. The Trailblazer Silver Plan is ideal for people with families, medical conditions, or prescriptions.
Do I need health insurance if I’m self-employed?
Yes! You should always have health insurance, even if you only carry catastrophic coverage. Life happens, even when you’re not expecting it. Accidents and illness can occur, so it’s a good idea to carry some time of coverage to ensure you don’t have to pay 100% of any medical costs out-of-pocket.
What should I consider when choosing a health insurance plan?
There are a few different factors to consider when choosing a health insurance plan. First, you should consider how much coverage you need. If you are young and healthy, you may only want to invest in a catastrophic plan that has a low monthly premium and will provide some support in case of an accident or emergency. If you anticipate having to use your insurance on a slightly more regular basis, you may want to opt for a bronze plan, which covers more than a catastrophic plan and still offers a lower monthly premium than other options. If you have a family, a pre-existing condition, or various prescriptions, you will probably want to consider a silver, gold, or platinum plan, depending on your budget. These “metal ratings” allow you to see roughly how much you’ll need to cover out of pocket:
- Platinum plans—pay for roughly 90% of out-of-pocket costs
- Gold plans—pay for roughly 80% of out-of-pocket costs
- Silver plans—pay for roughly 70% of out-of-pocket costs
- Bronze plans—pay for roughly 60% of out-of-pocket costs
What healthcare jargon do I need to know when choosing a health insurance plan?
This is one of the top self employed health insurance questions we hear. Thankfully, you don’t need to be a rocket scientist (or a doctor) to choose a health insurance plan that meets your needs. You should be familiar with the following terminology to help you understand which plan will work best for you:
Premium: this is the monthly cost the insured (you) pay to maintain active coverage.
Deductible: this is the amount you are responsible for paying—even for covered services—before insurance kicks in and begins covering costs.
Coinsurance: this is the portion of costs that the insured is responsible for covering for a health care service, which is typically represented as a percentage (e.g. patient covers 20%, insurance covers 80%)
Copayments: this is a fixed amount the insured pays for a covered health care service (e.g. $30 for a doctor visit)
At the end of the day, you know what’s best for you and your health insurance needs. Hopefully, these answers to top self-employed health insurance questions can help guide you on your journey to selecting the right plan. Visit our blog for more helpful tips on choosing the right self-employed health insurance plan. You can also get your free quote for Decent coverage here.
