Finding self employed insurance is not a difficult task in and of itself, the challenging part is finding affordable health insurance. If you are self employed, then you know how difficult it can be to find a great deal on insurance, especially if you are trying to cover an entire family with a range of health issues.
Finding Affordable Health Insurance
One of the most common methods of finding affordable health insurance is to work through an insurance agent. When working with an insurance agent it is important that you do plenty of homework prior to making a commitment. You don’t want all that work done by medical coding employees to go towards a super expensive premium or poor quality plan. All reputable health insurance agents will allow you to interview them and compare their offers and coverage plans for self employed insurance options.
Prior to making any sort of commitment, or signing a contract or making payments to an insurance agent, it’s a good idea to check with your state’s Insurance Commissioner’s office. The Insurance Commissioner will allow you to search through past records and find out if any complaints have been filed against your agent in the past.
In addition to using an agent, a great place to start your search for health insurance is eHealthInsurance.com. However, I would caution against signing on the dotted line without someone in the field reviewing the details with you. The various options can be a little overwhelming to someone who doesn’t deal with insurance on a daily basis.
Health Savings Accounts
When choosing your plan it might make sense in your situation to choose an affordable health insurance option that requires you to pay a higher deductible, but then allows you to offset those costs with a tax-free Health Savings Account, or HSA.
Health savings accounts are a great way to save money if you are self employed. They work by allowing you to deposit pre-tax money into your account and use that account to pay for your medical services that aren’t paid for by your insurance policy.
This way, you are avoiding higher taxes on that money and setting aside money now in order to pay for your services later. Just keep in mind that the deductibles for these types of plans are quite high, so get a good emergency plan in place first.
COBRA Through a Previous Employer
Another way to keep health insurance if you are planning on becoming self employed is to take advantage of the Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA. If you are currently working for a business that provides you with health insurance and are planning on working on your own, COBRA allows you to extend benefits for up to a year and a half after you have left your previous job.
COBRA can be quite expensive because you are essentially paying both sides of the health insurance equation. Employers are not required to pay any portion of the premium, but it may still be cheaper than having to switch insurance plans, especially if you may be subjected to some type of pre-existing conditions clause.
Warehouse Clubs and Trade Associations
An often overlooked source of health insurance for self employed individuals is trade associations. Many freelancer unions offer health insurance coverage options to their members, as do, believe it or not, warehouse clubs.
A quick check of the Sam’s Club Member Services area of their website confirms health insurance options are available for members. Costco also offers a variety of insurance options to members depending on which state you live in.
Taxes and Self Employed Health Insurance
One advantage of self employed insurance is that you may deduct insurance premiums from your federal taxable income. The government allows self employed workers to do this in order to level the playing field a bit, as large businesses are able to deem their health insurance premiums as a “business expense.”
If you have recently become self employed, it is always helpful to check your state’s health insurance laws. 34 states have created what are called “health insurance risk pools” that offer individuals and families to buy a special state-sponsored insurance plan if they are considered high risk or have pre-existing conditions.
If your state offers these types of plans then you should talk to a representative who can inform you of more details on these plans. Some states offer state-sponsored health insurance plans that have great benefits for affordable prices while others may not offer you the benefits you really need based on various factors such as the health of each family member, pre-existing conditions, etc.
Finding affordable insurance if you are self employed can be a difficult task that may require lots of research and interviewing. If you are in this situation it is important that you realize that adequate coverage is available for decent prices if you are willing to spend a little bit of time researching and asking questions.
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Actually no. I disagree with your statement “adequate coverage is available for decent prices”. In my state there is ONE company that offers individual coverage. I also looked at trade organizations in a neighboring state and found the prices even higher. We have bit the bullet and are buying very expensive coverage but I would never call it “decent prices”. Am eagerly awaiting 2014….
“Am eagerly awaiting 2014….”
You have to be joking. Anyone who thinks the Government will have the answer is KIDDING themselves. When has the Government EVER run a program that was SOLVENT let alone BETTER?
If the Government really cared about peoples health they would outlaw cigarettes instead of profiting over $1 a pack from them. THAT is how much the Government cares about YOUR health!!
I got a high deductible insurance plan through United Healthcare. We also started a HSA account to catch all of the smaller medical related expenses.
Also while this is not health insurance, there is also Health savings clubs which operate a bit like Costco or Sam’s Club. The one that I researched was Alliance for Affordable Services. They leverage the strength of numbers to help you save money. They provide a variety of personal and health care benefits to members at a savings.
Depending on your age and the level of benefits that you’re looking for, it isn’t always best to get a high-deductable health plan. It probably doesn’t happen often – but I was shocked to see that a similar plan to my own, with a higher HSA-eligible deducatable, was more expensive than my current low-deductable plan. Same carrier (Aetna), same network of doctors… just check out ALL your options before you purchase a plan.
Good point Stacey.
For my family’s situation using a high deductible plan worked out to be the best. But I agree with you that you should check out all your options before making a decision.
“adequate coverage is available for decent prices”
You must be joking. Or maybe I need to move to your state. My husband is self employed so we purchase our own benefits. We have worked with an agent to find medical insurance for a better price but have been completely unsuccessful. Now that our mortgage is paid off, this is our largest espense. It is even larger than our property tax bill (and we live in the state with the highest property taxes in the nation).
I just read through the entire article of yours and it was quite good. This is a great article thanks for sharing this informative information. I will visit your blog regularly for some latest post.
Nice Post this
Also while this is not health insurance, there is also Health savings clubs which operate a bit like Costco or Sam’s Club.
Thanks
We had a bad experience with our HSA. All our funds have been frozen since November due to the company that processed the transactions filing bankruptcy. I am beginning to think we will never see any of our money from that account again. The account was FDIC insured but they won’t cover it because the actual bank where the money was held did not go under.
I just want to warn people that this could happen to their account.
Good article – - now I need to do a little more research.
It really is hard to find the best option and I hope that following these suggestions can help us find something affordable. Thanks for the info!
How do you set up an HSA? Do you have any more information on these? I’d be really interested in learning more about these.
Hi Jenna,
Most banks offer an HSA savings account you can ask them at the branch or they might have information on their website about them.
Here is a good link with information on them.
http://www.buzzle.com/editorials/12-21-2005-84580.asp
We just had our premiums raised AGAIN in a 12 month period (due to the rising costs of health care they say) ugh…and we never even use our policy (knock on wood)…so i am off to try to find a new company, one that will appreciate that we don’t go to the ER for band-aids every other week. It’s bad enough that we have a high deductible $10,000 policy, we never use it and yet we continue to be beaten up every year. I am plain sick of this whole darn insurance game!
I’m self-employed and my husband’s employer doesn’t offer health insurance. There’s really only one option for private health insurance in our state and – despite our never coming close to meeting our deductible – they’ve raised our premiums by 42% in the past two years. The amount of prescription drug coverage in the plan is so low ($500 a year after meeting the deductible that we never meet), that I’ve resorted to buying meds from an offshore pharmacy where my out-of-pocket cost is only a third of what it would be otherwise.
If preventive health care services such as routine annual physicals are fully covered under your plan (with a waived deductible and perhaps a small co-payment), you need to make sure that your doctor’s office bills the annual checkup accordingly. My doctor’s office accidentally erred on billing an annual physical and it took more than a year to get it fixed!
I’m under an employer health insurance right now but before I was employed I just did without insurance. I’m in the same boat. Unless something changes they’ll use that uninsured time as a chance to say it’s a pre-existing condition. Yes, it can be a valid excuse on their part (though not necessarily in many of the cases they try it), but I wish they could only use it for a certain period of time, say a year from signing up, and have to pay all claims after that point.
It’s hard to know where we can place the blame for the out-of-control healthcare costs, but if there was some type of ‘public option’ for people who can’t afford private, then maybe the hospitals would finally be reimbursed (even a little is better than nothing) for treating those who routinely use trips to the ER as a safety net.
The health insurance in USA is ridiculous. Unless we take action to get it under control, big businesses will ruin it. I am actually fortunate to get double coverage through my employer. Aetna and Blue Cross
(Don’t ask me why but it is another example of why this country is crazy.)
My situation is a little different because I will be moving out of the country next year so I have to do some research into that. Any tips will be great. I will be keeping my U.S. citizenship so I do have the option of American insurance but will it be worthwhile if I move to another country? Who knows? Any tips would be great.