Do You Really Need Health Insurance If You’re Self-Employed?
Yes. Everyone needs health insurance. If you have a medical emergency you have to have a way to pay for it and it can be very very expensive.
Now self-employed health insurance is just individual or private health care coverage that you can buy for yourself and your family on the government’s health insurance marketplace. This only applies if you do not have employees. If you do have employees there’s different rules for health insurance.
Options on How to Get Health Insurance
Health Insurance Marketplace
The government’s health insurance marketplace is where you can find out if you qualify for Medicaid, tax credits or lower health insurance premiums. And if you have kids this is where you can enroll them in the Children’s Health Insurance Program if you qualify. So just go to healthcare.gov to learn more about the marketplace.
Private Health Insurance
Some insurance providers have plans specifically for self-employed people. So shop around and look for a plan that offers a wide range of benefits like access to in-network providers, annual checkups and preventive care. An independent insurance agent can help you find the right plan for you.
Health Care Sharing Ministries
This isn’t technically health insurance but it’s a group of people who belong to an organization like a church or a ministry and they pool all their money together and use that fund to pay for major health care costs for people in the group. Now there are some restrictions so do research and make sure that it’s a right fit for your family’s medical situation before going with this option.
Health Insurance Options for Short-Term Self-Employment
There are also some health insurance options for when you’re only going to be self-employed for a short period of time.
COBRA Insurance
COBRA insurance allows you to temporarily keep the same employer-based health plan that you had at your last job. Usually you can keep that for 18 months even up to 36 months. But you are going to pay more than you originally did because your employer will not be paying your premium anymore. This is really expensive but you want health insurance so if it’s what you need to have in the interim then it’s worth it.
Short-Term Health Insurance
This usually covers you up to three months with lower premiums than COBRA and you will have high out-of-pocket costs though and pre-existing conditions usually aren’t covered.
Industry Specific Health Insurance
This is a discounted health insurance available for certain professions usually through a freelancer’s union. But before you sign up for this make sure that you’re not paying more for this kind of plan versus when compared to a marketplace plan.
How Much is Self-Employed Health Insurance?
Well this varies depending on a lot of factors. The average person will pay $438 dollars a month and the average family will pay about $1,779 dollars per month. And if you qualify for tax subsidies you may not have to pay as much. Again check healthcare.gov for more information on that.
General Tips to Keep in Mind
Tip 1: Look for Agencies Who Can Help
Check out agencies like the Association for the Self-Employed that can possibly give you additional support like discounted plans and HSAs — health savings accounts.
Tip 2: Use Self-Employed Health Insurance Tax Deduction
If you qualify this means you can deduct a hundred percent of your health insurance premiums from your annual gross income when you file your taxes. In order to qualify you’ll need to prove that you have your own health insurance not a former employer’s — your own. And you’ll also need to prove your income for being self-employed.
Tip 3: Find a High Deductible Health Plan
This means you’ll have lower monthly premiums. You just need to make sure that you can cover the high deductible when you need to. That’s why it’s good to have an HSA because it’s a tax advantage savings account linked to a high deductible health plan. The money saved in your HSA can be used to pay tax-free for qualifying medical expenses.
Tip 4: Make Sure to Work With an Independent Insurance Agent
Use the Ramsey trusted endorsed local providers program to find a local agent who can help walk you through all of your options and find the best possible rates so that you’re not overpaying. They can help make everything a lot less confusing and make sure that you and your family are covered.
Final Thoughts
Health care can be really confusing and really expensive. So for you to have all the information possible especially when you are self-employed it’s really important. Because remember I want you to take control of your money and create a life you love.