Freelancers are primarily those who own their own business, or work “gigs” or contracted projects for others as they find work. Benefits include flexibility and work-life balance. Considering the recent growth in the American gig economy, within the next decade, at least half of American workers will have some form of freelance work built into their income.
However, challenges exist with this career choice as well. You have to manage all aspects of your business, acquiring your own work, and inconsistent income. Additionally, becoming sick and unable to work leaves you both without pay and with a great deal of out-of-pocket medical expenses. Without group health insurance plans offered by an employer, life is much more challenging.
According to How To Get Self-employed Or Freelancer Health Insurance, there are many questions as to affordable and trustworthy health insurance options for freelancers.
Are There Affordable Health Insurance Plans for Freelancers?
Many questions come along with the possibility of finding an affordable health insurance plan. One question that you should first consider include, “Am I able to purchase private health insurance, or do I need to buy a government health insurance policy?”
There's no easy answer for everyone, but understanding how health insurance works and the many different options that are available is a good start. The cost of health insurance for freelancers depends on several factors, such as where you live, your income level and the size of your deductible.
Private plans, and even government plans, can be expensive or outside your budget. However, a higher deductible plan can come at a lower price. This could be a good option for a generally healthy, young adult, with no pre-existing medical conditions, earning about $40,000 annually. It maintains a low premium, but in the event of an accident, you will have more to pay before your insurance kicks in.
In the article, 12 Faqs About Cobra Insurance the author writes, “On the other hand, if you have pre-existing conditions and expect to face more medical expenses regularly, then plans with higher monthly premiums but lower deductibles are a good option.” Therefore, it is essential to make sure that you shop around as much as possible to compare the many options that meet your needs. Buying in only one place will limit your possibilities.
What Type of Self-Employed Health Insurance Options Exist?
1. The Affordable Care Act (ACA) (a.k.a Obamacare) exists with open enrollment every November and occasional special enrollment periods available.
2. See if you qualify for Medicaid, which removes the premium and provides a significantly reduced overall cost.
3. Your Spouse or Domestic Partner's Plan is an option, which offers excellent total savings on premiums for everyone in the home.
4. Cobra Coverage is an excellent short-term option after leaving a full-time position to venture out on your own. However, start doing your research quickly to avoid the fact that this is actually quite expensive.
5. The Freelancers Union offers a health insurance plan as well. It could take careful planning and enrollment, but it provides quality savings and benefits alike.
6. Professional Associations offer insurance based upon your specific field or industry, where you sign up with the association and receive their discount on insurance.
7. Short Term or Temporary Insurance exists if you missed the open enrollment period and want to avoid paying medical costs until November rolls around again.
Although it is not the best option to consider first, speaking to a health insurance agent may provide additional options. Their advice and customized options may work to fit your individual needs. Make sure to check all the other options outlined above before choosing this kind of solution.
Consider the Penalty
Even if insurance alone may be too expensive, you may want to remember the tax penalties that come with NOT having health insurance in specific regions. Nationally, this is no longer an issue, though individual states like Massachusetts, New Jersey, and Vermont still have a requirement. According to TheBalance, “Maryland is still debating whether to implement a penalty on those who are uninsured. Each state has its own rules about how much you'll have to pay. Check with your state's taxation department to get more details.”
In the end, the most important thing to remember is that there is no one solution for everyone. There are many different insurance companies, policies, and options available that you should invest time into shopping around before making a decision. It is also helpful to consider your own health history and remember that the plan with the lowest premium may not be the most beneficial for your regular medical needs. If it becomes too overwhelming to search out the best policy on your own, there are many insurance representatives and brokers nationwide that are able to help evaluate the different choices available.