Health Insurance for Self-Employed Individuals

self-employed woman counting money

In the past few years, healthcare has become a top priority for many people. With the ongoing pandemic, individuals are placing additional value on feeling safe, protected, and prepared across all areas of well-being — and they expect their employers to do the same. Voluntary benefits, like vision and dental, have become essential to attracting and retaining talent, more than free snacks and other office perks.

Self-employed individuals, however, face a different challenge as they are responsible for their personal healthcare costs and insurance. Although staying self-employed allows them more flexibility and choice when it comes to work, more than 40% of all freelancers consider healthcare a major concern. Without employer premiums that offer discounted rates or bonuses, the 56.7 million self-employed Americans are entirely on their own when it comes to medical costs. And with medical costs skyrocketing to an average of $18,000 per person by 2028, it’s unsurprising that most freelancers tend to neglect healthcare.

Understanding Insurance for the Self-Employed

Someone self-employed runs a business that takes in income, but doesn’t have any employees; this could include workers who are freelancers, consultants, or independent contractors. In our current environment, not having health insurance isn’t an option. Fortunately, self-employed individuals can still get health insurance by purchasing their own policy.

Generally, the cost of a freelancer’s health insurance would depend on factors like where you live, your income level, or the size of your deductible. For example, self-employed individuals in Central Texas may need to pay $200 to $400 per month for health insurance. In contrast to this, people in large urban areas like New York City or San Francisco would likely have to pay more, while those in more rural states like Wyoming or North Dakota pay much less.

Purchasing a Health Insurance Plan

There are a few sources of affordable healthcare plans if you’re self-employed. For one, the health insurance marketplace under the Affordable Care Act offers different health insurance options. Many freelancers opt to buy their health insurance through the marketplace because the plans meet basic government-mandated requirements, such as 100% preventative care and approved coverage for people with pre-existing conditions.

Some gig service companies also offer benefits to freelancers who are using their platforms. You can likewise check with industry-specific associations you belong to, as many offer group pricing for healthcare to organization members. And of course, you can buy your plan from a reputable health insurance broker, who can help you compare offerings from private insurance providers. If you find it overwhelming and difficult to decide on your own, you’re not alone. Lack of health insurance literacy is a problem in the US; one in four Americans have avoided getting treatment because they were unsure of what their insurance covered, and would rather avoid a surprise bill.

It’s especially tricky for freelancers to manage their insurance because you don’t really have an HR department that can handle your benefits. Consulting someone who works in healthcare management can be incredibly helpful, as they are trained to handle the financial, economic, and legal aspects of medical services, including healthcare policies. Their strategic healthcare insights can make it much easier for you to understand your choices, so talking to a qualified healthcare manager can ensure you get the appropriate plan for you.

Before buying a plan, you can also contact private insurance agencies to ask in-depth questions about their offerings first. For example, federal law requires all private insurance plans to cover the costs associated with COVID-19 testing, but there is no federal mandate requiring insurers to waive COVID-19 out-of-pocket treatment costs. Although waiving hospital costs was the norm early in the pandemic, many insurers are now phasing out the waivers as safe and highly effective vaccines are now widely available. Many insurers like Smart and Simple Insurance do allow people to enroll online, where they can compare price points and coverage options; you can also call to clarify any concerns you may have.

Exclusively written for Smart and Simple Insurance by Kate Jordan

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