Health Insurance for the Self-Employed
If you are currently self-employed or plan to be soon, you need to know about the types of health insurance available to you. Entrepreneurs often find it challenging to find affordable plans that meet their healthcare needs. Plus, when you are self-employed, it is crucial to find ways to save money to put back into the business, and healthcare tends to be very expensive.
New and large plans tend to cost more. Traditional healthcare plans typically charge high premiums and carry large deductibles, so you end up paying a lot for something that doesn’t pay you back unless you have to use it.
Sole entities and even partnerships may have only limited HMO options available to them. When considering a healthcare plan to cover you and your loved ones, you may have to get creative and look outside the traditional cookie-cutter plans.
One option is a shared healthcare option, but if you are just starting out, you won’t have any affiliations and no access to existing group plans.
The law now requires Americans to carry health insurance. According to the Affordable Care Act (ACA), the federal government offers discounts, but these plans can still be costly depending on your income. They are managed through the healthcare.gov website.
You can explore ACA plans as a short-term option until your situation changes. If you increase the deductible, you can lower your rates and purchase healthcare that covers you for a “catastrophic” illness or injury.
If you are 65 years or older, you may be eligible for Medicare coverage. You can check out Medicare.gov to explore your options there. However, keep in mind you must report your income accurately and pay your taxes to build the proper credits to quality for Medicare. To help you, should you decide to go that route, you can consult this Medicare preparation guide.
Professional Employer Organization Insurance
One great option for self-employed business owners is using a Professional Employer Organization (PEO). It can help you with many aspects of running and business and help you obtain health insurance coverage as well. You can check out your options for PEOs here.
The Bottom Line
Once you find a plan that works for you, be sure it allows you to set up a Health Savings Account (HSA). An HSA allows you to save for medical expenses on a pre-tax basis. It also works like a traditional IRA, and once you reach the age of 65, you can withdraw any unused funds.
The key is changing your view about how to manage your healthcare expenses. Every dollar you save now on health insurance can go back into the business to help it grow. One of the best ways to manage your health insurance is to research all your options and educate yourself on how the healthcare system works. Armed with that information you can better make an informed decision that benefits you and your business for the long-term.