Health care is essential, but if you are self-employed, securing health insurance may be a bit more difficult. People who are employed full-time with an employer that offers health insurance only need to apply for healthcare coverage through their employer. However, freelancers and contractors will need to look into health insurance alternatives for self-employed people.
How Can Self-Employed People Get Health Insurance?
With the advent of the Affordable Care Act, all Americans have access to affordable health care, even if they are self-employed. You can enroll for healthcare coverage during the open enrollment period, which is from November to January each year. Here are the steps you will need to follow to explore the health insurance alternatives for self-employed people.
Visit the Health Insurance Marketplace
First, you will need to visit the Health Insurance Marketplace at healthcare.gov. This online portal has information about how to apply for health insurance during the open enrollment period. You will be able to create an account at healthcare.gov, submit an online application, and receive correspondence about your healthcare information through email.
Submit an Application
Applying for health insurance through the marketplace is your next step. This application can be submitted online, and you will usually receive an email within a few days with more information. You will also need to watch out for an Eligibility Notice in the mail or through email, as this notice will be confirmation that you can enroll in a healthcare plan of your choosing.
The application will need personal information about you, such as your legal name, social security number, and details about your employment. Additionally, when you apply to the Health Insurance Marketplace, you will need to provide information about your household size and estimated annual income. This information is critical in identifying the healthcare plans that are most appropriate for your financial situation.
Your household size accounts for you, your spouse, and any dependents who may be living with you. Dependents are those who rely on at least half your income, such as children, disabled relatives who live with you, or elderly parents who are unable to take care of themselves. Children are considered dependent until they are 19 unless they are students, in which case they are still considered dependent until they are 24.
If you live alone, then your household size is one. If you live with someone who is not a dependent and is not related to you by blood or marriage, then your household size is still one because you only provide for yourself. You will likely also have to note in your application that you file your taxes as “single” or “head of household”.
Your annual income is also important, so the marketplace can generate healthcare options that are appropriate for your income level. Specifically, you will be asked to estimate your annual income for the upcoming year. Usually, you can do this by looking at the previous year’s tax return, which will list your AGI (adjusted gross income). If you don’t expect your wages to change significantly, you can simply list the AGI on your last tax filing.
However, if your income is inconsistent, or you expect your income to significantly change by more than 10% in the upcoming year, then you will need to use the calculator on the Health Insurance Marketplace to estimate your income. This income calculator will make adjustments to your estimated wages for the year based on the state you live in and other information.
Assess the Health Insurance You Qualify For
After you submit an application, and you receive your Eligibility Notice, you will be able to assess the healthcare plans that are available to you. You will likely have several plans to consider, including plans that are designed to offer maximum protection in case of emergency or that are designed to manage preventative health care.
You should be mindful of the health insurance plan you select since you will likely not be able to change your health insurance plan until the next open enrollment period. Furthermore, you will also not be able to add dependents to your plan until the next open enrollment period, with very few exceptions (such as the birth of a child).
Do Self-Employed People Need Health Insurance?
Self-employed people need health insurance just as much as people who can get health insurance through their employer. However, freelancers and independent contractors will need to explore health insurance alternatives for self-employed people because they may make too much money to qualify for state health insurance programs.
It’s necessary to have health insurance coverage to pay for emergency room services, preventative health care, and prescriptions. Without adequate health insurance, it’s very easy for self-employed people to go into medical debt, which can be a heavy financial burden.
How Do You Compare Health Insurance Alternatives for Self-Employed People?
When it’s time to compare health insurance alternatives for self-employed people, you will need to assess certain factors about the health insurance plans that are offered to you in the Health Insurance Marketplace. For example, you will need to compare premiums, co-pays, and physicians that are in the health insurance network.
For many self-employed people, comparing premiums is one of the most important financial factors in selecting a health insurance plan. The premium is the monthly bill you will need to pay each month to keep your health insurance coverage active. Usually, the cost of your premium will be relative to the overall coverage you get from your health insurance.
For example, higher premiums typically have more flexible coverage and lower deductibles. Plans with higher premiums may even offer more access to specialists. You will want to select your health insurance based on the premium that is most affordable for your budget.
Deductibles are often a difficult concept, but essentially, a deductible is the amount of money you will have to pay before your insurance plan will cover the cost of your medical bills. A deductible limit will need to be reached each year before your health insurance will pay the full cost of prescriptions, common procedures, labs, exams, and other healthcare expenses.
In general, plans that have higher deductibles also have lower monthly premiums, but this may not be a good option for all people. For example, when deductibles are high in an emergency, this means you will need to pay significant out-of-pocket expenses before the rest of your medical bills are paid by insurance. For self-employed people, it may be a smarter decision to look for a plan that has a higher premium and a lower deductible, just in case of an emergency.
Co-pay amounts are also important to look at. The co-pay for your health insurance will be out-of-pocket money you need to pay for certain health services, such as routine blood work, emergency room visits, or office visits with your primary care physician. A co-pay will typically go into effect after your deductible limit has been reached. However, it’s usually more affordable to opt for a healthcare plan with lower co-pays, particularly if you need to fill prescriptions frequently.
Compare Prescription Coverage
Not all health insurance plans will cover all the same prescriptions. While most prescriptions have generic alternatives that are covered by most insurances, if you need access to unique prescriptions, such as contraceptives, then you need to be sure that your healthcare plan will cover the cost of this medication, with or without a co-pay.
In addition to analyzing the prescription coverage you will get from your plan, you also need to look up the pharmacies that are in-network for your health insurance. It’s just as important to have access to a convenient pharmacy for your prescription as it is to have insurance that covers all of your prescription needs.
While you are assessing health insurance alternatives for self-employed people, you also need to compare the physicians and medical facilities that are in-network for each plan. This is particularly important if you already have a physician or specialist that you like. Ideally, you should find a health insurance plan that folds your current physician into your coverage.
In addition, you will need to assess all the in-network facilities in your area, look at the type of specialists covered by your health insurance, and learn more about the providers you will be able to see under your plan. Each of these factors will ensure your healthcare needs are more convenient in the future and that you have quick access to healthcare services when you need them.
For self-employed people, health insurance can easily be obtained through the Health Insurance Marketplace at healthcare.gov. When you are looking at health insurance alternatives for self-employed people, you need to compare premiums, co-pays, and much more. Fortunately, applying for healthcare insurance as a self-employed person is simple. Get in touch with Health Compass Consulting to learn more about health insurance alternatives for self-employed individuals.