If you’re considering a career as a freelancer, one thing about which you should be aware is health insurance. Although there are many positives to being self-employed, for most freelancers the biggest downside is healthcare coverage costs.
I’ve been on my own health insurance plan since 2011, and I’ve found some ways to keep my costs relatively low. That doesn’t mean I’ve figured it all out yet there’s always something new to learn about navigating the American healthcare system, especially when you’re on your own.
Here are some of the things I wish someone had told me before I went out on my own:
| Takeaways |
|---|
| Health insurance is vital for freelancers to protect their well-being and finances. |
| Freelancers should explore various health insurance options tailored to self-employed individuals. |
| Deducting health insurance premiums from taxes can be advantageous for freelancers. |
| Female freelancers may benefit from specialized health insurance plans designed to meet their unique needs. |
| Freelancers working across state lines should understand the implications on health insurance coverage. |
| Exploring alternative solutions like health savings accounts or freelancer unions can be beneficial for freelancers’ health coverage. |
There Are Several Health Plans For Freelancers
If you are a freelancer, the health insurance marketplace is a place where you can compare plans side by side to find the best coverage for your needs. The marketplace is a great place to start your search for health insurance.
If you don’t have access to employer-sponsored health care and haven’t applied for Medicare, or if you’re looking for more options than what’s available in an individual plan on your state exchange the marketplace may be ideal for you.
The marketplace allows people who don’t have access to affordable health coverage through an employer or government program such as Medicaid/CHIP (Children’s Health Insurance Program) or Medicare the opportunity to purchase private health insurance at affordable rates.
Freelancers need to prioritize their well-being, and that includes having proper health insurance coverage. Learn more about the importance of health insurance for freelancers in our comprehensive guide on why health insurance is essential for freelancers.
Healthcare.Gov Has A Lot Of Choices
If you’re thinking about purchasing health insurance, the first thing to know is that you can use Healthcare.gov as a resource. Healthcare.gov is a federal website where people can shop for health coverage and apply for financial help if they qualify. It’s also free to use!
So what does this mean? Well, if you want to buy a plan on your own or compare plans before committing to one, then Healthcare.gov can help with that too! It provides information about all the different plans available through their marketplace (namely the Affordable Care Act).
There are also tools to help guide users through the process of enrolling in coverage including finding out whether they qualify for Medicaid (which requires no monthly payments) or financial assistance from private insurance companies like Cigna and Blue Shield of California.
Which may require monthly payments depending on how much income comes into your household per year ($48k-$98k).
You Can Purchase Insurance Through The Marketplace
If you’re a self-employed individual, you can purchase insurance through the Marketplace. You can apply for coverage online or by phone, mail, in person, or phone.
You Can Purchase Insurance Through An Agent
An agent is someone who works for a company that helps people get the right plan, doctor, hospital, and pharmacy. In most cases, these agents are experts in the field and can help you choose which plan is best for your needs.
When working with an agent, be sure to ask how long they have been working in health care and if they are licensed by their state to sell products like health insurance policies or Medicare Advantage plans (MA-PD).
If You Aren’t Self-Employed, You Can Get Coverage With Spouse’s Plan
As a freelancer, you are not eligible for health insurance through the Affordable Care Act.
If you’re married, however, and your spouse is employed by someone other than yourself in the United States (or working as an independent contractor), then that person can get coverage through their employer and they can add you to their plan.
The following are some different types of plans and policies that may allow you to get coverage even if you don’t have access to Obamacare:
Your spouse’s plan: Your spouse has a group health plan through their employer or union (such as Blue Cross/Blue Shield) or even a state-based high-risk pool program if so, this could be an option for both of you!
Just make sure that your spouse’s employer offers family coverage at a reasonable cost before committing yourself to this option.
Health insurance is a crucial safety net for freelancers, providing financial protection against unexpected medical expenses. Discover how health insurance can save you from going broke when freelancing by reading our article on health insurance and financial security.
Usually, Freelancers Need A High-Deductible Plan
There are two main types of health insurance available to freelancers: high-deductible plans and traditional plans. A high-deductible plan usually has a lower monthly premium, but it comes with higher deductibles.
These are the most common types of plans for freelancers because they have lower premiums and let you contribute to your own savings account before using health insurance (the deductible).
However, if you get sick or need emergency care often and have no savings, consider getting a traditional plan instead so that there is a less out-of-pocket cost.
A high-deductible plan has a higher deductible than other types of plans, which means that when something happens to make you go see your doctor (such as an injury at work), you will have to pay more out of pocket until the deductible is met first.
They also tend to have higher out-of-pocket maximums the most amount that can be paid annually before changing insurance companies or terminating coverage due to nonpayment costs for services rendered in one year’s time frame.
But lower out-of-pocket maximums are the total amount per person per day allowed under an insured contract between an insurance company and its policyholder prior reaching their annual maximum cap on hospitalization costs throughout their lifetime benefit period).
Don’t Forget To Shop Around Each Year And Compare Plans
If you have a plan that you like, but it gets too expensive over time, consider switching to one with lower annual premiums (but higher out-of-pocket costs).
Consider what your monthly payments on health insurance are going to look like after five years compared with if you were paying for individual doctors or hospitals as needed and then comparing that number with what your deductible would be in the new plan.
For example: “Doctor A is $100 per month, Pharmacy B is $50 per month, Hospital C is $15 per visit and Prescription Drug D costs $5 per pill at Pharmacy E total out-of-pocket cost for my medical needs each month = $185″
Shop around for a health plan that covers most of your actual medical needs instead of just trying to maximize monthly premiums by purchasing generic coverage through an HMO or PPO plan (if those options are available where you live).
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Know Your Network
This is a little vague, so let me explain: if you have health insurance through a company you work at, know what that company’s benefits are. Check the details of what they cover and how much is covered (and for how long).
Do they have an HMO network? Is there a referral process? If so, is it required or optional? Can they refer patients outside their network? Do they reimburse for services outside the network? Does their deductible kick in after seeing out-of-network providers or only after seeing doctors within their provider network? Knowing the details of your plan will help you make informed decisions about whether to stick with that company’s health plan or shop around for another option when freelancing.
Health Savings Accounts Allow You To Put Money Away For Medical Costs Tax-Free
You can contribute money to an HSA if you are enrolled in a high-deductible health plan. If you are, the amount of your annual contribution is tax-free and penalty-free as long as it stays in the account.
You do not have to pay taxes on interest or investment gains on the money in your HSA. When you withdraw the money from your HSA, it’s treated like a 401(k) or IRA you don’t owe any taxes on those withdrawals either (as long as they’re used for qualified medical expenses).
There are two types of HSAs: “single” and “family.” A single HSA works much like an IRA: every year after age 65 you get hit with an extra tax for being able to take out more than $1,200 per year without penalty;
Once married couples reach age 65 together they become subject to this same rule for their combined accounts (that is, no matter how many accounts there may be).
Family HSAs allow both spouses’ contributions into one account; however, this option comes at a price each spouse must be enrolled in HDHP coverage individually rather than jointly through their employer’s plan (unless they choose family coverage).
You Can Deduct Premiums As Long As You Are Paying The Full Cost Of Coverage
While you cannot deduct your premiums if you have insurance through an employer, or a government program such as Medicare, Medicaid, or CHIP (Children’s Health Insurance Program), there are exceptions to this rule.
If you are paying the full cost of self-employed coverage and receiving no subsidy from an employer or government program either in advance or after-tax then yes, your premiums are deductible.
You may find yourself wondering: How does someone know whether they’re getting a “subsidy” from their employer? The answer is pretty simple.
If your employer pays any part of your medical premiums directly and/or contributes to a Flexible Spending Account (FSA) on your behalf, then they’re funding part of that FSA on your behalf and thus providing some sort of subsidy towards healthcare costs overall.
The Catastrophic Plan Is Probably Not Worth It Unless You Are Under 30 Or Have A Hardship Exemption
This is a “catastrophic” plan that only covers things like emergency room visits and hospital stays. Catastrophic plans are available to people under 30 or those qualifying for a hardship exemption.
They also have some of the highest deductibles in the individual market, which means you’ll pay the first several thousand dollars of your medical bills out-of-pocket before insurance kicks in to help.
While catastrophic plans can come with low premiums (as little as $50 per month), they also have high deductibles ($6,000 on average) that could be tough for many freelancers to afford on their own.
For example, if you have an unexpected major surgery coming up, you might have to pay thousands out of pocket before your insurance kicks in and that could put your business at risk if financial problems follow.
In addition, not all states offer these types of plans; check whether yours does or not when considering this option by using HealthCare.gov’s subsidy calculator tool here: https://www.healthcare.gov/subsidy-calculator/
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Understanding Your Needs And Options Will Make Sure You Get The Proper Health Care Coverage
If you are a freelancer, you need to make sure that the health insurance company you choose will cover your needs.
There are many different options available that can meet your needs. Understanding these options and comparing them will help ensure that you get the proper coverage for your freelancing work.
It is important to understand what type of coverage is right for your situation. For example:
If a doctor visit costs $100, but with insurance, it would cost $15, then it’s better to have more expensive benefits than less expensive ones.
If an outpatient surgery costs $5,000 without insurance and $1,500 with insurance (with no deductible), then having a higher deductible may not be worth it.
If visiting specialists costs hundreds of dollars without insurance and only fifty dollars with insurance (with no deductible), then having lower deductibles could save money in the long run even though they’re higher initially because they don’t require as much out-of-pocket expense on each visit.
If laboratory tests cost thousands of dollars per test without insurance but only fifty dollars per test with high-deductible plans like HSA accounts then having lower deductibles may not make sense financially.
Since most people won’t be able to spend much money before reaching their maximum allowance when combined with lower premiums/costs (though some might still prefer this option because they don’t want any tax implications).
Freelancing can provide the flexibility to travel while working. Explore how freelancing enabled one writer to go on a globetrotting adventure in our story on using freelancing to travel the world.
Conclusion
As you can see, there are many options for health coverage for freelancers. Your unique situation may require something different than what we have discussed here, but this is a good starting point.
Always shop around each year to make sure you are getting the best deal and comparing your options. Make sure that the plan has enough coverage so that you can use it when needed but don’t pay extra money on premiums or other features that you will not use.
Further Reading
Here are some additional resources to explore for more information about health insurance for freelancers:
6 Health Insurance Tips for Freelancers Short Description: Discover useful tips to navigate the world of health insurance as a freelancer and make informed decisions about your coverage.
Priority Number One: How to Look After Your Health as a Female Freelancer Short Description: Female freelancers can find valuable insights and advice on maintaining their well-being while pursuing their freelance careers.
How Does Health Insurance Work When You Are a Freelancer? Short Description: Get a comprehensive understanding of how health insurance functions for freelancers and the options available to them.
FAQs
How can I find suitable health insurance plans as a freelancer?
Learn about different health insurance providers and plans tailored for freelancers to find the best coverage that suits your needs.
Can I deduct health insurance premiums from my taxes as a freelancer?
Yes, in many cases, you can deduct health insurance premiums from your taxes as a self-employed individual, but it’s essential to understand the specific rules.
Are there specialized health insurance options for female freelancers?
Yes, some health insurance plans cater to the unique health needs of female freelancers, offering tailored coverage options.
How does health insurance work when freelancing across state lines?
Understanding the implications of freelancing in different states on health insurance coverage is crucial, as rules and options may vary.
What are some alternative health insurance solutions for freelancers?
Freelancers may explore alternatives like health savings accounts (HSAs) or joining professional freelancer unions that offer group health coverage.
Costantine Edward is a digital marketing expert, freelance writer, and entrepreneur who helps people attain financial freedom. I’ve been working in marketing since I was 18 years old and have managed to build a successful career doing what I love.