Freelancers and self-employed workers have a lot of options when it comes to buying health insurance. It’s important, however, to weigh all your choices against your specific situation. After all, you might be freelancing temporarily as you look for other work.
Or you might have just been laid off and need to find coverage until you’re eligible for COBRA or Medicare. These circumstances require different approaches than those required by permanent freelancers who don’t anticipate finding traditional employment in the foreseeable future.
Independent contractors, or freelancers, generally don’t receive health insurance from employers the way most full-time Americans do.
That means they have to buy coverage on their own but that doesn’t necessarily mean they pay more than traditional employees who receive employer-sponsored coverage.
According to the Freelancers Union (a group that offers membership services like group health insurance plans), only 2% of independent contractors paid more for individual plans in 2014 than they would have paid through employer-sponsored coverage.
| Takeaways |
|---|
| 1. Understand the Importance: Recognize the significance of health insurance for freelancers. |
| 2. Evaluate Your Needs: Assess your health and financial needs to determine suitable coverage. |
| 3. Consider Life Changes: Take into account life events that may impact your insurance needs. |
| 4. Open Enrollment Periods: Be aware of open enrollment periods and their significance. |
| 5. Explore Health Insurance Options: Research and compare different insurance plans available. |
| 6. Seek Professional Advice: Consult insurance experts or financial advisors for guidance. |
| 7. Budget for Premiums: Incorporate health insurance costs into your budgeting and planning. |
| 8. Plan for Emergencies: Prepare for unexpected health issues with adequate coverage. |
| 9. Reevaluate as You Grow: Review and adjust your insurance plan as your freelancing career evolves. |
| 10. Prioritize Your Health: Invest in your well-being by prioritizing health insurance coverage. |
Consider A High Deductible Health Plan
High deductible health plans are a great option for freelancers who don’t use their insurance often. Since you’ll be paying more out of pocket, these plans save you money if you’re more likely to go without medical treatment (and pay the bill yourself) than visit the doctor.
For example, if your job doesn’t require that much physical activity, or if you don’t have any chronic illnesses and spend most of your day at a desk, this type of plan might be worth considering.
On the other hand, high-deductible health plans are usually not suitable for people who have frequent medical needs or who can’t afford to pay thousands of dollars in deductibles every year.
This is because they typically only cover major emergencies and hospitalization everything else will come out of your own pocket until you hit your deductible amount ($1k-$3k).
As a freelancer, securing health insurance can be challenging without a traditional job. However, there are ways to obtain health insurance without a job that can provide you with the coverage you need for peace of mind.
Use HSAs To Cover Medical Expenses
You can use health savings accounts (HSAs) to pay for your medical expenses. An HSA is a special account that you set up with a bank or credit union (and it’s completely separate from your personal savings account).
When you need health care, you take the money out of your HSA and use it to pay for expenses like doctor’s appointments, prescriptions and surgeries.
You don’t have to pay taxes on the money that goes into an HSA, but if you withdraw from it, you’ll owe income tax on those withdrawals.
If you’re self-employed and have an accident or illness while freelancing or if someone else gets hurt on the job having an HSA will allow you to cover some of those costs without affecting your taxes as badly as if they were coming directly out of pocket.
Shop For Insurance For Freelancers And Self-Employed
For many freelancers and independent contractors, the answer lies in short-term health plans.
These are not ideal for everyone and you should always look into association health plans (AHPs) if your industry allows them but they offer a good way to get coverage when you need it most.
Short-term health plans cover major medical expenses such as emergency room visits and surgeries up to $1 million.
They aren’t meant to be used as long-term solutions; they expire after three months or less, depending on state regulations. However, these policies can be useful in situations like:
You don’t have other insurance options available due to pre-existing conditions or age restrictions.
You’re looking for emergency coverage during an illness or injury that leaves no time for traditional methods of applying for coverage on your own through an agent or broker at HealthCare.gov (this is called “underwriting”).
Freelancers often face legal questions about outsourcing work. If you’re considering outsourcing, make sure to understand the legal implications. Check out this article on legally outsourcing your job for free to stay informed and make the right decisions for your freelance career.
Plan For The Unexpected
Freelancers don’t have the same benefits as regular employees, which means they’re not eligible for COBRA. This can make it difficult to secure health insurance if you lose your job.
Freelancers also need to be prepared to cover medical costs that are outside of their budget when they’re starting out.
To help with this problem, freelancers should consider using some or all of the following strategies:
Open a Health Savings Account (HSA). HSAs allow you to save money for medical expenses without paying taxes on it until you withdraw the money from your account.
Since freelancers pay their own self-employment tax rather than payroll tax, their HSA contributions will be lower than those who work for an employer but still worth it!
Get a high-deductible health plan (HDHP). HDHPs have lower monthly premiums but require you pay higher out-of-pocket fees before coverage kicks in (that’s why they’re called high deductibles).
If something comes up unexpectedly like an emergency room visit or surgery, this could save you thousands of dollars every year compared with traditional plans with lower monthly premiums.
But lower annual limits on what their policyholders must pay each year before they get financial help from insurance companies
Buy A Short Term Health Plan
If you’re a freelancer who doesn’t have access to employer-sponsored coverage, you can consider buying short-term health insurance.
Short term plans are not compliant with the Affordable Care Act and are generally much less expensive than ACA-compliant policies, but they can be renewed every three months, up to three times per year.
Short term plans don’t qualify for subsidies or cost-sharing reductions offered by some state exchanges and may not cover preexisting conditions meaning if you were sick before your policy started, it won’t pay out if anything happens during that time period.
Also, short term plans aren’t regulated as strictly as ACA-compliant policies; they may require higher deductibles (up to $25K) and may limit prescription drug benefits or mental health services.
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Ask About Temporary Health Plans From Your State’s Department Of Insurance
If you’re not eligible for an ACA-compliant plan and would like to find a temporary health plan, you can look into the plans offered by your state’s department of insurance. These are not regulated by the ACA and are often quite expensive.
Temporary health plans are typically not available in states with no state-based exchanges (Alaska, Iowa, Nebraska and Wyoming), but they may be available in other states that have taken some steps toward establishing their own insurance marketplaces.
The biggest downside to these policies is that they aren’t guaranteed issue so if you have a pre-existing condition or had a lapse in coverage recently (say, between jobs), you won’t be eligible for this type of coverage.
Choose An Indemnity Plan If You Have An Existing Condition
If you have an existing condition, or if you’re just not sure if your health will hold up over a year, you should consider getting an indemnity plan. Indemnity plans are best for freelancers who fit into one of these categories:
- Those with pre-existing conditions who haven’t been able to find affordable coverage elsewhere
- Freelancers who don’t mind paying out of pocket in case something goes wrong (or worse)
- Freelancers who want to save money on their premiums by going without preventive care and relying on emergency room visits and out-of-pocket expenses instead
Look Into Association Health Plans
Association health plans are a group health insurance option that can be bought by groups of small businesses. Unlike other types of coverage, they aren’t limited to one specific state and can cover more people than a small business would normally have access to on its own.
These policies have some key differences from the plans offered through an employer or marketplace: the ones purchased through association health plans are not required to follow federal law or other requirements that regular insurance policies must abide by;
For example, they’re not required to include certain benefits like maternity care (though some states may require these benefits anyway).
They also tend to have fewer restrictions surrounding eligibility for coverage, for example, a self-employed individual might qualify if he/she meets certain criteria.
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Assess How Much Coverage You Need
When it comes to insurance, you want to be sure that your coverage is right for your situation. That may mean finding a policy that’s more or less comprehensive than the one you’ve been using in the past.
Consider how much coverage you need. How much health insurance will help protect you against big expenses? Are there other types of coverage that can help with daily living costs (such as a long-term disability policy) or provide additional benefits (like dental care) if needed?
Assess your income and dependents. If your freelance work makes up a significant portion of your household income, then adding some level of health or disability protection might make sense for everyone involved.
Even if freelancing isn’t currently paying the bills, having access to affordable medical care could make all the difference should something happen especially if other family members are financially dependent on you?
Determine how much money is available after factoring in what needs to go toward basic living expenses and debt payments. Decide what type of plan would best fit into this budget: high deductible plans have lower monthly premiums but higher deductibles than traditional plans;
HSA-compatible policies allow people to pay out-of-pocket for healthcare costs until meeting deductibles before applying any remaining funds toward premiums;
Platinum plans cover 90% or more of essential services while still allowing enrollees some flexibility when choosing providers
Look Into Coverage Options Before Your Job Ends
If you are leaving a job, and if the plan you were on offers it, you can get COBRA continuation coverage.
This option is available to people who have been recently terminated from their jobs or are eligible for group health insurance benefits because of their current or former employment status.
If you meet these requirements, COBRA gives individuals 18 months of health insurance coverage after losing or changing jobs. The catch? You’re still responsible for paying the premium (but it will be less than what it would cost to buy new private coverage).
Check When Your Current Plan Ends
First, check when your current plan ends. If it expires before the end of the year and you’re looking to buy a new plan, you may be able to get a short-term plan. If you’re self-employed, for example, you’ll need to buy one regardless.
Short-term plans are not considered ACA-compliant (they don’t comply with the requirements set by the Affordable Care Act), but they can help bridge gaps in coverage when transitioning between plans or waiting for open enrollment season.
Avoid The Individual Mandate Penalty But Shop For ACA-Compliant Coverage Anyway
The reason you want to avoid the individual mandate penalty is that it’s fine. If you don’t get health insurance, then you’ll be charged $695 per adult or 2.5% of your household income, whichever is higher.
But if you do buy health insurance and find out later that it doesn’t meet ACA requirements (e.g., your deductible is too high), then you may have to pay a fee in addition to the premium price of your plan for every month that it was not compliant with the law–even if it’s only one month!
So how can freelancers find affordable ACA-compliant coverage? First of all, there are multiple ways to qualify for subsidies available through Healthcare.gov or state exchanges under the Affordable Care Act (ACA).
If your income falls below certain thresholds ($27,000 for individuals and $55,800 for families), then some subsidies might be available at no cost! Here are some other things freelancers should keep in mind when looking at plans:
When comparing two different plans from two different companies within their network (and they share the same providers), compare their costs separately rather than together;
This way each company’s network will apply its discounts after adding up all out-of-pocket costs from both plans together
Keep an eye out for “hidden” fees like additional co-pays outside of deductibles; these are often listed on things like hospital bills but not always disclosed when purchasing health insurance
Keep Up With Marketplace Deadlines And Requirements
The Affordable Care Act (ACA) has brought a lot of good to the freelance community, but it’s not all rainbows and butterflies. The ACA requires freelancers to have health insurance, which can be difficult if you don’t have a full-time employer or spouse to help pay for your premiums.
This means you need to make sure you comply with the law every year. There are several deadlines that all freelancers should be aware of:
- Open enrollment deadline: January 15th
- Payment due date: January 31st
- Premiums due date: Feb 15th
- Out-of-pocket expenses payable by March 31st
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Ask Friends And Family When Looking For Temporary Health Insurance Options
Asking friends and family for advice is good advice. After all, they’ve been in your shoes before. They know what to expect when you’re starting as a freelancer, and they can help make sure you don’t get stuck with an insurance plan that doesn’t meet your needs.
If someone has been through a similar situation to yours (i.e., being freelance without health insurance) and had success finding coverage, ask them about it! They may know of options available to you that aren’t yet on the market or haven’t made it onto Google yet.
Compare Monthly Costs Now, But Keep A Close Eye On Future Bills Too
When you’re shopping around for health insurance, it’s easy to get caught up in the monthly cost of each plan. But make sure you also look at the “total cost” over a year or lifetime.
For example, if you pay $20 per month for one plan and $30 for another, that might seem like a no-brainer $30 is cheaper than $20! But let’s say your office co-worker has a similar salary and gets the same two options from his company.
He decides to go with the less-expensive option because he doesn’t think he’ll need any medical treatment this year.
And since his plan offers good coverage for what he does use (like prescriptions), he thinks it’s worth paying more later if necessary so that he can save some cash now on his monthly payments.
In our example above, it wouldn’t be until next year when someone else needs an expensive surgery that they realize which choice was better:
By then they may have spent hundreds more than their friend who did opt out of certain benefits but still got covered under catastrophic illnesses like cancer or heart attacks at an affordable price point!
Research Options Through The Freelancers Union Or Other Associations
The Freelancers Union, the largest organization for independent workers in the United States, offers a marketplace for health insurance options. If you’re eligible to use it, this is a great place to start your search.
The Freelancers Union has also partnered with Guild Health and Wellness Association to offer members access to discounted rates on health insurance plans that are tailored specifically for freelance workers.
You can find out if you qualify by logging into your account or requesting an application from one of their offices.
Appreciate That Freelancers Are Not All Equal When It Comes To Buying Healthcare Coverage In 2019 And Beyond
In an ideal world, you’d be able to buy a plan from the marketplace with no issue. But as we mentioned earlier, some freelancers aren’t eligible for the Affordable Care Act (ACA) and will have to pay more than they would if they were employed full-time. This includes:
Freelancers who don’t have access to employer-sponsored coverage. Let’s say your company doesn’t offer health insurance and you’re self-employed in this case, you won’t qualify for any subsidies under the ACA because you’re considered self-employed by default.
If this is your situation and you don’t have access to another type of insurance protection like Medicare or Medicaid, then your best option might be buying an individual policy outside of the open marketplaces (like from eHealthInsurance).
Freelancers who are part of small businesses that employ 50 people or less. If your business has fewer than 50 employees total (including yourself), then it doesn’t qualify as large enough for its workers’ health benefits under Obamacare laws;
Therefore it wouldn’t matter if those workers were full-time or part-time they wouldn’t receive any tax credits toward their premiums either way! As such, these folks also need to look into different types of coverage options outside those offered through exchanges.
Conclusion
We hope you enjoyed our guide to the best times of year for freelancers to buy health insurance. The good news is, that each season has something good about it!
Whether it’s in the cold months of winter or the busy months of summer, there’s no right or wrong time. Consider what your needs are and choose a plan that meets them all!
Further Reading
Getting Self-Employed or Freelancer Health Insurance: Learn about the options available for health insurance when you are self-employed or working as a freelancer.
Freelancer Contractor Health Insurance: Discover the best health insurance plans for freelancers and contractors, ensuring you have the coverage you need.
6 Health Insurance Tips for Freelancers: Get valuable tips to navigate health insurance as a freelancer, optimizing your coverage and costs.
FAQs
How can I find suitable health insurance as a freelancer?
Finding suitable health insurance as a freelancer can be challenging, but there are options available. Consider exploring health insurance marketplaces, professional associations, or working with insurance brokers who specialize in freelance coverage.
What are the typical costs associated with freelancer health insurance plans?
Freelancer health insurance costs can vary based on factors like coverage level, deductible, and location. On average, freelancers can expect to spend a certain percentage of their income on health insurance premiums. It’s essential to compare plans and assess your budget to make an informed decision.
Can I get health insurance through my spouse’s employer?
If your spouse has employer-sponsored health insurance, you may be eligible to be added to their plan. Check with their HR department to understand the eligibility criteria and costs associated with adding a spouse to the plan.
What if I have pre-existing medical conditions as a freelancer?
Having pre-existing medical conditions can affect your ability to get health insurance coverage. However, some states have protections in place that ensure freelancers cannot be denied coverage due to pre-existing conditions. Additionally, there may be options like high-risk pools or government programs to explore.
Is there any government assistance available for freelancers to obtain health insurance?
Yes, depending on your country or region, there might be government assistance programs available to help freelancers access health insurance. For instance, in the United States, the Affordable Care Act offers subsidies and marketplace options for freelancers to obtain 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.