Tips for Managing Health Care Costs When You are Self Employed

As reported by Forbes 10.6 million people in the US are self-employed. With the hard times, decline in available jobs, many are turning to self-employment as a way sustain their living. This increase has created a gap in the health care industry as many self-employed workers lack proper coverage. However, there are many options available for managing health care costs if you are currently or planning to become self-employed.

health care
photo credit: Alex E. Proimos

Private Insurance Coverage

Many self-employed individuals immediately think of private medical insurance and cringe at the thought of the cost. However, many private insurers offer coverage options that are simply unnecessary.

Briggs & Butler suggests choosing only the coverage you truly need, enduring the waiting period, and comparing quotes to find a lower cost option. You will be able to have the coverage you need while working with your budget. You want to avoid choosing the first plan you come across that paying for coverage you don’t need and won’t use.

Join Your Employed Spouse’s Coverage

combo health insurance
photo credit: trenttsd

It is common to have one employed and one self-employed spouse in a household. If you are self-employed and married to an employed spouse, you have the option of being covered under their insurance. This is the most common method of gaining coverage. Though your spouse’s premiums will increase, this extra cost can be used as a tax write off.

Gather More Self-Employed People

Regardless of your industry, there are professional or trade organizations that offer their members a group insurance plan. By banning together with others in these groups, you can opt in for cheaper coverage than private coverage can offer. Look for local and national groups to find the right group for your profession. A couple of popular groups are the National Federation of Independent Business and the National Association for the Self-Employed.

Join a Discount Benefits Club

If you have already looked at coverage options, you undoubtedly come across a discount club. While these clubs are not exactly insurances, they do have their purposes. If you had to eliminate a portion of your coverage in areas such as dental and vision, a discount club can help close the gap. They offer savings to members by charging for referrals to health care professionals. You may also use these clubs in conjunction to your current coverage for added savings on procedures and visits.

Opt-In for Obamacare

health insurance reform
photo credit: twbuckner

There has been a lot of debate since the mention of Obamacare, however, it has passed and will take effect in 2014. For the self-employed, these changes in health care are highly beneficial. A few changes that will directly affect you are:

  • You are required to have health insurance or pay a fine: Everyone must have health insurance coverage by 2014 or you will be required to pay a penalty to the IRS.
  • Preexisting conditions can’t be denied: Regardless of your current health, insurance providers are not allowed to deny coverage based on your age or health status. Also, you current health care provider cannot cancel your policy if you get sick.
  • Coverage can be purchased through online health insurance exchanges: Regardless of whether or not it is required to have insurance coverage, it can be highly expensive. Therefore, online health insurance exchanges will be provided by state to offer low cost options for those seeking coverage.
  • Tax credits will be offered to low–income people: Even with the exchanges, health care coverage is expected to cost as high as $5,000 for an individual and $12,500 for a family. For this reason a tax credit will be offered and paid directly to the health insurers reducing the cost of healthcare to 3%-9.5% of your income.

Try Not to Get Sick

medical checkup
photo credit: Lorenzo Tlacaelel

There is only one sure fire way to save on health insurance, don’t get sick. Though we don’t always have control over this, there are ways you can reduce the chances of illness. There is more than enough information available on how to reduce your chances of illness. Eating right, exercising, disinfecting, and limiting contact with those who are at risk of spreading illness to you are just a few ways to stay healthy.

Preventative measures should also be taken to understand your risks and begin taking the necessary steps to reduce them. Take advantage of free clinics and health fairs in your area for screenings. Knowing your risks early will allow you time to get treatment and reduce the overall cost of your health.

Becoming self-employed has its pros and cons. Working for yourself allows you to be in control of your schedule, finances, profits and future. However, you lose some of the benefits of working for an employer, such as group insurance. With a little research and a lot of shopping around, you can still find the coverage you need in the price range you can afford.

About the Author: Author Amy Nielson is a blogger who writes articles for Briggs & Butler, a medical insurance provider that can offer policies for self-employed workers. You can follow her on Twitter @NielsonAmy.