Health Insurance Options For Self-employed Individuals – If you are self-employed, shopping for a health insurance policy can be overwhelming and confusing. There are many factors to consider, including the types of coverage you need, whether you have pre-existing conditions that may affect your coverage, and how much you can afford.
With health care prices rising and the American Rescue Plan (ARP) making health insurance more affordable and accessible, many people in the United States are choosing to protect themselves with health insurance. In fact, since the beginning of 2021, more than 4.6 million Americans have gained new health care coverage.
Health Insurance Options For Self-employed Individuals
It’s worth the effort to make sure you cover yourself. Health insurance can help offset the costs of unforeseen medical emergencies, as well as expenses related to chronic conditions and essential health care, such as doctor’s appointments, vaccinations, and proactive treatments.
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Learn the important information you need about self-employed health insurance to make sure you get the right coverage for you and your family.
Self-employed individuals may be required to have health insurance depending on state requirements. The original Affordable Care Act (ACA), also known as “Obamacare,” required all individuals to have health insurance or face a tax penalty. As of 2019, the penalty no longer applies at the federal level. However, some states still require health insurance. In 2022, these states and territories are:
If you live in any of the states above and do not have health insurance coverage, you may be subject to penalties.
When evaluating your health insurance options, it’s important to understand whether you should be classified as self-employed or a business owner. An easy way to tell the difference is to look at your role in the business. If you are a business owner, you usually run a business and have people working for you. On the other hand, the self-employed are typically sole proprietors or independent contractors.
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Business owners with employees can access health insurance plans through the Small Business Health Options Program (SHOP). This allows small employers to provide flexible health and dental coverage for their employees. It is also important to note that certain business owners are required to provide health care to their employees. This typically includes businesses that employ 50 or more full-time or full-time equivalent employees.
Individual entrepreneurs cannot purchase bonds through SHOP. Instead, they must purchase an individual or family plan.
There are several health insurance options for the self-employed. You may find it helpful to compare the following to determine if you qualify and how it fits your budget and coverage needs.
The Individual and Family Health Insurance Marketplace is a popular source for purchasing health insurance for independent contractors, self-employed individuals, and self-employed individuals without employees.
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There are many benefits to purchasing a custom plan from the Marketplace. All plans offered in the Marketplace cover 10 categories of essential health benefits and cannot exclude treatment for pre-existing conditions. There are also a number of different premium and cost-sharing options to choose from, so self-employed people can choose a plan that fits their budget.
Keep in mind that buying your own plan means you won’t have the same cost-sharing benefits as an employee who joins their employer’s group health plan. Employers usually cover part of the cost of employee premiums. If you are self-employed, you must pay the entire premium.
If your spouse works full-time for an employer that offers group health insurance, they may be able to enroll and enroll you in their plan. This can be beneficial as group plans tend to be significantly cheaper than individual plans. In some cases, your spouse’s employer may even cover a portion of the premium, although it may be less than your spouse is covered. Depending on your income, this may or may not be cheaper than buying your own plan, so it’s worth looking into both options.
The ACA requires all insurance companies that offer children’s insurance to make it available to children until they turn 26. It is possible for self-employed persons under this age to receive health insurance through the parental insurance package.
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Note that this option ends when you reach the age of 26, at which point you will need to find your own cover. Additionally, your parents may receive notifications about the health care you receive, so if privacy is a concern, this may not be the option for you.
If your income is low and you meet your state’s eligibility criteria, you may be able to get health coverage through Medicaid. Although this program was created by federal law, each state runs its own Medicaid program, which means benefits can vary from state to state.
If you visit the Health Insurance Marketplace and enter your location and income, it will tell you if you qualify for Medicaid coverage. In many states, you must have children and an income below the poverty level to qualify. In 2020, the median income limit for a family of three was $8,905.
If you are over 65 or disabled, you may be eligible for coverage through Medicare, even if you are still self-employed. The Medicare program consists of Parts A and B. Each section offers a specific type of coverage and has its own costs. Depending on your Marketplace options, the cost of Medicare may be more affordable. Those eligible for Medicare can either automatically enroll or manually enroll during their initial enrollment period.
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Other options to consider include COBRA and short-term insurance. The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a program that allows workers and their families to have continued health insurance coverage for a limited period of time after a voluntary or involuntary job loss or other specified event.
If you’ve left your job or been laid off and are now self-employed, you may have access to COBRA coverage. However, keep in mind that if you are eligible for COBRA, you may have to pay 102% of the total premium cost. Also, this coverage is only for a limited period of 18-36 months.
In some states, you can purchase short-term health insurance to cover the lack of permanent coverage. These plans usually provide coverage for up to 12 months. However, some states strictly regulate short-term health insurance plans and others don’t allow them at all, so it’s important to make sure this option is available in your area if you’re interested.
While neither COBRA nor short-term health insurance is a viable solution to your long-term health insurance needs, each can provide temporary coverage to help pay your medical expenses while you search for a traditional health insurance plan or wait for the next enrollment period. .
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When it’s time to start exploring your health insurance options, you can choose to visit the Health Insurance Marketplace or contact a trusted insurance agent to guide you through the process.
Unless you are eligible for a special enrollment period, you may only enroll in the Marketplace during the Open Enrollment Period. The 2023 open enrollment period is now active in most states and runs from November 1, 2022 to January 15, 2023.
When comparing plan options, keep in mind that each plan offered through the Marketplace must cover the following 10 basic health benefit categories:
Marketplace plans are also divided into metal tiers: bronze, silver, gold, and platinum. These categories are based on the percentage of costs you have to cover, not the quality of care.
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Plans also have an overall quality rating that ranges from 1 to 5, with 5 being the highest. Ratings are based on plan administration, medical care and member experience. This system provides an easy way for individuals to compare the quality of plans.
When comparing options, it’s important to be aware of the various cost components you may be responsible for, such as:
In some cases, you may be eligible for discounts from your individual health plans. This may include the Advanced Premium Tax Credit (APTIC) or Cost Sharing Allowances (CSR).
APTC is a tax credit available to households with annual income below the maximum threshold. You can take out the loan in advance to lower your monthly health insurance premium. The credit amount is based on your estimated annual income, and you have the option of using all or part of the credit to pay off your monthly fees.
Health Insurance Options For Self Employed Individuals
At the end of the year, if you have taken a higher credit than you are entitled to, you will repay the excess when you submit your tax return. If you bought less, you would get the difference.
Cost-sharing reductions are another benefit based on annual household income. They can help you save on your deductible, coinsurance, and deductible