Getting health insurance as a self-employed person scares many people who are searching for self-employment.
Self-employment and health insurance doesn’t need to be complex or scary. You just need to know your options and how to avoid mistakes that can cost you $1000s.
I interviewed Dave Walcher from USHEALTH Administrators.
Health Insurance Mistakes Made By Those Seeking Self-Employment
While there are numerous mistakes people make, most of the mistakes fall into three major areas.
Mistake #1: Not Talking To An Health Insurance Agent
Probably the number one mistake people make is not talking about health insurance with an agent before leaving their current job.
When you are employed is the best time to talk with a health insurance agent about your options since you have time on your side.
You can check with the agent to see what your options are. Are there health-based plans you can apply for (because you are in good health) or does a preexisting condition limit you or a family member?
An agent can figure out if you need to get an Exchange plan for the person with the preexisting condition and another plan for the rest of the family.
Not everyone in the family needs to be, or should be, on the same plan.
Mistake #2: Waiting Too Long To Make A Decision
The second mistake people make is not making a decision within 60 days of leaving their company.
To qualify for COBRA (named from the Consolidated Omnibus Budget Reconciliation Act of 1985 and revised in 1999), you need to make that election within that time frame. You must pay the entire premium amount (your portion and your former employer’s portion) plus an administration fee of up to 2%.
This can make COBRA coverage extremely costly.
The Department of Labor’s website clarifies this, “Qualified individuals may be required to pay the entire premium for coverage up to 102% of the cost to the plan.”
If you do not elect COBRA by the end of the 60-day time frame, you can only get Exchange health insurance.
Mistake #3: Heading Right To The Exchange
The third mistake is they go right to the exchange and not checking on their options.
In some states, that is the only option.
BUT, that is not the case for nearly half the country.
If you and your family are in reasonable health, you may get an off-Exchange plan that is less expensive and offers the same, or better, coverage.
Believe it or not, when an insurance company is able to screen their potential clients, they are able to better estimate costs and therefore are able to offer lower prices.
Self-Employed Health Insurance Isn’t Scary
Like much in life, when you have more information and access to professionals, things are not as scary as they might seem at first glance.
While getting insurance on your own might cost more than at a company when you work for yourself, you should be able to deduct the premiums and you will also have more deductions overall which will save you money.
If you have questions about your health insurance options, you may contact Dave here.
A disclaimer, I have known Dave for several years and when I met with him about my situation, he was unable to help me because of my preexisting condition. But he was honest enough to tell me that and we looked for options for my family.
[…] Yet the biggest concern I hear from clients and prospects is about health insurance. […]