Many people stay in dead-end jobs because they can’t afford health insurance. There are health insurance alternatives for the self-employed if you get creative.
Leaving Corporate America behind can be a scary proposition, especially if there’s a family involved. Trading in a regular paycheck for the flexibility of making it on your own also means giving up company sponsored health insurance. In fact, the lack of cheap health insurance for the self-employed is the reason most often cited for remaining in a job that is unsatisfactory.
It’s certainly a valid concern. While the self-employed, especially the self-employed who have families, can cut corners on many expenses, health insurance is not one of those corners that can be safely cut.
To make matters worse, health insurance costs are far higher for those who don’t have access to a group insurance plan. Fortunately, there are affordable health insurance alternatives and options for those who choose to strike out on their own in the world of entrepreneurship or freelancing.
Health Insurance Through a Spouse
The easiest and most common way to provide health insurance for family members is through a spouse’s employer.
Freelancers who are lucky enough to have a spouse working for a company that offers group health insurance will usually find that insurance through the spouse is the cheapest way to get good health insurance coverage for the entire family.
COBRA to Preserve Health Insurance Eligibility
COBRA (Consolidated Omnibus Budget Reconciliation Act) benefits will allow a newly self-employed to continue health insurance at the lower group insurance rates. The company must allow the employer to remain in the group insurance plan for a specific number of months, but the former employee must pay the entire premium.
For anyone who is used to paying 20-80% of their health insurance premium while the employer picks up the rest of the tab, the full cost of health insurance may come as a rude surprise. It will still usually be less expensive than individually purchased health insurance, and it’s only temporary.
Join a Health Insurance Cooperative
There are several organizations for self-employed workers and small business owners that have banded together to buy into group health insurance plans. Their combined buying power lowers the cost of premium health insurance policies.
Mandated Group Health Insurance for the Self-Employed
In some states, health insurance companies are required to offer group health insurance policy rates to the self-employed and small businesses that have at least one employee.
While the rates are not necessarily as cheap as premiums for larger group policies, the most important benefit of these mandated programs is that they must provide health insurance for all members of the group regardless of health. This can be very important for anyone who is denied individual health insurance because of their health or age.
Supplemental Health Insurance and Bare Bones Coverage
Many health insurance companies offer stripped down health insurance plans that are appropriate for a self-employed entrepreneur or freelancer who is in reasonably good health. A healthy, single young adult can often make do with accident insurance or a stripped down health insurance policy with a high co-pay or deductible.
Health insurance coverage is not something that should be left to chance. Anyone who is planning to take the plunge into self-employment should think long and hard about health insurance and find a way to provide the best health insurance that he or she can afford.