You're a freelancer or self-employed individual who gets to work with plenty of freedom.
But, the biggest downside is:
You don’t get employer-sponsored health insurance coverage.
Health insurance is one of the most difficult differences for traditional for freelancers and the self-employed to tackle.
Find out what health options are available to freelancers and those who are self-employed.
Learn how to find the right plan and to make sure you get it at for as cheap as possible.
Where to Get Health Insurance
Before you can tackle choosing a plan and dealing with the costs, you have to find a place to get health insurance.
Since the passage of the Affordable Care Act, states have run health insurance marketplaces where individuals can purchase plans independent of their employer.
This is one of the first places that you should look as you’re certain to be able to find a plan here.
Healthcare.gov has all the information you need to be able to find your state’s marketplace and to start getting a plan.
The easiest way to enroll in a Healthcare.gov plan is through the open enrollment period, which runs from November 1st to December 15th, and provides insurance starting from January 1st of the next year.
If you need insurance during the year, you can qualify for a special enrollment period if you or anyone in your household experiences the following:
- Getting married
- Having or adopting a child
- Getting divorced or legally separated and losing insurance
- Losing job-based health insurance
- Losing eligibility for Medicaid, CHIP, Medicare, or overage through a family member
If you’re eligible for special enrollment, you can get insurance that covers you before the start of the next year.
Your former employer
If you’re transitioning out of a regular full-time job to go full-time freelance or to try self-employment, talk to your employer about extending your health insurance benefit.
Many employers will let you keep your insurance plan, at an increased cost, for a period of time after you leave the company.
You might also be able to convert your group health plan through your employer to an individual plan.
Your spouse or partner
If you are married or in a domestic partnership, talk to your partner about signing up for a family medical plan.
Their employer likely offers a health insurance plan that can cover you in addition to your spouse or partner.
By taking advantage of your spouse or partner’s insurance, you can save money by sharing the cost of the plan.
You can also avoid the headaches that having different insurance plans can cause.
For example, you can visit the same doctors and specialists without having to worry about care networks.
Professional associations and business groups
Just because you’re freelancing or self-employed doesn’t mean you have to do everything on your own.
There are a lot of support groups for people like you.
One example is the Freelancers Union.
This non-profit organization advocates on behalf of freelancers to help them fight for proper treatment and pay from the companies that hire their services.
The Freelancers Union has more than 350,000 members across the country.
One of the benefits of membership in the Freelancers Union is that the Union can help refer you to health insurance companies and may be able to get you a plan at a lower cost.
All sorts of other groups offer similar benefits.
Your local chamber of commerce or a professional association for your trade might be able to get you a group rate on an insurance plan.
These plans work a lot like insurance through a traditional employer.
By grouping many people together, you can share the risk and qualify for a lower rate.
How to Find Inexpensive Options
One thing that many people struggle with is the cost of health insurance.
That’s no surprise given that the average premium for an individual health insurance plan was $321 per month in 2016.
Family plans average $833 per month.
This is the cost before paying for any healthcare and covering deductibles, which added another $4,358 to individual plans and $7,983 to family plans.
With how expensive health insurance is, it makes sense for you to do your best to find an inexpensive plan.
Think about the coverage you need
The first thing that you should do is figure out exactly what coverage you’ll need.
The Affordable Care Act mandates that every plan must cover at least:
- Preventative care
- Outpatient care
- Visits to the emergency room
- Inpatient hospital care
- Care before and after you have a child
- Mental health service and substance use disorder service
- Prescription drugs
- Services and devices to recover from injury or deal with disability/a chronic condition
- Lab tests
- Dental and vision care for children
Outside those ten essential services, insurance companies can choose to include or exclude any type of coverage.
If you see a plan with an additional level of coverage on top of those listed, you might be able to find a cheaper plan that doesn’t include that coverage.
Additionally, each insurer might provide different levels of coverage for different services.
For example, on insurer might cover prescription drugs in-full while another may require a copay.
Think about exactly what you need out of an insurance plan to make sure you don’t get coverage you don’t need.
Once you know what you need out of your insurance, you’re ready to shop around and compare the cost of different plans.
The easiest way to do this is to visit Healthcare.gov and look at the plans available in your state.
You can also get an estimate of the subsidies if any, that you’ll qualify for based on your income.
Plans on Healthcare.gov are rated as bronze, silver, gold, and platinum.
These rankings indicate how much each plan will pay toward medical costs.
- Bronze plans have cheaper premiums but only cover 60% of the cost of care.
- Platinum plans have the costliest premiums but cover 90% of the cost of care.
Consider other places to find insurance, such as through professional associations. You might find lower prices for equivalent care.
What to Consider When Choosing a Plan
You’ve already taken the time to think about the coverage that you need, but there are other things you should look at when choosing a plan.
- Plan network
- Out-of-pocket maximums
One thing to consider is whether the plan’s network works for you.
If you like your current doctor, you don’t want to choose a new insurance plan that will force you to choose a new doctor.
Another thing to consider is what the out-of-pocket maximum for the plan is.
This is the maximum amount of money that you’ll have to spend in a year on healthcare before the insurer will cover all additional care.
Though the Affordable Care Act mandates the largest out-of-pocket maximum that an insurer can have for a plan, some insurers will have lower maximums.
The deductible for your plan, the amount you have to pay before your insurance kicks in to pay for care, is also important to consider.
Plans with a high deductible leave you paying out of pocket for all but the most expensive care.
The Importance of an Emergency Fund
One thing to remember, regardless of the insurance plan that you choose, is that you should always have an emergency fund of some sort.
Emergency funds are meant to help you handle unexpected expenses.
In other words:
Having an emergency fund is like having insurance.
You hope that you never have to use, it but not having it when you need it can result in huge expenses.
Ideal Size of an Emergency Fund
|To start...||Ideal goal...||Super safe...|
|$1,000||3-6 months of essential expenses||12 months of expenses|
The size of your emergency fund depends on a number of factors.
For example, you want to have enough money to cover a few months’ living expenses in case you hit a dry spell in your freelancing.
One good rule of thumb is to make sure that you have at least enough money in your emergency fund to cover your insurance plan’s out-of-pocket maximum.
If you have enough money to cover that, you can ensure that you won’t have to take on debt to pay for healthcare.
Of course, you should try to have a bit more in your emergency fund, in case you have to handle another unexpected expense in addition to a medical mishap.
Finding the right health insurance plan when your freelance or self-employed can be difficult to do.
Taking the time to think about the coverage you really need and to shop around can help you find a low-cost plan that meets your needs.