Benepath Highlights Options for Self-Employed Individuals Seeking Health Insurance

The self-employed often face challenges in finding adequate and affordable health insurance. While relying on COBRA might be a viable option for some, there are other affordable options available to the self-employed.

Those who have recently become self-employed have the opportunity to preserve their health coverage by taking the initial step of extending their employer-sponsored health benefits through COBRA, which allows workers to extend their health benefits for up to 18 months after leaving a job. The up side of choosing this option is that coverage is guaranteed. The down side of electing to continue coverage through COBRA is that employers no longer pay their portion of the plan’s premium, and this can be anywhere from 75 to 80 percent of a plan’s cost. By keeping the coverage and paying the employer portion, self-employed individuals are likely to see a huge difference in what they pay for the coverage. However, this option may be cheaper than having to switch insurance plans, especially if individuals may be subjected to a pre-existing conditions clause.

Another option open to self-employed individuals would be to buy an individual health insurance policy on the open market. If the applicant’s health history is clean, it’s simply a matter of finding a policy that offers the benefits and costs that work for his or her budget. Individuals who opt for this plan need to make sure they choose a plan with adequate benefits to protect both their families and their assets. Unexpected medical emergencies, when combined with inadequate coverage, could cause lasting damage for the self-employed.

If having a low premium is the most important concern for self-employed persons looking for coverage, enrolling in a high-deductible health plan (HDHP) may be a way to secure affordable health insurance. HDHPs often have low, affordable premiums. Most HDHPs are coupled with a Health Savings Account (HSA), and money can be deposited into the account to pay for medical expenses not covered by the HDHP. All of the contributions to an HSA are made with pre-tax dollars, so this gives self-employed individuals a tax incentive to save for their health care needs. A major advantage of an HSA is that the money carries over from year to year, so there is no worry about using it or losing it.

Self-employed business owners can also qualify for group health insurance policies, but many do not pursue this option because they believe that individual health policies offer better benefits. While there are many benefits to individual policies, a group health insurance policy has a lot to offer the self-employed. Most importantly, it can offer individual employees the opportunity to receive health care when they may be denied by applying for an individual policy. If an individual is self-employed and employs no other workers, he or she is considered to be a group of one. Under Florida law, those who are self-employed and function as a sole proprietor of their business are eligible to apply for a Florida guaranteed issue small group health plan. These differ from individual plans because insurers are required to accept self-employed applications for a standard health plan, a basic health plan or a high deductible plan.

Finding the right coverage can take some time and effort, and self-employed individuals should carefully consider all of their health insurance options before making a choice.

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