Top 5 Tips for Self-Employed in Health Insurance
Figuring out how to make sure your family has health insurance is one of the most difficult aspects of being self-employed. Unexpected medical expenses can slow down your venture’s progress. These tips will help.
Due to today’s difficult job market, more Americans are starting businesses or becoming “accidental entrepreneurs” because of the lack of health.
It might be. Unexpected medical expenses that slow down your venture’s progress is not something you want.
You get more than access to medical care with insurance. You can also benefit from the lower rates that insurance companies negotiate for you with your medical providers. It also limits your financial responsibility for injuries and accidents that could otherwise lead to you (and your company) going bankrupt. Here are five money-saving ideas if you are uninsured, or searching for affordable insurance.
Comparison Shop
You need to have a wide view of the options in your local area to ensure you are getting the right health plan. Although you can buy directly from an insurance company, they won’t show you how their plans compare to others. When you shop online through a licensed agent like eHealthInsurance.com, you can compare plans from leading carriers in your area, compare rates and benefits, read customer reviews, and apply for coverage. You’ll be charged the same monthly premium regardless of whether you shop online or offline, as prices are set by your state department.
Take a look at COBRA alternatives
Many “accidental entrepreneurs” of today were laid off by their former employers. You may have been offered COBRA health coverage if you were laid off. This federal program allows you to temporarily extend the employer-based insurance you already have at your own expense. This is a great option for many people, and the 65% federal subsidy for COBRA premiums makes it even more appealing. It may be too costly. LegalZoom’s partner eHealthInsurance identified more than twenty states in which families could save over $500 each year by purchasing their own coverage instead of enrolling in subsidized COBRA. You don’t have to be pre-existing or disabled to get coverage.
Lock in your rate
Keep in mind that your premiums may increase from time to time when you purchase private health insurance for your family or yourself. You can temporarily protect your self by looking for a rate guarantee when you shop for coverage. An agent licensed in health insurance can assist you in understanding which companies offer rate guarantees. Some carriers will automatically lock you in to your rate for the first one year of your policy. Some carriers may offer to lock your rate for a longer time in exchange for a monthly fee. A carrier might offer a rate guarantee for 12 months, then ask you to pay $21 more per month to increase the rate guarantee. Calculate the savings to see if you aren’t paying more for coverage.
At Tax Time, Deduct Your Premiums for Health Insurance
You may be eligible to deduct premiums for health insurance that you purchased for yourself or your dependents if you are a self-employed individual in your state. You cannot deduct premiums for any month you were eligible for employer-sponsored insurance. The amount you can deduct must not exceed your annual net self-employment income. To learn more about self-employment and the tax implications in each state, consult a tax professional.
Have a look at HSAs
An HSA is an HSA-eligible savings account that provides tax advantages. HSAs are a good choice for self-employed people for many reasons. HSA-eligible plans include major medical insurance plans with a higher monthly premium and a lower deductible. You can deposit a portion your pre-tax income to a savings account and earn interest tax-free. The funds can then be used to pay qualified medical expenses including co-payments or deductibles. Tax-free accrual of unutilized money from one year to the next is possible. The IRS permits individuals to save $3600, and families to save $7200 tax-free in an FDIC-insured savings account (HSA).
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