A freelance worker, independent contractor, or self-employed person is someone who does business on their own and does not work for a specific company. These people enjoy many benefits including flexibility and work-life balance, but they also have to manage all the aspects of their work themselves. Healthcare coverage is one important consideration for anyone who decides to become a freelancer since most companies do not provide coverage to these kinds of employees.
Being a freelance worker can be risky because if you become sick and can't work, you likely won't have any income. That means you'll be forced to pay for all your medical care out-of-pocket. Without the option of a group health insurance plan through a traditional workplace, getting covered on your own is increasingly important.
- Freelancers and other people without health insurance can buy it in the Health Insurance Marketplace.
- If you recently left a position, you may be eligible for COBRA coverage.
- Some professional associations offer health insurance.
- Short-term health insurance plans provide some coverage, but they don't meet the standards of the Affordable Care Act.
How Much Does Health Insurance Cost for Freelancers?
Although it would be great to be able to give one number to answer this question, everyone's health insurance rates vary. Before you worry about how much health insurance costs, consider this. According to the Kaiser Family Foundation, the average lowest-cost bronze tier premium is $328 and the average lowest-cost gold tier premium is $482. Besides marketplace plans, you also have other options to find affordable health insurance.
Freelance Work in the United States
Many people choose to work independently as freelancers. According to the most recent data from the U.S. Bureau of Labor Statistics (BLS), 10.6 million people identified themselves as independent contractors or freelancers as of May 2017. Independent contractors made up 6.9% of total employment in the United States.
A major challenge facing independent, self-employed, and freelance workers is finding affordable and reliable health insurance. Luckily, there are several options to choose from and, with a little research, you can find a good plan to protect your health and get medical care when you need it.
You can find health insurance through several places as a self-employed freelancer. The following are some available options.
Affordable Care Act (ACA)
Ever since the Affordable Care Act came into effect, people have been able to find health insurance through the Healthcare Marketplace as either an individual or, in some circumstances, as a small business. Enrollment for ACA plans begins in November and usually ends in mid-December. Plans sold during that time typically begin on January 1 of the following year. So if you enrolled in November 2020, your coverage would begin on Jan. 1, 2021.
If you miss open enrollment, you can visit the marketplace and see if you qualify for a special enrollment period. Certain life changes and circumstances—such as a marriage, the birth of a child, or the loss of employer coverage—make it possible for you to qualify outside the open enrollment period for health insurance. You can also get health coverage if you qualify for Medicaid.
On Jan. 28, 2021, President Joseph Biden signed an executive order creating a special enrollment period lasting from Feb. 15 to Aug. 15, 2021, due to the coronavirus pandemic.
Your Spouse or Domestic Partner's Plan
If your spouse works and has coverage through their employer, you may be able to join their plan. Because it's an employer-based plan, it may also save you money because it may charge a lower premium since the employer will usually pay into the plan.
Even if you are not legally married, you may qualify as a domestic partner if you share the same home and live a domestic life together — as long as you are not married to anyone else.
If you recently left or are about to leave your full-time job to venture out on your own as a self-employed or freelance worker, most health insurance plans offer the option to convert your existing group plan into an individual plan. Your plan provider will inform you of your eligibility for COBRA coverage.
Individual COBRA plans may be more expensive depending on your personal circumstance, but the costs you may save in working for yourself may easily cover the difference. If you are leaving your job, you also may qualify for the special enrollment period. Be sure and check your options to make sure you save money wherever possible.
If your profession has associations or if you become a member of a self-employed worker or independent worker association, you may be able to get group insurance through these kinds of memberships. The group insurance allows individuals to band together as members of a group (of self-employed workers), which is similar to the group insurance through an employer. One example of a group that offers a health insurance plan is the Freelancers Union. The group also offers dental coverage and term life insurance, among other options.
Short-Term or Temporary Insurance
Short-term health plans do not provide you with the benefits or coverage options that are offered by the Affordable Care Act (ACA) plans. A short-term health insurance plan may be a temporary option to consider if you missed the open enrollment period and want to avoid paying medical costs until you can get ACA-type coverage.
Cutting Health Insurance Costs
If you find the plan prices expensive, then consider taking a higher deductible plan, or choose a lower metal tier in the marketplace. Consider having a discussion with a health insurance broker who represents several insurance companies and can search health insurance options for you. The more you shop for your health insurance, the more likely you are to save money.
The Bottom Line
There are a number of strategies you can use to find the most affordable health insurance policy. Because health insurance is based on several factors, your individual situation and needs become important factors in figuring out what plan will work best for you.