5 Places to Find Health Insurance for Freelancers or the Self-Employed
You have several options if you work the gig economy
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 freelancers 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.
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. But before you worry about how much health insurance costs, consider this. According to Department of Health and Human Services the average American with a federal marketplace plan in 2016 paid $106 a month after subsidies. In addition to the marketplace, you also have other options to find affordable health insurance.
Freelance Work in the United States
Many people are choosing to work independently. In many cases, that's not because they have to, but because they choose to do so. 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. That represents 6.9% of total employment.
But that number is expected to grow. By 2020, 50% of the workforce in the United States is estimated to have some form of freelance work. A major challenge facing independent, self-employed or freelance works 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 options available.
1. Affordable Care Act (ACA)
Ever since the Affordable Care Act — also known as Obamacare — came into effect, people have been able to find health insurance through the healthcare marketplace either as an individual or in some circumstances as a small business. Enrollment 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 2018, your coverage would begin on Jan. 1, 2019.
If you miss open enrollment, you can visit the marketplace and see if you qualify for special enrollment. Life changes and circumstances make it possible for you to qualify outside the open enrollment period for health insurance. You can also get healthcare if you qualify for Medicaid.
2. Your Spouse of Domestic Partner's Plan
If your spouse works and has coverage through their employer, this may be a good option. Because it's an employer-based plan, it may also save you money, because it may charge a lower premium for dependents.
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.
3. Cobra Coverage
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 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 there to make sure you save money wherever possible.
4. The Freelancers Union
The Freelancers Union offers a health insurance plan. There are also supplemental medical plans that include dental coverage and life insurance. The union's website also offers a guide for subsidies, an FAQ page, a glossary of health insurance terms as well as guide to choosing the right plan tailored to your needs.
5. Professional Associations
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.
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, however, short term health plans may not meet the condition of the Affordable Health Care Act (ACA) and may result in you having a penalty to pay under the ACA minimum coverage requirements if you do not carry the required coverage for at least 9 months of the year.
Speaking to a licensed health insurance broker may help you uncover many more options. They will be in a position to give you professional advice and will also be able to tailor solutions to your needs. Make sure to check all the other options outlined above before choosing this kind of solution.
Paying the Penalty
If you feel like health insurance is too expensive to afford, consider the consequences, especially if you live in certain parts of the country. While the national mandate no longer exists, some states still require healthcare coverage:
- New Jersey
Maryland is still debating whether to implement a penalty on those who are uninsured.
Each state has its own rules about how much you'll have to pay. Check with your state's taxation department to get more details.
Cutting Health Insurance Costs
If you find the plan prices expensive, then consider taking a higher deductible plan, or choose a lower "metal-level" in the marketplace. Again, consider having a discussion with a health insurance broker who represents several insurance companies and can search various options for you. The more you shop for your health insurance, the more likely you are to save money. Shopping in only one place will limit your possibilities.
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 an important factor in figuring out what plan will work best for you. We cover an extensive list of ideas and options to find affordable health care in our article: 10 Ways to Keep Your Health Care and Insurance Affordable.