The complete health insurance manual for self-employed entrepreneurs

Aug 16, 2022

If you don't have an HR specialist to guide you through your options, you need to know how to evaluate all the different health plans. Also, you must consider the unique requirements of self-employed entrepreneur -- such as maintaining your health so that you are able to expand your company.

It's crucial to choose insurance that is affordable and will cover your mental and physical requirements for health, which is the reason we're here to help in this journey. Read on to find out how to use insurance options and other solutions that can be beneficial for entrepreneurs who self-employed.

Do you really need insurance?

No question. Yes!

The cost of hospital or emergency rooms are expensive even for seemingly minor concerns.. The cost of counseling for mental health or burnout can cost as much as $250 per hour.

Let's face it: burnout is common among the employed. In fact, Vibely found that a nearly 90% of creatives experience burnout at one point or another in their careers.

It's hoped that you won't have to file an insurance claim. But should a health problem come up, you'll be glad you're covered.

Health insurance that is affordable for self-employed

Just like it sounds, the Affordable Care Act (ACA) was designed to be affordable and easily accessible. Open enrollment happens each year beginning on November 1st and ending January 1st or January 15th.

But you may be able to enroll at any time during the year, if you encounter one of four qualifying life events:

  • Losing health coverage
  • The household may undergo changes like being married, having a baby or even a death within the family
  • Residence changes, such as moving to a different ZIP code or county
  • Other events that qualify, such as income changes or the gaining of the U.S. citizen

The ACA has a wide range of plans to allow users to choose the best amount of coverage at a reasonable cost:

  • Platinum pays for 90% of your medical costs, with an additional 10% copay.
  • Gold covers 80% of your medical expenses, and comes with an additional 20% copay.
  • Silver covers 70% of medical expenses, and an additional 30 percent copay.
  • Bronze will cover 60% of your medical bills, plus an additional 40 per cent copay.
  • Catastrophic policies cover three basic health visits as well as preventive. You cover all other medical expenses until you meet the highest deductible.

How much does self-employed health insurance costs?

If you're trying to choose the best plan for you, you aren't limited to health insurance policies. It is also possible to choose vision and dental plans, or even combine medical insurance with a savings account, often referred to in the form of HSA.

Your cost depends on:

  • You can pick the coverage that you want
  • The types of insurance you select
  • Age
  • Your location

The more coverage you choose that you have, the higher the cost. You don't need to foot the entire bill. To ease the burden Government offers tax credit that allows people who work for themselves as well as their families to purchase health insurance from the Health Insurance Marketplace(r).

Tax credits and understanding in health insurance

In the event that you decide to sign up to purchase insurance through the Marketplace In the Marketplace, you'll be asked to provide your estimated earnings and information about your household. It will help determine the potential tax credit.

In order to qualify, your earnings must be at or above 100percent and 400% of the federal poverty threshold (FPL) which includes wages and tips. Don't worry if your income is higher than 400% of FPL. Health insurance policies offered by the Marketplace in 2022 also offer a tax credit with higher earnings.

The credit reduces the cost of premiums on health insurance for your spouse, you and dependent children under the age of 26.

Be aware, you don't require tax credit. You can use all, some, or none for a prepayment to reduce the monthly cost.

When you do your taxes towards the end of the year and you're required to repay some of those credits if your income is more than you expected. If you've used more tax credits than you qualify for, you'll be able to claim the difference as credits for refunds on your taxes.

Alternative insurance

If you search the internet, you'll discover other health insurance options, like healthshare, short-term healthshare, short-term other medical insurance.

These types of plans can help you insure yourself against the possibility of catastrophic medical incidents or injury. It's vital to know that they do not meet the definition of health insurance and don't have to offer the same health benefits as ACA plans.

For instance, they aren't required to cover any preexisting medical conditions -- generally, they won't. In addition, they might require that you pay for your medical bills on your own and provide the bills in order to receive reimbursement.

Small-business group insurance

Another option for the self-employed are small-business group insurance that is offered by The Small Business Health Options Program (SHOP).

The program is open to small companies that have up to 50 full-time workers. If you have fewer then 25 workers, you could get the Small Business Health Care Tax Credit, which is a 50% reimbursement of costs.

You can enroll through an insurance provider or the help of a SHOP-registered agent.

NOTE:This coverage is only available if you have employees working 30 or more hours each week. If you're a sole proprietorship or a partnership, you need individual protection.

Directly from insurance companies directly

A different option is to purchase health insurance with the company you trust: Cigna, United Healthcare, Aetna, Kaiser Permanente, Anthem, or Oscar Health. It's a good alternative if you have an insurance plan that you enjoyed with a former employer, and would like to use those providers and facilities.

Remember, you have to select a qualified plan to get the premium tax credits that are available through the Marketplace.

Certain of them offer dental and vision coverage. You can also receive coverage through a special provider like Delta Dental or VSP Vision Care.

The myths surrounding health insurance

Choosing health insurance isn't easy. There numerous myths about the process. Let's address some of those common misunderstandings now.

 Myth #1: If you don't have an employer, insurance isn't an alternative.

Thanks to the ACA as well as tax credits provided by the government Individual insurance can be affordable for everyone. However, you must choose the right plan, though.

If you don't get sick often and you want to lower your costs it is possible to do so by selecting a policy with a more of a deductible as well as a copay. If you or your family is suffering from chronic illness, you can lower costs through choosing the HMO policy.

 Myth #2 Myth #2: I'm covered as quickly as I sign up with an insurance provider for health.

Based on the health policy you select, there may be some waiting time until you're fully covered. For instance, if you purchase insurance from the Marketplace in the open enrollment period and your insurance doesn't begin until January 1 of the year following. Take the time to review the information or get in contact with the insurance company to answer the questions you have.

 Myth 3 The health insurance policy will pay the entirety of my health expenses.

The insurance policy you choose will not cover 100 the cost of your needs. Your coverage depends on the amount of copays, deductibles, and the annual out-of-pocket limit in your chosen plan.

The the deductibleis the amount you pay before insurance coverage kicks in. In general, the less your insurance premiums per month, the higher the deductible you will have to pay.

A copay is the amount you pay towards the healthcare bill. Most of the time, once you've hitting your deductible, it's likely that you'll be still accountable for 10 to 30% of the cost of healthcare according to your insurance plan.

The annual out-of-pocket maximum is the total amount of cash you'll have to pay throughout the year. When you've spent that amount of money on healthcare expenses, the insurance company will start paying the entire cost up to the close of the year.

 Myth #4: Lower premiums will save me money.

It is tempting to select the one with the lowest cost, however in the long run, it could cost you more.

This is especially true in the case of an ongoing condition such as asthma or diabetes that requires regular medication and care, or if you or one of your relatives requires urgent surgical intervention.

Pick a plan that provides you enough coverage for your anticipated medical needs (including the possibility of unexpected medical needs) but doesn't break your budget. You may not use all of your coverage, but you'll have what you'll need in case an emergency medical situation occurs.

 Myth 5: Insurance for health pays for every doctor I choose.

Depending on the type of plan you choose You may be limited in your alternatives when selecting your doctor.

HMOs also known as Health Maintenance Organizations, are one of your least expensive health insurance options. It is essential to select a primary care physician from their network, and you must only visit specialists if they refer to you. There is no coverage for out of network healthcare other than in emergency situations.

Point of Service (also known as Point of Service plans, are like HMOs in the sense that you require the approval of your primary doctor in order to see a specialist. There is the possibility to see doctors outside of network, but you'll pay less using the in-network provider.

EPOs or Exclusive Provider Organizations will only pay for treatments if you visit specialists, doctors, or hospitals in the plan's network (except for emergencies). However, their networks are generally greater than that of an HMO's. Some may require a referral before seeing a specialist.

PPOs also known as Preferred Provider Organizations permit you to see any provider you want however, you'll be paying less if you use networks.

 Myth #6 The health insurance policy only covers physical illness.

Many insurance plans today consider behavioral and mental health problems to be vital. Therefore, the plan you choose could provide counseling, drug abuse and other related concerns. Some providers have better access to certain services than others. Before making a decision, make sure to read reviews about the experience of being able to get access to mental health treatment through their network.

NOTE: Different states and insurance companies offer various mental health benefits. Compare options on the Marketplace for a better chance of getting the protection you require.

Health treatment options for self-employed

As a business owner and entrepreneur, you have more control than ever over your health care options. Thanks to the rise the health insurance exchanges, SHOP, the SHOP program, and HSA plans, there's never been a better time to allow self-employed individuals to be in charge of their healthcare costs. Remember, to choose the best plan, you must take time to understand your healthcare needs before deciding on an option.