Health Insurance For Self Employed

 In Blog, Individual Health Insurance

Obamacare has changed the rules for health insurance for self employed people. Prior to implementation of Obamacare or The Affordable Care Act (ACA), self employed individuals could qualify for a group health plan by simply making some creative changes to their business such as:

Adding a spouse to payroll or making your spouse an official partner of your corporation – Unfortunately, since Obamacare became law in 2010, these options are no longer available to people who are self-employed.

What Does Self Employed Mean?

I know the answer to this questions seems rather obvious, but this is an important distinction about how the Government now views self employed. Obamacare views self-employed people differently.

Here is the Government’s definition of Self-Employed:

“If you’re self-employed with no employees you are not considered an employer. You are considered an individual and will be required to purchase an individual/family plan or be subject to a tax penalty. An individual can purchase a health plan on the Federal or State Insurance Exchanges or from a private insurer.”

“For more information about self employed health insurance options and to request a Free Quote go here: sole proprietor health plans NY

Self-employed people are those that are in business for themselves, usually without employees. They are freelancers, consultants, 1099 employees or sole proprietors. Many entrepreneurs work out of their own homes or share office space.

Most enjoy the freedom of not having a boss or someone telling them what to do. But along with the freedom comes the stress of having to create your own income or paycheck. And now, finding your own health insurance plan.

Health Insurance Options For Self Employed

We will briefly cover available health care options for the self employed:

Individual Health Insurance ( The Public Health Exchanges)

The Health Insurance Marketplace is another option for a self employed person to purchase a health plan. The marketplace is public and most states run a health insurance exchange. The line-up of insurance companies on the marketplace are limited without some of the major insurance companies participating. Those companies that do participate,  offer health plans that have limited networks.

To qualify for an individual health insurance plan, you must buy a plan during the open enrollment period. Open enrollment begins November through January.  If you miss the open enrollment period, you could still purchase a health plan within 60 days of a qualifying life event.

A qualifying life event includes:

  1. Losing coverage due to job loss
  2. Between jobs with no coverage
  3. Moving to a new state not covered by your current plan
  4. Marriage
  5. Having a child

There are 4 “metallic tiers” to choose from: Platinum, Gold, Silver and Bronze. The Platinum plans have the least out of pocket expenses but the highest premiums. The Bronze plans have the lowest premiums but the highest out of pocket expenses for medical care.

Caution: While public exchange health plans might be lower in cost, as the old saying goes…”you get what you pay for.” Most networks are limited and many doctors in the New York region, do not accept “Obamacare.”

Association Health Plans

Association health plans are becoming very popular – and why wouldn’t they? Individual health plans in New York are almost impossible to find. There are several associations that offer health plans: Freelancer Unions, Nurse or medical Unions, Labor Unions and so on. These entities came together to give their members bargaining power to offer robust health plans at reasonable prices.

Technically, association plans are group health plans that offer health insurance, dental and vision plans for individuals and family members. Once you join the association – usually by paying an annual fee – you have access to networks such as:

  • Anthem Blue Cross (Blue Card)
  • Emblem Health (Prime Network)
  • Cigna (Open Access Network).

Why an Association Health Plan Might Be A Good Option For You

  1. You are a sole proprietor looking for affordable health, dental and vision coverage
  2. You work for a company that does not offer health benefits
  3. You are an independent contractor or 1099 employee
  4. You are looking for a large network of health providers
  5. You don’t want Obamacare – Public Exchange Plans

If you are interested in learning more about Association Health Plans, call: 914-633-1717 for your free enrollment kit.

Can I deduct my health insurance premiums as a sole proprietor?

Yes, self-employed individuals, including sole proprietors, can deduct health insurance premiums on their tax return as a business expense. However, you should always consult a tax professional for specific guidance.

Avoid These Common Health Insurance Buying Mistakes

When you are searching for a policy, don’t just look at the plan’s monthly cost. Many people make the mistake of buying the lowest priced policy but they do not figure in other fees they might face such as: doctor co-pays, deductibles and out of pocket maximums – meaning the most you might have to spend in a year.

Understand how your deductible works. Most policies nowadays have a deductible – this is the out of pocket amount you are responsible for before the insurance company pays. Some policies could have multiple deductibles – one for each family member.

Before you decide to purchase a policy, ask the insurer to provide you with the “Explanation of Benefits” (EOB), sometimes also called the certificate of coverage which gives you the full details of what your plan covers and what it does not.

7 Tips on Choosing a Self Employed Health Plan

1. What Health benefits are important to you?
Purchase a plan that meets the needs of you and your family but also keeps your costs low.
For example: Do you take medications? Buy a plan with good prescription coverage and low co-pays. This could save you money on an annual basis.

2. Budget: Be mindful of your monthly budget but don’t buy on price alone.
Buy a plan with deductibles, co-payments and out of pocket maximums that you can afford if God forbid, you have a serious health emergency.

3. Physician network: Choose a plan that your doctor participates in.
Do you have a favorite doctor you want to keep? Which plans does he or she accept? This is probably the most important factor when considering which health plan to choose. Find a health plan you can afford but call your doctor’s office to confirm that they accept the plan before you sign up.

4. Brand Name: Are there insurance carriers that you prefer?
Are there any that you know have poor customer service or a history of slow reimbursement? Avoid insurance companies that have a bad industry reputation.

5. Consumer and industry reviews: Research complaints against insurance companies and ask friends if they have had a good experience about the insurance carrier you are considering. You can also check the financial ratings and complaints against insurance companies at your State Department of insurance.

6. Consider using the services of independent insurance agents or brokers: A good broker or agent can help cut through the clutter and explain how each health plan works and what is covered in plain English. Insurance agents and brokers like us,  also work on your behalf to help you find a policy that meets your needs. You Do NOT pay more to utilize our services. We get paid commissions directly from the insurance company and the cost is already included in the monthly premium.

7. Beware of brokers or agents that charge fees:  Be wary if someone wants to charge you a fee to find you a health plan. Chances are, they “double-dipping” your pocketbook – fee + commission.

Get Expert Advice From an Independent Insurance Agent

We are independent insurance agents and we work for you, not the insurance companies. If you’re self-employed, selecting the right health insurance plan is crucial. It’s about finding a plan that your doctors actually take and not paying for a plan that doesn’t cover typical medical expenses.

With the right plan, you can protect your health and your work. This peace of mind lets you focus on what you do best: running your business.

At Health Plans NY, we’ve been helping small business owners save money and improve their group insurance plans since 2005. And we’d love to help you. Get in touch today to find out more!

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