Choosing Health Benefits When You're Self-Employed

By Andrew Hickey on Mar 15, 2024 @ 10:05 AM

Being self-employed has several rewards. You have the flexibility of working on your terms. You can choose your clients and projects. There is also the potential to earn more money and be free to manage your schedule and work-life balance.

However, one major challenge is choosing your health benefits. You need them to care for you and your family throughout the year, but you may not know where to start.

Since you're not part of a group plan, you must navigate the complex world of individual health insurance. There are medical, prescription, dental, and vision. Plus, don't forget about life insurance. Should I get all of them? Can these be bundled together? You have many questions, and we have tips to help you pick your health benefits.

Key Takeaways:

Health insurance is essential for all adults, including self-employed individuals, to avoid bearing the cost of medical care alone.
Before shopping for health insurance, it's essential to understand your health needs to determine what kind of coverage will work for you.
When comparing health plans, ensure they cover your basic health needs, fit within your budget, and include your preferred doctors, hospitals, and clinics.
Consider extras such as dental and vision coverage and seek professional advice.
Remember your pre-existing medical conditions, your medications, and how often you have doctor visits while purchasing a health plan.

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Why self-employed people need health insurance:

Health insurance is essential for all adults, whether they work full-time for an employer or own a business. Paying for health services such as regular screenings, sick visits, procedures, or out-of-pocket hospital stays can be expensive. By purchasing a health plan, you can rest assured that if you need medical care, you won't have to bear the cost alone. This can lead to better overall health outcomes.

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Understanding your needs:

Before shopping for health insurance, you must understand your health needs. This will help you determine what kind of coverage will work for you.

Pre-existing medical conditions
Medications you take.
How often do you have doctor visits?
What type of doctor visits do you have?

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Comparing health plans:

Once you have a good idea of your needs, it's time to start comparing plans. When comparing plans, see if they cover your basic health needs, such as doctor visits, hospitalization, and prescription drugs.

One good place to start is Healthcare.gov, which is the federal marketplace for finding health plans. You can see what options you have available in your state.

If you have any employees as part of your business, you may qualify for the Small Business Health Options Program (SHOP). Additionally, there is a special tax credit for business owners who qualify for benefits through SHOP.

One downside to the federal marketplace is that you must be eligible for a particular open enrollment period if you're looking outside the standard window. Typically, federal enrollment takes place between November 15 and January 15.

The good news is that there are other places to find health insurance. There are military insurance programs like TRICARE and membership organizations, such as if you are a professional union or guild member.

You can also go directly through health insurance companies any time during the year to enroll in short-term or long-term health insurance. Costs can be higher; however, they have fewer limitations on how and when you can enroll.

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Consider your budget:

Health insurance can be expensive, so you need to consider your budget. Look for plans that fit within your budget but also provide adequate coverage. Remember that you may have to pay a higher monthly premium for better coverage.

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Check the network:

Ensure your plan has a network including your preferred doctors, hospitals, and clinics. Going out-of-network can be costly, so you must ensure your providers are covered.

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Remember extras:

Some health plans include dental and vision coverage. Consider whether you need these extras and if they're worth the additional cost.

If you find a medical plan that suits you but doesn't offer dental and vision, you must search for separate plans.

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Seek professional advice:

If you need more time, consider seeking professional advice from an insurance agent or broker. They can help you navigate the complex world of health insurance and find a plan that meets your needs.

Choosing health benefits as a self-employed individual can be daunting, but with some research and planning, you can find a plan that works for you. Remember to consider your needs, budget, and network when deciding. Good luck!

For more tips on choosing benefits, check out this open enrollment cheat sheet.