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Winter 2023  Volume 15, Number 4        


The Self-Employed Person’s Guide to Navigating Health Insurance

When you decide to strike out on your own and start a business, one of the first things you need to figure out is health insurance. You do have options, but navigating the world of private plans, public programs, and alternative arrangements takes some homework.

Evaluate Your Health Insurance Needs

Before diving into specific plans, take stock of your situation and identify the kind of coverage that makes sense. Factors like your age, health status, and financial picture will shape your strategy. Young, healthy self-employed individuals may opt for lower premiums and higher deductibles. Those with chronic conditions or less disposable income might prioritize generous provider networks and prescription drug coverage over lower monthly costs.

You’ll also want to think about life changes on the horizon. Are you planning to start a family soon? That would make maternity care an important consideration. Will you be retiring in the next couple of years? Medicare eligibility may be top of mind.

Research Private Plan Options

For many self-employed people, purchasing private health insurance is the optimal route. You can buy a plan directly from an insurance provider or through the Health Insurance Marketplace at HealthCare.gov. The Marketplace enables you to easily compare options during open enrollment from November 1 to January 15 each year. Those who experience certain life changes like job loss, divorce, or moving can qualify for a special enrollment period.

Short-term limited-duration health plans are another private option, though they come with more limitations. These plans offer lower premiums by excluding those with preexisting conditions and leaving out essential health benefits like maternity care. On the upside, short-term plans provide some temporary coverage for healthy individuals.

Explore Public Health Programs

In addition to private plans, you may qualify for free or low-cost public health insurance based on your income, age, or disability status. Medicaid provides comprehensive health coverage to millions of low-income Americans. In most states, you must earn less than $17,000 as an individual or $35,000 for a family of four to meet eligibility requirements. Rules do vary by state, so visit Healthcare.gov to check thresholds in your area.

Once you turn 65, you become eligible for Medicare, which serves over 60 million seniors and younger people with disabilities. Coverages under Medicare Part A (hospital care) are free for most beneficiaries, provided they have contributed premiums for at least 40 quarters during their working career. Coverage B (medical coverage) costs $164.90 per month or more if you earn over $97,000 (or $194,000 as a joint filer). Part D adds prescription drug benefits for an additional premium.

Look Into Alternative Options

If private plans and public programs don’t work for your situation, some alternative options can fill potential gaps. The Consolidated Omnibus Budget Reconciliation Act (COBRA) enables you to temporarily remain on a former employer’s health plan if you pay the full premiums. Membership organizations you belong to, from professional associations to alumni groups, may also offer access to group coverage.

Health care sharing ministries (HCSMs) are faith-based nonprofits that share medical expenses among members, but they aren’t insurance. HCSMs can reject applicants with preexisting conditions and don’t guarantee payment of bills.

Select a Plan that Fits Your Needs and Budget

When deciding on a plan, consider the monthly premiums, deductibles, total out-of-pocket costs, and the plan’s provider network. The Healthcare.gov Plan Finder lets you compare details on all private plans available. For help parsing the pros and cons, independent agents and brokers can provide guidance.

Please call our office for additional information or assistance.

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In this issue:

This Just In... Can You Still Retire Comfortably in this Economy? Tips to Get Back on Track

Retirement Planning When You’re Your Own Boss

The Self-Employed Person’s Guide to Navigating Health Insurance

Five Life Insurance Don’ts: How to Avoid Putting Your Family at Financial Risk

New 401(k) Superpowers: How Your Plan Will Work Smarter for You




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