7. Health Insurance & Where To Get It
Being a contractor, Psychology House can not legally offer you health insurance. Which means you would have to purchase your own. Luckily, this allows you more coverage options and the ability to write off your healthcare premiums as business expenses. But, for those of us who have never purchased health insurance before, we often don’t know where to start. So we wrote this guide to help you with that very thing.
Choose what’s right for you
We can’t tell you which health insurance plan to choose or where you should purchase it from. There are just too many factors that would determine which plan is best for you. For example, are you getting coverage for just you or for your family? Do you have particular doctors or medications you would need to have covered? Does your plan include mental healthcare costs (we’re a little biased on that one)? Before you begin searching for a plan, try to determine some factors that are important to your particular situation. Then use that to determine which plans check all of your boxes.
Common terms & jargon
To help you navigate some of the health insurance lingo you’re about to dive into, here is a list of the common terms you’ll see:
Deductible - An insurance deductible is the amount you pay for medical services before your insurance starts to pay. Higher deductible plans typically have lower monthly premiums, but cover less of your medical expenses. Low deductible plans typically cost more per month, but cover more of your medical costs. If you tend to require a lot of medical services, a lower deductible plan may be more beneficial
Monthly premiums - This is the amount you pay each month to have health insurance. This amount varies based on the plan you choose and the amount of coverage it provides
Copay - A copay is a fixed amount you pay for a covered health care service at the time you receive it, with the rest covered by your insurance. For example, a routine doctors appointment may cost you $60 per visit, and your insurance covers the rest
Out-of-pocket - Out-of-pocket costs are expenses for medical care that you must pay yourself, including deductibles, copays, and coinsurance, not covered by insurance.
Coinsurance - Coinsurance is the percentage of costs you pay for covered health services after you've met your deductible, with your insurance covering the rest.
In network/Out-of-network - Many insurance companies require you to choose from a list of doctors and providers they work with. They are considered “In network”. Doctors and providers who are not in their network are considered “Out-of-network” providers. Many plans will not cover you if you use a provider who is not in their network. Some will still cover a percentage of your costs.
Where find health insurance
Below is a list of common places where self-employed individuals can purchase health insurance coverage:
Health Insurance Marketplace
The Affordable Care Act (ACA) marketplaces, accessible via HealthCare.gov or state-specific sites, offer individual health insurance plans. These plans provide a range of coverage options and may include subsidies based on your income, making them more affordable. Enrollment typically occurs annually during the Open Enrollment Period, but you might qualify for a Special Enrollment Period if you experience a qualifying life event, such as losing previous coverage or significant changes in your household.
Private Health Insurance
For those seeking more flexibility, purchasing health insurance directly from insurance companies is an option. This route offers a wider array of plans that might not be available through the ACA marketplace, allowing you to choose one that closely aligns with your specific needs and preferences.
Professional Associations and Unions
Many professional organizations, trade groups, and unions offer group health insurance plans to their members. These plans often provide better rates and coverage compared to individual plans due to the collective bargaining power of the group. Joining an association relevant to your field can thus be a cost-effective way to secure health insurance.
Freelancer and Gig Worker Platforms
Platforms like the Freelancers Union provide access to health insurance plans specifically designed for self-employed individuals. These organizations understand the unique needs of freelancers and gig workers, often offering plans that are more flexible and comprehensive than standard individual policies.
Spouse’s Health Insurance Plan
If your spouse has health insurance through their employer, you may be able to join as a dependent. This is often one of the most cost-effective ways to get coverage, as employer-sponsored plans typically offer lower premiums and better benefits.
Health Sharing Ministries
Health sharing ministries provide a faith-based approach to health care costs, where members share each other's medical expenses. While not traditional insurance, these plans can offer a community-oriented way to manage health care expenses, though they often come with restrictions based on lifestyle or religious beliefs.
Health Savings Accounts (HSAs)
If you opt for a high-deductible health plan (HDHP), you can open a Health Savings Account (HSA). An HSA allows you to save money tax-free for medical expenses, helping to offset high out-of-pocket costs associated with HDHPs.
Health insurance is probably the least fun part of being self-employed. But luckily it’s only a once a year decision. If you like the plan you choose, you can just keep renewing it each year. If you don’t like it, you can always choose a new one the following year. Be sure to deduct your monthly insurance premiums from your taxes as well. And keep in mind, most plans will cover proactive measures like regular bloodwork and a yearly physical. So use it! Get your money’s worth.
