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Self-Employed Health Insurance

The Importance of Finding Your Own Health Insurance

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If you are self-employed health insurance may be something you are tempted to skip buying. This can be a costly mistake. Many young people feel that they are young, and healthy and so they do not need to worry about health insurance, especially when they have to pay for it on their own. Insurance protects your assets and your finances. Health insurance can make health care more affordable. There are several health insurance options for the self-employed. If you are considering becoming self-employed, you need to have your independent health insurance in place before you quit your current job. Here are the different aspects you should consider when getting your own health insurance.

1. High Deductible Health Insurance Plans for the Self-Employed

You should consider how much you actually go to the doctor. If you are healthy you may be safe buying a catastrophic or high deductible plan. These plans usually have a deductible ranging from $1000 to $5000 that you need to meet, and then the insurance covers everything after that. These plans are great for healthy people. You should consider a health savings account in conjunction with it.

2. Traditional Health Insurance Plans for the Self-Employed

If you use insurance more often, you may consider using a traditional health insurance plan. You can find these through a local insurance agent or by searching on the Internet. Different states have varying guidelines for the plans. So you need to do a search on your own. You should carefully consider how much the insurance plan would cost you if you use it.

3. Shop Around for the Best Self Employed Health Insurance Plans

Take the time to shop around. Many insurance agents cater to the self-employed and offer a variety of health insurance plans. This may take a little extra time, but will ultimately save you a great deal of money. It is important to realize that the savings on premiums from a high deductible account may make up for the difference in out of pocket cost. You should consider the maximum that you will have to pay on each plan.

4. Avoid Coverage Lapse

It is important to avoid having your coverage lapse. If your coverage lapses you will have waiting periods for certain conditions and problems. You may consider purchasing short term insurance to cover any lapse you may have between jobs. You can also use COBRA insurance options to cover a lapse in coverage. Most plans will renew automatically, but you need to make sure that is the case with your health insurance plan.

5. Health Savings Accounts

Determine if you are eligible for a health savings account. This account is available for high deductible insurance plans. There are specific rules around the plan, but you can use the money you contribute as a deduction, your money will earn tax free interest, and if you withdraw the money to pay for your medical expenses you will not be taxed on it. You are not eligible for a Health Savings Account (HSA) if you have a Flexible Savings Account (FSA).

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