Health Insurance Articles
The Best Ways To Obtain Health Coverage For Self-employed Individuals
2010-01-14
Self-employment comes with many benefits and advantages. However, it also comes with its disadvantages. One of the most evident downfalls of self-employment is the lack of health insurance coverage. While most employers provide some form of health insurance option to their employees, self-employed individuals do not have this benefit and are left to find their own health coverage. Transitioning from an employer to self-employment may allow a person to keep employer-provided insurance by paying both the employee and employer portion of the premium. This is made available through COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) for a maximum of 18 months from the last day of employment. However, even with the coverage under COBRA, self-employed individuals will eventually have to face the difficult task of finding and obtaining their own health insurance coverage.
Several obstacles prevent people from obtaining health insurance coverage - the biggest being confusion about different options and the cost of high premiums. According to NASE (National Association for the Self-Employed), "illnesses and injuries trigger half of all personal bankruptcies in the United States. Even a relatively minor accident or illness can cost you thousands of dollars out of your own pocket."This is why self-employed people need to make sure to obtain proper medical coverage.
If a self-employed person happens to be married to someone who receives employer health insurance, one option is to extend their coverage to all family members. This would increase the health insurance premiums, but the costs are often lower than obtaining separate coverage from a private market. Health insurance premiums are generally much lower for group insurance then for individual insurance. If the spouse option is not available, finding an association that offers group health insurance will be cost effective. Some states even allow self-employed individuals the option of starting their own group with as little as two persons.
When looking for a group plan or individual plan, it is important to research all the available options. It may even be beneficial to sit down with an insurance agent to discuss your options. These options are more than likely to include fee-for service (FFS), health maintenance organization (HMO), preferred provider (PPO) and point of service (POS) plans as they each have their own benefits and disadvantages. They may also direct you to consider is catastrophic health insurance, a plan that has high deductibles but low insurance premiums. An agent will also be able to direct you to any special programs that your state may offer for self-employed individuals.
While it may take hard work, there is no question that all self-employed individuals need to find some form of affordable health insurance coverage.
