Due to the tough job market nowadays, many more Americans are starting their own businesses. That being the case, health insurance isn’t usually at the top of the priority list for a boot-strapped new entrepreneur.
However, your health coverage does more than just provide you the ability to get medical care. It also limits your financial liability for injuries and accidents that have the potential to put you and your business into bankruptcy.
We’ve provided some health insurance money saving tips and strategies for the self-employed below.
Estimating unpredictable income
The first thing you need to be able to do in order to determine which route is best for you regarding your health insurance is estimate your income for the coming year. This can be difficult when you’re self-employed but you need to do your best to estimate your income and expenses accurately based on your past experience, realistic expectations, industry standards and more. Keep in mind that if during the year it looks like you be more than 3%-5% off on your estimate, you can and should update your Marketplace application if you decide to go in that direction.
How do I know if I’m self-employed or a small employer?
Once you have a good estimate for your income, the next thing you need to do is determine whether you are actually self-employed or a small employer. You’re considered self-employed if you run a business that makes income and has no employees. Employees are generally people whose income you report on a W-2 form. Independent contractors that you hire to do some work for you are not considered employees.
Determining The Best Health Insurance For You
The reason why we said you need to be able to give a good estimate of your income is because the plans through the government marketplace are based off of your income. Now you can only sign up for one of those plans during open enrollment which is Nov. 1rst – Dec. 15th and they will only benefit you if you make less than $48,240. Since Open Enrollment won’t come around again until November, you are limited in your options. The only way you can get a plan through the marketplace is if you have a qualifying event which includes:
Qualifying events for health insurance special enrollment include:
- Losing your health coverage through a life event
- Examples of these life events include: getting a divorce, losing your job, losing your Medicaid or CHIP eligibility, or expiring COBRA coverage
- Please note: If you voluntarily quit your health plan or are terminated because you didn’t pay your premiums, you are not eligible for a special enrollment period.
- Having or adopting a child
- Permanently moving somewhere with different health insurance options
- Ageing off your parent’s health insurance plan.
- Having a change in income or household status that changes your eligibility for tax credits or cost-sharing reductions
- Your plan being involuntarily canceled by your insurance company.
The special enrollment period usually lasts for 60 days, so be sure to purchase your coverage during that time if you have a qualifying event.
If you don’t have a special enrollment and make more than $16,000 a year then you don’t qualify for Medicaid and will not be able to get health insurance through the government marketplace until November 1rst. The good news is there is still a good option for you.
Medsharing plans operate very similar to traditional health insurance except the premiums are put into an escrow account and claims are paid less the Members Shared Responsibility Amount. Preventative care, doctor visits, prescription discounts and more are all included in medhsaring plans.
Some of the benefits of Medsharing plans are:
- They can be purchased year round.
- They are government compliant but not affiliated with the government at all, which means they exempt you from the tax penalty and it keeps the government out of your business.
- Guaranteed Issue
- PPO Network
- Monthly premiums are much lower (usually about half the price of government ACA plans) because of the way they structure their plans
- Your price is based on your age bracket, so you can have peace of mind that your health insurance premium will stay the same until you reach the next age bracket
- Your monthly payments go towards helping others members as opposed to corporate higher ups
- When negotiating your bills they have leverage due to the cash they bring to the table as well as tax benefits from being a non-profit organization
Your only other option for health insurance would be a short term plan, which is not guaranteed issue and does not exempt you from the tax penalty for not having health insurance.
For these reasons and more the company we partner with for medsharing programs has grown from about four thousand member to over 4 million members in the last few years. Many people in the self-employed boat are taking advantage of the benefits offered by medsharing programs and saving a lot of money on their monthly premiums. If you are interested in learning more about medsharing plans and/or your options for health insurance as a real estate professional, please contact one of our licensed agents toll free at 866-487-9887.