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What is a Self-Employed or a Freelancer?

Self-Employed Health Insurance: Freelance worker must apply for health insurance when he/she has decided to work independently as a Self-Employed person or a freelancer.

A Self-Employed worker, independent worker, or freelancer is a person who works on his own and doesn’t work 9-5 for any company.

As a Self-Employed or freelance worker, one can enjoy many work facilities and flexibility, as well as work-life balance, but they have to manage everything related to their work, by themselves.

How Much Is Self-Employed Health Insurance?

It would be great if we could give a single figure for answering this question, but unfortunately, the answer is not the same for everyone’s health care coverage. Health coverage rate varies person to person and business to business.

According to DHHS (Department of Health & Human Services), the average monthly cost was $106 (after applying subsidies), for an American with the federal marketplace health insurance plan.

Apart from the option as mentioned above, other affordable health insurance marketplace plans are also available.

Why Should Self-Employed Workers Worry About Their Healthcare Coverage?

Because of frequent discussions about the changes in the healthcare system, cancellation, and other concerns, everyone is more worried about the health care costs.

Working as self-employed or a freelancer is not bad, but you feel annoyed when you have pay for your medical expenses, from your pocket.

For instance, if you get sick or get into any other medical issue, you will have to pay for medical costs and hospital charges.

However, if you have availed healthcare plan, then you do not have to pay that much, as compared to what you were paying without having a health coverage policy because your health care agency will get you covered for this.

We have some strategies to offer that can help you figure out what is the best way of getting yourself insured.

Also, as a self-employed person what are the best options to find health coverage.

Self-Employed in the United States

Freelancing is increasing in the United States, in fact, in 2015, 33% Americans had chosen to work independently.

Within next three years, half of American population in the United States will be doing freelance work, until 2020.

Finding an affordable yet reliable healthcare policy is going to be a significant challenge for independent, self-employed or freelance workers.

Fortunately, with a little legwork/research, you can find several health coverage opportunities.

You can find out right health care plans that can let you get healthcare when it is needed.

Five Places to Get Health Insurance as Self-Employed Person

Here are some options, available for self-employed freelancers, with affordable and reliable reputation:

  1. Obamacare: (Affordable Care Act) At healthcare marketplace, you can easily find health insurance policies suitable for self-employed or freelancers as well as a small business.
    Most freelancers and self-employed workers will not fall in the small business category, but in case if it applies to you, click here for detailed.
  2. Spouse or Partner: If you are married or even unmarried, your Domestic Partner’s Health Insurance or Spouse’s Health Insurance may be an excellent option to consider if you have decided to do freelance work or as a self-employed person.
    For applying as a domestic partner (while being unmarried) you have to be in a situation such as you are sharing the same house and are living together with your partner. Your marital status has to be unmarried as well.
    Learn in detail about who qualifies as a domestic partner.
  3. Group Health Insurance: If you are a member of the self-employed community or independent workers association then you can get group insurance.
    Group insurance helps individuals to group up as members of an association of self-employed workers. It is just like you are getting insurance through the employer.
    For a further read on group insurance, click here.
  4. Freelancers Union: The Freelancers Union offers health insurance to its members, along with Supplemental Health Insurance Plan like the dental insurance plan, or life insurance plans.
  5. Individual Health Insurance: Whether you are planning to leave your current job or you have already resigned for the sake of starting to work as freelancer or self-employed.
    Many healthcare coverage policies allow you to turn your existing group insurance plan into an individual health insurance plan.Individual health insurance plans are a bit more expensive, but your freelancing venture may help you cover the difference quickly.
    You can also qualify for the Special Enrollment Period (SEP) if you are leaving your job.
    Do check options suitable for you at Special Enrollment Period, to cut the cost.

Best Health Insurance Plans for self-employed Freelancers

You can use multiple methods to find out best suitable and affordable health insurance plans for freelancers.

As health care coverage depends on various factors, therefore your needs and current situation play a significant role in determining which plan will better serve your needs.

You can read further in our article about seven ways to save money on health insurance premiums.

Missed Open Enrollment but Require Health Insurance

You can visit the health insurance marketplace, in case if you have missed the open enrollment and see if you are eligible for a Special Enrollment Period (SEP).

The good news is that if you qualify for the CHIP or Medicaid, you can still apply for healthcare insurance.

You can read further about checking your eligibility for Medicaid or CHIP while being able to apply for Special Enrollment Period here.

Best Short Term Health Insurance Plans – Temporary Health Insurance Coverage for Freelancers?

According to Affordable Care Act (ACA) also known as Obamacare, short-term health plans do not meet the minimum essential health care coverage requirements and this may result in a tax penalty.

In case if you have missed the Open Enrollment Period and you are not willing to pay the medical costs until you get the Affordable Care Act coverage, short-term health insurance plan can be the way to go for you, considered as a temporary option.

Still, they do not satisfy the requirement of the Obamacare Affordable Care Act (ACA) therefore, may end up with a penalty to be paid by you, under the ACA minimum coverage terms, if you are not able to keep the required insurance for at least nine months in the year.

Consulting with an authorized health insurance agent can uncover more suitable opportunities for you, as the insurance agent can provide you professional insurance guidelines as well as will give you appropriate yet straightforward solutions to your requirements.

You must look into aforementioned options, before proceeding with this solution.

Importance of Health Insurance for a Freelancer?

All freelancers and self-employed workers must avail health insurance under the ACA (Affordable Care Act) if they can afford it.

The freelance workers or self-employed workers are required to have “Minimum Essential Coverage” (MEC) health insurance plan.

Minimal Essential Coverage is an insurance plan that fits the Obamacare (Affordable Care Act) requirement for having the healthcare coverage.

You must enroll in a plan that qualifies as minimum essential coverage (also known as “Qualifying Health Coverage”), to keep yourself safe from the penalty of not having insurance.

Tax Credits for Self-Employed Workers – Health Insurance Costs

Tax credits and grants can be helpful in making your health care expenses much affordable.

It is possible to get an advance tax credit as well.

In a report of Department of Health and Human Services dated March 2016:

  • For individuals who qualify for an average advance premium tax credit, it covers about 73 percent of the gross premium.

Health Insurance Penalty

You will have to go through the penalty if you can afford the health insurance and you haven’t availed it.

Also, if you are not qualified for healthcare coverage exemption, you will still have to pay the penalty.

This kind of penalty is known as Individual Mandate Penalty.

At the time of filing your taxes for the year, you will have to pay the penalty for not having the health insurance.

Penalty fee depends on your situation and can become quite expensive at the end.

For the tax year 2018, the penalty is:

  • 2.5 percent of your aggregate household income
  • Yearly fee health insurance plan (Bronze) is $695 per adult, $347.50 per child under the age of 18 years, to a maximum fee of $2,085.00

Due to this reason, it seems quite difficult to pay for health insurance when you are a self-employed freelancer at a budget.

In this situation, you will be paying more for the long-term if you are not going to sign up for a health insurance plan.

How To Reduce Healthcare Costs?

You should take a high-level deductible plan or maybe select a lower metal-level in the healthcare marketplace if you find the health insurance plan prices not affordable.

Still, I would suggest that it will be beneficial if you speak up with a professional health insurance agent, who is handling several insurance agencies and can find multiple affordable options for your need.

To save more money, shop more for your health insurance. You should get health insurance plan for yourself and your family to avoid the massive penalties.

Do not forget to apply for tax deductions for paid premiums, because this is how you will be able to avoid the government penalties at the time of filing tax while not having health insurance for the self-employed or freelance worker.

If you have questions or suggestions regarding our posts, you can always contact us for feedback/suggestions.

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