Self-employment
is an important career choice for many people. But with this choice comes the
need to provide your own health insurance, which can be a formidable expense.
The new health care legislation signed into law by President Obama should make
it easier for individuals to purchase health insurance. Until all its
provisions take effect, if you are self employed and are seeking health care
coverage, here are four options.
- Join your
spouse's plan. If you have a spouse or partner who is or can be
enrolled in an employer-sponsored plan, joining his or her plan is usually
the simplest and least expensive way to maintain coverage. Nearly all
employer-based plans offer coverage to spouses and children, and many
provide coverage to domestic partners as well.
- Look into
COBRA coverage. If you formerly worked for an organization that
employed 20 or more people and made a group health plan available to
employees, you may be able to obtain medical coverage through the federal
Consolidated Omnibus Budget Reconciliation Act, known as COBRA. COBRA
requires employers to make available to departing employees the option of
continuing membership in an employer-sponsored group medical plan at the
employee's expense. You can continue your health insurance under COBRA for
yourself and your dependents for 18 months, during which time you can
search for the best option as a self-employed person.
- Check out
high-deductible plans. Another option is to enroll in a
high-deductible health plan (HDHP) and fund a health savings account
(HSA). As the name suggests, high-deductible health plans involve a high
deductible or threshold, a minimum of $1,200 for an individual and $2,400
for a family in 2011, below which you must pay all costs. In essence, a
high-deductible policy provides coverage for catastrophic situations but
not for regular doctor visits and routine care. Such plans can involve
complex cost-sharing arrangements in which certain procedures or visits are
covered only in part. When considering this option, factor in not only
monthly premiums but also the costs of partial out-of-pocket payment for
different procedures. Combining an HDHP with a tax-free health savings
account can also save you in taxes. You deposit pre-tax dollars into your
HSA, and use that money to pay medical expenses that aren't reimbursed by
your health insurance.
- Investigate
coverage through a professional association. A more
cost-efficient option may be to enroll in a group plan through a
professional association or union. Check with any affiliations you may
have (or inquire about any you can join) and ask about group rates for
members.
Tracking # 1-021447
© Carmen Coleman, President and CEO
Lifetime Financial Group, LLC
30 W. Broad Street, Suite 300
30 W. Broad Street, Suite 300
Rochester, NY 14614
(585)325-2525
© 2011 McGraw-Hill Financial Communications.
All rights reserved.
