As a self-employed person you are accustomed to making decisions for yourself. There are several options available for self-employed health insurance; however, that decision can be difficult. Following is information that can help you decide which self-employed health insurance policy is right for your family:
Look at Your Health Insurance Options
Individual vs. Group Health Insurance
Group health insurance premiums tend to be lower and buy significantly better coverage than an individual policy. However, a lack of employees may make it difficult or impossible for a self-employed person to qualify for a group health plan. When shopping for self-employed health insurance, be sure to ask the agent or provider what you need to do to qualify for a group plan.
If you are not eligible for a group plan, an individual plan will provide valuable coverage for your family. A disadvantage of an individual plan is that these policies take into account the medical history of each person insured under the policy—a factor that can significantly drive up cost. In addition to higher costs, coverage under an individual plan tends to be more restrictive than a group plan.
Health Savings Account (HSA)
There are other alternatives. Introduced recently, a Health Savings Account (HSA) couples a high-deductible health plan that provides coverage for major losses and a savings account to accumulate funds for other qualified, more routine medical expenses. The premium for the health plan and your contributions to the savings account are tax-deductible. Cash withdrawals from the savings account are not taxable if used to pay for qualified medical expenses. Contribution limits are set by law and are subject to change annually.
Supplemental Health Insurance
A disability that causes work loss is one of the most common causes of family bankruptcy in America. Each year, one in four workers over 30 will become disabled for more than 30 days. Some disabilities may be work-related, others just happen.
Most employees are covered by workers compensation insurance for work-related illness and injury. In contrast, many self employed people do not carry workers’ compensation insurance. A supplemental health insurance policy will cover expenses related to lost wages and other medical expenses normally covered by workers’ compensation for on-the-job injuries.
Supplemental health insurance also will help cover the costs associated with off-the-job illness or injury. Some forms of supplemental health insurance offer a cash benefit to help pay bills while you are unable to work. Others will help pay for medical treatments not covered under a regular health insurance policy.
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