You have decided to work for yourself, you set own work hours, without a boss looking over your shoulder. But you forgot one important thing, health insurance. Without health insurance you can risk losing so much. Just because you happen to be self-employed, doesn’t mean you can’t have health insurance.
People start to look for health insurance when they own their own business, are freelancers or independent contractors. A person can purchase insurance for individuals or a family plan. This allows a person to pick and choose a plan suited to their needs and what fits into their budget.
It is important to talk to a licensed insurance agent who can discuss the best options that are suited for you. Many of these agents offer free, no-obligation quotes, which allow you to find the best coverage and rates. Plans will vary greatly depending on the state you reside in.
Some states allows a self-employed person to purchase small employer health insurance. Preexisting conditions or high risk individuals can greatly effect what the cost will be. However, these are possibly your best option. If you live in a state that doesn’t allow to buy small employer health insurance, you would purchase the insurance as an individual.
Individual plans are relatively easy to obtain if you are in good health. Individual plans can be purchased through companies or through a licensed insurance broker. Many times you can customize the policy to your specific needs and budget. If you should have a preexisting medical condition, the rate may be more expensive.
Sometimes different organizations, a credit union, for example, has the option for it’s members to buy into their health insurance plan. This coverage can vary depending on what their policy is, and it may or may not be underwritten.
There are different types of insurance available.
Options for Health Insurance for the self employed
Health Savings Account Plans
This plan has offers high deductible plan with low monthly premiums. This is a medical savings account where money is saved for health care. This is a tax-free service and the person can deposit money into their account for future health care.
Preferred Provider Organization
PPO for short, is a flexible health care plan where the covered party can visit any health provider and still receive the coverage. An individual can visit a provider that is in the network or out of the network. They can do this without a referral.
Health Maintenance Organization
HMO for short, is an affordable option in health care. This plan was designed to help control costs. This plan can be cheaper, but the options are more limited. These plans require the person choose a primary physician within a designated network.
Point of Service Plans
POS for short, provides benefits to consumers in the same manner as the PPO and HMO plans. A person will choose a physician within the designated network, but also have coverage when visiting any other health care provider, even if it’s out of their network.
If you are self-employed and have purchased health insurance, the cost for your health insurance might be tax deductible. The deduction is claimed on the 1040 form as an adjustment to your income. The insurance deductions include premiums for medical and dental insurance coverage, and qualified long-term coverage for you, a spouse, and those who are dependents. The insurance plan needs to be listed under your business name or your name, if you are the sole proprietor.