What You Need to Know About Health Insurance
If you’re an independent contractor, freelancer or self-employed worker, you may discover that finding affordable healthcare can be challenging. As a self-employed worker, you are your own business and have to pay for your own benefits. If you don’t have group health insurance through another job or other source, as an independent contractor there’s little chance you’ll get it from your client. You must buy individual health insurance – also known as private health insurance. There are pros and cons to being self-employed when it comes to getting adequate healthcare coverage. On the positive side, if you’re self-employed, you can take advantage of high quality plans with lower monthly premiums than what most employers offer their employees. On the negative side, if you’re self-employed then the costs of any medical services will be coming out of your own pocket rather than being reimbursed via tax advantages like a traditional employee receives.
Individual Health Insurance for Self-Employed Individuals
If you’re self-employed, you can’t buy group health insurance like other employees do. So, you’ll need to buy individual health insurance instead. You can buy individual health insurance either on your own or through a group plan. When buying individual health insurance on your own, you have much broader choice of plans, including the ability to find plans with lower monthly premiums. But, you’ll have to pay the entire premium yourself. Because individual health insurance plans are less expensive than group plans, you can use the savings to help pay for the premiums of an individual plan. You can buy individual health insurance directly from an insurance company or through a broker. You can also buy health insurance through an online marketplace where you can compare plans side-by-side.
You Can Only Buy Private Health Insurance Through an Insurance Agent
It’s possible to buy health insurance directly through an insurance company’s website. But, if you’re looking for individual health insurance for a self-employed person, you can’t buy it online. You can only buy individual health insurance through an insurance agent. You can either go to an insurance company’s local office or ask an insurance agent to visit you at your home or business. Given that many insurance agents work on a commission basis, you may find that you’re offered a wider range of plans if you go to an insurance company’s local branch office compared to what an insurance agent offers you. This is because the local branch office doesn’t get paid by selling you a specific health insurance product. So, they don’t have any vested interest in selling you one product over another.
Types of Private Health Insurance Products for Self-Employed Individuals
The best way to understand the different health insurance products for self-employed people is to first understand the different health insurance terminologies. There are three main types of health insurance plans for self-employed people: indemnity, managed care and preferred provider organizations (PPOs). Indemnity Health Insurance – This is the oldest type of health insurance. It pays you a lump sum in the event of a covered illness or injury. You then use this money to pay for the treatment you need. Managed Care Health Insurance – This type of health insurance typically has a network of contracted doctors and hospitals. You’ll have to use these providers in order to get the full coverage of your plan. Preferred Provider Organization (PPO) Health Insurance – This type of health insurance gives you a network of contracted doctors and hospitals, but you can see any provider outside of the network without a referral.
Self-Employed Individuals and Healthcare Tax Benefits
One of the biggest advantages of being self-employed is that you pay taxes as an independent contractor, not as the employee of a company. If you have group health insurance through a full-time job, you may be able to deduct the full amount of your health insurance premium from your taxes. But, if you’re self-employed and you have individual health insurance, you can’t write off your premium from your taxes. Moreover, if you’re self-employed, you won’t have the tax advantages that an insurance company gives to full-time workers. For example, if you have a full-time job, your employer’s insurance policy will cover the cost of your dependents’ healthcare expenses. You won’t get that coverage if you’re self-employed.
If you’re self-employed, you don’t have the option of joining an employer’s health insurance plan like other employees do. Since you can’t get affordable health insurance coverage through an employer, you must buy individual health insurance as a self-employed individual. You must buy private health insurance if you’re self-employed and want to obtain health insurance coverage. When you buy private health insurance, you have many different health insurance products to choose from, including indemnity, managed care and PPO plans.