Self-Employed Health Insurance - What You Need To Know About Going Out On Your Own

Shopping for Plans

If you want to shop around, it’s very simple to do. You can go directly to healthcare.gov—make sure you do not go to .com or any other website extensions, it has to be .gov—and there you'll be able to window shop and compare prices. You can play a little bit with your income, as well—for a lot of self-employed people, when you do the write-offs at the end of the year, you can adjust your income to what you want it to be, more or less.

I have a lot of clients that are self-employed, and they're able to check what the income should be in order for them to qualify for certain rates, which is helpful. But you don’t have to submit it right when you run it.

There's also an alternative to filling out a starter application. It's called healthsherpa.com. It's a bit more user-friendly. When you go to it, you'll be able to compare prices without starting the application.

Now, if your goal is to get to a certain dollar amount within your business and you know what your family situation looks like, you can drop that in and get an idea of what your costs will be for investing in insurance when self-employed. However, you have to be very careful with that income when you officially choose a plan, because Uncle Sam doesn't like you if you don’t report that accurately.

When you apply for insurance when self-employed, they’ll ask you what you’re projected to make, and if you put a certain number down just to lower your premiums and end up making more at the end of the year, when you file your taxes, they'll re-calculate that tax credit that they gave you upfront and charge you that difference.

Getting Overwhelmed

Even with this information, the whole process of getting insurance when self-employed can be very overwhelming, especially if you're not educated about health insurance. My suggestion would be to contact an experienced agent if you can. They can help guide you through the whole process of finding insurance when self-employed and make it much easier for you.

But just in case you can’t hire an agent, here are some key points to look at when you're taking a look at the options for obtaining insurance when self-employed:

The premium is what you pay monthly, then you have a deductible. Typically all those Marketplace plans will have a deductible; however, your preventative care will be covered 100% before you meet that deductible. So if you only use your plan for annual checkups, don't worry, you don't have to satisfy that deductible. That will be free. Now, if something does happen to you and you need medical assistance, that's when the deductibles come into play.

Once you reach that deductible, there is a certain co-insurance factor to pay attention to. Every plan has different percentages that the company will contribute versus what you will contribute until you reach your maximum out-of-pocket cost.

Once you reach your maximum out-of-pocket cost, the company has to cover a hundred percent of all of the bills moving forward, except for certain things like copays. If your plan has a copay, that's not subject to a deductible, so just keep that in mind.

Health insurance is not one-size-fits-all. Sometimes I encourage people looking for insurance when self-employed to get a plan with set copays. Sometimes—for example, if they're pregnant—I tell them to get a plan without the copays. Due to the delivery bills, they will hit their maximum out-of-pocket no problem, and then they won't have to pay anything after that. It really just depends on everybody's situation.