The Self-Employed and Health Insurance

Self-employed persons are those in business for themselves, usually without employees. Many work out of their own homes. Some are consultants, graphic designers, Web engineers, etc. If you’re a self-employed person, this section of our guide will lead you through a four step process designed to help you find the coverage that best meets your needs, and to help you manage your coverage effectively once you’ve purchased it.

Since self-employed persons typically purchase individual and family health insurance coverage rather than small business group coverage, that’s what this portion of the guide will focus on. If you want to learn about purchasing group coverage for yourself and your employees, please skip ahead to the small business health insurance section.

Assessing Your Needs

Selecting the best health insurance plan for your needs means making an informed choice and knowing your personal priorities. Is budget most important? Which benefits do you really need? Consider the following questions.

Six questions to help you assess your needs:

1. Who will be covered under this plan?

Why it matters: You probably want to cover yourself and your dependents. But ask yourself: does anyone in your family have other coverage options? In some cases, you may actually be able to save money by covering different members of your family separately under two or more plans.

2. Do you maintain a significant savings cushion or do you live paycheck to paycheck?

Why it matters: If you don’t maintain a cushion of funds in the bank, you may want a health plan with a lower deductible. If you do keep a savings cushion large enough to afford a higher deductible if necessary, you may be able to find a plan with lower monthly premiums.

3. How often did you visit the doctor last year?

Why it matters: If you visit regularly, it may make sense to pay a higher monthly premium in order to keep your office visit copayment and deductible low. If you rarely visit the doctor, a plan with higher copayments may cost less per month.

4. How much did you spend on health care last year?

Why it matters: It’s important to know what you spend on health care and if you expect to spend at the same pace. If these are recurring costs (for prescription drugs, for example) make sure that the plan you select covers the services you need at a level that’s affordable for you.

5. Are you eligible for group health insurance coverage?

Why it matters: In most states, self-employed persons buying health insurance plans on their own need to purchase individual and family plans. However, some states may allow persons with business licenses to purchase small business/group plans, even without employees. A small business/group plan may be a more affordable option than individual and family plans in some cases. To learn more about group health insurance, skip to the Small Business section of this guide. Find out if you qualify for group health insurance by contacting your state Department of Insurance.

6. Are any specific benefits necessary or irrelevant?

If you’re a regular user of prescription medication, make sure you find a plan that covers prescriptions at a copayment level you can afford. If it’s possible you or your spouse could become pregnant, pay close attention to how much you would need to spend form your own pocket for maternity care.