According to the most recent data from the Bureau of Labor Statistics, there are 9.6 million self-employed workers in the U.S. That number is projected to grow to 10.3 million in 2023. One big consideration for self-employed workers is finding health insurance.
As I’m sure you know, this is a big topic.
Since I’ve had to go through the process, I wanted to provide some information about your options to help you navigate finding affordable coverage. There are many different considerations that go into selecting health coverage.
Make sure you consider all different angles and consult with your spouse before making a decision.
If you are lucky enough to have a spouse with access to an employer plan, that is likely your cheapest option. Otherwise, you may want to consider COBRA, or buying private insurance via healthcare.gov. If that isn’t an option you can look into health sharing services such as Medishare.
Before we get started, I wanted to address some questions that I’ve seen pop up here and there regarding health insurance for the self-employed.
Can I Get Health Insurance if I’m Self-Employed?
In short, yes. There are several different options for securing health insurance coverage when you’re self-employed. If you do decide to go the self-employed route, make sure you add healthcare spending as a budget line item.
Don’t go without coverage because you think it’s too expensive. Even if you’re young and healthy, you never know when something could go wrong. It takes just one medical emergency for the bills to start piling up.
While having coverage in place is essential, review all of your options first. It’s important to do your research and consider all the different ways you can get coverage before making a decision.
How Much Does it Cost for Health Insurance if I’m Self-Employed?
According to eHealthInsurance.com, an online health insurance marketplace, the average price for an individual policy in 2018 was $440. Premiums for family plans cost an average of $1,168 per month.
The final price tag for your health coverage will depend on a number of factors including the type of plan you select if you qualify for any subsidies, your annual income, and so on. Here’s Healthcare.gov’s online calculator to help you estimate your health insurance costs.
Group Health Insurance vs. Individual Health Insurance
One of the first things you need to understand when buying health insurance is the difference between group health insurance and the individual kind. This is something that I didn’t have a firm grasp of going in and I think it helps to understand how these differ so that you know what to expect.
Individual health insurance is what you purchase if you can’t participate in a group plan. You buy this on the open market at a place like eHealthInsurance.com or Healthcare.gov.
Just to clarify, you can purchase individual insurance for your entire family. “Individual” doesn’t mean one family member.
Group health insurance is cheaper (with the exact same coverage) than individual insurance. Why? Because with group insurance, the risk is spread across a large number of people. Also, typically with group plans, your employer is picking up some of the costs.
Health Insurance Options if You’re Self-Employed
If you’re self-employed and don’t have employees, you’re looking at “individual” health coverage options. However, if you run a business with one or more full-time employees, you may be able to sign up for group health insurance as a “one man group.” See this list of one man group states.
Another way you may qualify for group insurance is to look at your trade organizations such as the Freelancer Union. Costco even has a health insurance plan.
Also, there are faith-based medical-sharing ministries, like Medi-Share, that could be a good option depending on your health care coverage needs.
Below are some options to consider when looking for health insurance coverage as a self-employed individual.
If you’re married and your spouse has group health insurance available through the workplace, this should be your first stop. As mentioned previously, group health insurance plans are often significantly cheaper than what you’ll find on the open marketplace.
In addition, you’ll get better coverage to go with the lower monthly premium.
Even if you’re not married, you may qualify as a domestic partner. Have your spouse check with the Human Resources department on the cost of coverage and conditions for adding another person to the plan.
First, know that if you recently left your job and were covered by a group plan there, you can take advantage of COBRA continued coverage. This means you’ll convert your existing group plan into an individual plan and pay the full price tag.
In my case, to continue with my old group plan, COBRA ended up being very expensive. I think a lot of newly self-employed folks find the same thing. That’s why I’m writing this post.
However, in some cases, taking advantage of COBRA can be a good option as a newly self-employed individual. Make sure you weigh all of the pros and cons and decide on which way to go before your COBRA eligibility runs out.
Another option to find health insurance is through Healthcare.gov, the government health insurance marketplace. You can find coverage for either an individual policy or as a small business.
Most states use Healthcare.gov to purchase health care coverage. However, certain states have their own websites where you can compare options and enroll. Here’s a quick list:
- District of Columbia
- New York
- Rhode Island
Open enrollment usually starts in November and runs through mid-December. Coverage for plans purchased during open enrollment begins on Jan. 1 of the following year.
If you miss open enrollment, you may still be able to purchase insurance if you qualify. Special enrollment such as life changes or circumstances can make it possible to purchase insurance at other times of the year.
As I mentioned previously, there are certain professional organizations that offer health insurance plans. Becoming a member of an independent worker association or a professional organization can give you access to group insurance at discounted rates.
Do a quick search to find out what professional organizations are available in your line of work. If you’re looking for a more general option, check out the National Association for the Self-Employed, which offers help with purchasing health insurance coverage.
Short-Term or Temporary Coverage
While getting short term or temporary coverage is not a great long-term strategy, it can tie you over while you find something more permanent. Short-term insurance plans provide individual healthcare coverage for a defined period of time, up to 364 days.
These plans come with a renewal option so you can extend your coverage beyond the initial period. Many of these plans offer limited benefits and may not cover certain conditions such as pregnancy. Make sure you read the fine print before signing up for a temporary plan.
With that said, these can be a good option to help offset some of the medical risks until you can find a permanent health coverage solution.
Health insurance is so expensive! Here’s how to get health insurance when you are self employed.
Alternatives to Traditional Health Insurance Coverage
There are other options for obtaining coverage beyond the standard health insurance options for the self-employed. One such alternative is to go with a health care sharing ministry rather than a big health insurance carrier such as Aetna.
While health care sharing ministries are not insurance, they can provide a coverage safety net for medical expenses. They could be a viable and often cheaper alternative to traditional insurance so I wanted to share more information.
What are Health Care Sharing Ministries?
At its core, a health care sharing ministry facilitates the distribution of health care costs among members who have common ethical and religious beliefs. It’s important to note that health care sharing ministries do not accept risk or make guarantees that they will pay for medical bills.
Most health care sharing ministries are oriented toward practicing Christians and aligned with the ideas and principles found in the Bible. They use it as the basis for the idea that members have a responsibility to help with each other’s medical needs.
The majority of health care sharing ministries require its members to be actively practicing Christians in the U.S. Some even require a signed affidavit from the members’ pastors as a condition of joining.
With all that said, there are a few that are more lenient and inclusive, even to people who are not practicing Christians. Below you can find information on some of the largest ministries to help you decide if this could be a viable option for you and your family.
Medi-Share started in 1993 with the idea of following a biblical model of health care–Christians helping Christians. Members share each other’s eligible medical bills and are also encouraged to pray for other members in need.
Your monthly share (similar to an insurance premium) is based on the age of the oldest applicant and how many family members are participating. The annual household portion (AHP) is similar to an annual deductible and ranges between $1,000 and $10,500.
The AHP you select at enrollment will determine how much you have to pay out-of-pocket before your bills are covered by the health share. Each month, your monthly share will be matched with another member’s eligible medical bills. You’ll actually get information on whose bills your share is helping pay each month.
Medi-Share does offer limited coverage for pre-existing conditions. Members can receive up to $100,000 per year once they’ve been faithfully sharing for 36 consecutive months. And once a member has been sharing for 60 consecutive months, he or she can receive up to $500,000 per year.
Medi-Share does not cover dental, vision, or hearing expenses. However, they do give members savings cards which can provide discounts of up to 30% for these expenses.
Christian Healthcare Ministries
Christian Healthcare Ministries (CHM) claims to be the first and longest-serving health cost sharing ministry. They’ve shared more than $3.5 billion in members’ medical bills. It’s available in all 50 states as well as countries outside of the U.S.
There are three program options to choose from – Gold, Silver, or Bronze. Your monthly premium and maximum out-of-pocket costs will depend on which option you select. There’s also an optional Brother’s Keeper program to protect against catastrophic medical bills.
Limitations do apply for pre-existing conditions so keep that in mind when looking at this as an option. The ministry does have a pre-existing condition program but there are certain conditions that need to be met before you’re accepted and your bills are shared.
CHM does not cover dental, vision, hearing, or chiropractic care. For dental and vision discounts, CHM recommends that members join the Careington LivingWell Plan, but this will be an additional monthly expense.
Liberty HealthShare started in 1995 and is one of the most liberal of the health care sharing ministries. To be a member, you’ll have to commit to five statements covering belief in God, freedom, and ethics.
There’s no requirement to be part of a Christian congregation to become a member. You’ll also be asked to support the community through healthy living, wise decisions, and good stewardship.
Liberty HealthShare offers three different programs to choose from depending on your resources and circumstances. Each one has an Annual Unshared Amount (similar to a deductible) that has to be met before eligible medical costs will be shared.
Unlike some of the other health care sharing ministries, Liberty covers the cost of an annual physical for all members. In addition, there is no physician network so you can keep all of your regular doctors.
Liberty Healthshare does not cover dental, vision, or hearing expenses. They do, however, give members free access to the SavNet Health Savings Program which gives discounts for these types of expenses.
Get 24/7 Access to Online Doctors and Therapy With HealthSapiens
HealthSapiens is another alternative to traditional health insurance that you may want to consider. Even if you have health insurance, HealthSapiens gives you access to a doctor or a therapist for a low fee. So it could still save money.
HealthSapiens believes that telemedicine is the future of healthcare and they’re trying to lead the way. With HealthSapiens, you can schedule a consultation with a doctor at any time and from anywhere.
When you want to schedule a consultation, simply call the HealthSapiens helpline or log on to your member portal. A HealthSapiens Care Coordinator will then update your Electronic Health Record (EHR) with your symptoms.
Next, you choose from over 1000 board-certified physicians through their convenient web portal. Members can communicate doctors via live video, phone, or email.
If you need a prescription, the doctor will send it to the pharmacy of your choice. Once your consultation is complete, HealthSapiens will update your EHR. Any doctors that you consult with in the future can see your full medical history via your EHR.
HealthSapiens Medical Plan subscriptions cost $19.95 for a single person and $24.95 for family plans which cover up to seven people.
Want to schedule an in-person consultation with a doctor? You may soon be able to with HealthSapiens.
With their upcoming HealthSapiens 2.0 update, HealthSapiens is trying to blow the doors off of centralized healthcare. Their vision is to create a borderless, healthcare system that gives members the freedom to consult with a doctor from any state at any time.
To make this all possible, HealthSapiens has built a token payment system powered by the Ethereum blockchain. Members will purchase tokens and use those tokens to make payments to doctors.
Before choosing a doctor, members will be able to compare prices and read patient reviews. HealthSapiens is trying to bring the same transparency to shopping for a doctor that you expect in every other area of life.