According to the U.S. Bureau of Labor Statistics, 10 million workers are self-employed in the country. Being a self-employed worker can be liberating, but it also means youâre your own HR department, too. One of the biggest challenges youâll face is finding affordable insurance options.
With a traditional employer, you had a limited array of health insurance options, and you mightâve had access to a team that could help you understand the paperwork and process. Now that youâre on your own, youâll also have to navigate this maze on your own.
It wonât be easy, but we can help lessen the burden a bit by helping you learn about your options.
| Pros | Cons | |
| Online Insurance Marketplaces | Lots of options to choose fromCan get personalized help in finding the right plan | Sellers might be biased and offer a plan thatâs not right for you |
| Affordable Care Act Marketplaces | Might qualify for subsidies to lower costCan find out if youâre eligible for Medicaid/ CHIP/ other low-cost insurance optionsGuaranteed coverage for essentials | Can only enroll at certain times of year or after certain eventsCosts can be high if you donât qualify for subsidies |
| Short-term Health Insurance | Low cost | Doesnât cover essentialsDoesnât cover pregnancy Doesnât cover pre-existing conditionsMight not available in your state |
| Through a Spouse or Domestic Partner | Low cost | Not available for single peopleMight have to pay more than your spouse/partner for coverage |
| Freelancers Union or Other Associations | Might be able to get lower rates through a group plan | Might not have as many options available |
1. Online Insurance Marketplaces
Insurance marketplaces (also known as âbrokersâ) are for-profit companies that sell Affordable Care Act (ACA) exchange plans and non-ACA plans. It provides you with more information and assistance than going through the ACA exchange on your own. Thereâs no cost to use an online marketplace; instead, it gets a kickback from the insurance companies when it sells you an insurance plan.
That kickback can be up to an average of $20/month depending on where you live, according to the Kaiser Family Foundation. Thatâs not chump change so brokers might present you with biased estimates. When youâre working with a broker, itâs important to ask them whether theyâre presenting you with all of the options available on the Affordable Care Act marketplace, and if not, why not.
PolicyGenius
PolicyGenius is one of the largest and easiest-to-use online insurance marketplaces. In addition to health insurance, you can also get quotes for life insurance, homeowners insurance, auto insurance, renters insurance, disability insurance, and more.Â
To learn about insurance plans that might be right for you, choose the type of insurance youâre looking for on the homepage. Then, enter your zip code, county, and email address to see the list of plans and carriers available to you.
eHealth
eHealth offers health insurance plans from over 180 companies. Itâs also heavily focused toward Medicare and can help you figure out your options for this unique health insurance program. To see an immediate list of insurance plan options, select the type of insurance youâre shopping for and enter your zip code.
HealthMarkets.com
Speaking to a live agent can help you better understand which plan is right for you. But if youâre not ready to take that step, HealthMarkets offers a short survey instead. Once youâve completed the survey, it compares your responses to multiple plan coverages and generates a âFitScoreâ for each plan thatâs tailored to you. The FitScore can help you easily see which insurance plan fits your needs the best. Â
2. Affordable Care Act Marketplace
The Affordable Care Act is the biggest government initiative in recent years that tries to address how people â including freelancers â get affordable health insurance. The ACA created a central health insurance marketplace thatâs run by either your state government or the federal government, depending on where you live.
Your options on the ACA marketplace are graded according to a set of metal tiers:
| Plan tier | 2020 average premium1 | Insurance company pays… | You pay… |
| Bronze | $331 | 60% | 40% |
| Silver | $442 | 70% | 30% |
| Gold | $462 | 80% | 20% |
| Platinum | $501 | 90% | 10% |
Itâs important to note two things here: first, the cost varies widely across the country. For example, the cheapest Bronze plan for one person costs an average of $219 in Rhode Island, but $552 in West Virginia.
Second, these numbers might shock you. If youâre a four-person family in West Virginia, for example, paying $2,208 per month on health insurance might seem like the opposite of affordable, and it is.
But one of the best features of the ACA is that depending on your income, you might qualify for subsidies thatâll help bring your actual cost down to an affordable level. Youâre also notified if you qualify for Medicaid, CHIP, or other free or low-cost health insurance options.
To sign up for an ACA plan youâll need to wait until the open enrollment period each November through December for plans that start in the new year. If you have a âqualifying life eventâ (see below), you can also sign up at any time:
- If you lose your existing coverage (e.g. if you lost your job)
- If you have a change in your household (e.g. getting married)
- If you move to a new area
- If you have a big income change, become a member of a tribe or become a U.S. citizen, leave AmeriCorps service, or leave jail or prison
3. Short-Term Health Insurance
Short-term health insurance plans are different from ACA plans because theyâre not as tightly regulated. For example, they generally donât cover preventative healthcare like annual doctorâs visits, pregnancy care, or prescription drugs.
They also come with high deductibles and carriers impose dollar limits for payouts. This type of plan is best as a temporary stop-gap measure for protection, if you get really sick or have a major accident while youâre in-between better insurance plans.
In fact, these plans are so consumer-unfriendly that theyâre banned or heavily regulated in many states. Short-term health insurance plans are usually around 20% of the cost of a low-level Bronze plan, according to one Kaiser Family Foundation survey. But remember: if you need to see a doctor, it might cost you a lot more than if you purchased a full health care plan from the ACA marketplace or another source.
4. Through a Spouse or Domestic Partner
Not everyone has this option, but if you do, itâs generally the best way to get insured as a freelancer. Employers can provide health insurance at affordable rates for their employees, and often, their employeeâs family members, too.
You might have to pay an additional fee to be included on your spouse or partnerâs plan. But itâll usually be much cheaper than finding your own plan through a broker or the ACA exchange without a subsidy. If youâre not married but youâre in a partnership you can check with your partnerâs employer to see whatâs required to qualify as a âdomestic partnerâ for insurance purposes.
5. Freelancers Union or Associations
Professional associations can often get similar discounts that employers receive. The Freelancers Union (an unofficial union), for example, offers options for health insurance, vision insurance, and dental insurance for freelancers.
Like so many other insurance-related rates, the actual cost of these plans depends on where you live. The Freelancers Union doesnât charge a membership fee, but other organizations do. If so, youâll need to weigh the cost of a membership fee against any potential savings you might get from buying health insurance through an association.
Finding the Best Health Insurance for You
The biggest factor to consider when shopping for health insurance plans as a freelancer is what your needs are.
For example, if youâre trying to start a family, youâll want to avoid short-term health insurance plans that donât cover pregnancy expenses. If you have a chronic illness and need health care more frequently, choosing a âcheapâ Bronze health insurance plan can actually cost you more over the long run because these plans offer minimal coverage.
Itâs not always easy to know what kind of health services youâll need in the upcoming year. Some events, like a major car accident, canât be planned. But if you focus on the kind of health services you need today, and compare multiple health insurance plans from different carriers, youâll find there are many health insurance options for freelancers.
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Source: goodfinancialcents.com