If you’re self-employed or want to become your own boss, there’s a lot to love about running a small business or being a solopreneur. However, purchasing health insurance is a significant downside for you and your family.
Instead of going without coverage or overpaying, use these five options to save money on insurance when you work for yourself.
1. Join a spouse, partner’s, or parent’s health plan.
If your spouse or partner has a health plan at their job, you may be able to join it. That may be the most affordable option because group insurance generally costs less than individual coverage. And if you’re under 26, in most states, you can remain on a parent’s health plan until your 26th birthday.
2. Get COBRA continuation health coverage.
If you leave an employer to work for yourself, you may have the option to purchase coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA). It allows you to continue group insurance for at least 18 months after leaving a job. While COBRA coverage is typically the most expensive option, buying it for interim coverage could be a good move until you find a cheaper plan.
3. Enroll in a federal or state marketplace health plan.
All U.S. residents who are citizens or nationals can enroll in or change marketplace health insurance annually from November 1 through January 15. However, many life changes qualify you to get coverage during the rest of the year, including:
- Relocating to a new ZIP code or county
- Getting married or divorced
- Having or adopting a child
- Losing health coverage in the past 60 days
- Expecting to lose health coverage in the next 60 days
Premiums get determined by your location, family size, income, tobacco use (in most states), and age. You may qualify for a subsidy that lowers the price.
4. Consider a high-deductible health plan (HDHP).
An HDHP is health insurance with a higher-than-normal deductible and lower monthly premium. Eligible plans allow you to contribute to a health savings account (HSA) and use funds to pay qualified medical, dental, and vision care expenses on a tax-free basis. There’s no spending deadline, and if you still have a balance after your 65th birthday, you can use an HSA in retirement.
An HDHP may be a good option if you’re relatively healthy, but it could cost more if you have high medical bills. So, do your best to anticipate your annual healthcare expenses.
5. Enroll in a health-sharing plan.
Health-sharing plans differ from insurance because they’re offered by organizations whose members share medical costs. However, some are ACA-eligible when they cover essential services, such as annual checkups and vaccinations.
Sharing plans charge a monthly fee (like a premium) and have an annual unshared amount (like a deductible) before the plan covers eligible expenses. They give members lower costs but have different rules for what’s covered.
For example, sharing plans don’t have to cover pre-existing conditions, such as cancer, diabetes, and heart disease, and can decline applicants. Or they may cover some expenses related to pre-existing conditions based on how long you’ve been a member.
Health sharing can be a more affordable option if your income is too high to qualify for a federal or state marketplace plan subsidy. Some plans specialize in membership for those who are self-employed.