Navigating Health insurance as 1099/Self Employed

If you are self-employed, you are not alone. According to a report by the Bureau of Labor Statistics, there were over 9 million self-employed individuals in the United States in 2020. While being your own boss can have many advantages, one of the challenges is finding affordable health insurance. Unlike traditional employees who often have access to group health insurance plans, self-employed individuals must navigate the complex world of individual health insurance plans. Today, we will explore some of the health insurance options available for self-employed individuals.

"Being self-employed shouldn't mean being self-insured."- Alex Padilla, former California State Senator and current United States Secretary of Transportation

Individual Health Insurance Plans:

Individual health insurance plans are policies that you purchase on your own, rather than through an employer. They are available through the Health Insurance Marketplace or directly from insurance companies. These plans typically offer coverage for essential health benefits, including doctor visits, hospitalization, and prescription drugs. Premiums and deductibles vary depending on the plan and your location.

Individual health insurance plans offer several types of coverage, including:

• Health Maintenance Organization (HMO): An HMO plan offers coverage for services provided by doctors and hospitals within the plan’s network. These plans typically require you to choose a primary care physician who will coordinate your care.

• Preferred Provider Organization (PPO): A PPO plan offers more flexibility in choosing doctors and hospitals. These plans typically offer higher out-of-network benefits but have higher premiums and deductibles.

• Point of Service (POS): A POS plan combines elements of an HMO and a PPO. These plans require you to choose a primary care physician and offer a network of doctors and hospitals. However, you can also receive care outside the network for a higher cost.

• Exclusive Provider Organization (EPO): An EPO plan is similar to an HMO but does not require a primary care physician. These plans offer coverage for services provided by doctors and hospitals within the plan’s network.

Group Health Insurance:

If you have employees, you may be eligible for group health insurance. Group health insurance plans are available to businesses with at least one employee. These plans can offer more affordable premiums and more extensive coverage than individual plans. However, as a self-employed individual, you cannot qualify for a group health plan if you do not have employees.

Group health insurance plans can be categorized into two types:

• Fully-funded plans: A fully-funded plan is purchased by an employer from an insurance company. The insurance company assumes the risk and pays for the claims.

• Self-funded plans: A self-funded plan is when an employer assumes the risk and pays for the claims. Self-funded plans are typically used by larger companies that have a stable and healthy workforce.

Group health insurance plans offer several types of coverage, including:

• Health Maintenance Organization (HMO): An HMO plan offers coverage for services provided by doctors and hospitals within the plan’s network. These plans typically require employees to choose a primary care physician who will coordinate their care.

• Preferred Provider Organization (PPO): A PPO plan offers more flexibility in choosing doctors and hospitals. These plans typically offer higher out-of-network benefits but have higher premiums and deductibles.

• Point of Service (POS): A POS plan combines elements of an HMO and a PPO. These plans require employees to choose a primary care physician and offer a network of doctors and hospitals. However, employees can also receive care outside the network for a higher cost.

• High-Deductible Health Plan (HDHP): An HDHP is a plan with a high deductible and lower premiums. These plans are typically paired with a Health Savings Account (HSA) to help employees pay for qualified medical expenses.

Short-Term Health Insurance:

Short-term health insurance policies provide temporary coverage for a specific period, usually up to 12 months. These plans are designed to fill the gap in coverage when you are between jobs, waiting for a new health plan to start, or transitioning to Medicare. Short-term health insurance plans do not cover pre-existing conditions and may not provide coverage for all essential health benefits.

Health Care Sharing Ministries:

Health care sharing ministries are organizations that pool funds from members to pay for medical expenses. Members of these organizations share a common set of religious or ethical beliefs and agree to help each other pay for medical bills. These organizations are not considered health insurance, and they may not cover all medical expenses.

As you can see, self-employed individuals have several health insurance options to choose from. The best plan for you will depend on your individual needs and budget. It is essential to do your research, compare plans, and consider all the costs and benefits before making a decision. With the right health insurance plan, you can protect your health and financial well-being while enjoying the benefits of being your own boss.