Self employed HMO insurance
May 16th, 2009
HMOs (Health Maintenance Organizations) are usually less expensive than other types of health insurance plans. There are benefits and disadvantages to most everything in life; this indeed holds true with health insurance for self-employed people who have HMOs. As already stated, HMOs are less expensive, which is why most people select an HMO in the first place. Having a self employed HMO insurance plan is is a little more rigid than a PPO (Preferred Provider Organizations). With an HMO you can only choose a health care provider that is on your provider list. If you choose a doctor outside of the HMO network the cost of your health care won’t be covered. Your primary doctor will be a member of the HMO, and if you require any specialized health care your primary physician will refer you to another doctor who may or may not be in the HMO. There are somewhat fewer specialists, such as internists and surgeons who are members of HMOs, because they would suffer a reduction in pay.
Health insurance plans in the HMO system didn’t come into being until the late 1970s as part of the managed care industry. Before HMOs came into being health care costs could skyrocket without being restrained in any form. An HMO insurance provider puts a limit on what health care providers can charge you for their services. The positive affect of cost containment allows the health insurance industry to make the HMO insurance premium more affordable.
The premiums for health insurance for self-employed people covered with HMO insurance can be deducted as a business expense on your income taxes. Your health insurance policy must be owned by your business and in your name for the premiums to be eligible for tax deductions. In 2002 you could only deduct 70 percent of your premiums, but now the premiums for health insurance for the self-employed are 100 percent deductible. The tax law was changed in 2003. The good thing about deducting your premiums from your taxes is that you no longer have to fill out the long itemized deduction forms.
Even with an HMO, health care costs can mount up. As a general rule, health insurance pays 80 percent of your doctor, hospital, and other health care related expenses. Unless you have a supplementary health insurance plan, the other 20 percent of the medical bills not covered by insurance will be your responsibility. If you were to use your IRA account to pay those outstanding medical bills, you may not be charged the normal 10 percent early withdrawal penalty fee, which is a very good thing for the small business owner.
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Posted in: Trish | Comments Off