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Finding Self Employed Health Insurance under the Affordable Care Act

Jul 3rd, 2013

Self Employed Health Insurance

Credit: PT Money via Flickr

Working for yourself is the American dream. Just think about it, no more bosses ordering you around, no morning commute to worry about, getting to work in your underwear all day, no self employed health insurance…wait what? Yes that’s right, self employment doesn’t come with health insurance. Sadly it is one of the dark sides of being self-employed. While it’s nice not have to worry about someone stealing your lunch out of the break room refrigerator, you do have to worry about what will happen if you get sick.

No doubt for the first couple of years at least your self employment will be a high stress experience. In the interest of not adding to that worry burden it might not be a bad idea to have some health insurance, just in case.

Because let’s face it when you’re the only one responsible for your income and the rent comes due, you can’t afford to be sick. Maybe you’ll just catch a cold then get better a day later. Or maybe you’ll get hit by a bus and be in the hospital for three weeks. You never know, it’s always better to be prepared.

So in celebration of self employment, we at Vista Health Solutions have created a new comprehensive self employed health insurance guide. You can check it out here.

In this post we’re going to give you a brief introduction and overview of some of the options available to you. But if you want a deeper dive into the topic, check out our guide (seriously check it out, it’s great and I wrote it so you know it’s going to be a good read).

Anyway, since we’ve also established that self employment is the American dream (apparently) and tomorrow is July 4th, let’s call this post our patriotic duty for the holiday.

 

The Affordable Care Act and Self Employed health insurance

Alright now that you’ve resolved to get some health insurance for your newly founded business where do you begin? Purchasing insurance has always been a little bit difficult, but now with the Affordable Care Act the industry is changing.

The Affordable Care Act, as you might already know, is President Obama’s sweeping healthcare reform legislation that became law back in the spring of 2010. Its major provisions like the individual and employer mandates, as well as the elimination of pre-existing conditions and the creation of state health insurance marketplaces go into effect next year.

The idea behind the law is to make health insurance more affordable and accessible for the majority of Americans. Which may or may not work, depending on who you’re talking to and who they voted for last year…

So where does your new home business(or sole proprietorship, as you’re now legally known)  fit into all this? For the purposes of health insurance sole props will be considered individuals under the Affordable Care Act. That means they’re subject to the individual mandate to have health insurance or pay a penalty. If that sounds potentially expensive, don’t worry you might be eligible for a tax credit to offset your insurance costs. The catch is that you can only get the tax credit if you choose to buy your insurance at your state’s health insurance marketplace.

More terms?! Your state’s health insurance marketplace will be a place for you to view and compare the different health insurance plans available in your state. You can think of it sort of like an Amazon.com or Travelocity except that you’re shopping for health insurance plans.

If you want to learn more about how the health insurance exchanges will work, check out comprehensive article on the subject here. Or for a quick look to see if you’ll get a tax credit you can use our health care reform calculators.

 

Buying insurance at the state marketplaces

Next year when the insurance marketplaces open, Vista Health Solutions will have all of the marketplace plans available for sale right here on our website. Our helpful team can assist you in choosing the plan that works best for you. In fact you might want to come to us first if predictions about state marketplace computer problems are to be believed.

Additionally if you don’t qualify for a health insurance tax credit (to make buying at the marketplace cheaper), we’ll still be offering non-marketplace plans next year. So for those looking to get the best of both worlds Vista Health Solutions will be your one stop shop. .

 

Ehh…marketplaces sounds cool, but how else can I get health insurance?

So what other options do you have for health insurance if you don’t want to go through the exchange? Maybe you’re looking for insurance to fill the gap of time in between now and when the marketplace plans begin on Jan. 1, 2014.

 

Spouse’s Insurance

If you’re lucky enough to be married to someone with health insurance, you can try getting added to their plan. The process is probably fairly simple and can be done by contacting their Human Resources department. Also as an added bonus all married couples (gay and straight) can now be add onto their spouse’s plans without getting hit with extra taxes. Thank you Supreme Court!

 

COBRA

Aside from having the same name as an awesome venomous snake, the COBRA program is a way you to keep your health insurance even if you lose your job. COBRA stands Consolidated Omnibus Budget Reconciliation Act which sounds very kind of complicated but let’s go over it.

The program lets you stay on your old company’s insurance policy as long as you take over the full financial responsibility of the insurance premium, which in most cases can be a substantial amount.

 

Insurance through a professional group

Getting health insurance through a professional group like the freelancer’s union, a bar association, or a trade association is another viable option for the self-employed business person.

There’s a plethora of organizations that provide this kind of support for all different professions. A good place to start is to look locally. Perhaps check in with your local chamber of commerce to see if they offer any insurance options to their members or have local providers that they recommend for their members.

 

Your neighborhood insurance broker

Buying health insurance can be such a hands off experience with lots of phone calls and emails to people in far off places. Wouldn’t it just be nice to sit down with someone face to face and have them explain your insurance options to you? Then get up and shake hands on the deal when it’s done?

That’s where your local insurance broker comes it. They have the advantage of being great resources and know your health insurance options front, back, and sideways. They’ll be able to explain all your options and help you compare insurance plans from different carries. Also if they’re good at their job they’ll be able to do it without tons of industry jargon.

Whew! Alright we covered a lot of ground, but hopefully you have a better understanding now of the options for health insurance available to you as a self employed person. Again, this is meant to be a brief (but fun) overview of self employed health insurance options. For more information visit our dedicated self employment page.

Happy Fourth of July from Vista Health Solutions! Get out there and achieve that American Dream!

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