The 6 Best Ways to Get Health Insurance When You're Self- Employed
By: Heather Wilde
For entrepreneurs, finding good health coverage can be difficult. Here are the options for getting the best care.
As my role requires a lot of travel, both domestic and international, I've always needed a health plan that covered me while traveling outside of my home state. This year, however, all of those plans have disappeared from the individual and small group market.
I found myself in the same position that many small businesses face: Groups are based on the number of full-time employees on payroll, and contractors who you offer benefits to.
That's all well and good if your company offers healthcare as a benefit. But what if it doesn't?
Many small businesses don't meet the minimum threshold to offer group insurance, preferring to hire contractors instead of employees. That includes my company.
Solopreneurs and married partners often only qualify for Individual insurance, which gives them extremely limited HMO plans to choose from. If you miss the open enrollment period, you can go up to a year without coverage. With my old plan no longer offered, I could stay on COBRA for a while, but that wouldn't help my coworkers. I started to look into options.
Turns out, there's an entirely new category of healthcare dedicated to solving this problem. "Health Cost Sharing" started as a way for people who are generally healthy to protect themselves against unexpected health events.
James Maskell of health cooperative kNewHealth sees it as the best option for entrepreneurs -- though he is, of course, somewhat biased. "With the increased buying power of the group, it brings the cost of health maintenance down for everyone," he says
The cost is much lower than traditional insurance -- for only a few hundred dollars a year, you can have coverage, which includes all the same types of care that you would expect. As long as you're willing to live by the "code" of healthy living these co-ops require, it may be just what you need.
It's one option of many. Not sure what to do? Here's a handy list of how to gain health coverage as an entrepreneur:
1. Healthcare Marketplace
HealthCare.gov is the main place many go to purchase insurance as an entrepreneur or small business. If you're daunted by all the options, companies like StrideHealth and SimplyInsured help you navigate and find plans in a quick and easy way.
If you had access to a health plan from a previous employer, parent, or spouse, you can continue that coverage for up to an additional 36 months depending on the circumstances. Be careful with this, however, as COBRA is often more expensive than other options. Additionally, COBRA cancellation is not an open enrollment event.
3. Short Term Health Insurance
If you're outside an open enrollment period, you can purchase Short Term Health Insurance. The price of this coverage is generally very low, but it doesn't cover much, and can refuse coverage to those with chronic conditions.
Some associations like NASE offer health insurance as a benefit to joining. However, according to the WSJ, the cost of the association fee may be greater than the benefit you receive. Do your research.
Professional Employer Organizations, or PEOs, are companies that outsource management tasks like payroll and accounting. However, as they offer healthcare as a benefit, entrepreneurs who sign up with PEOs are able to gain group health insurance as well for a small monthly fee. Gusto, Zenefits, and Justworks are a few examples.
6. Health Cost Sharing
And, as mentioned above, there is the option for Health Networks. Companies like Liberty Healthshare, CHM, kNew Health and others are sprouting up to cover those who want affordable, no-frills healthcare. One thing to watch out for -- you need to be in good health already to join.
Whatever you do, one thing is clear: Your health is vital to your business success. Do what you can to stay healthy.