October 26, 2014



Self Employed Health Insurance: Making the Right Choice

Self-employed Health Insurance DeductionsTaking advantage of your self employed health insurance deductions is an effective way of reducing your self-employment tax. It is estimated that more than 40 million Americans today are without health insurance. Don’t be one of them.

Being self-employed does not mean that you have to be without health insurance. There is little doubt that the subject of health insurance is one of the most pressing concerns among self-employed individuals. In response to this, the government has introduced policies designed to help self-employed individuals (Check out: http://www.hhs.gov/healthcare/facts/timeline/).

Today, freelancers, consultants and similarly self-employed individuals are able to deduct their health insurance premiums. An invaluable benefit of the self employed health insurance deduction is that it is recognized as an above the line deduction for your Adjusted Gross Income.
It is important to note that, in order to benefits from such deductions, you will need to found eligible. Self Employed Health Insurance deductions can be claimed by;

• People who own 2% or more of an S-corporation stock.
• Self employed individuals with Schedule C or Schedule F incomes level.
• Individuals involved in a partnership who have self-employed incomes.

Choosing the Right Insurance Health plan

However, long before you can benefit from self employed health insurance deductions, you’ll need to overcome the hurdle of choosing the right health insurance plan. Deciding on the right insurance plan can be quite tricky because of the number of available options. Understanding the difference between your choices is the key to making the right decision.

High Deductible Health Plan

If you’re self-employed and you’re looking for a way to further reduce your premium then a High Deductible Health Plan (HDHP) may be an ideal solution. Working with a HDHP allows you to shift some of the risk carried by an insurance company to yourself. You do this by agreeing to accept higher deductibles than those found with HMO and PPO plans. The higher your deductibles are, the lower your monthly premium will become. Depending on the policy you choose, you may choose to raise your deductibles as high $10000.

There are certain risks with this approach. As a safeguard, people who consider High Deductible Health Plans typically have a Health Savings Account (HSA) which they rely on to fund their deductibles. Working with an HSA also allows them to pay for any other out-of-pocket expense that may emerge.

With an HDHP plan, you’re less likely to consider medical support unless it is absolutely necessary because of the higher deductibles. On the other hand, you’re more likely to choose medical options that offer genuine value for your dollar.

Benefits

• Lower rates
• Quality Health Care

Health Maintenance Organization

If you’ve been searching for a health insurance plan then odds are that you’ve stumbled across several HMO policies already. Health Maintenance Organizations are very popular among self-employed professionals. This is because the offer fairly affordable rates in comparison with other options. Members of an HMO are required to choose a primary care physician who will be in charge of handling all their medical needs—including the coordination of referrals. If you intend on retaining your current physician as your primary care physician, be sure to pick an HMO that he participates in. Otherwise your treatment will not be covered by your insurance plan.

Benefits of an HMO

• Reasonably Priced.
• No deductibles.
• Copayments apply to prescriptions, hotel admissions and emergency visits

Preferred Provider Organization

Like an HMO, PPO is a managed health care plan. However, unlike an HMO, a PPO plan provides you with the opportunity of choosing a physician or medical institution that is not included within the established network. You will however be required to pay higher deductibles and increase your co-payments for this option.

Do Your Homework

The only way of ensuring that you get the best self-employed health insurance policy is to take the time to review and compare your various options. Learn more about the different terms and conditions that may affect an insurance plan. The more informed you are about the different options available to you, the easier it will be for you to find a plan that you can match to your needs and budget. You don’t need to wait. You can start comparing different insurance quotes now.

What Are the Different Options Available When Buying Self-Employed Health Insurance?

Buying self-employed health insurance doesn’t have to be a difficult task.  Too often we are faced with the notion that being self-employed means we either cannot afford health insurance at all, and we are on our own, or the we will have to pay hundreds and thousands of dollars a month just to afford costly premiums.  Especially if you have a preexisting condition, you feel like there is absolutely no way you can get yourself into a decent self-employed health insurance program that will take care of your needs.

Self-employed Health InsuranceThis does not have to be the case, as there are thousands of good, affordable, and effective programs out there that can fit your coverage requirements and budget (Read more here: http://www.hhs.gov/news/press/2013pres/05/20130509a.html).  Also, the government has several programs that will make it more affordable for you to have self-employed health insurance coverage if you qualify.  You just need to do a bit of research, but this article should bring you up to speed on the general options.

Preexisting Conditions

This is often the make or break point of those who want to be self-employed and those who do not.  A preexisting condition is something that can completely destroy any hope of acquiring a good health insurance program.  Especially, a condition like diabetes is sure to cause a health insurance program to deny coverage to an individual.  So, what can you do?

If you have a preexisting condition, you can use a secondary self-employed health insurance program, such as COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985).  This program will offer the capability for you to get coverage from the government on top of another health insurance option.  This will enable you to get your hands on a good self-employed health insurance option.  Now, for some this may be more expensive, as you will also have to pay for a COBRA premium on top of normal health insurance.  But, the beauty is that you can now have affordable coverage, even with a preexisting condition.

There are also several other government programs that support a “high risk pool”. Several states have enacted this program, so that those with conditions like diabetes are not totally denied coverage if the need some kind of a self-employed health insurance plan.  Do your homework to see if you live in a state that currently has one of these programs.

For Healthy and Young Business Owners

Of course, there is always the option of not having any self-employed health insurance coverage.  This is almost never a good idea, as you leave yourself open to a massive amount of problematic variables.  Even a broken arm can cost thousands, and few have that kind of cash sitting around the house.  You never know what life can throw at you, so it is always a good idea to get covered.  There are a few ways you can go about doing this, especially if you are a healthy person.

A “catastrophic” health insurance program is for someone who is on minimal mediations and doesn’t necessarily need regular coverage.  This is not always recommended, but if you almost never see a doctor (or ever have to) this may be an affordable way to go.  A catastrophic program will have a very high deductible, but this deductible will give you a target for which to save.  This coverage is to be used in the event that you are injured and your costs exceed your deductible.

By far, the best way to go is to get an affordable health insurance program, as you never know when you will get sick, require prescription coverage, or extended care.  These self-employed health insurance programs are often seen as “too expensive” for the average Joe, but that is simply not the case.  Any decent amount of research can reveal a large list of good, affordable self-employed health insurance programs at a premium that most business owners can afford.  This way, you stay covered from any potential health risks, and at the same time, you aren’t breaking the budget.

In addition to that, a self-employed health insurance program can be used as a “business expense”, which means that you can write this large sum off of your Federal Income Taxes. Be sure to do your research and find the best option that works for you.  But, do make sure that you cover yourself from disaster, as you never know when you will wish that you had it.

How to Get an Affordable Individual Health Insurance

Individual Health InsuranceOne of the most notorious reasons why entrepreneurs balk at the idea of going to a self-employed status is because of the idea that they might have to buy very expensive health care insurance.  Individual health insurance is surrounded by myths of it being something that only the “rich” can afford.  While it might be a bit more expensive than something a major employer might provide, it is still not outside the realm of possibility if you are a self-employed entrepreneur.  Being a small business owner can seem to be a bit complex sometimes, but this aspect does not have to be one of them.  Much like with affordable whole life insurance, there are several options that you can take if you are looking for good, reliable, and affordable individual health insurance.

COBRA

Having COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) insurance may be a quite expensive option, because you will be the one paying for a hefty chunk of the health insurance premium.  Now, this is something you can use in the event that your small business has already provided you with individual health insurance, but it will also give you added benefits for up to a year after you resigned from your employed position.  This plan cannot always been seen as something that you can use permanently, but it will give additional health care in the event that you may need it.  Also, COBRA does have certain plans that will cover someone who is self-employed with a preexisting condition.  This is not always easy to get, especially on an individual health insurance plan, but with COBRA, it will give you that extra help you may need to get your insurance plan off the ground. Read more here: http://www.usa.gov/Citizen/Topics/Health/HealthInsurance.shtml#COBRA:_Keep_Your_Insurance_If_You_Leave_Your_Job

Health Savings Account

This may be a very viable option in the even that you find you are a relatively healthy person and you do not have a preexisting condition.  Health Savings Accounts, or HSA’s, are something you can use in the event that you don’t have too many funds to put into a health insurance program.  An HSA is a program whereby the policyholder “sets aside” a certain rate per month to the individual health insurance program.  This money is still considered in the possession of the policyholder, but it will be used as a “deductible” in the event of a health problem where the funds are needed.  An HSA is great for those business owners, entrepreneurs, and self-employed workers who are relatively young, healthy, and don’t foresee any real health insurance needs in the near future.  You will want to make sure that there is a good amount of time between the initial start up of the program, and when you will need those funds.  Being that it is a “savings program”, there has to be money in the account in order for the account to be useful.

Affordable Health Insurance

Usually the best way to go, which has the fewest amounts of variables, the highest amount of benefits, and the lowest cost for what you can get, is a regular individual health insurance program.

A good individual health insurance program will give you the necessary stability that you will need in order to have enough coverage for a health problem, and at the same time, it has the potential to be something with a relatively low premium.

Too often, good self-employed people end up just looking at a few plans and get discouraged at the low amounts of coverage and the high premiums that they are quoted.  If you do a good bit of homework, you will be able to find a plan that works well for you, for the specific needs that you have.

For instance, a great way to go about acquire the right individual health insurance program is to go through an agent.  Agents are an excellent way to save a serious amount of money on a really good plan.  The reason is that they know the ins and outs of the industry, where you may not.  You do not simply want to go right to a health insurance company’s medical encoder, as they will stick you with the highest premiums possible for coverage you don’t necessarily need.

Getting an affordable individual health insurance program does not have to be difficult as there are great plans out there that will fit your budget and give you the coverage you need.  Be sure to do your homework, and you will find one that works for you.

Different Health Insurance Options for Self-Employed Entrepreneurs

To most self-employed people, the reason why you resigned from your place of employment was because you wanted to master your own fate.  You did not want to be stuck in a dead-end job with no way out.  However, you quickly learned just how difficult it could be to find health insurance for self-employed people.  This can be very discouraging, and has often been the reason why many self-employed people wash out, and go back to the job.

You don’t have to do find yourself in that situation, as there are plenty of options out there, even if you are considered “high risk”.  Being self-employed should be something that is fulfilling, and not something that is far more trouble that it’s worth.  What are the options for health insurance for self-employed entrepreneurs?

Insurance For Generally Healthy People

Health Insurance for Self-employed

This is perhaps the easiest place to be, if you find that you need health insurance.  Of course, it still may not be cheap.  The whole point of health insurance is keeping yourself protected from the unknown, but that does not have to break the bank, especially if you are considered “low risk”.

There is a common misconception that buying state-run health insurance is the cheapest way to go.  This is only the case if you are in a very low-income bracket.  For most who are self-employed, however, you do not qualify.

Using a program like COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) is not always the best way to go, especially if you are a healthy person.  Health insurance for the self-employed does not always work best with state help, and the reason is that these Federal programs are tailored more for those who have preexisting conditions and for those who are unemployed (See: http://www.dol.gov/ebsa/newsroom/fsjobloss.html).

Using a state program will cause you to pay for more coverage than you actually need, which means that your cost to benefit ratio will be too high to justify.

Your best bet is to use one of three options:

  • HSA, or Health Savings Accounts, offer the ability for you to “set money aside” for your health coverage.  These are still considered self-employed health insurance programs but the premiums are much lower.  The drawback is that the deductible will be very costly in the event of a problem.
  • “Catastrophic” health programs have very low premiums ($100-$150) per month, but they will have an extremely high deductible, and will only cover certain problems.  This is only something you use if your deductible is less than the cost for medical care, which is only once every blue moon.
  • Private health insurance for self-employed people is probably the best way to go, if you know where to look.  Often times, many think that this is way off budget, but this is simply untrue.  There are lots of affordable programs; you only have to know where to look.  The best way to find the most affordable program is to search for one online, and do online health coverage quotes.  This is like cutting out the agent (middleman) for almost the same results.

Preexisting Conditions

If you have a preexisting condition, then you probably have already found out that you may not be able to find affordable coverage, or find even coverage at all.

In this case, you will want to use COBRA.  Now COBRA will allow you to acquire affordable health coverage from a private company, and at the same time, you will have secondary coverage from this Federal program.  The beauty of this is the fact that you can always have some kind of coverage, which will not totally bankrupt you.

Also, you may live in one of the many states that have a “high risk” pool.  This offers affordable coverage in the event that you are considered high risk, and cannot find a program to cover you.  Be sure to check if you live in one of these states.

Overall, however, you still need to find yourself health insurance for self-employed people.  This will require research, but your most optimal coverage will come from using an online quote, in addition to government secondary programs.  Even if you have a preexisting condition, health insurance for self-employed people is not out of your reach.

Helpful Tips on Buying Individual Health Insurance

This seems to be at the top of many minds, especially for those who are self-employed.  Since this past four years, health insurance has come to the forefront of the news, as many have watched the cost of medical care rise dramatically.  Now, more than ever, it is vital to receive good medical coverage, but sometimes it just doesn’t seem affordable.  Are there options out there for those who are self-employed?  Is buying individual health insurance going to break the bank?

Individual Health InsuranceThe answer is that it might, if you don’t do your research.  There are literally thousands of affordable health options out there, especially if you live in certain states.  You don’t have to worry if you are a bracket that might be considered “high risk” or you have a preexisting condition.  Buying individual health insurance is not something that has to be confusing, and it isn’t something only the “rich” can afford.  Simply do your homework, and you’ll be surprised what you can find.

State Coverage

The common misconception about state coverage for medical insurance is that it is either free, or extremely cheap.  This, of course, is the case if you are extremely low income, but most self-employed people are not in that bracket.

State coverage is often a costly way of buying individual health insurance, but it is an option if you are in certain situations.

If you are a healthy individual, this may not be the best way for you to go.  The reason is that it will cost you more than you need to pay, and you will have more coverage than you require.

State coverage is for folks who are considered “high risk” or have a preexisting condition.  The reason why this is helpful is because a good many health insurance companies will not cover someone who is considered high risk, because they are almost sure to lose money.

That is why many states have what they call a “high risk pool”.  Depending on the state, this either means that they will sponsor a health program, or they will offer a secondary program in supplement with buying individual health insurance.  The beauty of this is the fact that many insurance companies will cover an individual with a secondary government option, as they will cover the extra cost.

Another option is COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985).  This is another secondary health care option that is a federally run program.  This means that it doesn’t matter what state you are in, you can still acquire coverage.  In most cases, however, this is only a temporary fix, as they will only be active up to one year after you resigned from your last employment position.  If you do have a preexisting condition, you will be able to keep it as a secondary option, allowing you to acquire a primary health insurance program.  Buying individual health insurance is going to be costly, in addition to the COBRA program, but it will still keep you covered, and that is what is important.

Private Health Insurance

This is often the “Pegasus” of buying individual health insurance: most people believe that an affordable option just does not exist.  However, nothing could be further from the truth.

Buying individual heath insurance is expensive if you do not do your research.  If you go to the first health insurance company you run into and talk to one of their own medical encoders, they will attempt to stick you with the highest premium possible for coverage that is beyond your needs.

The best way to go is to get a quote online, as these quotes will often get you to the most optimal coverage for the cheapest premium.  The best part about online quotes is that they cut out the middleman.  They do the exact same thing that a health insurance agent will do: find you the best price for the most coverage.  Buying individual health insurance may take doing considerable homework, but it is not impossible to find something you can afford.

The important part is that you don’t go uncovered, as there is far more risk in that than paying a high premium.  Make sure you are covered; get health insurance as soon as you can. For more information about getting individual health insurance go to: http://www.womenshealth.gov/aging/paying-for-healthcare/individual-insurance.html#individual.

How to Choose the Right Individual Health Insurance Plans

Individual Health Insurance PlansIndividual health insurance plans are an ideal option for people who are self-employed. The type of insurance plan that you choose will affect the quality of the coverage that you receive. It is important to note that qualifying for individual health insurance plans becomes more difficult as you get older. Insurance companies may also choose to exempt people with diagnosed pre-existing conditions (in which case you should check out: https://www.pcip.gov/Whos_Eligible.html). The best way of guaranteeing that you get the right insurance coverage plan is to carefully compare the quotes of your different options.

Individual health insurance plans can be found under different categories.

Indemnity Medical Insurance Care:
Top on the list of potential individual health insurance plans is an indemnity insurance plan. An indemnity insurance plan allows the holder to see any physician of his choosing. Because of this they are sometimes referred to as ‘Fee for Service’ health plans. An Indemnity plan typically covers a portion of the medical services that the patient receives depending on how the agreed terms. If you should choose to purchase an indemnity plan, the following are some of the key points that you must know be aware of;

  • Your choice of physician or hospital may be restricted by the location of the provider. Before you agree to an indemnity policy, take the time to find out what the terms of the policy on the subject are.
  • Indemnity individual health insurance plans do not always cover preventative health care services. Before agreeing to a policy, find out exactly what the company views as preventative services. Most companies consider routine office visits and checkup examinations to be in this category.
  • Discover what your deductible is. Your deductible is the amount that the insurance company will expect you to pay before your coverage applies. Deductibles are usually based on annual calculations. Find out how much this is and if you can reduce or increase it. Depending on the policy, you may be able to get coverage on certain services without first meeting your deductibles.
  • Your policy may require that you pay a co-payment after the deductible. A co-payment means that you will share a percentage of the cost of the remaining charges with the insurance company. Learn if this applies and what the percentage is. Co-payments are often used when you purchase medication or arrange for a basic visit to your physician.

The key advantage of an indemnity plan is that it provides you with a lot more flexibility when choosing physicians or hospitals. Indemnity plans are however less affordable than managed healthcare plans.

Managed HealthCare Plans:

Organizations offering Managed HealthCare plans are capable of providing discounted insurance rates because they negotiate with physicians and hospitals for reduced charges. There are several different types of Managed Health Care Insurance plans for self-employed individuals. However the most popular of these are PPO and HMO.

PPO:  With a Preferred Provider Organization plan, you get the opportunity to choose the physician that you want to work with. You are provided with the options of working with a physician who is a registered member of the organization as well as non-members. This is a good option if you do not want to be restricted to only the healthcare professionals provided by an HMO. You should however note that choosing a physician who is not a member will increase the amount that you end up paying.

HMO: HMOs (Health Maintenance Organizations) are the more popular option among Managed HealthCare plans. This is because they offer lower rates that the alternatives. Under the individual health insurance plans of an HMO, you’ll be required to select a primary care physician who will be in charge of your medical needs.

The benefits of a managed healthcare plan vary with different carriers. Before choosing a managed health insurance plan, learn the Out-of-Pocket cost is. Your Out-of-Pocket cost refers to the expenses that you will be expected to make out of your own pocket—excluding your premiums. This includes your deductibles, coinsurance and copayment.

 Choosing the Right Insurance Plan

There are other alternatives that you may want to consider. For instance, if you’re self-employed and you belong to professional association that offers individual health insurance plans, then you may consider applying through this medium. The type of coverage offered with this plan may not extend to your family members. For more information on finding the right plan visit: http://finder.healthcare.gov/.