IQ expert Jason Beans: Array of health insurance options available for freelancers
Q: I just started doing freelance work and am about to shop for health insurance. How do I even get started? What tips do you have for me?
A: If you are a freelancer and health insurance has been holding you back from making the plunge, it shouldn’t. There are a few basic questions you should ask yourself before you start your search for the right health insurance plan.
But don’t worry — there are many options available. Here’s a good launching pad for you:
1. Are you married? If your spouse is covered by a health insurance plan, consider being added to it. If not, consider finding a spouse (just kidding).
2. Are you still employed? If you’re going to leave your job or you recently lost your job, look into COBRA. It became law in the 1980s so that people who have resigned or been fired could hold onto their employer-provided health insurance. However, this option may be one of the priciest, particularly if your company was kicking in the majority of your monthly premium. You could perhaps switch to a more basic health insurance plan. COBRA typically covers an employee for just 18 months after he cuts the ties with his former employer. For more details, visit the website of the U.S. Department of Labor.
3. How does your state define a small group? If you are one of the lucky ones who lives in a state that defines small group as one person (such as Maine, North Carolina and Rhode Island) then insurers are required to guarantee issue either an individual health insurance policy or a small group plan to someone who’s self-employed. Note that every state varies when it comes to the open enrollment period. For more information, visit www.statehealthfacts.org.
4. Do you belong to a labor union? If so, check out with your union about health insurance.
5. Do you live in a state that provides group or individual coverage through the Freelancers Union? The Freelancers Union offers health insurance to eligible members in certain New York counties and in certain eligible industries. Dental, life and disability coverage can be obtained if you live anywhere in the United States.
6. What does your local Chamber of Commerce? Your Chamber of Commerce is there to guide you as you start your business. Some chambers offer small businesses group package plans if you have at least two employees. One-person plans also may be available.
7. Do you have a pre-existing medical condition? If you do, then you might find it easier to go through an insurance broker. Buyer beware, however: Do your research first and get references.
8. Would you mind being in a high-deductible insurance plan? If not, then a health savings account (HSA) might be the way to go. It can save you a lot of money on your premiums, but you have to be able to afford the high out-of-pocket deductible. You can open an HSA at a bank or credit union. This route may be helpful if you’re looking to lower your taxable income, since you’d be contributing pretax dollars to your HSA. For more HSA information, visit the website of the U.S. Treasury Department.
By the way, the federal health care reform law will create insurance marketplaces called exchanges that should make it easier for individuals and small businesses to buy health insurance.
Jason Beans is CEO of Chicago-based Rising Medical Solutions, a medical cost containment/care management company serving the workers’ compensation, group health, auto and liability markets. Beans founded Rising in 1999. Since then, Beans has received a number of honors, including Business Council Advisory Man of the Year and Midwest finalist for Ernst & Young Entrepreneur of the Year. Rising has appeared several times on the Private Company Index’s Top 10 Growth list and Inc. magazine’s Inc. 5000 list.
Beans earned a master’s degree from MIT’s Entrepreneurial Masters Program and a bachelor’s degree in finance from Boston College.
For more information, visit www.risingms.com.
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