Today’s guest post is by Michael Cahill of Vista Health Solutions (@VistaHealth).
If you’re self-employed, you know what it feels like to pay way too much for health insurance, or to feel like you have no option for affordable insurance. It’s no wonder that many self-employed Americans remain uninsured. But it’s always a good idea to have some form of health coverage, because life is unexpected and, as the saying goes, it’s better to be safe than sorry.
Let’s assume you agree and you want to find health insurance—and that getting coverage through a family member’s plan is not an option. Now what?
Before You Start Researching
The first step is figuring out what you need and want in a plan—based on your budget and your lifestyle. Keep in mind: Monthly premiums for individual plans are extremely high compared to rates you may have paid in the past, especially if you’ve been a member of an employer-based group plan. Questions to ask include:
- What’s my budget? Having a good understanding of your finances is essential.
- How many people need to be covered?
- Do I or any of my dependents have pre-existing conditions? Prior to the Affordable Care Act, having a pre-existing condition was almost a guarantee that you would be denied health insurance coverage. Beginning next year though (2014), the ACA bars insurers from denying coverage based on medical history. So if you are applying for health insurance this year with a pre-existing condition, be aware that you might be rejected because of it. But you will be able to apply again next year without the same worry.
- Am I planning for any major life events in the near future (marriage, having a child, etc.)? Pay special attention to the coverage for maternity care or how much it might cost to add your spouse to your insurance plan.
Where to Start Looking
Many of us start looking for health insurance online, and online brokerage sites can be a particularly comprehensive resource. These sites provide you with a lot of information about the types of plans offered by insurance companies to individuals in your region. The process is not that different from online shopping, except you’re browsing for a health insurance policy instead of a widescreen TV. Another common approach is to seek information directly from an insurance company, either online or by phone.
As a side note, some states still offer small business status to self-employed individuals, which can serve to give you a break on your monthly rates. But that possibility will be gone soon when the Affordable Care Act takes effect.
The plans that are offered through online brokerages or insurance companies tend to be the most expensive, so it’s wise to explore additional options.
Medicaid is a government sponsored health program for Americans who cannot afford insurance. Qualification requirements are determined for the most part by income, but many individuals who are eligible for coverage are often unaware of these requirements, and thus remain without adequate affordable care. Although eligibility requirements are state-specific, individuals with an annual income up to 100% of the Federal Poverty Line are generally eligible for care.
The Affordable Care Act is set to raise the annual income limit for all 50 states, which means that more people will be eligible for Medicaid coverage in the not-so-distant future.
For Members of Professional Organizations
Many professional organizations offer their members some form of healthcare, from trade unions to bar associations to writers organizations. Be sure to look into the associations or organizations you are a part of to see if they offer insurance. Here are a few of the most well-known organizations focused on professional writers.
Authors Guild. You must have had a book published by an establish, reputable publisher, or for freelance writers you must have had at least three articles of fiction or non-fiction published in a generally circulated periodical within the 18 months of applying for membership. Check out their full eligibility requirements here.
National Writers Union. Members have access to their database of individual insurance plans available in all 50 states. To become a member you must have had a book, a play, three articles, five poems, a short story, or an equal amount of newsletter, publicity, technical, commercial, government, or institutional copy published. You’re also eligible for membership if you haven’t been published yet, but have a large body of work that you are trying to get published. See their membership page here.
American Society of Journalists and Authors. The requirements are very similar to the NWU, except they look for specifically for nonfiction pieces—so a published book or at least six substantial bylined pieces of nonfiction writing for established publications are needed for eligibility. See their guidelines here.
Freelancers Union. They have a robust offering of health insurance options, and it’s very easy to join. Visit their registration page to learn more.
What ACA Means for the Self-Employed
Under the Affordable Care Act, if you are self-employed, you are considered an “individual,” meaning you are subject to the individual mandate to have health insurance.
If you are currently uninsured and you intend to stay that way, you’ll have to pay a fine of $95 next year. This fee might not seem like much, but it is tied to the rate of inflation and will increase every year.
One positive is that next year, as an individual under the ACA, you are eligible for tax credits to help pay for plans sold through your state’s online marketplaces. These marketplaces will look a lot like the brokerage marketplaces discussed earlier.
What’s more, next year many states will be expanding their Medicaid programs. However, states may also choose to opt out of the expansion. Currently, 26 states are open to, or leaning toward, expansion. The expansion would allow the federal income limit for Medicaid to rise to 133% percent of the FPL. Eligibility requirements will be expanded as well, specifically allowing single adults without children to qualify for Medicaid.
If that all sounds confusing, don’t worry. The federal government will be providing assistance to those looking for health insurance. Call centers are currently being established all over the country to handle the influx of questions, which is expected to be huge, for when the marketplaces open in October. In the meantime, click here to get the most up-to-date information about the marketplaces and the Affordable Care Act.
Michael Cahill is the editor of the Vista Health Solutions Blog. He writes about the health care system, health insurance industry and the Affordable Care Act. For more information about how the ACA may affect small business owners, visit the Vista Health Solutions self-employed health insurance guide. Follow him on Twitter at @VistaHealth.