Short-Term Health Insurance For Freelancers
Although health insurance is no longer mandatory in many states, it’s still a good idea to have it. Unexpected medical expenses can be expensive.
Freelancers should consider joining a professional organization or union that offers group health plans. These tend to function very similarly to ACA plans. They also qualify for a tax deduction.
1. COBRA
As a freelancer or independent contractor, you have a unique set of health insurance options. Whether you’re leaving a job for good or have just become one, it’s important to understand your options so you can make the best decision.
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that requires companies with 20 or more employees to offer their group health plans to those who leave their jobs. It’s also an option for those who lose their job due to a reduction in hours, death, divorce or other qualifying events. Individual states may have their own similar laws.
While COBRA is a great idea for those who were covered by a company plan, it’s expensive. That’s because the employer normally pays a portion of the cost of the health plan for its employees. Adding yourself to your spouse’s health insurance policy is another way to get coverage as a freelancer. But be sure you do the math to determine if it makes financial sense.
Some professional associations or unions have group health insurance options for their members. If you can find a plan that fits your needs, it’s an excellent alternative to COBRA and other types of self-employed insurance. Also beware of “limited benefit” plans, which typically only cover specific issues such as a critical illness or an accident.
2. Group plans
If you are an independent contractor or freelancer, you may be able to get coverage through your professional association or another membership group. For example, some local chambers of commerce offer affordable health insurance for their members. Some of these plans also provide telemedicine benefits. But before you sign up for a plan like this, be sure to read the fine print and compare coverage options to marketplace plans you can buy on your own.
Another option is to purchase a short term medical plan. These plans are typically less expensive than ACA-compliant plans. However, they do not offer the same level of coverage as ACA-compliant plans. For example, they often exclude coverage for preexisting or chronic conditions and pregnancy and childbirth. They also do not offer coverage for preventive care and mental health. Some states have restrictions on how long you can be enrolled in a short term health plan.
If you are a self-employed person, you may be able to save money on your premiums by opening a health savings account or choosing a higher-tier plan in the marketplace. You could also consider a high deductible health plan (HDHP) that is eligible for the maximum premium tax credit. A licensed insurance agent can help you figure out your coverage options and the individual mandate rules in your state.
3. Medicaid
Many freelancers and self-employed people enjoy a lot of benefits from being their own boss, but some aspects of working for yourself can be tricky to manage, like health insurance. Fortunately, a variety of options exist to help these individuals find affordable health coverage.
For example, some freelancers can get group coverage through a trade association or professional union. This type of group health plan is similar to what employees might receive from a company and may include dental, prescription and other healthcare coverage. For example, Freelancers Union has a partnership with health insurers to offer its members access to a variety of plans in their state of residence. The union also provides telemedicine and other services.
Another option is a short-term health insurance plan, which provides temporary healthcare coverage for a set amount of time. These types of plans are typically cheaper than ACA-compliant individual major medical policies and can be renewed for a limited number of times. However, they often do not cover everything a typical medical plan does, including preexisting conditions.
Lastly, some states run their own version of Medicaid, and these programs can be an affordable alternative to ACA-compliant private insurance plans for self-employed people who cannot afford the premiums for an ACA-compliant major medical policy. Applicants will typically be required to meet a certain income requirement to qualify for the program.
4. Self-employed health insurance options
The appeal of freelance work is the flexibility it offers, but if you haven’t found an employer or group plan yet, it can be a challenge to find health insurance options. However, there are a variety of options available to help you manage your medical and financial needs.
You may be able to continue your former employer’s health insurance coverage through COBRA, which provides an option similar to group plans but for individuals who have left employers with 20 or more employees. However, COBRA is usually more expensive than purchasing individual plan insurance on the market. Also, you must pay for the entire policy yourself, as employers normally help cover part of the costs through employment benefits.
Another option for the self-employed is to join a professional organization or union. Many of these groups offer group health insurance akin to that provided by employers, and membership can often include access to telemedicine and other medical services that can help ease the cost of working as a freelancer or independent contractor.
In addition, some states have laws that allow small businesses to band together and purchase group insurance for members. This can provide some level of coverage at a more affordable rate than individual market insurance, and it can be a good choice for those who have been unable to qualify for tax credits on the ACA marketplace.