How Much Is Health Insurance Being Self-Employed?

How Much Is Health Insurance Being Self-Employed?

There is a lot of freedom in working for yourself; self-employed individuals get to set their hours, pick their work location, and decide which types of tasks or projects they take on. However, since independent contractors aren’t considered employees, they aren’t typically eligible for company benefits such as health, vision, or dental insurance. Getting health insurance that will go with you where every you want to go is essential, and not simple. Our Connect plans can provide that coverage and peace of mind.

This can be difficult for people who often need to see the doctor for things like pre-existing conditions or who have small children. Medical expenses can add up, especially when you have a family to think of. When you’re self-employed, it’s important to ensure you’re prepared for the unexpected.

Read on to learn how much health insurance costs when you work for yourself and how you can get the quality coverage you need for you and your family at an affordable rate.

Self-Employed vs. Full-Time

So, what does it mean to be self-employed? Self-employed workers are people who work as sole proprietors or independent contractors and typically specialize in one specific trade or skill.

Your job classification affects your eligibility for healthcare benefits, so it’s important to understand how being an independent worker is different from full-time employment. When employed full-time by a company, they are legally required to provide Social Security, Medicare, state taxes, unemployment taxes, and a consistent salary or hourly wage.

When you’re working for yourself, you’re responsible for covering costs like these on your own. Businesses are not legally required to offer any type of health plan, vision plan, or dental plan to contractors, although some do.

Does Self-employment Affect Tax Season?

Your job classification not only affects health benefits but also how you handle your taxes and the type of tax return you’ll have to fill out.

Independent contractors will typically use a 1099-MISC, which they’ll receive from companies that have paid them over $600 the previous year.

When you’re self-employed, you receive the gross amount of your income and will need to set aside funds to pay for income taxes on your own. Tax rates vary by state, so you’ll need to save an amount from each check that is appropriate for your situation.

What Affects Your Self-Employed Health Insurance Costs?

Here are some factors that will impact how much your health plan costs as a self-employed individual:

  1. Age
  2. Location
  3. Tobacco use
  4. Type of plan
  5. Level of coverage

The amount you spend on health insurance will depend on your unique circumstances. The more coverage you need, the higher your monthly premiums will be. If you don’t visit the doctor often, you can purchase a health insurance plan with just the basics.

Your Age

Age plays a major role in the cost of your insurance plan; in fact, older people pay much more on average than those younger than them. This is because a health insurance company would see someone older as riskier to insure because they tend to need more medical attention.

Older people, particularly senior citizens (65 and up), are much more likely to have pre-existing conditions or develop other illnesses that require them to visit the hospital for regular treatment. Not all senior citizens frequent the hospital, though, so this could feel unfair for some.

Your Location

The city and state you live in also affect the cost of your premium. Every state has different laws and regulations surrounding health insurance, so make sure to do plenty of research on the trends in your area. The competition also matters. If there are a lot of health insurance companies in a particular area (ex: New York), they will all set their rates at a much more competitive price point.

This means you’ll likely get a better deal than people who live in areas without many options available. Less competition means companies can set higher rates because they know people don’t have many other quality health insurance options.

Your Tobacco Use

People who smoke regularly, or within the past 12 months from applying for health insurance will have to pay a surcharge. This extra fee could equal up to 50 percent of your total premium.

This is because tobacco can dramatically impact your physical health, meaning you’d need more medical care as a result. If it’s found that you’ve been dishonest about your tobacco use to pay less on your premium, you could face fines, probation, or even jail time.

The Type of Plan

Do you need a family plan to cover your spouse and dependents? Perhaps you’re just shopping for yourself. An individual plan will be much more cost-effective, but the family plan will offer you the best value for your spending if you have dependents. The more people you need to cover, the more you will spend on your monthly premium.

The Deductible, Co-pay & Coinsurance

There are three key price determinants when determining how much you will pay monthly and when you use the coverage. The higher the deductible the lower your premium but you will have the pay that amount to the healthcare provider before insurance starts paying. The co-pay is a set amount that you will have to pay for certain types of situations (often shown as a $30 payment due per outpatient visit). The coinsurance is the amount you pay for covered health care after you meet your deductible and it is usually an amount that is a percentage of the total cost of care—for example, 20%—and your insurance plan covers the rest.

Ways To Access Health Coverage

If you’re self-employed, so many healthcare options are available.

  • Government program (NHS, Medicaid, Marketplace, etc)
  • A parent’s plan (if you are under 26 in some countries)
  • A significant other’s plan
  • A health insurance plan if you can choose to work where your choose and want the freedom for coverage outside your home country.

If you want access to quality coverage for yourself and your loved ones, but don’t want to break the bank, here are some options you can choose from.

Medicaid

Medicaid is a federal and state government assistance program designed so those with little or no income can still access the quality healthcare they need most. However, you must meet certain criteria regarding income and other non-financial requirements.

According to the Affordable Care Act, your financial eligibility is determined based on your Modified Adjusted Gross Income (MAGI). Eligibility is determined month-by-month, so when you no longer meet the requirements, your coverage will end on the last day of your first non-eligible month.

A Parent’s Plan

Did you know you can stay on your parent’s health plan until the age of 26? It doesn’t matter if you’re married, not living with them, or financially independent; you can still stay on (or get back on if you went off) their plan until you turn 27. So, if you’re in your early 20s and new to the self-employment journey, you might opt to go this route to cut costs wherever possible.

If your parents have a health insurance marketplace plan (and you’re not on it already), they can enroll you during the annual enrollment window. They can also enroll you during the special enrollment period if you have a qualifying life event (ex: having a child).

A Significant Other’s Plan

If your spouse has a health insurance plan on their own or through their job, you can take advantage of this as well. They will have to contact their insurer and convert the plan into a family plan, so the monthly premium would go up, but it’s cheaper than both of you purchasing individual plans.

A Global Health Insurance Plan

If you’re working remotely as a self-employed individual and work remotely, like to change your work location, then consider the Connect plan with Insured Nomads could be a great option for you. You will be covered for emergencies and have access to mental health resources, inpatient and outpatient care, prescription coverage, and more.

Everything You Get With Insured Nomads

When you opt to purchase health insurance through us, you’ll have a couple of options to choose from. The Connect plan is available to cover you in your home country in many places as well as regional or worldwide. Pricing changes according to where you want to be covered, your age, deductible, co-pay and coinsurance. Keep in mind that if you include dental and vision the cost for coverage does increase significantly. Maternity benefits are available with a waiting period, but this does also greatly affect the price you will pay.

Health Plan Highlights

There are so many amazing benefits you can get with your Connect health insurance plan; we cover many things that other insurance companies do not.

  • Inpatient care. Inpatient care is what you receive if you need to go to the hospital for any reason that requires you to stay for at least one night (possibly more). This could be anything from an organ transplant to chemotherapy treatment recovery.
  • Outpatient care. Outpatient care is what you receive if you have a medical issue that can be taken care of within the same day you arrive in the hospital. You’ll be discharged in this case and won’t need to stay overnight. Examples of outpatient care include check-ups with your primary care physician and minor urgent care visits.
  • Mental health resources. You’ll also have access to mental health resources like counseling and substance abuse support. You can request to speak to someone anytime you visit the hospital for inpatient or outpatient care.
  • Additional assistance. Other assistance we offer includes ambulance transportation to your local ER, preventative screenings, prescription coverage, infertility treatment, vision care, and more.

INC Membership

Everyone who has a health insurance plan with Insured Nomads will receive an INC Membership at no additional cost.
Check out these highlights:

  • Stay informed. You’ll be notified immediately if any health and safety alerts could make it dangerous to travel or changes regarding visa or vaccination requirements.
  • Luxury perks. As a membership holder, you’ll also gain access to an airport lounge at many airports you come across along your journey. You can enjoy perks like dining and sleep pods at no extra cost.
  • Mental health. We also provide travelers with telemedicine services. You can speak to a licensed therapist in the language you feel most comfortable communicating. Our team is multilingual and multicultural.
  • Emergency assistance. In our mobile-app, you’ll have access to a panic button 24/7, all year long. We can send someone out to you whenever you need. If you need to be evacuated or relocated for your safety, we can make those arrangements at no extra cost.

Our membership is an extra layer of protection (and fun) for those working from different locations worldwide.

Travel Safely, Work Better

It might be tempting to skip purchasing global health coverage to save money, but if you need medical care, you’ll have to cover any associated costs out-of-pocket. This would be much more than if you had health insurance to offset some (or all) of your medical expenses.

Your mental and physical well-being has a lot to do with how you perform at work. If you have a pre-existing condition that needs ongoing treatment or a health emergency, you’ll want to be protected so you can keep being your best no matter what happens.

Whichever health insurance plan you select, you can get coverage for up to one year, and renew at the end of your policy period if you’d like. Even better — you don’t need to wait for open enrollment; apply for coverage through Insured Nomads anytime.

About Insured Nomads   

Insured Nomads is the first to take an integrated traveltech, fintech and insurtech solution to the world for remote workers, globally distributed teams, expats, and travelers. Their purpose is to make travel as safe and smart as staying at home. They do this by providing health insurance with exceptional medical benefits in tandem with wellbeing, safety, security, and advanced tech-enabled solutions for ease of payment for healthcare, emergency response and evacuation. Insured Nomads is available through affinity relationships, direct, embedded and through select brokers and partners for groups and individuals.

When researching destinations and travel, Try Peanut - a free google chrome extension. It automatically displays travel requirements, visa rules and more on booking.com, expedia & google flights.

Sources:

Young Adult Coverage | HHS.gov

5 Factors That Affect Your Health Insurance Premium Costs | moneycrashers.com

How Health Insurance Marketplace® Plans Set Your Premiums | HealthCare.gov

Tax Forms for Independent Contractors: What Businesses Need to Know | paychex.com

The Differences Between Employed vs. Self-Employed | thebalancecareers.com

6 Health Insurance Options If You’re Self-Employed | moneycrashers.com

Beginner’s Guide to Health Insurance for Freelancers | ZenBusiness Inc.

Eligibility | Medicaid

Author

  • Insured Nomads

    Insured Nomads provides global health and safety protection for the remote worker, traveller & expat. Insurance paired with advanced tech-enabled features and solutions for health, safety, security, well-being and support.

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