Working for yourself is liberating! But what do you do now that your boss isn’t paying for half your health insurance?
What you need to know about healthcare
The Affordable Care Act has brought the issue of health insurance to the forefront, which is fabulous for freelancers. Whether you’re freelancing full time, to supplement a part-time job or as a way to make a little extra cash and stay busy after retirement, the issue is still the same. Once you stop working for “the man,” “the man” stops paying part of your insurance premiums.
Many people who become or are considering becoming freelancers are shell-shocked when they hear what their insurance will cost now that their employer isn’t paying half. The way insurance works, in fact, means that the total cost between you and your employer is potentially hundreds of dollars less than it is when you try to hop on your own plan.
That’s not because freelancers are more likely to get sick, mind you. It’s because your employer is buying the policy as part of a group rate, which makes it cheaper. There’s also the issue that many freelancers don’t think to buy health insurance until they’re sick, which will also make your rates higher (if it’s available at all).
The Affordable Care Act aims to reduce this burden by giving us access to state-supported exchanges (if we’re under 65) and ensuring that pre-existing conditions don’t preclude us from consideration. That being said, it’s not free.
Cassandra Droogan, founder and president of PYSIS Inc., explains it best from her experience jumping through hoops (answering business questions, not health ones!) to get insurance she could afford. “Our current employer-based healthcare insurance system completely stifles and discourages entrepreneurship.”
While that may be true, some of us are still unwilling (or unable) to give up our dreams and work a traditional 9-to-5. So, what do you do now?
Before we get into how to get health insurance, there are some things many people fail to consider. Dr. Taffy Wagner — a wife, mom and certified financial services specialist for Ameriplan and who works from home — says people should consider five key things when shopping for insurance.
- What type of policy do you need? HMO or PPO?
- How often do you go to the doctor?
- Do they accept pre-existing conditions?
- What are the co-pays?
- What will the deductible be? (A higher deductible will cost less, but make sure you could reasonably afford it if something happened.)
We also think you should consider the likelihood that you’ll get pregnant (even by accident). Prenatal care, office visits and bills for labor and delivery rack up fast. And like it or not, people with better insurance have access to better care. Often, this coverage is optional (if available at all), but you need to consider it honestly. Amanda Brandon, a work-at-home mom with a baby on the way, tells us that while she has insurance, her plan only covers complications.
Reid Rasmussen of freshbenies.com has even more recommendations. He says that the No. 1 priority is to stay healthy. “If you don’t use the healthcare system,” he says, “ you don’t have to pay near as much for health care.” He tells us that obese women pay about $300 per month more than women who are at a statistically safe weight. So lose weight, stop smoking and make sure you get plenty of rest and your daily recommended doses of vitamins and minerals.
Rasmussen also recommends using a broker because they understand the complex options that differ from state to state, and they can help you get the best coverage at the best price. You need to know and understand your needs (and what you’ve spent in the past, even when you had insurance) so you can work with your broker to get a plan that fits your needs and budget without over-insuring (which he points out is a waste of money).
Health insurance options for freelancers
When we put out the call for freelancers and experts to give us their recommendations for health insurance options, they responded! These options were recommended by some of the people you trust most — fellow freelancers!
Recommended by Reid Rasmussen, who owns the company with his wife
As fellow work-at-home entrepreneurs, the couple started freshbenies to focus on helping busy women and families. According to Rasmussen, “women make 80 percent of the benefits buying decisions, but they deal with 110 percent of the healthcare issues for their families. (That’s one smart man!)
The freshbenies website poses this question: “Did you know up to 70 percent of medical issues could be solved over the phone?” Uh… no, we sure didn’t! This service isn’t insurance, it’s a service that allows you to call (or video chat online) a U.S.-based, board-certified doctor anytime, 24/7 (365 days a year) to consult them about many common ailments — you can even get a prescription written at no additional cost.
Sure, sometimes, they’ll recommend you see a live physician (they haven’t worked out how to give stitches remotely, yet). But at only $10 or $20 a month per family, you can get access to their Teledocs, medical health advisor, medical bill savings, dental and vision services, a prescription drug savings plan and more (with a 30-day money-back guarantee!).
Look for local and state health services
Recommended by Din Dang, who’s recently started a business
Dang tells us some cities (and even states) have government-sponsored or subsidized healthcare options available. Dang, who lives in San Francisco, takes advantage of healthSF, a service that allows residents of the city under a certain income level to take advantage of programs that give them basic, ongoing medical care without insurance. Dang says, “Although it’s slow to get an appointment and the quality of service is challengeable, I appreciate it as a San Francisco [resident].”
Find out if there are any similar services in your area and what the qualifications are.
Recommended by a PR consultant we’ll call Ms. Scarlet, who prefers to remain anonymous
Ms. Scarlet says, “I’ve had to get a family insurance policy for a family of three… and eHealthInsurance was by far the best source to find reasonable prices. My husband also works for himself, so we could pay thousands a month for insurance, but I’ve been able to find plans that cover the basics (child immunizations, hospitalization, doctor visits, and basic dental cleanings, x-rays, etc. ) at the best rates through this website — like anywhere from $450 to $600 per month for our entire family.“
How did she hear about it? “I actually heard about the site from a phone rep from United Healthcare,” she explained. “… I was shopping for an individual family policy and theirs were just way too expensive. I also went through individual brokers who were trying to charge $1,400 for a family of three.” She also tells us the phone consultants are very polite and good at helping you determine what’s right for you.
Recommended by work-at-home mom and Ameriplan benefits specialist and certified educator in personal finances Dr. Taffy Wagner
Wagner, who also recommended we check out Freelancers Union (see below), knows all too well what it’s like for freelancers in the U.S.. According to an article she recommended we check out in the Huffington Post (December 2012), costs pose a barrier to medical care for nearly one in three Americans. After talking to other friends who are self-employed, Wagner thinks that number is fairly accurate.
Wagner, who gets her benefits through the company she works for, Ameriplan, notes that it wasn’t financially practical to put herself and her twins on her husband’s insurance, which he gets through his job. “With Ameriplan Healthcare, I have medical, dental, vision, prescriptions, chiropractic (which my husband’s policy doesn’t have) and hospitalization. I have my husband on my plan to supplement the things he does not have in his insurance policy.”
Recommended by Katherine Farris, a virtual business professional
We all know a bit about supplemental coverage (Afla-a-a-a-a-ac!) While these aren’t technically insurance plans and the initial cost typically comes out of your own pocket, the prices are generally a lot more reasonable and you can purchase only the coverage you need, including supplements for regular coverage, dental, vision, life and even treatment for cancer and other maladies. When you’re forced to have medical care, you make a claim and the supplemental plan rebates you a set amount of money based on which plan you’ve chosen.
Medical sharing plans
Recommended by Katherine Farris, a virtual business professional
Medical sharing plans can seem a bit risky, but may be a viable option for some. Basically, it’s community care. Each person in the family pays a set amount per month that goes into a fund that pays benefits for everyone in the group (some encourage those who can afford it to pay in extra when they can, to ease the burden on those who make less money). There are drawbacks here, because you aren’t necessarily guaranteed to have your care covered when you need it (though with enough people in the group doing what you’re doing, it’s probably likely… it’s just a risk you should be aware of).
Keep in mind, these types of things are typically faith-based organizations providing an option for a group with similarly held beliefs. That means some types of care that are considered a violation of the tenants of that religion may not be covered. (But again, we’re probably talking about extreme procedures you likely wouldn’t approve of if you’re willing to be involved.)
On Farris’ plan, her family pays less than $500 a month and has a deductible (yes, there’s a deductible) of $2,500. This plan isn’t for everyone, but Farris says that in conjunction with her supplemental insurance, “so far, this seems to be the most affordable while still providing some peace of mind.”
But what of the risk? Farris admits it exists. She told us that with their most recent monthly invoice, she’d received notification that some people’s needs weren’t being met under the plan and asked all the other members to donate an additional $5.03 each month to cover the cost. “I find this amazing,” she told us, “[I’m] happy to send in an extra $10 with my monthly contribution, having faith that if I were ever in need, others would do the same for me.”
Recommended by Toni Dolce, owner of boutique media company Purple Critter (and Dr. Taffy Wagner of Ameriplan)
Freelancers Union, which is free to join, offers a number of benefits (including discounts on a lot of the products and services you need to run your business). It also has a group health insurance plan available. The benefits may not be as much as you’re used to and will certainly cost more than what you paid through your employer, but it’s one way to take advantage of group coverage from a solid, stable, reliable company.
The bottom line
The bottom line is, there are a number of options available for freelancers to have some kind of health care. It’s important to research all your options and talk to a broker to get his or her input (even if you don’t use them to purchase your final option). The more quotes you get, the better. Just make sure you understand the potential drawbacks of each option.