It’s that time of year again — the autumn leaves are spectacular…and come November, it’ll be time to figure out your healthcare coverage as a freelance writer.
It’s healthcare plan renewal/signup time, or — if you’re just contemplating making the leap into freelancing (and don’t live in a country with national healthcare) — time to figure out how to keep your family protected as you leave the corporate world.
I’ve heard from more than one writer in recent weeks who’s hesitant to go freelance because the healthcare issue makes them nervous. And hearing that makes me sad.
Don’t let this be the issue that stops you from pursuing your freelance writing dream! This. Is. Solvable. Especially now, in the U.S., where I’m thrilled that there are more options for health insurance for freelancers than there were when I started my most recent freelance stint in 2005. (If you’re elsewhere, check out these emerging alternatives that help freelancers limit their risks if they become ill.)
Here’s a rundown of the ways you can get healthcare coverage as a freelancer — and some of my personal experiences with them):
1. Spouse’s policy
Many a writer has simply added themselves to a spouse or partner’s healthcare policy and kept on rolling. In some cases, you can get added free, in others you’ll have to pay your part of the premium to be added to their policy.
My tip on this: Cost-compare. At one point, we discovered my husband’s employer’s policy was actually worse for coverage *and* more expensive than self-insuring through method #4 below — so we switched.
Passed in 1986, the Consolidated Omnibus Budget Reconciliation Act (COBRA) included a rule that when you leave a company where you had healthcare, they must offer you the right to extend your coverage — usually for up to 18 months — by making your own premium payments. So if you’re planning a departure, this could be an option that buys you some time while you research your next healthcare move.
I was on COBRA and freelancing when I had my birth son (they have to let you extend it beyond the usual time limit if you’re pregnant), and premiums were substantial, but it was terrific — paid for everything, including a 10-day hospital stay and outpatient followup care mid-pregnancy. Often, corporate plans cover more than individual plans, so it can be worth a serious look.
3. Affordable Care Act
If you’re a legal U.S. resident and low income, you’re at high risk for a major disease, or have a pre-existing condition, fall down on your knees and thank President Obama. The ACA has revolutionized healthcare for you. No more super-expensive high-risk pools! No more getting declined for coverage. Legal immigrants can obtain coverage. No more begging and hoping you can get one of the limited spaces set aside in your state’s low-income catastrophic insurance pool (if your state even had one — not all did).
That birth son I mentioned? He’s now a starving student type who has a medical condition and doesn’t live at home — and his ACA-backed state low-income plan available through the ACA pays every dime. Yes, coverage isn’t all you would wish, but it will cover the basics, including some dental.
If you’re not low income, you can still use the healthcare Marketplace at Healthcare.gov to choose from a variety of plan types, and easily compare them. (Visit early — the site tends to bog as we near enrollment deadlines.) More on these types below.
4. Local chamber or business group
For several years, my city Chamber of Commerce offered an affordable group plan for members that had pretty nice coverage! Look into whether a local business or professional organization might have a plan you could join as a member. There are also some national organizations that might be able to help, such as…
5. Freelancer’s Union
I’m excited to report that as of a year ago, the Freelancer’s Union now offers health insurance plans on a national scale! Previously, they were only able to offer plans in a handful of states.
They may not have a plan you love available in your locale, but it’s well worth finding out. That’s because if you can’t get into a group of some kind and aren’t low-income, you may face steep premiums.
6. High-deductible private insurance
If you earn a decent income and don’t qualify for subsidized care under the ACA, you may find yourself looking at individual or family insurance plans. After you get over the sticker shock — it can easily run $1,000 or more for a family of four to get a plan with low deductibles — consider getting a bare-bones plan that protects you from complete disaster, but does little else. You’ll pay for most routine medical attention, though being with your plan may entitle you to discount rates.
These plans may have a $10,000-$20,000 deductible. (I know!) That is money you’d be smart to set aside in a savings account, so it’s there if you end up needing it. You may save so much in premiums that you could sock that money away — and if you’re lucky, end up keeping it if you stay healthy that year. I know writers who’re paying $300 and less for these plans.
So far, I’ve stuck with low-deductible plans because I’m risk-averse, but this may be the year I switch over, as rates continue to rise.
8. Health Savings Accounts
Here’s something that can take some of the sting out of getting a high-deductible plan — many plans will allow you to sock some of that money away in a tax-sheltered HSA. I highly recommend choosing a plan with an HSA feature, if you can. You can then pay medical expenses that aren’t covered by your plan from the HSA account.
How’s that help? If your family is allowed to put $6,000 a year in an HSA and your tax bracket is 20 percent, that’s deposit is subtracted from your gross income — and you save $1,200 on your tax bill. I’ve been using HSAs for years…just wish they would let me put in even more.
9. Get healthcare as a business
You may be able to obtain insurance at lower rates for your family, and any employees you may have, by applying for it through your business. (Yes, you’ll need to be a legit, registered business.) Check out the federal Small Business Health Options Program, for one. Your state may have other alternatives.
In my state, you need at least two people working in the business to qualify for these plans, but rules vary, as insurance is a state-regulated industry. When I cost-compared last year, the rates were worse on the business plans for me than they were for an individual/family plan, but it’s worth checking, as rates change each year.
10. Faith-based healthcare-sharing
Some religious denominations are trying to step into the breach and offer low-cost healthcare on a pool-your-money basis. Everyone pays a modest monthly premium based on ability to pay, and then those who need get their bills paid out of the pool. The Alliance of Healthcare Sharing Ministries might be a place to start looking into this — the Alliance says a half-million people are now enrolled in this model.
The catch: There’s no absolute guarantee here your bills will get paid — you appeal to the group for assistance. It’s not insurance, but a cost-sharing scheme that could well be a low-cost alternative, if you’re okay with a degree of uncertainty in the mix.
11. Pay cash and get a discount
If you’re rolling in dough — or have few assets and aren’t worried about losing them all — you can consider being a cash customer. Paying cash in full when you receive services can often earn you a discount off the retail price of up to 30 percent, if you’re savvy enough to ask for it.
12. Get a flat-fee doctor
Visit the doctor a lot? This is an emerging physician model that’s might be worth checking out. For a low monthly rate — think $79 a month or so — you get all-you-can-eat visits. This angle doesn’t take care of hospital, pharmacy, or other medical costs, but it could be a money-saver on the doctor side.
Putting it all together
Yes, healthcare is complicated for freelancers. You might want to combine several of the ideas above to help keep your healthcare costs down. There are many options. That’s why you should start learning about your alternatives early, before enrollment opens November 15, and there’s a high-pressure scramble to sign up somewhere before the deadline (especially for those of us who’ve gotten that lovely notice that our current plan won’t be offered next year — like me).
One note: This isn’t the only time of year you can get insurance! If you have a life event such as getting married, adopting, or losing your job-related coverage, you may be able to enroll in the off-season. So if you move into freelancing months from now, you may still be able to get into a plan at that time.
I’m not going to lie here: Freelancers can get health insurance — but it costs. Depending on your family size and situation, maybe a lot. It can be a bit of a shock, if you’ve been at a company that picked up all or most of the premiums. This is one reason freelancers need to earn high hourly rates — you have costs you didn’t have as an employee.
My personal advice, as the child of an insurance salesman? Don’t go uninsured. You’ll be at risk of losing everything if you have a medical crisis, and also pay a tax penalty starting in 2016.
How have you gotten health insurance? Leave a comment and share.