Health Insurance for Freelancers: 12 Viable Options

health insurance for freelancersIt’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.

2. COBRA

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.

Bust your fears and earn more as a writer

 

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35 comments on “Health Insurance for Freelancers: 12 Viable Options
  1. jamesrod214 says:

    I think that the best way to get a policy is just to add yourself to your spouse’s policy. Like you say, there are times when you can be added for free. This happened with my friend and his wife. It has really helped them save a lot of money.

    • Carol Tice says:

      Well, that’s not an option that’s open to everyone, James — and sometimes, it’s expensive to do so. It used to be spouses all got on free, but not so much anymore. At one point I was on my husband’s plan and compared with self-insuring, and found I got a better deal on my own.

  2. Rob Benton says:

    I agree that getting on your spouse’s insurance is a good idea as long as it’s cost effective. This is something that I think gets underused all the time. I think for a lot of people it’s just that they don’t feel like going through the extra effort of adding their spouse, but doing so can potentially save a lot of money in the long run.

  3. Adam Bockler says:

    You make a great point about considering your spouse’s health insurance policy if you are a freelancer. My brother does freelance webdesign and art. His wife works for a university; and, consequently, they have fantastic health insurance. If you don’t have the option of insurance through your spouse, it can be a good idea to talk to a health insurance broker. They can help you figure out your needs, plans, and premiums that are available.

  4. Sherri says:

    Kate- Our out of pocket maximum is $13,700 for a family of two. Your mileage will vary of course, depending on your state (I’m in OK), your income (i.e. if you can get help) and insurance brand.

  5. kate says:

    Sherri, I am curious, what is the out-of-pocket maximum on that plan?

  6. Sherri says:

    Hubby and I just finished looking at health insurance for 2016. The insurance for us both through my employer was going to run $800 per mo. (Um…no.)My husband’s company insurance was just as expensive. We went with the government’s ACA, and with subsidies, we’ll be paying $68 a month for bronze Blue Cross Blue Shield. The deductible is $13,500 but it’s better than nothing! A note – If you have health insurance through your employer you can still use Healthcare.gov. Just check the box “I have no insurance through my employer” and proceed. (This was told to me by a healthcare.gov representative during a phone conversation.)

  7. G says:

    Really good to know that freelancers have all of these options for Health Insurance.

  8. kate says:

    I’m on the ACA coverage, and I received a notice that my plan (Cigna) will no longer be offered in 2016. The bad thing is you can’t even get an idea of the plans available and what they cost until November 1st!

  9. Lila says:

    I get mine health insurance from a company called ehealthinsurance dot com. I chose a bronze package but still that’s better than nothing.

  10. Josh says:

    This is one of the scariest parts of being in business for yourself as a freelancer/blogger. Working for a large employer it was just 10 minutes a year of looking at your new coverage.

    Now it seems like hours of deep study to find the best option for me and my family. This did present a few options I didn’t even know about so thank you. Although, the gut wrenching feeling isn’t likely to go away until it’s all over and done with.

    • Carol Tice says:

      After a decade of doing it, I’m less of an emotional wreck over it, Josh. At this point, I know there ARE options. And yes, it does seem like it takes hours of careful review to pick the best one — my husband is our designated healthcare plan researcher, and he does invest a bit of time in it.

      I was blessed to have terrific corporate healthcare at my two staff writing jobs, so to me the bigger shock is that less is covered, and it’s increasingly hard to get 100% coverage for things like hospital stays — even WITH the healthcare, you often still have exposure under individual plans, which I think is morally wrong.

      But all this just points up the need for freelancers to charge professional rates and have a savings account for that rainy day when the kid breaks a leg or whatever.

  11. Lily says:

    Great advices, thanks for them! It’s important for freelance writers to know about facilities that are available for them…

  12. Leslie Clary says:

    The Affordable Health Act is fabulous and for the first time I was able to actually afford health insurance. However, be careful and be sure to read the fine print– in any policy. I live in a rural area and had a medical emergency a year ago — a brain seizure and was taken by ambulance to the nearest hospital just across the border in another state. The only other option was to drive three hours on winding mountain roads to a larger city that was still in California. I didn’t even know what town I lived in and simply was not cognizant enough to tell them –No! Go the three hours. My insurance only covers California. At this point the insurance company – Blue Cross – is still claiming it was my responsibility and my $4500 annual co-pay is now up to over $11,000–for a one day emergency. I’m contesting it one last time, but I don’t know what will happen. I’m honestly not sure what I could have done differently, but I am thinking of getting one of those wrist bands that says DO NOT take me to the nearest hospital in case of an emergency!

  13. Mercy says:

    Nice post Carol, though most of these are for US based individuals and I don’t live US. Thanks for the knowledge once again, Carol.

    • Carol Tice says:

      Afraid I’m not as up to speed on healthcare in other countries (besides the ones where everyone’s on the national healthcare) — but the link in the post goes to some interesting models in Europe that are looking to help protect writers from income loss if they’re sick.

  14. Where you get your healthcare can affect costs. I live in a rural area and the doctors like to just order the tests they feel are necessary. Recently I had to go to a specialist in a city 75 miles away. They had a “package” of tests they ordered for each new patient (although it wasn’t called that). Each test and lab had its own deductible, plus the costs for labs and paying others to read your results and write a report. It was over $1500. My personal doctor told me about this packaging when all the test results went back to her, and also that many of the tests were unnecessary. When your doctor orders a battery of tests, ask which ones are really necessary, and which ones can be postponed and only done if the first ones don’t reveal the problem.

  15. Dan says:

    We use a healthcare sharing ministry, and it works awesome. Yes, there’s no guarantee of coverage. But, everything they say they will cover gets covered in reality. They do have some finicky rules like for-profit health insurance companies, but they really keep the BS to a minimum. The one we use costs us $330 per month for 2 adults with an annual deductible of $2500. They pay everything after that, and I feel relaxed that they’re not trying to figure out what not to pay for like for-profit insurers. And they don’t yank you around based on income like ObamaCare.

    Soooooo worth it for us. I recommend them strongly if you identify as a Christian.

  16. Kayla says:

    Great article! Health insurance was the thing my family was most worried about when I left my job to freelance full-time, but I assured them that it could be done and there were options for the self-employed. Thanks for confirming my opinion. 🙂
    Kayla recently posted…Where to Find These Mythical “High Paying Clients” You Keep Hearing AboutMy Profile

  17. Jeannie Michael says:

    The website wasn’t marked as required, so I’ll go ahead anyway.
    Just want to thank you for the info, it’s extremely fortuitous right at this time. Thanks for ALL the useful advice – you’re a terrific source of incentive and encouragement.

  18. John Soares says:

    Discounts for paying in full often apply even if you already have a plan. I have ACA bronze, which means I have a high deductible to meet. I always pay in full, which usually gets me a 10-15% discount.

    And by the way, I get this discount when using my credit card; it doesn’t have to be cash or check, at least for me.

    A key point, as Carol mentioned: always ask about discount policies before the procedure or visit.
    John Soares recently posted…Self-Employed? Get a Flu Shot!My Profile

  19. I looked into most of the things listed, as my husband and I are both self employed. This is a great list. The ACA didn’t work out for us. Also, the Freelancer’s Union doesn’t “offer” healthcare- they are actually acting as a BROKER for insurance in your state. That was WAY too expensive for us to afford– $800+ a month.
    We ended up going with the Healthcare Sharing. It was a great option for me and my family. They have good premiums each month, you help other people with the premiums you pay, and the deductible isn’t so bad… However, preexisting and preventative isn’t covered and/or doesn’t apply to your deductible. Really, it boils down to being a catastrophic plan. All the members in my family are pretty healthy and rarely need to visit any doctors, so we’re finding this to be a good choice for us for the short term. As for the uncertainty, the ministry I went with has been able to cover 100% of all the claims submitted. They have no issues with paying for the claims they get. So, I wouldn’t worry too much about that, as more and more people are subscribing to this type of model, adding to the money pool for healthcare payment requests made by members. They even ask for extra moneys to put into a fund for out of network claims or for claims that wouldn’t be covered on a normal basis, but have special circumstances surrounding them.
    We did get vision and dental through our bank that offered plans direct to consumer. For this subject, you really need to assess the needs of your family in the past and decide what’s best.

    • Lucie says:

      I’ve also been a member of a faith-based health share plan for some months, at the lowest level, and thank God that I’m a healthy person overall, though pre-diabetic, who rarely even goes to a doctor. Nevertheless, I’m always aware of the inherent risks. For those of us without spouses, who are searching for even part-time day jobs, and who have very few clients because we’re still relatively new to freelancing, it’s like walking on a tightrope, frankly. I really don’t want to go back to a full-time day job in my old field, but neither can I ignore the realities of needing to add to my insufficient future retirement income. Wondering how others have dealt with this.

      • Carol Tice says:

        Lucie, if you’re low income, you may qualify for free federal coverage — that’s what my 23-year-old son is on. We’re in open enrollment now, so check it out!

  20. Ava Jarvis says:

    When I gave notice at my old job, one of my coworkers told me that with my pre-existing conditions I’d have to get CORBA and I’d end up in the poorhouse and come crawling back to the company begging for my old position. How nice.

    He sure hadn’t thought to research the ACA stuff—or any of these other options apart from CORBA, the most expensive one. I’m lucky I thought to at least look into ACA coverage, because getting out of that job was the best thing for my health, though I am concerned about what happens once I earn a living again.

    I’m going to keep this very useful post clipped into my Evernote.

    I quite like your site—practical life and business stuff is covered, not just improving writing skills.
    Ava Jarvis recently posted…Need a clean PDF of a blog post you wrote?My Profile

  21. John Burnell says:

    Here is a very important point about affordability: If you are self insured, 100% of your health insurance premiums are tax deductible from your federal return. You have to file an itemized return, but if you’re freelancing you should be itemizing anyway to take deductions for business expenses. Be sure to figure the tax deduction into your insurance cost.

    Another tip: COBRA is probably the highest-cost option. It is convenient not to have to shop insurance and take COBRA, but you probably can’t afford to if you just lost a job.

    I’ve been a full-time freelancer supporting a family of four for 13 years and have had to get my own health insurance for most of that time. It isn’t cheap, but there are a wide range of policy and rate options.

    • Carol Tice says:

      Right on, John — it’s true, COBRA can cost you…but if you are receiving treatment for something heavy-duty at the time, that coverage may be essential for the moment, and independent family policies don’t have as lavish coverage.

      And…thanks for pointing out the tax write-off on premiums! It is one of the advantages of freelancing — that IS a writeoff.