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Freelancers: Keep that Health Insurance!

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health insurance for freelancersEmployer-provided health plans are the number one reason that employees capable of freelancing full time don’t quit their jobs.  People would rather man their cubicle from 8 to 5 than give up their comprehensive, subsidized company health insurance.  However, those looking to make the jump to full-time freelancer, and those who have already joined the ranks of the self-employed, have plenty of options to ensure they remain covered.

Self-employed individuals purchasing health insurance can choose between indemnity plans (also known as fee-for-service plans), preferred provider organizations (PPOs), health maintenance organizations (HMOs), point-of-service (POS) plans and even health savings accounts (HSAs).  This freedom to choose between various health insurance plans available in a variety of cost structures can result in finding the best plan that’s most tailored to your specific needs.

Another advantage of purchasing your own health insurance is the ability to scale back coverage to your essential needs to save money on your monthly premiums.  Since group health insurance provided by an employer offers a broad range of benefits intended to cover a wide variety of people, extra costs are built in for all employees, whether they need extensive care or not.  Because of this, group plans can be unnecessarily expensive for healthy individuals.

Some options to consider:

1. Work with a certified health insurance broker who can match your needs and budget to a corresponding health plan.  The great thing about brokers is they are paid by the health insurance companies, not you, so their services are free to use.

2. Sign up for a health savings account.  An HSA is a savings account that allows you to contribute and withdraw money for qualified medical expenses without being taxed.  By pairing a health savings account with a high deductible health plan, individuals can save up to 40 percent on health insurance premiums.  And any money left in the account at the end of the year rolls over to the next year, so you don’t lose any of your investment.  It’s a great way to control your health care costs.

3. If you resigned from your job, you may be eligible to continue your group health coverage through COBRA.  COBRA can be very expensive, but some recent government subsidies have made it much more affordable, so it’s worth looking into.

Retaining or obtaining health insurance may seem like an unnecessary cost to some freelancers, but since emergency medical care, unexpected operations and hospital stays are so expensive, maintaining health insurance while self-employed can save you thousands of dollars in the long run.

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