If any of the following words apply to you — freelancer, free agent, contractor, independent contractor, consultant, or self-employed — then we need to talk. According to the Small Business Administration, there are roughly 10 million independently employed individuals in the United States. However you choose to describe yourself, you have one of the hardest jobs with the highest satisfaction rates in the world.
Independence comes at a price, though, and a big chunk of the cost of independence is having to take care of everything yourself. This includes finding and buying health insurance for yourself and perhaps your family. Some are retirees, others are re-entering or just entering the workforce, a few of us have been laid off and decided to strike out on our own, and a handful are just natural born risk-takers.
We all get sick or injured on occasion, but the vast majority of independent contractors simply can’t afford to pay medical expenses out of our own pockets. That means there is a need for health insurance options for freelancers.
More than 17% of Americans do not have health insurance — and this percentage is much higher for freelancers. What do we do about it? Many are forced to rely on a spouse who is employed by a company that provides health insurance.
Finding the right solution starts with identifying the problem. The biggest hurdle most self-employed people face when purchasing their own health insurance is cost.
Under the Affordable Care Act (ACA), state-level exchanges will act as clearinghouses for health care plans; this should simplify the process of shopping for something affordable. Another aspect of the ACA that will prove helpful (especially to struggling freelancers) will be the tax credits available to low- and moderate-income people who are self-employed. These credits are designed to help offset a portion of insurance costs.
Some self-employed individuals turn to state and national associations that allow members to join their group plans. These groups enjoy discounts that are otherwise unavailable to individuals. Other sources of group insurance include chambers of commerce and fraternal organizations.
Freelancers who are unable or not interested in joining larger groups can take advantage of lower rates offered by Health Maintenance Organizations (HMOs), which offer deep savings over other forms of health insurance. Freelancers often choose HMO plans with higher deductibles to lower their costs even further while still providing protection from serious illness or injury.
Most freelancers and self-employed individuals are equipped with skills and personality traits that drive them to be independent players. They are encouraged to channel these same proactive qualities when shopping for health insurance; create a list of features you want your policy to address, and then arrange that list in order of importance to you. Use your completed inventory when shopping around for coverage.
When shopping for health insurance options for freelancers, it’s important to compare apples to apples rather than apples to oranges. This means making a spreadsheet and listing the features of various options in separate rows across multiple columns, so that you can be sure you’re looking at the same features when it comes to comparing cost and coverage.
The bottom line: you chose the independent life for a reason, and finding the optimal health insurance plan requires you to utilize that keen sense of self-motivation. You’ll be amazed at the results.
Frank Addessi is a regular contributor to The Simple Dollar where he writes about health insurance. Frank is a licensed insurance agent in Pennsylvania and has been involved in the insurance industry for more than 25 years.