When taking the leap from a 9-5 job to becoming a freelancer, it can be challenging to understand the process to get health insurance, especially if you have never had to purchase your own plan before.
There are a lot of misconceptions about what it means to own your own health insurance plan and the process to enroll.
Here are 3 misconceptions about getting health insurance when self-employed:
You can enroll anytime
Once you leave your job, it is important to act quickly when changing your health insurance benefits. Usually, benefits will end at the end of the month you leave your job.
You will also only have 60 days to find a new plan. If you miss this deadline, you will have to wait until Open Enrollment in November to enroll, so it is important to stay organized and look for a new plan before the deadline passes.
If your employer offers you COBRA, which allows you to keep your current coverage, and you decide to keep it, usually you have to let them know by the following month.
Your coverage will be the same
Employer plans are different than non-employer plans. Major insurance companies contract with businesses to give the best rates. If there are more employees at the company, the cost per month is significantly lower than the price of your own plan.
Because of this, it is wrong to assume you can get the exact same coverage elsewhere. Often, the same plan is exclusive to employers, so you have to be prepared for a new plan structure, benefits, premiums, and network of doctors.
Your pricing will be the same
Pricing of your own health insurance plan varies compared to what you were paying before at your employer. You and your employer share the cost of a health insurance premium, and they often cover 80-90% of the cost, leaving you to pay the rest out of your paycheck monthly.
However, once you get your own plan or go on COBRA, you must pay the full price of a plan. This can be shocking at first because you have to pay significantly more than a portion of your paycheck for health insurance.
All in all, switching from an employer plan to an individual plan will allow you to keep health insurance coverage once you leave your job. However, be prepared for different coverage and higher prices than you previously paid when factoring into your budget.