Deciding to quit your full-time job and freelance full time can bring uncertainty.
Along with changes including income, work hours, and lifestyle, one of the biggest concerns is also health insurance coverage.
With the creation of the Affordable Care Act (ACA), health insurance coverage is required to be offered by employers of 50 or more full-time employees.
If you were previously working at a large company and taking advantage of their healthcare coverage and have never had to find your own plan before, the process can seem overwhelming.
However, the process of finding health insurance shouldn’t keep you from pursuing your dreams and making the change to become a full-time freelancer.
Feeling like your only option for affordable health insurance is to stay at a salaried job can prevent you from quitting and starting your own business.
Instead, here is what you can expect when looking for health insurance once you become a freelancer.
There are plans available for self-employed individuals
The only source of health insurance is not at a salaried job. In fact, as an individual who just quit their job and is looking for coverage, you will have 60 days to find something new.
These plans are available on the marketplace (ACA) or as private options. They allow you to enroll on your own terms and are customizable to your budget, desired deductible, and provider networks, so finding a plan similar to the one you had at your salaried job is possible.
Health insurance isn’t as expensive as you think it will be
One concern that freelancers face when it comes to obtaining health insurance is that it will be so expensive that the only alternative is employer-based coverage. This is not the case. In fact, as a self-employed individual, you could be eligible to get a subsidy for your health insurance to help lower the monthly cost. This benefit is available on marketplace (ACA) plans. To see if you qualify, you would have to report your income after any deductions (from expenses). Qualifying for a subsidy can be beneficial because you can get a lower insurance rate, all while getting the protection you need.
Health insurance is a business deduction
As a self-employed individual, keeping track of your expenses is essential to ensure you are making the most of your monthly income and reducing the amount you pay in tax each year.
But did you know that health insurance is a tax-deductible expense?
This means that the money you spend each month on health insurance can be written off as a deduction on your tax return at the end of the year and will help lower your overall tax liability. Talk to your tax advisor for more information about how to do this.
Health insurance is an asset to your business
Instead of looking at the cost of health insurance as a burden, look at it as something that will not only protect you but also your business if you were to get into an accident or be diagnosed with a critical illness.
While it may seem like a good idea to cut health insurance as an expense to save money for start-up costs, you never know what could happen down the road. With uncertain income when your business starts out, one large medical bill can impact your business. Don’t skimp on health insurance and you will thank yourself later.
How to enroll in a health insurance plan
The easiest way to enroll in a health isurance plan is to find a broker to work with. They work with the major carriers and can help you find coverage similar to what you previously had. They also know the rules and regulations self-employed individuals must meet to get coverage.
Main takeaways
Health insurance coverage is important because of high health care costs in the United States. With a new uncertain income, one medical bill could set you back financially. However, if you are afraid of the cost of health insurance and if you can afford it, think about what would happen if you did not have it.
Finally, staying at a job you are unhappy with for benefits is not the only option for health insurance, as there are standalone and private options available to you. More important, if you opt to go uninsured because you are so overwhelmed with the process, an emergency or illness could set you back financially. Thinking about these possibilities will help you to determine the value of health insurance.
Talk to a broker today and get a free quote.