Affordable healthcare insurance for the self-employed costs much less than you may realize. Because of the Affordable Care Act legislation (Obamacare) and the availability of federal tax subsidies through State and Federal Health Exchange plans, persons that start their own small business, or work for themselves, can potentially pay thousands of dollars less per year than in the past. Your household income helps determine subsidy-eligibility and the price you pay. High-quality and flexible benefits can be easily obtained.
Catastrophic, comprehensive and HSA plans are very popular options that often feature lower-than-expected prices. We help you find the most cost-effective way to provide medical, dental, and other ancillary coverage. Traditionally, rates tend to increase less on these types of policies compared to other types of plans. Depending upon the plan, you may be able to tax-deduct premiums, and pay for qualified expenses with pre-tax dollars. Non-Obamacare plans are also offered, although medical underwriting is typically required.
By shopping, comparing and reviewing your best options during Open Enrollment each year, we can easily show you the most affordable plans in your area. Customized options are available for entrepreneurs that are not eligible for spousal coverage. Policies can be molded to meet both budget and any other medical condition concerns. Employees may be eligible for coverage through small-business plans. The amount of contributions by the employer will vary, depending on the plan. Typically, if you own your business and have no workers, you are probably self-employed. Freelancers typically have no employees and are often suitable candidates for HSA plans.
If you have employees (including family members), many new low-cost options have become available. For example, the “SHOP” (Small Business Health Options Program) Exchange is designed to assist your workers (assuming you employ less than 50 workers) find quality benefits that meet all regulatory requirements. It’s available any month of the year since there are no Open Enrollment deadlines. Dental benefits are also available with or without medical benefits. Separately, you may add additional ancillary products, including long term health, disability, and property and casualty coverage.
To be eligible, your company must have at least one full-time employee that is not a partner, family member, or owner. An “FTE Calculator” is available to help determine the status of your company. Flexibility of plan choices is present since you can choose to offer a single plan, or multiple plans. Ultimately, workers can view and select specific plans that best match their household income and medical condition needs.
The employer also determines the waiting period required before workers can receive benefits. If there are no employees in your business, then SHOP Exchange plans are not available. Persons that run their own business have many options, including insurers, and local organizations.
The Small Business Health Care Tax Credit can pay for 50% of the premiums that an employer pays for their employees. The percentage reduces to 35% for non-profit companies. When no SHOP plans are offered in the area, specific IRS guidelines may apply. The credit is a sliding-scale credit, and a business expense deduction may be taken for premiums larger than the credit. The credit can also be carrier forward or back for different tax years.
Qualifications for the credit include:
Coverage offered to all full-time employees.
Average annual salary of employees is approximately $55,000 or less.
Employer pays 50% of cost of coverage.
Must be less than 25 full-time employees.
SHOP Marketplace Rates In Selected Areas (Individual And Family Marketplace Rates May Be Lower)
Monthly rates and plans shown below are for the total for two persons (Both 40 years-old)
Birmingham Area (Jefferson County)
$529 – BCBS Blue Saver Bronze For Business – $20 generic drug copay. $7,850 deductible.
$622 – Blue HSA Silver For Business – $6,000 deductible and 20% coinsurance. HSA-eligible.
$703 – Blue Secure Silver For Business – $4,000 deductible and 20% coinsurance. $40 and $70 office visit copays. $15 and $30 Tier 1 and Tier 2 drug copays.
Atlanta Area (Fulton County)
$819 – Kaiser KP Bronze HDHP 6850/0/S9 – $6,850 deductible. 0% coinsurance. HSA-eligible.
$827 – Kaiser KP Bronze Virtual Complete 6300/20/60/S9 – $60 and $80 office visit copays (after deductible is met). $30 generic drug copay.$6,300 deductible.
$854 – Kaiser KP Bronze Virtual Complete 5000/30/40/S9 – $40 and $60 office visit copays (after deductible is met). $25 generic drug copay.$5,000 deductible.
Milwaukee Area (Milwaukee County)
$696 – CGHC EPO Bronze $8550 Deductible/0% – $35 pcp office visit copay and $0 specialist office visit copay (after deductible is met). $8,550 deductible.
$712 – CGHC EPO Bronze $6500 Deductible/40% – $6,500 deductible and 40% coinsurance.
$736 – CGHC EPO Bronze $5500 Deductible/30% – $75 and $150 office visit copays. $5,500 deductible and 30% coinsurance.
Cheyenne Area (Laramie County)
$942 – Mountain Health CO-OP High Plains SG Bronze – $60 pcp office visit copay. $7,200 deductible. $15 and $125 generic and preferred brand drug copays.
$1,071 – Mountain Health CO-OP High Plains SG Silver – $35 and $75 office visit copays. $10 generic drug copay and $50 preferred brand drug copays. $4,000 deductible. $110 Urgent Care copay.
$1,144 – Mountain Health CO-OP High Plains SG Silver WY HSA – $4,400 deductible. 0% coinsurance. HSA-eligible.
Fairfax Area (Fairfax County)
$602 – Kaiser KP VA Bronze 8700/0%/Vision – $8,700 deductible. 0% coinsurance.
$604 – Kaiser KP VA Bronze 6000/30/20%/HSA/Vision – $6,000 deductible. 20% coinsurance. $30 and $50 office visit copays. $10 generic drug copay and $40 preferred brand drug copays ($20 and $50 mail order). Policy is HSA-eligible.
$610 – Kaiser KP VA Bronze 6850/0%/HSA/Vision – $6,850 deductible. 0% coinsurance. Policy is HSA-eligible.
We Help The Self-Employed Save Money
We specialize in helping you get the most value for your dollar for self-employed individuals and families. We’ll take the time to preview hundreds of Marketplace policies from many companies and present you the plans that best provide you with the plans you want and at a price you can afford. For many persons, your premiums will be tax-deductible on your 1040 Form (line 29). S-Corporation filers, however, will have different criteria to meet. Pandemics (such as COVID-19) may result in additional temporary tax savings.
Since we represent you, and not the insurance company, our job is never finished until you are completely satisfied. And we also review your existing coverage every year to advise you of any changes that will impact your rate or benefits. Family plan information can be found on this page. If any retired worker reaches age 65, and becomes Medicare-eligible, we will gladly review Medicare Supplement and Advantage plan options. Senior policies offer a much different package of benefits compared to under-65 plans. Many ancillary products are offered at no cost or a low cost. Also, policies are more standardized, and the comparison process is simpler. Plan G (HD) offers a low premium with a higher deductible ($2,340). Generally, monthly rates are less than $55 per month.
Quality Coverage From Highly-Rated Companies Must Be Considered
One of the most important considerations is the quality of the coverage and carrier. It is critical to select an insurer that has a proven track record of paying claims on a timely basis and avoiding (if possible) large rate increases. For those reasons, we never recommend any “discount medical plans,” or “limited benefit plans.” These types of policies are not necessarily inexpensive, and often feature large gaps in coverage. Pre-existing conditions are rarely covered, and waiting periods are common with many diseases and illnesses.
Also, these are the types of policies that frequently receive many complaints…another good reason to stay away from them. Most people who purchase these contracts, cancel quickly when they learn more about the coverage. If they have been charged an upfront payment, they are often difficult to get back. These are different than Trade Association options, which are typically dependable, although sometimes costly.
Companies Offering Coverage In Your Area
One issue that can’t be controlled is the availability of companies that participate on your State Exchange. Unlike in 2013 and earlier, when many companies offered plans, it’s a completely different scenario under Obamacare. For example, although Blue Cross (and affiliated companies) are participants in almost every state, other heavyweights such as Cigna, Aetna, UnitedHealthcare and Humana have chosen to avoid most (or all) states. However, by 2024, it is possible they will expand into additional states.
UnitedHealthcare offers non-Obamacare short-term plans that feature low premiums, although they have been slowly wading back into several states. Aetna is reentering several states and offering 2022 plans. Ancillary coverage is also available including dental, vision, and hearing benefits. Most carriers offer Group benefits through large and small employers.
A high-deductible major medical plan (Bronze-tier and Silver-tier) is one of the most common choices for individuals and families that are self-employed. Premiums are often thousands of dollars less than a standard group policy, and most preventive benefits (qualified) are covered at 100% without any waiting period or copayment. Deductibles and maximum out-of-pocket expenses (MOOP) should both be considered. Often, $0 deductible plans have high out-of-pocket expenses.
A few of those benefits include routine annual physicals, wellness visits, mammograms, Pap tests and a preventive colonoscopy. Your health insurer can provide a full listing of these benefits. And of course, during Open Enrollment each year, you do not have to answer any medical questions, pass a physical examination, or provide any medical records. Pre-existing conditions are covered and there is no waiting period.
$8,700 Deductible Allowed
Typically, you can purchase a Marketplace plan with deductible options as high as $8,700. Bronze-tier plans are able to offer the $8,700 option while Silver-tier plans can also legally offer a $8,700 deductible. If you rarely have office visit (other than preventive) and prescription expenses, a lower deductible may be a waste of your money. If you don’t often reach your deductible, then selecting a higher deductible is advisable, allowing you to substantially lower your premium. Maximum out-of-pocket expenses are also $8,700 per person with a maximum of $17,400 per family.
However, be wary of a low deductible/high coinsurance and out-of-pocket expense plan that may have higher costs than expected. The savings may end up being much less after all factors are considered. For example, A Gold-tier plan with a low deductible and high maximum out-of-pocket expense limit will not be cost-effective if you expect to incur large medical expenses, and especially if a major surgery is scheduled within the calendar year. NOTE: Tax-deducting your healthcare premiums can potentially save thousands of dollars. The Self-Employed Individuals Tax Center provides free relevant information that may be quite helpful.
Affordable HSA Plans
Health Savings Accounts (HSAs) are also a viable option. Although premiums are higher than catastrophic plans, much broader coverages are provided, along with the opportunity to pay for qualified medical, dental and vision expenses on a tax-deductible basis. Usually, benefits are paid at 100% after the deductible is reached (many catastrophic plans have a 20% coinsurance), so the potential out-of-pocket expenses may be less with an HSA. Also available are cheaper 20% and 30% coinsurance options. But we don’t feel the lower premiums are worth the potential risk you face with massive out-of pocket-costs.
Self-employed persons also like HSAs because of the reduction in out-of-pocket expenses when you use Network providers. Although, many benefits are subject to a deductible, negotiated discounts by the major insurers can dramatically reduce your costs. For example, MRI costs can reduce from $800 to $450, and lab tests can reduce from $150 to $35. Office visit and prescription costs will also reduce, but not as substantially. Large hospital bills will receive the largest reductions. Surgical procedures and ER visits are also substantially discounted.
Medical Underwriting No Longer Utilized
Since Marketplace plans are no longer medically underwritten, it is much easier to qualify for coverage. But this does not mean that prices are lower. Actually, policy costs are expected to continue to rise, so that persons with serious medical problems can be treated without paying a large premium. The concept may appear unfair (or fair), depending on your personal situation. However, federal tax subsidies can ultimately drastically reduce prices. Larger families with higher incomes often receive annual subsides of $10,000 (or more).
Although Presidential elections every four years can often lead to speculation that massive healthcare system changes will reduce rates, typically, this does not occur. Tweaks and adjustments are often helpful, and Medicaid expansion helps low-income households. But many challenges still exist for many self-employed households.The 2024 Presidential election results could lead to additional options becoming available.
We understand the financial challenges of the self-insured. Affordable health insurance plans are available and we carefully research the companies that offer the most competitive rates, and also provide the coverage that is important for you to have. We have made it easy to view rates and plan details. Of course, there is never any obligation and we’ll be happy to help with the information you receive.