Many people prefer working as a freelancer to traditional employment, but managing health care becomes more difficult without an employer providing you options and footing some of the bill. Freelance insurance options depend on a variety of factors, from your medical needs to your budget, and it can seem a little overwhelming to sort through it all on your own.
And let’s face it: When your income varies drastically from month to month, health care spending tends to take a back seat. Prioritizing putting your earnings toward daily needs can simply seem practical. But considering the mountain of medical bills a sudden accident or illness can bring, it’s smart to invest in the right health insurance.
As you start looking into freelance insurance, here are four tips to keep in mind.
Assess Your Needs
Whether you’re a freelancer or not, evaluating your insurance options means first addressing what you need from your plan. Do you have chronic conditions that require extensive coverage, or do you keep doctors’ visits down to emergencies? Do you have the savings to make a high-deductible plan a safe bet?
Understanding your health and financial needs is crucial as you investigate the different kinds of coverage available. Checking that you have a plan that covers all your bases will help you avoid unexpected costs in the future.
Look for Savings
While it’s true that health care is one more cost to worry about, that doesn’t mean you’ll be eating ramen noodles for the rest of the year when you add a plan. Plans under the Affordable Care Act (ACA) grant many freelancers the opportunity to access a full suite of coverage priced to fit their budget. If your earnings are less than 400 percent of the federal poverty level, you may qualify for tax subsidies to remove some of the financial burden associated with freelance insurance premiums.
And remember that health insurance premiums are tax deductible for self-employed workers, which means that it will lower your taxable income to report your monthly premiums, regardless of whether you have previously itemized these deductions. So don’t get sticker shock — if you take advantage of the aid available, insurance can be more affordable than you think.
Know When to Enroll
It can be easy to miss the enrollment period when you don’t have an HR department sending you daily reminders and holding information sessions. Open enrollment, or the normal yearly period during which you can sign up for ACA Marketplace plans, typically begins on November 1 and lasts for about a month and a half. If you miss open enrollment, it’s also possible to qualify for a Special Enrollment Period, particularly if you recently lost coverage from a previous employer.
Another option for bridging gaps is short-term insurance. While these plans don’t meet the ACA’s Minimum Essential Coverage (MEC) requirements by themselves, they provide health coverage with low premiums for a limited term — as of October 2, 2018, 364 days in most states. Because they do not meet MEC requirements, for the remainder of 2018 you would still face a penalty come tax season, though in 2019 the ACA tax penalty for individuals will disappear. If you missed the ACA’s open enrollment period or you just need something temporary, then a short-term policy is a good way to maintain your coverage.
Leverage Supplemental Insurance
If necessary, supplemental insurance policies like critical illness or fixed indemnity plans can stand alone as a limited alternative to regular insurance. Supplemental plans cover portions of what a normal Marketplace plan would cover. While a Marketplace plan includes pharmacy benefits, emergency room benefits and a variety of other aspects of MEC plans, supplemental plans may only cover one or two of them at a time.
Supplemental plans are best equipped to go alongside a regular ACA policy. If the only affordable option for you is a plan with higher deductibles and copays, a supplemental plan can offset some of the costs of care by paying you cash in the case of events like hospital visits or particular critical illnesses, including cancer or stroke.
Just remember that a supplemental insurance plan on its own does not qualify as an MEC plan. But if you’re not expecting any major changes to your health, it’s a way to stay partially covered in case of emergencies. As with short-term insurance, there’s no enrollment window for these plans.
Prioritizing health care doesn’t have to break the bank — or your spirits. If you know your options going in, you can advance your freelance career knowing you’re protected.