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Healthcare coverage Texas Overview for Small Business Owner, Self-Employed, 1099 Contractors.
Some self-employed people choose this type of lifestyle because they want to become entrepreneurs and build their own businesses, while freelancers and contractors may enjoy the freedom to work on the assignments they choose, on their own schedule.
While the self-employed life can offer lots of flexibility and freedom, it also means you’ll need to manage your own health insurance. As a “business owner,” you are responsible for choosing, securing, and paying for your health coverage.
Self-employed contractors and freelancers have a few health insurance options to choose from. You may have been previously employed full-time and received health insurance from your employer. As you handle your own health insurance needs, it can help to talk with a self-employed health insurance provider who can walk you through self-employed health insurance options like those below.
COBRA
COBRA is short for the Consolidated Omnibus Budget Reconciliation Act. It covers workers and their families for up to 18 months when an employee has lost their job or experiences a specific circumstance such as:
- Death
- Divorce
- Transition between jobs
- Voluntary job loss
- Decrease in hours worked
With this coverage, being self-employed alone wouldn’t qualify you for COBRA. You’d need to lose your health coverage due to losing your job with your full-time employer or by experiencing another life event, like the ones above. Then, you can get COBRA and choose to pursue a self-employed career.
COBRA may put the responsibility of paying for coverage on the individual, up to 102% cost of the plan, which includes administrative fees. So, even though you’ll still be eligible for the coverage you used to have at your job under COBRA, you may be required to pay for the entirety of the coverage, which your employer might have helped cover previously.
COBRA generally does require that group plans offered by employers with 20 or more employees offer “continuation coverage,” which is a temporary extension of health coverage. If you worked for a large company, you’re likely eligible for COBRA if you lose your job with it.
When you might want COBRA: COBRA might be a good option for you if you like your old health insurance plan and want to continue your current health coverage arrangement in the meantime as you look for your next option. Also, if you’ve already met your deductible for the year, or if you take expensive prescriptions, continuing coverage under COBRA may make the most financial sense.
ACA / Government Health Plans
You may have heard of it as “Obamacare” or as the “Affordable Care Act,” ACA for short. ACA is the U.S. federal government-sponsored health coverage. The ACA has an annual Open Enrollment Period, where anyone can enroll in a plan or change their plan, beginning November 1 and ending December 15. Otherwise, you may qualify for an ACA plan if you are eligible for:
- A Special Enrollment Period due to a life change: Qualifying life changes may include moving, having a baby, adopting a child or getting married.
- Medicaid: Medicaid is an insurance program providing low-cost or free health coverage to people with low income, including people with disabilities, older adults, pregnant women, individuals, families and children.
Typically, if you’re eligible for COBRA, you’ll also be eligible for an ACA plan. When you purchase healthcare through the ACA marketplace, you may also be eligible for subsidies. These include a premium tax credit health insurance subsidy and a cost-sharing subsidy.
There are also state-sponsored health insurance plans, depending on the state. Not all states have them, so check with yours to see what’s available.
When you might want an ACA plan: ACA plans can vary widely in price and provider options. If you’re flexible with which providers will work for you, and you’re eligible for subsidies, an ACA plan may make sense. You’ll be able to research all your plan options and choose the one that works best for you.
If you have pre-existing conditions, the ACA plan may also be a good option for coverage. Keep in mind, navigating the marketplace can be a little challenging with all the options that are available. You can call the ACA hotline if you have questions.
Private Plans
Private health insurance plans are offered year-round through private plan advisor.
These insurance agents work directly with health insurers and can give you a customized quote that provides you with the best insurance offering for your budget and health needs.
Private plans can also vary widely in price and coverage. If you have a per-existing condition, you may pay for a more expensive plan with a private insurer. But if you’re relatively healthy, you may be able to get a less expensive plan that still covers you for emergencies and preventive care.
When you might want a private plan: If you’re not eligible for COBRA, and if you won’t get any subsidies from the ACA marketplace, a private plan can be a good option. You can get an individual insurance quote for a private plan within minutes here.
Another benefit of a private plan is that the customer service can be much better compared to having to deal directly with the insurance company. You can talk to your advisor and get questions answered and problems fixed, without having to call big companies and be put on hold or having to talk to multiple customer service agents.
Group Plans
If you’ve expanded your business to include at least one other employee outside yourself, you can explore group health insurance plan options. Providing your employees with health insurance coverage can be a good recruiting and retention benefit, as 80% of employees would choose benefits like better health, dental, and vision insurance over a pay raise, “Harvard Business Review” reports. According to Gallup, one in six U.S. workers stays in an unwanted job because of the health benefits.
How do business/group health insurance plan options work? As the business owner, you purchase the plan and decide on specifics like coverage, copays, and deductibles. Typically, employers cover a portion of the plan’s annual or monthly premium cost, while employees cover a premium portion, too.
When you might want a group plan: If you have at least one other employee and plan to expand your business, it might benefit you as a business owner to offer group health insurance.
We recently experienced a Great Resignation, where American workers quit their jobs in record numbers. Professionals are becoming clearer on what they want from an employer. In many cases, this includes health insurance coverage. If you can offer it, group health insurance plans can help you recruit and retain top talent.
Healthcare Coverage
Brokers are experts who advise small business owners and individuals about their health plan choices and help them make the best decisions for their families, employees, and their business.
Vision insurance helps protect your eye health and ensures you have access to the eyeglasses or contacts you rely on.
Dental coverage means you’re likely to pay less for services because we contract with dentists to offer you lower rates. Most procedures, even braces, and dentures, will be a fraction of what they’d cost without benefits.
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Need Help Getting Self-Employed Insurance?
As you can see, you have lots of options when it comes to health insurance as a self-employed individual. It’s important to protect your health, especially when you’re self-employed because health issues can disrupt your work and affect your business.
Talk with a Texas advisor to run through your options. We’ll talk with you confidentially about your health history and needs, your budget and what you want out of your health coverage. When you know what your private plan options are, you can compare those to other coverage like ACA plans, so you can make a decision that makes sense for you and your family.
