Health insurance for the self employed can be one of the toughest obstacles to overcome when trying to start your own home business. And for work-at-home moms, this can mean finding insurance for the whole family. No easy task.
And while changes have been coming down the pike with the passage of health care reform in March 2010, most of those changes won’t take effect until 2014, though a few changes will happen sooner. If you’re in the need of self employed health insurance right now, the wait for 2014 may be long.
Here are some of current options for self employed health insurance:
1. Spouse’s Employer Sponsored Health Insurance
This is likely your best bet for health insurance for the whole family, if you are married and your spouse has a health insurance plan through his or her employer. Employer sponsored health insurance tends to be much cheaper than any plan purchased individually. However, there sometimes are special enrolment options outside open enrolment that may be an available to you, so check with the plan’s administrator.
2. Consolidated Omnibus Budget Reconciliation Act
COBRA gives people the option to continue on their employer sponsored plan, usually for 18 months, after they’ve left the company. So if you are leaving a job to start a home business, this is an option.
The problem with COBRA is that the premiums are high, and there’s no flexibility in plan choice. You have the same health insurance as you had as an employee. You can’t change options to save money. And now you must pay all the premiums, whereas when you were an employee your employer likely covered some of the cost of the premiums.
If you lost your job in 2008 or 2009, you may be eligible for the stimulus package relief COBRA Premium Reduction of 2009.
3. Guilds, Unions or Professional or Membership Organizations
Employers are able to pool together their employees and spread the risk across a large group, thus lowering premiums for the entire group. When you buy individual health insurance, that doesn’t happen and so the cost is higher and you may be denied coverage. Other groups like guilds, unions and other membership organizations can pool together their members to get better premiums and coverage too.
So if you belong to a group like this, investigate their health insurance options. You might be able to buy a policy for yourself or for the whole family. The discount you may receive in health insurance can be well worth the dues of the membership organization.
In a nutshell, health insurance for the self employed can be expensive and tricky to obtain.