Your Options For Self-Employed Health Insurance

You probably love the benefits of being your own boss, except when it comes down to self-employed health insurance. Most people who have their own business feel they pay much more than they should for this coverage, and there is no clear-cut way around it.

Federal law extends certain protections to those seeking to buy self employed health insurance for themselves and their workers. Check with your Department of Insurance to be sure that you know which protections apply to your group. Be sure to use the free service on SPENDonLIFE.com to get multiple insurance quotes so that you can easily compare options.

Small Businesses

With few exceptions, small employers cannot be turned down. This is called guaranteed issue. If you employ at least 2 but not more than 50 employees, health insurance companies must sell you any small group health plan they sell to other small employers if the employer group meets the participation requirements. They can also require you to contribute a minimum percentage of your workers’ premiums If you are buying a large group health plan and you employ 51 or more employees, your group can be turned down.

Your group health coverage cannot be canceled because someone in your group becomes sick. This is called guaranteed renewability and it applies to group plans of all sizes. Insurers can impose other conditions, however. They can require you to meet minimum participation and contribution rates in order to renew your coverage. Additionally, they can refuse to renew your coverage for nonpayment of premiums or if you commit fraud, or if they are discontinuing that health plan or if they are withdrawing from the small employer market. In the case of discontinuance, they must give you a chance to buy other plans they sell to groups of your size.

Generally, as a small employer, you can be charged higher premiums because someone in your group is seriously ill.

Solo Workers

If you are self-employed with no other workers, you are not eligible to buy a group health plan on your own (though you may be able to join another group health plan through a family member). Therefore, the laws that protect employers’ access to group health plans do not apply to you. Your access to health insurance is protected by the laws that apply to individuals

If you are self-employed and buy your own health insurance, you are eligible to deduct a percentage of the cost of your premium from your federal income tax. This deduction is 100%.

Association Plans

These can be a great bet. Some small employers and self-insured people buy health coverage through professional or trade associations, which leverage vast size to negotiate premiums lower. For a few hundred dollars a year in dues, you may be eligible for a significantly reduced cost policy. The membership pays for itself by bringing you a higher value, lower priced policy. Check with various groups.