Health Insurance Options for the Self-Employed

If you are newly self-employed or considering self-employment, you may be unfamiliar with your health insurance marketplace options.

This can be especially true if you have previously relied upon traditional employers to cover your insurance needs. It can be intimidating to realize you are now entirely responsible for finding and funding your own insurance coverage.

Fortunately, sourcing affordable health insurance does not have to be impossible while working for yourself. Depending upon your type of self-employment, where you live and other factors, you may have a wide variety of options from which to choose.

Affordable Health Insurance for Individuals and Businesses

The first step in finding the right affordable health insurance is determining whether you need personal health coverage for yourself and your family, or whether you need insurance options to cover your employees, as well. If you are a freelancer or “solopreneur,” you are most likely to benefit from selecting a personal policy from the health insurance marketplace.

If you are an entrepreneur with employees in need of coverage as well, you will need to investigate group or business insurance options. These are available directly from private insurers, such as Blue Cross Blue Shield, or through the public marketplace.

If you have between one and 50 employees, you may qualify for a Small Business Health Options Program (SHOP) plan. SHOP plans allow your employees to share health care costs with your insurer and can be purchased in a range of coverage levels.

Where to Find Affordable Health Insurance for Just Yourself

You can purchase marketplace health insurance for yourself and your family through your state or national marketplace or on the private market.

In the private market you can purchase insurance directly from the insurer of your choice at any time. Shopping around and comparing coverage and pricing can allow you to find the best policy for your needs at competitive pricing.

Your state or federal health insurance marketplace will offer a range of insurance options, but you may face restrictions on when you can purchase a policy. Generally, you are only permitted to shop for insurance using the marketplace during the annual Open Enrollment window or when you have experienced a life change that qualifies you for a Special Enrollment Period. Qualifying life changes include change of employment or marital status, the birth or adoption of a child or loss of other coverage from any cause.

If you have recently become self-employed, you may qualify for a special enrollment period. If you are planning to become self-employed, be sure to check with your marketplace immediately upon changing employment to ensure that you do not miss your enrollment window.

Alternatively, if you are traditionally employed but anticipate becoming self-employed in the near future, consider enrolling in COBRA insurance through your current employer. While COBRA is not a long-term solution, it can provide coverage for you and your family while you transition and provide you with extra time in which to research, select and obtain alternative coverage.

Finding Affordable Health Insurance for Yourself and Your Employees

When sourcing affordable health insurance options for yourself and your employees, it is important to determine in advance what your priorities are. Consider:

• Your maximum cost limits.
• Your tolerance and capacity for administrative burden.
• The need to offer competitive benefits packages, and what benefits your competitors are offering.
• Any priorities you may have for specific coverage options.
• Whether you need or want to offer your employees a single coverage option or multiple plan options.
• Including dental coverage options or making stand-alone dental plans available.
• What terms and conditions you will apply to your benefits packages, such as the amount of time employees must work for you before qualifying for coverage and whether you will offer open enrollment or enforce enrollment periods.

Exploring these priorities will enable you to compare and contrast marketplace health insurance policies clearly and efficiently to find the best options for your needs.

Common Types of Group Insurance Plans

Whether you shop the health insurance marketplace or private insurers, you can expect to find the following types of group plans available.

• Stand-alone dental plans. These plans can be offered as an add-on to any other type of health insurance coverage, as many health plans do not include more than emergency dental care, and some offer no dental coverage at all. Premiums are often high, but dental plans can be a strong competitive advantage for employers in some markets.
• SHOP plans. SHOP plans are designed specifically for small businesses with between one and 50 employees. They are a form of customizable cost-sharing plan and are available through both the public and private marketplaces.
• Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) plans. Limited to businesses with 50 or fewer employees, these plans provide employees with a standard reimbursement dollar amount. Employees purchase their own health care directly in whatever forms they prefer and submit their expenses on approved products and services to their employers for reimbursement up to the total permitted amount. These plans are popular with both employers and employees for the flexibility and financial control they offer.
• Traditional Group Health Insurance Plans. These plans are often the most familiar to employees but can quickly become expensive for employers. They are, however, one of the best options if it is important to you to offer your employees a range of plan options. You can arrange to offer one of these plans by contracting with Blue Cross Blue Shield or another national private insurance company.
• Group Coverage HRA plans. Similar to QSEHRA plans, HRA plans feature an arrangement under which employers grant employees a set monthly dollar amount to use on health care via reimbursement. Employees source their own care and apply for reimbursement on eligible expenses.
• Self-funded insurance. Although it is an uncommon option, you do have the choice to establish and offer your own, internal, company-funded insurance plan. You may wish to contract with a third-party administrator to assist you with the administrative burden.