Being self-employed gives you the freedom and flexibility to be your own boss. However, one major drawback of being your own boss is securing your own affordable health insurance.
We all know that our nation’s healthcare system is perfect—no notes! But let’s pretend that, sometimes, hypothetically, figuring out health insurance is a shitty hellscape. Even with all the hurdles, going through life without health insurance is not worth the risk. Let’s take a look at the basics of securing yourself (and your family) health insurance when you’re self-employed.
How to get health insurance when you’re self-employed
Table of Contents
Self-employed health insurance is individual health care coverage you buy for yourself and your family. This means that instead of a group plan (typically offered through an employer), you need to find private coverage. Here’s how to get started.
Shop the marketplace
This is your first stop, and ideally it’s a one-stop shop. The marketplace (or “the exchange”) offers plans that meet the minimum standards for coverage at various price points. To start looking for private plans, go to the federal government’s health insurance marketplace at HealthCare.gov. The website includes information about private plans that are available for purchase outside of the marketplace.
With open enrollment kicking off in a few days on Nov. 1, now is the time to start shopping. Numbers vary based on your age, health condition, location, and the type of plan you choose, but a recent study by eHealth found that the average monthly premiums for individual coverage were $484. For more, here’s my formula for figuring out how much you need to budget for health expenses.
Look into association health plans
Depending on your line of work, look into joining a professional association that offers group health insurance plans. Some groups, like chambers of commerce or freelancer organizations, provide insurance options for members. Rates are often cheaper when purchasing as part of an association.
Similarly, you can look into health-sharing ministries. These nonprofit religious organizations connect members who share healthcare costs. The major thing to keep in mind here is these plans are not full insurance.
Consider an HSA, too
A health savings account (HSA) is a smart way to store away extra cash, tax free, to pay for approved medical expenses. Essentially, it’s a personal savings account that can be used only for medical expenses.
Pairing a high-deductible marketplace plan with an HSA can provide significant tax savings. While the option to open an HSA is typically offered by your employer, you still have options even if you don’t have insurance through your employer. Here’s our guide to opening an HSA without an employer.
Review options through a spouse or family
If your spouse has employer-provided coverage, you may be able to join their plan. If you’re a young adult and your parent’s plan covers dependents, you usually can stay on—or get added to–your their health plan until you turn 26 years old. Ultimately, having access to an employer plan often provides more options at better rates.
Apply for a short-term insurance plan
If you don’t expect to be self-employed in the long run, these plans provide temporary coverage when transitioning between jobs or waiting for other coverage to start. They have less coverage but lower premiums.
If you aren’t yet self-employed but recently left an employer, you may qualify for COBRA, which temporarily continues your previous employer-sponsored coverage.
The bottom line
Finding individual coverage takes more effort when you’re self-employed, but options do exist. Weigh costs, coverage levels, and subsidies to get health insurance that meets your needs. Reaching out to an insurance agent or broker can also help navigate your choices.