From Sharon OBrien
Find the right health insurance coverage at a price you can afford
If you are self-employed, or planning to start your own business now or after you retire, the following tips will help you find the best self-employed health insurance coverage options that will fit your budget.
Keep the Health Insurance You Have, For Awhile
The easiest way to ensure that you continue to have good health insurance after you leave your corporate job is to keep the same coverage by invoking your rights under health provisions in the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986.
Under COBRA, you can leave your job and keep your current coverage for up to 18 months at group rates, so long as the company you’re leaving employs 20 or more people and you weren’t fired for gross negligence or incompetence. For more information about COBRA coverage, check with the U.S. Department of Labor
Even so, expect the price tag to be a shock. Once you’re self-employed you’ll have to pay the full cost of the coverage, which is likely to be much higher than the amount you were paying as an employee. According to the Kaiser Family Foundation, workers typically pay only 28 percent of their insurance costs.
Lighten Your Load Before You Leap
If you have the luxury of planning ahead and leaving your job on your own timetable, consider signing up for the least expensive health insurance plan your company offers during the open enrollment period closest to your departure date. That way, you will have a lower cost self-employed health insurance premium to cover under COBRA.
Don’t Let Time Slip By
Under the law, you are guaranteed access to health insurance as long as you find a new policy within 63 days after you reach the end of your COBRA benefits. If you fail to arrange for new coverage within that timeframe, your health insurance application could be rejected or the new policy could exclude a pre-existing condition for up to a year.
There is an old adage that says the best way for a self-employed person to ensure his or her success is to have a working spouse. The same holds true here. If you’re married, there is a good chance that joining your spouse’s plan will cost less than most other options, including COBRA.
Do Your Homework
If you decide you need your own self-employed health insurance policy, check out ehealthinsurance.com, which comes highly recommended by the likes of Money magazine, Kiplinger, the National Federation of Independent Business and financial guru Suze Orman.
This online resource lets you compare dozens of health insurance plans that are available in your area with just a few keystrokes, and even provides information about the insurance companies’ financial health.
Learn the rules that apply to your situation and follow them. This is especially important if you or someone in your family have chronic health problems or a pre-existing condition.
Find a Reputable Health Insurance Agent
If you prefer to deal directly with an agent for your self-employed health insurance, do your homework. Interview a few different agents, and compare the price and coverage of the self-employed health insurance plans they offer.
Before you sign anything or make any payments, check with your state insurance commissioner’s office to find out if any complaints have been filed against the agents or the insurers they represent.
If you need help finding a reputable agent, check with the National Association of Health Underwriters.
Pay More to Pay Less
Another way to lower your self-employed health insurance premiums and still get good coverage is to choose a plan with a high deductible, and combine it with a tax-free health savings account (HSA). You deposit pre-tax dollars into your HSA, and use that money to pay medical expenses that aren’t reimbursed by your health insurance. You can find more information about health savings accounts and HSA-eligible insurance plans at hsainsider.com.
Join the Crowd
If your business grows and you start hiring employees, you may be able to save money by getting health insurance for your business through a professional employers association that provides health insurance and other services to small businesses. The can help you find a group that meets your needs.