16.8 million U.S. workers are self-employed, often left piecing together their own health insurance coverage
Group health has always been a mainstay of working within an organization but with the proliferation of the self employed, many people do not know the ins and outs of protecting themselves and their families in terms of health insurance. The Affordable Care Act has provided some well deserved solutions for the underserved but depending on the individual and family circumstances, there may be different answers out there. Here’s some help.
A growing number of U.S. workers are self-employed and lack some of the traditional benefits that often come with full-time salaried work. In advance of Labor Day, healthinsurance.org explains how self-employed workers can assemble a benefits package for health, dental and vision coverage when they don’t have an offer of coverage from an employer.
"Many people have access to employer-sponsored coverage, where the employer has taken on the task — and many of the costs — of putting together a benefits package,” said Louise Norris, a health policy analyst for healthinsurance.org. “But when you’re on your own as a gig worker or a contractor, the responsibility and costs of creating a benefits package often fall to you.”
More than 16.8 million people — about 10% of the U.S. workforce — were self-employed as of July, according to the Bureau of Labor Statistics. Fortunately, there are coverage options for the self-employed that aren’t tied to an employer, said Norris.
Find the right health insurance
Here are some ways for gig workers, freelancers and the self-employed to find health insurance coverage:
ACA Marketplace – Affordable Care Act-compliant health insurance plans are available on the Marketplace each year during the open enrollment period, which runs from Nov. 1 through Jan. 15 in most states. Many people qualify for an income-based premium tax credit through the Marketplace that brings the average premium price for enrollees to $111/month. ACA-compliant plans can also be purchased outside the Marketplace during open enrollment, but premium tax credits are not available for plans purchased outside the Marketplace.
Spouse – Almost all employer-sponsored plans offer spousal coverage during the open enrollment period set by the employer. Individuals who have lost coverage through their own employer may qualify for a 30-day special enrollment period with their spouse’s employer.
Membership organization – Some professional associations and membership organizations offer health benefits or help facilitate enrollment. Keep in mind that not all of these plans offer the same guarantees and benefits as ACA-compliant plans.
COBRA – Depending on the circumstances, it’s possible to extend existing employer-sponsored health insurance coverage for up to 18 or 36 months through COBRA by paying the entire cost of the group coverage, plus an administrative fee of up to 2%.
Consumers' options are often limited if they don’t act quickly after losing other coverage, or if they miss specific enrollment windows.
“If you’re self-employed and looking for health coverage, it’s important to understand enrollment deadlines and restrictions,” explained Norris. “You want to make sure you’re not locked out of your best opportunities for health coverage because you didn’t time your decision correctly.”
The IRS allows self-employed workers to deduct on their taxes up to 100% of the amount they pay for health insurance for themselves, their spouse, and their dependents.
Decide on dental and vision insurance
Dental and vision insurance may be included in some health insurance plans, but there is no requirement they be included, even in ACA-compliant health plans (except for vision coverage for children on individual and small-group plans). Stand-alone plans for dental and vision can be purchased by people who want that coverage. These plans will have their own monthly premium, and may include a deductible and preferred providers, similar to a health insurance plan.
“The usefulness of dental and vision coverage can really vary from person to person,” explains Norris. “To help you decide if this coverage makes sense for you and your family, first find out how much local providers charge out-of-pocket for expected expenses like routine check-ups, dental cleanings and eyewear.”
Consider supplemental insurance
Workers can also find other forms of supplemental insurance outside of an employer, such as critical illness insurance, life insurance, disability insurance, and accident insurance, by reaching out to licensed insurance providers in their state.
“A contractor who does underwater welding will likely have different coverage needs than a freelance writer,” Norris said. “It might be wise to consider additional coverage to account for any risks associated with your particular line of work.”