Health Insurance for the Self-employed

Self-employed individuals need health insurance. However, if you’re self-employed, you’ll know unlike employed individuals, you don’t have an employer offering any help. When you're self-employed, navigating the health insurance marketplace can be overwhelming.  

Because you're paying for your own health insurance in full, you want something you can afford. At the same time, you want good coverage. Then there's the tax component. Maximizing your deductions is a must for the self-employed individual. So, where do you start? The best place to start is with an overview of your options. In this article, we'll talk about the three health insurance options for the self-employed and see how each relates to a self-employed individual.

Affordable Care Act Health Insurance

One option for the self-employed is getting their health insurance through the ACA marketplace, also known as Obamacare. Most employers will offer health insurance coverage through the ACA. The driving idea behind the ACA was to make healthcare more affordable for those with pre-existing conditions. If you do have a pre-existing condition going with an ACA plan could be the right choice. Although these plans are more expensive compared to non-ACA plans, depending on the cost of treatment for your condition (if one exists), it could make sense to choose a plan through the ACA marketplace.

Private Non-ACA Health Insurance

If you don't have any pre-existing conditions that require ongoing medical treatment, choosing a private health insurance plan can be a great option for the self-employed. The costs are much more affordable than the ACA plans, the rates are very stable, PPO coverage is nationwide, and you can enroll at any time during the year, unlike the ACA options.  In addition, 100% of your premiums are tax-deductible.

Healthcare Cost Sharing Ministries

A health care sharing ministry is an organization that facilitates sharing of health care costs among individuals and families who have common ethical or religious beliefs. A health care sharing ministry is not actual insurance, is not regulated by the Department of Insurance, does not use actuaries, does not accept the risk or make guarantees, and does not purchase reinsurance policies on behalf of its members.

While members of these plans are exempt from paying the tax penalty for not having health insurance, there is still a significant risk to these plans. The healthcare sharing ministry is not required by law to actually pay any of your medical bills. In addition, healthcare sharing ministries, because they're not considered health insurance, are not tax-deductible. 

The Bottom Line on Health Insurance for the Self Employed

The more you understand what the private insurance market offers, the better your chances of finding the best plan for you.  That being said, if you qualify for cost assistance or you have a pre-existing condition that you need coverage for, your best choice will almost always be a subsidized marketplace plan.

The best thing to do if you're looking for a new health insurance policy or looking to make changes is to get in touch with a qualified health insurance agent. They'll help you assess your needs and walk you through your best options.

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