(www.inkthinkerblog.com) — Affordable health insurance is one of the biggest concerns for self-employed folks (you know, aside from finding work and getting paid). I know that losing my husband’s benefits when he left his job was a big stressor for us! I recently had a chance to sit down with eHealthInsurance.com Vice President of Human Resources Wendy Nice Barnes to get some insider advice on how to save money on health insurance when you’re self-employed or running a small business.
But first, some background, courtesy of eHealthInsurance.
- There were 10,413,000 self-employed according to the U.S. Bureau of Labor Statistics, “Employment and Earnings Online,” January 2008 issue.
- Workers 55 and older represent one of the fastest-growing groups of the self-employed, says consulting firm Challenger, Gray & Christmas.
- The number of 55-plus Americans working for themselves has increased 28 percent since 2000, compared with stagnant or declining self-employment for most other age groups, according to a Challenger analysis of government data.
- According to Harvard researchers, at least 50 percent of all bankruptcies result – at least in part – from medical expenses.
- Affordable health insurance is possible for any age group.
- Average health insurance premiums for people ages 25-34 were $128 per month with an average $1,829 deductible
- Average health insurance premiums for people ages 35-44 were $173 per month with an average $1,955 deductible
- Average health insurance premiums for people ages 45-54 were $227 per month with an average $2,262 deductible
- Average health insurance premiums for people ages 55-64 were $301 per month with an average $2,420 deductible
Tips for Solo Self-Employed
Wendy shared with me that the single most important factor in finding affordable health insurance is to arm yourself with information: Carefully research your plan choices and understand all of your coverage options before making your choice. You also want to get a good understanding of the terms that the agencies use. Shop around for the coverage you need,” Wendy said. “The best option is to dig in and investigate the alternatives.” She suggests the following:
- Be very honest with yourself about the coverage that you need and will use.
- Don’t over pay for things you don’t need, make sure any coverage you get takes care of your real needs.
- If you have children, make sure their needs will be covered by any policy you buy, so be sure you’re looking at the largest varieties of plan options available in your state.
- Your safest bet is to go to a broker (such as eHealthInsurance or 2 Insure 4 Less) that is licensed in your state and sells the widest variety of products available.
- Consider an Health Savings Account (HSA) that can grow with you and your business. With a HSA you can purchase a higher deductible plan and then save money – pre-tax – in a HSA. You can contribute pre-tax dollars to your own HSA and use the money in that fund to to pay for qualified medical expenses when they arise.
- Ask your doctor or pharmacist if you can switch to lower-cost medications, shop around for basic medical supplies on your own, and take advantage of free preventive care.
- Make sure you get your yearly physical; it could determine your eligibility for future health plans. Knowing your current health status better prepares you to make a decision on whether you should change plans or if you can scale down your existing (or new) plan in the event you need to make a change in the future.
- Check your health insurance plan to see if they offer a discount at local or national health clubs. Some plans do and you can save money on the monthly membership cost for the family.
- Don’t be afraid to mix and match plans and coverage options for family members to keep costs lower.
The best way to figure out what kind of insurance coverage will work for you is to do a comprehensive self-check of your health. “Ask yourself how often you go to the doctor, what your usual symptoms are, what regular prescriptions you take, and what maintenance medications you take,” said Wendy. “By doing a self-assessment, you can then go to a site like eHealthInsurance and tailor a plan to your needs. For instance, you may not need a maternity benefit. If you’re on a maintenance drug and it’s generic and you’ve been on it forever and it works well for you, you may find you can get discounted rates for a 90-day supply.
“Model a plan that’s for your needs,” Wendy said. “Compare similar plans with different carriers to make a correct decision. If saving is the most important thing for you and you’re relatively healthy, you may be set with a higher-deductible plan because your premiums will be much lower.”
Tips for Self-Employed With Employees
If you’re running a small business and need to provide insurance for your employees, these extra tips from Wendy will help. Keep in mind that to use a group plan, you actually need a small group of people. You and your spouse wouldn’t be enough because you’d be on the same plan. Check individual offerings for details.
- Talk to your employees. Understand the coverage your employees need most, and get the plan that covers those needs, and only those needs. For example, if pregnancy coverage is not an important priority for your employees, considering a plan without pregnancy coverage can save you money.
- Investigate group and small business plans. Again, be very honest with yourself about the coverage that your employees need and will use. Make sure any plan you buy will meet the real needs your employees have and fit your budget. Again, it’s a good idea to work with a licensed agent or broker that can help you find the right health insurance plan at the right price.
- Consider a business HSA. If a group plan is too expensive, you may have the option of helping employees with a business HSA. With a business HSA employees purchase their own health insurance plans and open HSA. Employers are then able to contribute pre-tax dollars to their employee’s HSA which may be used to pay for qualified medical expenses or saved for the future.
- Get your group healthy. Develop programs to encourage healthier employees, such as finding a local health club that will give your employees a discount on memberships. A healthier group will help you save on premiums in the long run.
Health Insurance Resources
Contents Copyright © 2006-2014 Kristen King
(image: Sundeip Arora )