I remember when I turned 26 and was no longer eligible to be on my parents’ health insurance policy. It was the same year I decided to quit my full-time job and become self-employed. Having never dealt with buying health insurance myself, let alone having an employer provide it for me, I felt completely lost and intimidated. I had no idea where to start, what I needed, what it would cost, etc. etc. etc. Basically, I had a lot of questions.
So for those of you self-employed boss babes out there, I’m here to breakdown what you need to know about health insurance and hopefully make things a little less intimidating.
This is why you need health insurance
Um, YES. Yes, you do. First of all, in the event that something were to happen to you and you didn’t have the funds to pay for it out of pocket, you’re pretty much screwed. Secondly, I totally understand being self-employed and wanting to save money, but in the end, it’s more cost-effective to have health insurance (if you choose the right plan). Plus, you are now required by law to have health insurance and may have to pay a penalty come income tax time if you don’t have it!
I found it most helpful to start by reading through an educational site that gives you the basic rundown. Start by heading to howtogetcovered.com. The amazing folks at Oscar, an affordable health insurance company that I’ll tell you about in a second, just recently launched this incredibly resourceful site that helps you get started. It will, first of all, convince you to get covered, and then point you in the right direction so you can start comparing plans.
If you’re based in New York, California, or Texas, I would definitely consider enrolling in one of Oscar’s health insurance plans before 2018. They make the process SO simple. They even have an app with incredible customer service and the ability to request a call from your doctor to answer quick questions. I would definitely take a look at their plans!
Here’s how to pick a plan
As you start looking through different insurance plans, the main thing you’ll want to focus on are the premium (monthly payment) and the deductable (how much you pay out of pocket before the insurance company starts paying for you). Basically, you’ll be deciding whether to spend more per month and have a lower deductable, or spend less per month and have a higher deductable. If you have a high deductable, you’ll pay more out of pocket but less per month. If you have a low deductable, you’ll pay less out of pocket but more per month.
So it’s important to understand your priorities and your general health needs. If you’re generally healthy, and also trying to save money, then having a higher deductable with a lower monthly payment may make sense for you. Why? Because the idea is you’ll likely only need the yearly checkups that are already included in your plan and won’t need to pay much, if anything, out of pocket.
However, if you will be seeing doctors more often than what’s included in your plan, then having a low deductable and a higher monthly payment may make more sense. For me, I see a psychologist & a psychiatrist throughout the year. Because I see these doctors more than once or twice a year, it makes more sense for me to have a higher premium (i.e. monthly payment), and a lower deductable (if any at all).
Other Things to Look For
If you already have certain doctors that you love, you’ll want to check to see if they are in-network, or covered by the insurance policy you’re considering. I found it easier to just call the doctors directly and ask if they take that insurance.
Another important thing to look for is whether your policy offers a “rate guarantee”. Your premium (or monthly rate) typically goes up every year. At least that’s how it’s been for me. I had no idea that was going to happen and I felt like I had no choice but to just accept the new rate. Luckily, you actually can lock-in a rate when you initially sign up for your insurance policy. This will depend on the policy, so it’s best to talk to customer service about it before you sign up.
Don’t forget the tax break!
For most self-employed individuals, your monthly premium is likely tax deductable. Great news, right? There are a few contingencies, so just make sure to ask your accountant.
Any other questions about health insurance? Let me know!