all about How To : 6 Tips to Find Affordable Health Insurance When You Become Self-Employed

6 Tips to Find Affordable Health Insurance When You Become Self-Employed If you’re dreaming about leaving a corporate job to work for yourself, getting affordable health insurance is probably one of your top concerns. Fortunately, there are more protections now than ever for those who leave the safety of a group health plan.

In this post I’ll cover six tips to find affordable health insurance when you become self-employed or leave a job for any reason, so you and your family get the coverage you need.

Major Benefits of the Affordable Care Act

The Affordable Care Act (ACA), known as Obamacare, requires every American to have qualified health insurance, or be subject to a tax penalty (with some exceptions). The law applies no matter if you’re employed, self-employed, unemployed, a child, an adult, or which state you live in.

One of the major benefits of the ACA is that you can’t be denied coverage or charged sky-high premiums when you have a preexisting medical condition. Additionally, there are no annual or lifetime caps on your health coverage.

And no matter how much covered care you receive, the law put caps on how much you have to pay. Out-of-pocket annual maximums vary depending on your plan, but if you get in-network care, you’ll never have to pay more than $6,850 as an individual or $13,700 as a family.

The ACA also offers many low- and middle-income Americans a health subsidy, which cuts the cost of premiums, depending on your income and family size.

Healthcare reform gave American workers who don’t get group coverage at work more options and security; however, there’s no denying that health insurance is still a huge expense.

Tips to Find Affordable Health Insurance When You're Self-Employed

Healthcare reform gave American workers who don’t get group coverage at work more options and security; however, there’s no denying that health insurance is still a huge expense.

When you go out on your own, the real cost of health coverage can be shocking—especially if you just left a company that payed a big chunk of the insurance bill on your behalf.

Remember that the high cost of health insurance pales when compared to the alternative. Having a medical emergency or being diagnosed with a major illness that you can’t afford to treat could be devastating. Having peace of mind makes health insurance worth every penny.

Here are 6 tips to find affordable health insurance when you become self-employed or no longer have job-based coverage for any reason:

Tip #1: Don’t miss key annual deadlines

Since insurance companies can’t exclude you from coverage for having preexisting medical conditions anymore, what’s to stop consumers from buying coverage only after they get sick?

The answer is twofold: the law implemented an annual open enrollment period and hits you with a financial penalty if you stay uninsured for more than two months. In general, if you miss the enrollment window, you can’t get health insurance until the following year.

So don’t let these key ACA deadlines slip past you:

November 1, 2016 – is the first day of open enrollment for coverage that will begin on January 1, 2017. You can shop and enroll in new coverage or change an existing plan during the annual window that lasts until the end of January.

December 15, 2016 – is the last day to enroll in or change plans for coverage to begin no later than January 1, 2017.

January 31, 2017 – is the end of open enrollment. After this date, you can enroll or change health insurance plans only if you qualify for a special enrollment period.

Special enrollment allows you to get or change coverage outside of the regular enrollment window when you have a major qualifying life event, such as losing insurance at work, getting married or divorced, having a child, or relocating. However, you typically only have 60 days after the event occurs to enroll.

Tip #2: Estimate your annual income as closely as possible

I mentioned that you can get a subsidy, or government assistance, to cut the cost of health insurance. For 2016, it applies when an individual earns just over $47,000 or a family of four earns about $97,000 per year. Those who earn less get higher amounts of assistance than those at the top of these ranges.

If you earn less than the poverty level, which is currently $11,800 for an individual or $24,300 for a family of four, you may qualify for Medicaid or the Children’s Health Insurance Plan (CHIP).

The healthcare subsidy is a tax credit that you get to use in advance. It goes directly to your health insurance provider every month so you pay a lower premium.

These are free or low-cost state-run programs that may have slightly different names depending on where you live. Unlike Obamacare health plans, they don’t have set open enrollment periods, so if you qualify, coverage can begin any time of year.

The healthcare subsidy is a tax credit that you get to use in advance. It goes directly to your health insurance provider every month so you pay a lower premium. This is very different from other types of tax credits that you get only after filing your taxes for the previous year.

While it sounds great to have health subsidy money as quickly as possible, one challenge is that it’s based on how much you estimate earning in the following year when you’ll get coverage—not on last year’s income.

Since self-employment incomes can vary dramatically from month to month, the chances of knowing exactly how much you’ll earn is pretty slim.

To reconcile with the government, you have to square up each year when you file taxes. If you underestimated your income, you may have to return a portion of the tax credit that was already spent on your health insurance during the previous year. In other words, you may owe additional taxes that you weren’t expecting.

When you enroll in an Obamacare plan, you’ll have access to a marketplace account. That’s where you can update any changes to your expected income or family size that will affect your tax credit so it can be corrected.

Tip #3: Know the best places to shop

You probably remember the federal government’s infamous botched launch of healthcare.gov in 2013. That debacle made it difficult for many to shop for health insurance through the marketplace, known as the health exchange.

In 20 states there are state-run exchanges that operate on their own or in some level of partnership with the federal government. So depending on where you live, you can sidestep healthcare.gov altogether if you like.

While the federal and state sites are running smoothly now, they’re not the only options you have to buy health insurance when you’re self-employed or unemployed.

Here are 3 of the best places you can shop for health insurance from licensed professionals:

Local insurance agents and brokers – are representatives or independent companies or in your local area. They typically don’t charge consumers because they earn commissions from insurance carriers. If you need help comparing health plans or submitting an application, having advice from an in-person local pro can really help.
Online insurance brokers – are private companies like GetInsured and eHealth that allow you to compare plans on benefits and price. Many have customer service agents that can answer questions and help you choose a plan without charging a fee.
Online insurance aggregators – are private companies like insuranceQuotes and netQuote that match you to the best possible options so you can compare multiple plans on benefits and price. Many have customer service agents that help you purchase a plan by phone at no charge.

No matter where you buy health insurance, your application for a subsidy gets routed through the federal government where they verify it and put your tax credit into motion.

Tip #4: Consider a high-deductible plan

With health insurance, if you’re in relatively good health, a high-deductible plan can make sense.

With many types of insurance policies, a smart strategy to cut premiums and save money is to raise your deductible. A deductible is the amount you have to pay first before your benefits kick in.

With health insurance, if you’re in relatively good health, a high-deductible plan can make sense. But the downside is that if you do get sick, you’ll have to pay much more out-of-pocket before your payouts for covered claims begin.

When you choose a high-deductible health plan, not only do you pay lower premiums, but you’re also allowed to contribute to a health savings account (HSA).

Contributions you make to an HSA are deductible on your tax return, which mean they reduce your tax liability. You can take distributions from the account to pay for medical expenses—such as doctor co-pays, prescriptions, and supplies—before your deductible is satisfied and your health benefits begin.

You can also use HSA funds for a long list of other types of expenses, even if you don’t have insurance for them, such as going to a dentist, ophthalmologist, chiropractor, or psychologist.

With Obamacare, the highest deductible and least expensive plans are called catastrophic plans. They’re technically only available if you’re 30 years old or younger and don’t allow you to use a subsidy to help reduce the cost.

However, if you’re over 30 and experienced any of a number of financial hardships, you’re also eligible for a catastrophic plan. If you don’t qualify, there are other high-deductible plans to choose from. Just remember that you risk having to pay more out-of-pocket in return for lower premiums.

Read or listen to How to Save Money on Healthcare with an HSA to learn more.

Tip #5: Shop your plan every year

Once you become self-employed and get your own health insurance, it’s still important to shop plans every open enrollment because your medical needs or income may change.

Additionally, competitors are always coming in and out of the health insurance marketplace. The companies that were doing business in your ZIP code last year may not be the same set of players this year.

In other words, it’s likely that another insurer now offers a plan that’s similar to or better than yours, for a lower price. So, if you don’t shop you could easily be leaving money on the table.

Tip #6: Use short-term coverage as a last resort

If you miss the deadline to enroll in a qualified health plan, but don’t qualify for the special enrollment period, are you simply out of luck? Fortunately, no. You can purchase a short-term health plan to get some amount of coverage until the next enrollment comes around.

Problem is, short-term plans don’t have to meet ACA standards. That means they can charge more if you have a preexisting condition, put caps on benefits, or not cover basic services like prescriptions and preventive care.

Because short-term plans fall so short, the law doesn’t consider them real insurance.

Because short-term plans fall so short, the law doesn’t consider them real insurance. So even if you buy one, you’re still considered uninsured and have to pay the Obamacare penalty.

Having short-term coverage is certainly better than nothing after you lose job-based insurance, but should be replaced by a qualified health plan as soon as possible. That’s the best way to have the protection you need against the huge financial risk of medical costs.

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all about How To

Rabu, 05 Oktober 2016

6 Tips to Find Affordable Health Insurance When You Become Self-Employed