Self Employed: 5 Tips for Saving Money on Health Insurance

If you work as an independent contractor or decide to start your own business you are definitely going to want self employed health insurance. Your goal will be to find a customized plan that is affordable and also meets your particular health care needs. Since you are involved in your product or service every day, you will also need an uncomplicated plan that can be monitored easily. In other words, you will be your own HR department. The tips that follow should make that important task easier:

1. Options for Choosing a Doctor

Think about how much staying with a doctor you now have or choosing your own doctor matters to you. For example, traditional health plans are more flexible, but you must also be prepared to pay a higher premium. PPO, POS and HMO plans, which are discussed below, are all less expensive, but they also have many more restrictions in the health care choices subscribers are allowed to make.

2. Consult with a Professional Medical Insurance Agent and Discuss the Following Plans:

  • Health Maintenance organizations (HMOs) – Generally, these plans are the most affordable plans, and they provide comprehensive coverage and a health care provider network as well. Subscribers are required to select a Primary Care Physician (PCP) when they enroll.
  • Preferred Provider Organizations (PPOs) – These plans are quite flexible, and subscribers can see any health care provider they choose and still be covered for the service, They can also visit an out-of-network provider without obtaining a referral in order to be covered.
  • Point of Service Plans (POS) – They combine the benefits of PPO and HMO plans. Subscribers are required to select a primary care physician within the plan’s network, but they are also covered if they see any health care provider.
  • Health Savings Account (HSA) plans – They include a Health Savings Account (HSA) and a high deductible that provides catastrophic coverage and charges a low monthly premium. With an HSA, subscribers save tax-free funds for their health care services, and those who are self-employed can makes deposits in their HSA for their future medical needs.

3. Consider the Tax-Saving Benefits of your Health Plan.

Because health insurance for the self-employed is legally classified as a business expense, the related costs are tax deductible. This is a major advantage, because many of those who are self-employed are unable to earn any of the discounts that a company with many employees would receive. Otherwise, they must belong to an association or buy coverage through some other group. In order to deduct their insurance expenses from their federal income tax, subscribers must not be covered by their spouses group health insurance policy, and the tax deduction taken cannot exceed the net profit from the subscriber’s business.

4. Think about Getting Group Health Insurance.

This type of insurance is less expensive because the risk associated with it is spread over a large group of people—such as a union, alumni association or trade association—or through the subscribers state government. As a rule, it includes two or three options, such as a high-deductible plan with an HSA, a PPO or an HMO. In this case, the premiums vary from the least expensive plan to the most expensive option. If your health is relatively good and your prescriptions costs are minimal, you will probably want to choose the high-deductible health plan that includes an HSA. This will enable you to deposit funds in a tax-deductible savings account that can be used for your future medical expenses.

5. Use all the Resources that are Available to You.

Note that your small business organization or local Chamber of Commerce may be able to assist you in finding a small group plan that will lower the cost of buying health insurance as a self-employed person. Your top priority should be finding a policy that protects both you and your family from huge medical bills that would undermine your financial health.

Comparing Quotes

Finally, once you have tapped all your resources and reviewed some insurance plans, the next step is to look for some health insurance quotes online. You will have discovered that premiums vary widely, and even though you have found a plan that seems right for you, you will also want something that you can use as a basis for comparison. Begin by visiting health insurance comparison sites and indicate your specifications as to the kind of health care insurer you need. Then, you will find a list of providers that you can review by premium, deductible and other related factors in making your decision. You will also discover that it is quick and easy to use, and this is not surprising since Kiplingers considers it to be the best health insurance website.

Author Bio: Susan is a freelance writer for a site that compares health insurance coverage from the top health insurance providers. She is also a part-time teacher. Her favorite thing to do outside of work is to ride her bike through the woods with her husband.

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