If you are a self-employed individual or plan on starting your own business sometime soon, finding the best health insurance for your situation can become quite the headache. Follow these essential tips to help you find the best health insurance to fit your budget.
Keep Your Current Health Insurance for Now
If you have recently left your job to pursue the exciting task of entrepreneurship, it’s best to keep the same coverage that you had at your job. How is possible? You can do so because of your rights under the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986. Under this act, you can leave your job and keep your insurance coverage for up to 18 months as long as your previous company employs at least 20 people and that you weren’t fired. Even with this, the price of insurance may be more than one might expect. Self-employed individuals will have to pay the full cost of their health insurance coverage, which is probably higher than a typical employee would pay.
Watch the Time and Plan Ahead
According to COBRA, as long as you find a new policy within 63 days after reaching the end of you COBRA benefits, you are guaranteed access to health insurance. Failure to obtain a new policy within the time frame could result in your application being rejected or the policy may exclude a pre-existing condition for up to a year. Because of this, it is very important to plan ahead.
Along with this plan, if you plan on leaving your job to become self-employed at a certain time, be sure to obtain the cheapest health insurance plan offered so that your premium will be much lower once you actually leave.
Lower Your Premium
One excellent way to lower your existing self-employed health insurance premium is to find a plan that has a high deductible. Then, combine this plan with a tax-free health savings account (HSA). Using an HSA, you can deposit pre-tax dollars and use this money to pay for medical expenses within the future.
Purchase Your Own Policy
For many people that are self-employed and in great health, they can simply sign up for a policy with a high deductible and low premium. A variety of different health insurance options can easily be compared online. As far as individual policies go, they can unfortunately become very expensive at times. This case is especially true if you are over the age of 55. In order to keep the premium within your budget, expect to pay roughly between $1,000 and $5,000 for a deductible.
Small Business Group Plan
Just because you are self-employed doesn’t mean that you are always working alone. For this reason, you can easily hire an employee and then potentially be able to buy a small group insurance plan. If you have a pre-existing condition, this may come in handy. In fact, some states even require by law that certain insurers must issue insurance to small groups. Because of this, your group may be guaranteed a policy. Keep in mind that you will most likely need an insurance broker to help set up the policy.
Now that you’ve read some tips regarding self-employed health insurance policies, it’s time to go out there and get one for yourself. Don’t make the mistake that many entrepreneurs make these days by not obtaining a health insurance plan. You need to be properly covered in case anything happens to you in the future.
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