Alyssa Lane
As a freelancer, you may not have access to employer-provided health insurance, but that doesn't mean you have to go without. There are a variety of options available to ensure you have the coverage you need. From enrolling in government-sponsored programs like Medicaid and the Affordable Care Act (Obamacare) marketplace to purchasing private insurance, freelancers can find plans that fit their unique needs and budgets. Additionally, freelancers can consider joining local or national organizations that offer group health insurance, taking advantage of health savings accounts (HSAs), or even negotiating discounts with healthcare providers when paying in cash. While navigating the world of health insurance as a freelancer can be challenging, it's not impossible to find comprehensive and affordable coverage.
| Characteristics | Values |
|---|---|
| Availability | Freelancers can get health insurance through the Affordable Care Act marketplace, local and national organizations, and COBRA. |
| Cost | Self-employed health insurance can be expensive, with costs varying depending on family size and situation. |
| Options | Freelancers can consider enrolling on the government marketplace or with a private insurer, or joining a group plan through a local or national professional organization. |
| Savings | Freelancers can use a Health Savings Account (HSA) to save money on taxes and prepare for out-of-pocket health costs. |
| Discounts | Freelancers can ask providers about discounts for paying upfront or in cash. |
| Flat-fee doctors | Freelancers can pay a monthly rate for unlimited doctor visits, though this doesn't cover hospital or pharmacy costs. |
| Group coverage | Freelancers can join a group plan through a local or national professional organization or by forming a group with other freelancers. |
| Family plans | Freelancers can add themselves to a spouse's plan, often at no additional cost. |
| Open enrollment | Freelancers should be aware of open enrollment periods to avoid missing the window and having to wait until the next period to enroll. |
| Subsidies | Low-income freelancers may qualify for subsidies such as Premium Tax Credits (PTC) or Cost-Sharing Reductions (CSR) to lower the cost of health insurance. |
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What You'll Learn
Government marketplace vs private insurer
There are two main ways for freelancers to enrol in health insurance: on the government marketplace or with a private insurer.
Government Marketplace
The Health Insurance Marketplace, also known as the exchange, is a platform established under the Affordable Care Act (ACA) that enables individuals and families to compare and purchase health insurance plans. It is a service that helps people, families, and small businesses shop for and enrol in health insurance plans. The federal government runs the Marketplace in most states, and some states run their own. ACA Marketplace Insurance plans are usually cross-listed on private websites like HealthCare.com.
Marketplace insurance offers the opportunity for individuals to apply for a tax subsidy if they qualify for financial help to pay a portion of their health insurance plan because their income falls between 100 and 400 percent of the national poverty level (138 percent in states with expanded Medicare coverage). Government-subsidized insurance can save the consumer money monthly, but if they need care from a facility or physician that isn’t covered in their small network plan, they could wind up spending more money out of pocket. Many on-exchange marketplace insurance plans have smaller doctor networks, and it is important to check that your doctor or a hospital close by is in-network before buying a plan.
Private Insurer
Private health insurance plans are sold directly by health insurance companies, agents, or through an online website entity like HealthCare.com. These private, off-exchange plans are slightly different in structure. No private health insurance plan is eligible for any financial subsidy assistance. Private plans can be a big draw for individuals who need specialty care, as they tend to have bigger networks.
For some independent workers, enrolling on the government marketplace may be less costly, though plans may not be as comprehensive. For other workers, enrolling with a private insurer may make more sense cost-wise and be a better plan. It boils down to cost efficiency and preference.
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Health savings accounts (HSAs)
One of the main advantages of HSAs is their tax benefits. When you are enrolled in an HSA-eligible health plan, you can make pre-tax contributions, grow your funds tax-free, and withdraw funds tax-free for eligible expenses. This can help reduce your taxable income and save you money during tax time. HSAs also offer flexibility, as they can be transferred from job to job and have no "use it or lose it" rule. You are not required to contribute a minimum amount, and there is no penalty if you do not contribute to your account. However, there is a cap on the annual amount you can contribute.
It is important to note that HSAs are typically paired with high-deductible insurance plans, which are considered \"emergency\" plans. These plans do not cover much regular treatment but can be helpful in the event of a medical emergency. As a result, HSAs are often used to save for future healthcare costs while providing access to funds for eligible expenses in the present.
Before opening an HSA, it is recommended to research and understand the rules and requirements to ensure it aligns with your needs and to avoid unexpected fees. HSAs can be a valuable tool for freelancers to manage healthcare costs and save money, especially when paired with an HDHP.
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Local, national, and industry-based organisations
Local Organisations
Many cities offer health insurance for freelancers through business organisations or local chambers. These are typically group plans, and the availability and specifics of these plans will depend on your location. It is worth checking with your local chamber of commerce or business organisation to see if they offer health insurance coverage. Even if they do not, you may be able to find a group of members who are also interested in starting the process of getting group coverage together.
National Organisations
The Freelancers Union is a national organisation that offers an insurance option built around freelancers and their needs. Freelancers Union, Inc. (FU) is not a licensed insurance agent, but its wholly owned subsidiary, the Freelancers Insurance Agency (FIA), is a licensed health insurance producer in several US states, including New York, California, and Texas.
Industry-based Organisations
Professional employer organisations (PEO) are recommended by Forbes for self-employed individuals and small businesses to establish insurance. While this will require your business to be registered with your state government, it can be a great way to access insurance as a freelancer.
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Family member's plan
As a freelancer, you can consider joining a family member's health insurance plan. This is a common way for freelancers to stay covered. If your spouse has a healthcare policy, you can usually add yourself to their coverage either at no cost or with an additional premium. This is often a cheaper option because their employer will be subsidizing it. If you are a younger freelancer, you can also be added as a dependent on your parent's insurance plan. Under new healthcare laws, most insurance companies need to offer coverage for children under 26.
If you are looking for insurance for your family, you may be able to obtain freelancer health insurance at lower rates for your family by applying for it through your business. You can also consider a health savings account (HSA) to save for your family's health. This is a tax-protected account that is specifically designed to be used for healthcare costs. You can save each year on taxes while also preparing for any out-of-pocket health costs. You can then pay for medical expenses that aren't covered by your plan from the HSA account.
If you are a low-income family, you may qualify for Medicaid, a public health insurance program that helps people with low incomes pay for healthcare. Each state has its own Medicaid rules and eligibility requirements, but anyone making up to 133% of the federal poverty level could qualify. Some states have expanded Medicaid eligibility under the Affordable Care Act. You may also qualify for a health insurance subsidy if you do not qualify for Medicaid. These subsidies lower the cost of healthcare for low-income individuals.
If you are a freelancer with a family, it is important to consider your health insurance options carefully. While it can be challenging to find affordable coverage, there are options available, such as joining a family member's plan, applying for insurance through your business, or exploring low-income options like Medicaid and subsidies.
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Discounts for paying upfront
While freelancers don't have an employer to offer them health insurance, they still have a variety of healthcare options available. One way to save money on health insurance as a freelancer is to pay upfront and in full. This can result in discounts or lower premiums.
For example, if you're leaving a full-time job to become a freelancer, you can take advantage of COBRA coverage, which allows you to keep your employer-sponsored health insurance plan for up to 18 months after leaving your job. While COBRA coverage can be expensive, paying upfront for the entire duration of your coverage can save you money on administrative fees, which can cost you hundreds of additional dollars per month.
Another way to save money on health insurance as a freelancer is to purchase a plan through organisations like Freelancers Union, which offer tailored self-employed plans with potential discounts and no extra costs. You can also explore options like Opolis, a freelance employment cooperative that provides affordable, premium group benefits.
Additionally, consider local, national, and industry-based organisations that provide group health insurance for freelancers, such as professional associations or unions. These groups may offer Association Health Plans (AHPs) that function similarly to employer-provided insurance. In certain areas, the local Chamber of Commerce may also offer group health insurance for freelancers.
Finally, if you're under the age of 26, you can remain on your parent's insurance plan, or you can join your spouse's plan if they have a healthcare policy. This can often be done at no additional cost or with a premium.
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Frequently asked questions
There are a few ways to get medical insurance as a freelancer in the US. You can enroll on the government marketplace, or with a private insurer. You can also look into local, national, and industry-based organizations that provide group health insurance for freelancers. Freelancers Union, for example, has over 25 years of experience connecting freelancers to the right health insurance plans.
Consider your medical and financial needs. If you are relatively young and healthy, you might want to select a high-deductible or catastrophic plan. If you have a chronic medical condition, a plan with a more expensive premium but lower out-of-pocket costs might be better. You can also look into getting a health savings account (HSA) to help pay for medical expenses that aren't covered by your insurance plan.
If you cannot afford a health care plan but don't qualify for Medicaid, you may qualify for a health insurance subsidy. Subsidies lower the cost of health care for low-income individuals. You can also look into enrolling in a group plan with other freelancers, which can help lower costs.
