Self Employed Medical Insurance

Congratulations on trying the world a freelancer, an independent contractor, or a small business owner! It’s a great world.

It is, however, a world where good affordable medical insurance can be tough to find. The good news is that some breaks are available and that decent coverage can be found with a little due diligence.

Tax Deduction

If you’re self employed, you’ll be able to deduct 100 percent of your health insurance premiums. This deduction is a good one because it’s an above the line deduction. This means you can take advantage of it even if you don’t itemize.

Self Employed Choices

Before you begin your search for medical insurance, consider your situation carefully:

• Individual Coverage- An individual plan might be what you’re looking for if you just need coverage for yourself
• Family Coverage- You’ll want a plan that provides coverage for your family with a family medical plan if you need this
• Group Coverage- If you employee more than two employees, your company will be eligible for a group health insurance plan

Gap Coverage

Speaking of group coverage, if you’re coming from a job where you had group coverage, you might need some medical coverage to fill a gap.

• COBRA- This coverage is usually available for 18 months after your leave an employer group plan. You pay the lower group plan rates which tend to be lower than individual medical plan rates

• Short Term Medical Insurance- This insurance covers you from one month to a year. It has many of the features of the individual plan but it’s a bit more restrictive. For example, pre-existing conditions will not be accepted.

When you exhaust your gap coverage, you need to begin seeking longer term medical expense insurance. Following are some options to consider:

High Deductible Policies with a Health Savings Account- This combination can help you save tax free money you can use for health related expenses and protect you in case of a catastrophic illness or injury.

Health Maintenance Organizations (HMO)- These will provide comprehensive health care with copayments. You’ll have to use doctors that belong to the HMO.

Preferred Provider Organizations (PPO)- This coverage allows you to see any provider in your network. If you go out of the network, coverage may be limited and you’ll pay more.

Major Medical Insurance- With this traditional insurance, you can go to any doctor or hospital you like.

With any of the plans, your premium will be affected by the following three factors:

• Deductibles- This is the amount you pay before the insurance company begins to pay. Deductibles usually range from $250 to several thousand dollars.
• Copayment- This is a fixed amount you pay at the time of a service. For example, you might pay a $25 copayment for a visit to your doctor.
• Coinsurance- This is the percentage of your bill that the insurance company will pay after the deductible. It might be that they pay 80 percent of the first $5,000 after the deductible is met. So, the insurance company would pay $4,000 and you would pay $1,000.

Raising these will result in lower premiums. But make sure you can afford the price.

Steve Wyrostek -MedicalInsurance.org Expert A 20 year plus veteran of the insurance industry, Steve managed departments in the personal and commercial lines areas of major insurers. He’s familiar with how insurance—ranging from boat to workers compensation—works.