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There are many types of health insurance coverage. When a person decides to become self-employed, that individual will face unique challenges regarding health insurance. Health insurance for the self-employed is about finding and keeping health insurance coverage. Whereas a traditionally employed individual can often sign up for the benefits offered by the employer, the self-employed person is charged with the task of finding health coverage. On top of that, the person must be able to pay the premiums to maintain such coverage. Options for the Self-Employed If an individual takes steps to become self-employed, one of the first things he or she may do is quit the day job. By taking the necessary steps, the individual can maintain health coverage by extending the benefits offered by the employer through COBRA. COBRA stands for the Consolidated Omnibus Budget Reconciliation Act of 1985. This act allows former employees to keep their benefits for up to 18 months after no longer being employed. Another option is to purchase an individually underwritten policy. On the open market, an individual basically needs to find a policy which offers both benefits and costs the self-employed individual can work with. This is a fairly simple matter if the person’s family medical history is clean. What about pre-existing conditions? If a newly self-employed individual has kept his or her coverage through COBRA, he or she cannot be denied coverage for pre-existing conditions. If the 18-month Cobra period has ended or the individual has chosen to drop COBRA coverage for any reason, he or she does run the risk of being denied coverage in the private market because of the pre-existing condition. There is the possibility the self-employed individual can gain family coverage for less than purchase on the private market if the individual is married with a spouse who has coverage through a different employer’s health insurance plan. The benefit of this sort of coverage is it cannot usually be turned down or have the rates increased due to health history. Considerations There are always issues to consider when purchasing health insurance. For the newly-unemployed, self-employed person, he or she must consider that COBRA coverage is expensive. The former employer is no longer covering the company’s share of the plan’s premium. This amount is often a significant amount of money. Another issue to consider is picking a plan with enough benefits to cover both family and assets. Sudden medical emergencies can cause extreme financial strain on a individual or family who is not adequately insured. Health insurance for the self-employed can be a daunting and fiscally-challenging prospect. The potential or current self-employed individual needs to research the options. Discussing the possible plans and premiums with a licensed insurance agent can help clarify important issues regarding coverage. An individual should make sure the agent is licensed and knowledgeable of the self-employed person’s state’s laws. With the help of a trusted agent, the self-employed person can pick a health insurance policy that will protect him or her. The individual may even find an affordable plan to help protect family and assets in the event of unexpected medical emergencies.
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