According to statistics, there are roughly 10 million people self-employed in the U.S today.4 Even though we went through a pandemic in 2020, the percentage of self-employed has increased over the last year. Did you know that the average self-employed person makes a salary of $83,792?4 It should not be as shocking as it sounds since being your own boss is a popular thing today! If that’s the case, then being your own boss means being in charge of ALL things including health insurance.
One of the best benefits for being self-employed is getting to choose from a variety of health insurance companies, but don’t let that overwhelm you! First, let’s address some short term solutions if you have recently lost a job and are now self-employed.
Short Term Solutions
According to Dave Ramsey, there are three short term solutions for the self-employed such as5–
- COBRA health insurance
- Short-term health insurance
- Industry-specific health insurance
COBRA health insurance lets you keep your employer based insurance plan for up to 18 months.5 However, you may end up paying more on your premiums each month since you no longer work for your previous employer.
Then there’s short-term health insurance. One of the best benefits of getting this insurance is signing up outside of the enrollment plan period. Not to mention, monthly premiums have a lower cost and the term for this insurance is up to three months! On the contrary, this type of insurance may have an out-of-pocket cost or may not be able to cover a pre-existing condition.5
Finally, the Industry-specific Insurance is a good fit for groups like college students, freelancers, and unions, etc. However, make sure you talk with an insurance agent, who can help you determine if the insurance is a good fit for your situation.
Self-Employed Permanently
Depending on what you want, there are different health insurance options that will provide the best coverage. Here are three options you can choose from.5
- Health Insurance Marketplace
Moreover, you can find out if you qualify for Medicaid, tax credits, and lower health insurance premiums.5 Health insurance in the Marketplace is federally own, which means you don’t have to have employer owned health insurance, and is backed up by the Affordable Care Act.
- Private Health Insurance
Later in this article, we will review the top four insurance providers that fall under the Private Health Insurance umbrella. Therefore, this category of health insurance companies will provide affordable rates and good coverage for the self-employed. For example, there are insurance companies with affordable rates that have a variety of in-network access to physicians, specialists, health care facilities, and more. These insurance companies are some of the best options since they cater to both families and employers, as well as, provide optimal coverage for individuals.
- Health Care Sharing Ministries
According to Dave Ramsey, health care sharing ministries are not exactly, “health insurance”.2 Let me explain. These groups of people, “share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs.” 2 This is a great option for anyone experiencing low-income salaries or has lost a job and needs insurance to help cover pre-existing conditions. However, the self-employed can have access to funds as long as they are members of these churches or organizations.
Top Health Insurance Companies for the Self-Employed 2021
Altogether, health insurance companies offer affordable and decent coverage such as wider network, lower premiums, and deductibles. These are the top health insurance companies to choose from if you are self-employed: United Health Care, BlueCross BlueShield, Kaiser Permanente, and Cigna.1 Now, let’s break down each company to review their best offers.
BlueCross BlueShield
All Around Best Health Insurance
Partnered with 90% of the doctors and hospitals around the country with 1.7 million providers in the network, BlueCross BlueShield emphasizes local needs and customizes products and services to each individual.1 According to Investopedia, self-employed workers like this insurance company’s data driven approach such as it’s National Health Index, which maps out the health status of each county.1 Founded in 1929, it has 106 million members with 36 BlueCross BlueShield companies that can insure individuals in all 50 states.1 As well as, scoring a 2.5 to 4.5 on a scale of 1 to 5 from the National Committee for Quality Assurance (NCQA).1
Advantages:
- Large network of providers
- Good reputation
- Data-driven to improve efficacy and affordability
Disadvantages:
- Some bad reviews in certain regions
UnitedHealth Care
Most Versatile Network
Compared to BlueCross BlueShield, their network of providers are a whopping 1.3 million.1 So, what makes it’s network the most versatile? Individual plans might be the most expensive when it comes to this insurance company, but they are loaded with supplemental coverage like dental, vision, short-term insurance, Medicare, and even Medicaid. They offer coverage in almost every state plus 130 countries.1 Not to mention, this health insurance provided extra benefits once the pandemic began. For example, the company uses specialize data to confront healthcare injustices while using artificial intelligence to help member engagement. Also, they have expanded their reach by using telehealth and digital therapy.1
Advantages:
- 1.3 million network of providers
- Telehealth and digital therapy
- Offered in 49 states
Disadvantages:
- Slightly expensive individual plans
- Some discrimination among mental health patients (Depesido & Investopedia, 2021)
Kaiser Permanente
Most Notable for Preventive Care
You might be wondering what “preventive care” has to do with insurance coverage. First, we know that health insurance provides financial responsibility and shares the risk with the insured. However, this insurance company helps promote preventive tasks. For example, tracking your vitals like blood pressure and cholesterol, getting immunizations, and essentially catching potential health problems before they occur.3 Did you know that under your health plan, you can get preventive care services at no additional cost? Let’s take a closer look.
Here are some examples of preventive care services for adults, women, and children at no additional cost.3
Adults-
- Abdominal Aortic Aneurysm
- Annual drug screening
- Depression screening
- Diabetes screening
- Physical therapy
Women-
- Anemia screening
- Breast Feeding Equipment
- Counseling intervention for pregnant or postpartum persons
- Rh incompatibility screening
Children-
- Age-appropriate preventive medical examinations
- Congenital Hypothyroidism Screening
- Vision screening
- Immunizations (from birth to 18 years; doses, recommended ages, and recommended populations vary):
- Diphtheria, tetanus, pertussis
- Haemophilus influenzae type B
- Hepatitis A
- Hepatitis B
- Human papillomavirus
- Inactivated poliovirus
- Influenza
- Measles, mumps, rubella
- Meningococcal (meningitis)
- Pneumococcal
- Rotavirus
- Varicella
When using this insurance, you will have access to different plans that include Medicare, Medicaid, high-deductible health plans, health savings account, catastrophic plans, and plans depending on where you live.3 However, Kaiser Permanente has a strong reputation and their network has 727 medical officers, 39 hospitals, 23,597 physicians, and 63,847 nurses.3
Advantages:
- Several options for preventive care without additional costs
- Strong reputation
- HSA access
Disadvantages:
- Available in 8 states
- Behavioral health care is not as extensive as health
Cigna
Great for Convenience
Starting out with an outstanding network, Cigna offers global coverage to 180 million customers in 30 countries, 1.5 million providers and facilities.1 In the U.S., Cigna works with 67,000 pharmacies, roughly 500 hospitals, and 175, 000 (both mental and behavioral) providers.1 When it comes to individual plans, this insurance company has plans in 10 states- Colorado, Arizona, Florida, Illinois, Kansas, Missouri, North Carolina, Tennessee, Utah, and Virginia.
Moreover, Cigna offers great benefits for the self-employed. For example, you might qualify for $0 down virtual care.1 Also, Cigna’s Express Scripts Pharmacy offers home deliveries of a 90 day supply prescriptions with 24/7 access to licensed pharmacists.1 Finally, this insurance company has a digital therapy service called Talkspace for behavioral health services.1
Advantages:
- Virtual Services & Prescription Delivery
- Expansive provider network
- Several Plans for Self-Employed
Disadvantages:
- Not available in all states
Self-Employed Health Insurance Tips
Knowing that you are your own boss and Human Resources director, you might need help finding answers to questions when your shopping for health insurance. First, we want to consider agencies that could help you. Organizations like Association for the Self-Employed Membership can give you access to discounted health insurance plans, Health Savings Account (HSA), and other support according to Dave Ramsey solutions.5
Also, there is a deduction for self-employed health insurance tax if you qualify. For instance, you’ll need to prove you have your own personal health insurance coverage and that you are not covered by an employer’s group plan or named in someone else’s policy—like your spouse’s policy.5 Similar, you cannot qualify for a deduction if you qualify for your spouse’s coverage.
Finally, choosing a higher deductible will give you lower monthly premiums. If you have an HSA, which is tax-advantage savings account, the interest you earn is tax-deferred (where the withdrawals you make pay for medical expenses without tax). Remember, getting help from an agent or a broker is beneficial to finding the right plan. Check out our article on, Can I Save Money on Health Insurance? for more information!
Article Resources
1.) Dore, K. & Investopedia. (2021, September 18). Best Health Insurance for Self-Employed of 2021. Investopedia. https://www.investopedia.com/best-health-insurance-for-self-employed-5078989#citation-31
2.) healthinsurance.org. (2021, March 12). What is a health care sharing ministry? https://www.healthinsurance.org/glossary/health-care-sharing-ministry/
3.) Kaiser Permanente. (n.d.). Preventive Services. Retrieved October 11, 2021, from https://healthy.kaiserpermanente.org/learn/preventive-services?kp_shortcut_referrer=kp.org/prevention
4.) Pengue, M. (2021, July 22). Self-Employment Statistics: Demographics and COVID-19. WBL. https://writersblocklive.com/blog/self-employment-statistics/
5.) Solutions, R. (2021, September 27). How Do You Get Health Insurance if You’re Self-Employed? Ramsey Solutions. https://www.ramseysolutions.com/insurance/self-employed-health-insurance
