How can you get affordable family health insurance if you are self-employed?

Health Insurance for the Self-Employed

Government Guide to reliable Health Information - healthfinder.gov

National Association of Health Underwriters (nahu.org/index.cfm) - This site provides consumers with a quick reference list of important health coverage assistance contacts

Health access database: nahu.org/consumer/healthcare/topic.cfm?catID=4

While the health care and health insurance debate is continually changing in our nation, the reality still remains that the individual, the small business and the self employed individual are typically overlooked in the health insurance marketplace.

Some states require all insurance companies to provide some basic level of coverage to all small businesses that aren't strictly in business for the purpose of collecting insurance benefits (like North Carolina, but the coverage is very limited). Others have no requirements whatsoever.

There are certain companies in every region of the country that specialize in finding coverage for small businesses, and if you are incorporated, this will likely be your best option.

Local insurance brokers will be happy to help you, but try to find one that is experienced, and preferably a part of a larger agency that has a strong reputation.

Here is more information and advice:

• I am a licensed health insurance agent. What you should do is find a small local broker in your area who deals with several different insurance companies, ex: Anthem, Medical Mutual, American Community, etc. Have him/her do some quotes for you and see what they have for the best price. You may also want to consider an HSA, which is a high deductible plan, starting at $1000 and you contribute, if you wish to a savings account for qualifying medical supplies, such as eye wear, contacts, band-aids over the counter drugs, peroxide. It rolls over each year and is tax free. Some plans also will pay 100% after your deductible is met and some will pay only 80%. It's your choice. When you call a broker, they can give you more information regarding these plans for your state.

• Watch out for the so-called National Association for the Self-Employed. There have been many complaints against this arm of the MEGA Life Insurance Company.

• I too am a licensed insurance agent. Do find a local independent agent, preferably one that specializes in health care. A good starting place is the National Association of Alternative Benefit Consultants. This organization specializes in Consumer Driven Health Plans (CDHPs) and is the organization that trains and certifies Chartered Benefit Consultants. It is the only insurance certification that specializes in CDHPs. They have a searchable database of agents by state qualified and trained in this area.

• Go to your State Dept of Insurance and look up complaints filed against ANY insurance company you are considering. Then look up the same information for the major carriers in you state. See if the product someone is trying to sell you have an inordinately large number of complaints. Also, always get quotes from multiple carriers. Anyone who tells you that there is only one carrier with a suitable product for you generally has an interest in you not seeing what the open market can offer. Be an informed consumer.

Insurance Alternative

Have you considered an insurance alternative? Although traditional insurance can be great at times, it is an unfortunate reality that not everyone can afford the cost these days. In addition to that, there are tons of people who have limited insurance benefits or who have been denied for coverage based on a variety of different factors.

Consumer driven health care is on the rise...and one of the options therein is a discount program. Unlike traditional insurance, there are: 1. No waiting periods 2. No pre-authorization for treatment required 3. No exclusions on laboratory procedures 4. No paperwork 5. Instant savings 6. All ongoing medical problems are accepted 7. Cosmetic surgery is included in many markets 8. No age limits

There are lots of people who opt for this alternative, especially small business owners who need coverage for themselves OR for their employees.

Insurance Alternative WARNING

The idea of discount programs as an alternative to medical insurance and seems to consider discounts plans part of the Consumer Directed Health Plans.

Discount programs are NOT an appropriate substitute for a major medical plan. Discount plans do one thing; get you negotiated discounts for selected services. If you seldom use health care services and are willing to take the risk that nothing serious will ever happen then you may want to take the risk. I have many clients come to me after they have experienced an unexpected event and had no idea just how expensive medical procedures are today.

For some perspective, a routine appendectomy in CA runs in excess of $30,000. A gentleman who is now my client bought major medical coverage after his discount plan left him with a $26,000 bill. Contract cancer with surgery and chemotherapy and the costs can exceed $500,000. If I was in that situation, my major medical plan would cover 100% of that except my $4800 Maximum Out-of-Pocket. Even if you got a 50% discount, that is $250,000 out of your pocket with a discount plan.

Second, discount plans are not the emphasis of Consumer Driven Health Plans. If you want to learn more about them, go to the website of the National Association of Alternative Benefit Consultants (naabc.com). This organization accredits the ONLY insurance designation that specializes in CDHPs. The US Treasury Dept actually links directly to their site from their section on Health Savings Accounts. CDHPs are about balancing exposure, empowering consumers and transparency in pricing without surrendering the catastrophic protection a major medical provides. In fact, federal legislation around HSA plans specifically requires limits on maximum out-of-pocket expenses before the insurance company must pay everything else.

HSA's & High Deductible Health Plans (HDHPs)

As a licensed health insurance agent, I speak to clients every day who are very frustrated with their health insurance options (or lack of such). The vast majority of my self-employed and small business owner clients find some relief in an HSA-eligible plan.

The basic idea is that you reduce health insurance premiums by choosing a plan that has a high deductible - for instance, $3200-$5700 for the whole family. With many plans, you can choose to have it pay 100% of covered expenses after meeting the deductible, and the entire family's medical bills go toward meeting that ONE deductible, as opposed to each family member having to meet separate deductibles. When you crunch the numbers, you often find that the out-of-pocket limits are roughly the same! By doing away with co-pays, coinsurance, etc, you can reduce the costs, often saving hundreds of dollars per month on a family plan.

The next step is being prepared to meet that deductible. In order to address this, the idea is to start putting that savings into an account called a Health Savings Account (HSA). This functions outside the health insurance plan, and is a tax advantaged account. This means that you can take an 'above-the-line' tax deduction for the money that you put into the account (up to $2850 for an individual or $5650 for a family in 2007) and you also do not have to pay taxes on any interest the account earns. You don't lose the money at the end of the year either - so if you stay healthy, it's still your money.

Seek out an experienced health insurance representative who will take time to find out how your family uses health insurance and see if this is right for you.

First answer by Chris. Last edit by Sdresh. Contributor trust: 871 [recommend contributor]. Question popularity: 227 [recommend question]