Independent Contractor Health Insurance
There is hardly a company out there that offers independent contractor health insurance. Independent contractors, freelancers, and other people working for them selves have the quest of finding health insurance that covers all their needs and doesn’t create a large strain on their finances, especially when first starting out.
The article below and the quote tool above are designed to help the independent contractor and other self employed person understand and evaluate the different health insurance options.
Basics Of Independent Contractor Health Insurance
As an independent contractor, there is no guarantee that work will be steady. This makes it difficult to financially plan ahead, especially for those just getting started in the business. The upside is that people who are self employed can often deduct their health insurance premiums on their income taxes each year.
Sometimes independent contractors can find group health insurance coverage from professional organizations that they may belong to. Once again, this isn’t a guarantee, but it’s a place to start looking.
This puts independent contractors in the same category as everyone else who does not have insurance as part of their employee offered benefits and has to purchase it on their own. Keep in mind you will have to provide the health insurance company with evidence of insurability. This often includes filling out a health questionnaire and undergoing a the underwriting process.
Health insurance companies have been known to go back as far as ten years looking for chronic pre-existing conditions for reasons to either deny you coverage or charge higher premiums. There is also the chance that you may be denied coverage, given a limited policy, or charged higher premiums due to your personal habits including drinking and drinking, your age, health, weight (obesity automatically flags someone as high risk), medical history, income or other “high risk” factors.
Options For Independent Contractor Health Insurance
The options for independent contractors when it comes to health insurance are the same as it is with anyone else. You have the choice between using an HMO (Health Maintenance Organization) a PPO (Preferred Provider Organization), a POS (Point of Service) Plan, a fee for service plan and/or a HSA (Health Savings Account).
Health Maintenance Organization – (HMO) These are “pre-paid” insurance plans where either the employee or the employer pay a fixed monthly fee for service. The fee never changes but you are often regulated to going to a specific doctor or clinic under contract with the HMO.
Preferred Provider Organization – (PPO) This is a medical plan where you receive discounted rates for using specified doctors, hospitals, clinics, etc.
Indemnity Health Plan – This is the standard health insurance plan where you pay for your care up front and submit a claim to your insurance company to be reimbursed.
Health Savings Account – (HSA) Allows you to put away pre-tax dollars for medical expenses including doctors visits, co-pays, prescriptions, vision and dental needs as well as a number of over the counter items.
Point of Service – (POS) This plan allows you to pick your own doctor. You will pay less if the doctor is part of a network of doctors that your insurance company has a contract with. If the doctor is out of network you will split the cost of coverage. Usually that split is 80/20.
Premium Lowering Ideas For Independent Contractor Health Insurance
Even if you have found a health insurance policy you are happy with you may want to consider a health savings account for additional tax savings.
It usually doesn’t save any reasonable amount of money to go with a co-pay plan over a high deductible plan. In fact, high deductible plans may be cheaper in the long run, especially if you are healthy and make few trips to the doctor each year. Look at the numbers and make sure you choose the option that is most cost effective.
Look for family rather than per person deductibles as well as annual rather than per incident deductibles to save money on out of pocket costs. Per person deductibles cost a lot more money in the long run, especially if you have young children and find yourself spending a lot of time at the doctor’s office or hospital.
Re-evaluate your health insurance coverage annually. Your medical needs will change over time and you want to make sure you are paying for the coverage you need and not coverage you do not need.
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