Since it's rare for Americans to work at the same loyal employer for the entirety of their careers, many employees are opting to take charge of their future by setting up businesses they can drive and control. The Internet offers many opportunities for entrepreneurs, such as the ability to work from home while raising a family, convenience, efficiency, closeness with sellers/buyers and the intrinsic value of being able to create a better balance between work and life.
However, along with this good news comes the challenge of finding health insurance. If you don't find the right plan at the right price, you can seriously damage not only your physical well being but also your long-term financial health.
Below, we provide steps to help entrepreneurs and the self-employed find appropriate insurance.
Health care in America has evolved into a sprawling system of hospitals, clinics, managed care overseers, insurance companies, giant for-profit corporations, and myriad other organizations employing a vast labor force.
Add the Affordable Care Act (Obamacare) to the mix, and the result is a huge bureaucratic morass that's difficult for home-based entrepreneurs to navigate.
You can do all the research and figure it out yourself - or you can do it the easy way with a quick call or email to a health insurance broker. Health brokers are a free service, and they'll do all the legwork for you in finding affordable plans with the right doctors and prescriptions that meet your needs. To find one in your area, visit the website of the National Association of Health Underwriters, an association of benefits professionals who serve individuals and businesses.
Beginning in 2014, Obamacare required most Americans to carry at least a minimum amount of insurance coverage or pay a penalty. While that penalty is currently small, it is set to increase substantially over the next couple of years. This penalty can over time take a bite out of your retirement savings.
You may be eligible for a government tax credit to help you purchase insurance if you aren't eligible for health insurance coverage from another source (such as a spouse's plan). If your annual income is within a certain range, you will generally qualify for some kind of credit toward your insurance premiums.
This amount will increase based on the number of members in your family. If you live in Alaska or Hawaii, that income figure will also increase. This handy chart outlines the income ranges.
If your income falls below the bottom of the range, you may be able to qualify for Medicaid, depending on the rules in your state. If your income is too high to qualify for a tax credit, or you're eligible for health care through other employment, you won't qualify for a credit.
There are two ways to purchase individual insurance coverage: either directly from a private insurance carrier or through an online health insurance marketplace or "exchange." If you qualify for a tax credit, you will need to purchase your insurance through an exchange to receive the credit.
Many states have their exchanges where you can purchase health insurance. If your state does not have an exchange, you would purchase through the federal health exchange. You can find links to all the health care exchanges through healthcare.gov by clicking here.
If you do not qualify for a credit to help you purchase your insurance, you can purchase a plan through the exchange or from any health care insurer who provides plans in your state. While you could go online and search for plans, ask your doctor which companies they work with, ask friends who they are insured through, or just start calling health care companies.
It's important to remember that health insurance rates are set by law. Rates and coverage are the same whether you use a broker or go directly through an insurance company or exchange.
Health insurance plans purchased through the exchange are sold and administered by private health insurance and must provide the following core benefits:
- Outpatient Care
- Emergency services
- Hospitalization (maternity and newborn care)
- Mental health and substance use disorder services
- Prescription drugs
- Rehabilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services
Some additional considerations when shopping for insurance:
- Medical conditions for which you are currently receiving treatment
- Medications you take regularly
- Being able to continue with your current doctors, if this is important to you
- Deductibles and out-of-pocket costs
Unless you have recently experienced a qualifying event (change in family status, loss of a job, loss of insurance, etc.), you will need to wait until the next open enrollment period in November 2016 to purchase health insurance.
Don't wait until open enrollment begins to start researching your options. To further investigate the tax and financial ramifications of buying your non-employer sponsored insurance, consider consulting the financial advisors at Charles Schwab SCHW , TD Ameritrade AMTD , or T. Rowe Price TROW .
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.