Self-Employment in America: Balancing Tradition and Healthcare

Benjamin Franklin was one of the first Americans to embody the spirit of self-employment, showcasing hard work, long hours, and a relentless drive to succeed. A lot of modern Americans share Franklin’s beliefs and practices, but many struggle to maintain their health or secure reliable healthcare.

Nowadays, health insurance costs are sky-high, especially for the self-employed. They often pay twice as much for monthly premiums compared to those who have employer-sponsored plans. Finding affordable and sensible healthcare feels like an uphill battle for those who work for themselves.

But there is hope. While miracles may not be on the table, hardworking self-employed individuals can still find affordable and suitable healthcare options.

A quick way to explore available options is by using search engines to find sites that compare prices. These sites offer a great starting point to understand the variety of individual care plans insurance companies offer, although the numbers can be overwhelming at first.

Alternatively, you can go directly to insurance companies to see their available plans and prices. Be aware that these options tend to be on the pricier side. Plans from online brokerage sites and insurance company websites are among the most expensive you’ll find.

If you’re married, you might benefit from dual health insurance. This means if your spouse has healthcare benefits through an employer, you can receive coverage too. Simply ask the employer about adding you to the plan. This process is usually straightforward and quick.

COBRA, the Consolidated Omnibus Reconciliation Act, allows recently fired employees to keep their former employer’s insurance for up to 18 months. If you’ve become self-employed after losing a job, this might be a good option. However, you will have to pay the full premium, which can be more expensive than you’re used to.

Looking back at labor unions, one of their main goals was to provide healthcare for members. Many modern organizations, including bar associations and arts groups, offer some form of healthcare. Larger national organizations might even offer fully subsidized plans. If you’re part of a professional organization, it’s worth investigating.

While health insurance brokerages might seem outdated, speaking with a knowledgeable broker can save you time and money. Despite the wealth of free information online, a professional can provide tailored advice and options.

Medicaid was created to ensure that people who can’t afford healthcare can still receive it at little to no cost. Many believe only the extremely poor qualify, but in reality, many Americans meet the eligibility requirements. Medicaid eligibility is based on income, typically for those earning up to 100% of the Federal Poverty Line (FPL). The Affordable Care Act (ACA) includes a Medicaid Extension, raising this threshold to 133% of the FPL, allowing more people to qualify.

Under the ACA, self-employed individuals must purchase health insurance or face an annual fee. This fee starts at $95 but will increase over the next few years, eventually being tied to inflation.

One of the ACA’s benefits is the choice it offers. States are required to create online marketplaces where consumers can choose their healthcare plans and providers, with various possible tax credits based on income. Lower-income individuals will pay less for insurance. For those earning between 100 and 400% of the FPL, annual healthcare costs won’t exceed 9.6% of their income.

States can also opt to extend Medicaid coverage under the ACA, raising the income eligibility to 133% of the FPL and allowing single, childless adults to apply. Currently, 26 states are considering or have decided to adopt this extension, which takes effect in 2014.