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The ultimate health insurance guide for self-employed creators

Category: Build Your Business

The ultimate health insurance guide for self-employed creators
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Read time: 5min

One of the biggest struggles for creative entrepreneurs in countries without universal healthcare is finding affordable health insurance coverage. Understanding and navigating your options can impose a major challenge; especially as a self-employed content creator

Without an HR professional to walk you through your options, you need to know how to evaluate different healthcare plans. You also need to consider your unique needs as a solopreneur — like staying healthy so you can keep growing your business. 

It’s vital to get a plan that’s affordable and covers your physical and mental health needs, which is why we want to support you through this process. Keep reading to learn the ins and outs of insurance and some options that work well for self-employed creators like yourself.

Do you really need insurance?

No question. Yes!

Emergency room or hospital bills can rack up fast - even for relatively minor concerns.. Counseling for mental health or burnout can cost as much as $250 an hour. 

And let’s face it, burnout is common among the self-employed. In fact, Vibely found that a whopping 90% of creators experience burnout at some point in their career.

Hopefully, you’ll never need to make an insurance claim, but when a health issue comes up, you’ll be glad you’re covered.

Affordable health insurance for the self-employed

Like it sounds, the Affordable Care Act (ACA) was designed to be affordable and accessible. Open enrollment happens each year from November 1st until January 1st or January 15th. 

But you may be able to enroll throughout the year if you experience one of four qualifying life events:

  • Losing health coverage
  • Changes in the household, such as getting married, having a baby, or experiencing a death in the family
  • Changes in residence, including moving to a different ZIP code or county
  • Other qualifying events, such as income changes or becoming a U.S. citizen

The ACA provides a variety of plans that allow you to find the right balance of cost and coverage:

  • Platinum covers 90% of your medical costs, with a 10% copay.
  • Gold covers 80% of your medical costs, with a 20% copay.
  • Silver covers 70% of your medical costs, with a 30% copay.
  • Bronze covers 60% of your medical costs, with a 40% copay.
  • Catastrophic plans cover three primary care visits and preventive care. You cover all other medical costs until you reach a high deductible. 

How much does self-employed health insurance cost? 

When selecting the right coverage for your needs, you aren’t limited to health insurance plans. You can also opt for dental and vision plans or pair your health insurance with a health savings account, also known as an HSA. 

Your cost depends on: 

  • The coverage you choose 
  • The types of insurance you select
  • Your age
  • Your location

The more coverage you choose, the higher your premium. But you don’t have to foot the entire bill. To help lessen the strain, the government offers tax credits that allow self-employed individuals and their families to buy health insurance from the Health Insurance Marketplace®

Understanding tax credits for health insurance

When you sign up for insurance in the Marketplace, you’ll be asked for your estimated income and household information. This determines your potential tax credit.

To qualify, your income must be between 100% and 400% of the federal poverty level (FPL), including wages and tips. Don’t worry if your income tops 400% of the FPL. 2022 Marketplace health insurance plans also offer a tax credit for higher incomes.

The credit reduces the cost of health insurance premiums for yourself, your spouse, and any dependent children under the age of 26.

Be aware, you don’t have to use your tax credits. You can use all, some, or none of your credit in advance to lower your monthly premium. 

When you do your taxes at the end of the year, you may have to repay some of those credits if your income is higher than you estimated. Alternatively, if you used less tax credits than you qualify for, you’ll get the difference in a refund credit on your taxes.

Alternative insurance

If you search the internet, you’ll discover alternative health plans, such as healthshare, short-term, and supplemental health insurance plans.

These types of plans can help you insure yourself against catastrophic medical events or injuries. But, it’s important to understand that they don’t qualify as health insurance plans and aren’t required to cover the same health benefits as ACA plans.

For instance, they don’t have to cover preexisting conditions — and usually don’t. They also may require you to pay your own medical expenses and then submit bills for reimbursement.

Small business group insurance

Another option for the self-employed is small business group insurance through the Small Business Health Options Program (SHOP).

It’s available for small businesses with up to 50 full-time employees. If you have fewer than 25 employees, you can qualify for the Small Business Health Care Tax Credit, which covers 50% of the cost. 

You can enroll through an insurance company or with the help of a SHOP-registered agent. 

Note: This coverage is only available if you have employees working 30 or more hours a week. If you’re a sole-proprietor, you must get individual coverage.

Considering hiring employees to help grow your knowledge business? Check out this article for everything you need to know about hiring employees. 

Buying directly from insurance companies

Another option is to buy health insurance from your preferred insurance company: Cigna, United Healthcare, Aetna, Kaiser Permanente, Anthem, or Oscar Health. This can be a great option if you had a plan you liked at a former employer and want to access those providers and facilities. 

Keep in mind, you must select a qualifying plan to get the premium tax credits available on the Marketplace.

Some of these companies also offer dental and vision coverage. Or, you can get coverage from a specialty provider like Delta Dental or VSP Vision Care.

Health insurance myths 

Choosing health insurance isn’t easy. It doesn’t help that there are so many myths surrounding the process. Let’s address some of those common misunderstandings now.

Myth #1: Without an employer, insurance isn’t an option.

With the ACA and government tax credits, individual insurance is affordable for everyone. You do need to select the right plan, though. 

If you rarely get sick and need to keep your premiums low, you can do that by choosing a plan with a higher deductible and copay. If you or your family has chronic conditions, you can lower costs by choosing an HMO plan. 

Myth #2: I’m covered as soon as I sign up with a health insurance company.

Depending on the healthcare plan you choose, there may be a waiting period before you’re fully covered. For instance, if you purchase insurance from the Marketplace during open enrollment, your coverage won’t start until January 1 of the following year. Be sure to read the details or get in contact with the insurance company to get answers to your questions. 

Myth #3: Health insurance will cover 100% of my healthcare costs.

No insurance plan covers 100% of your costs. Your coverage depends on the deductible, copay, and annual out-of-pocket maximum in your chosen plan. 

The deductible is the amount you pay before insurance coverage kicks in. Generally, the lower your monthly insurance premium, the higher your deductible will be. 

The copay is your share of the healthcare bill. In most cases, after reaching your deductible, you’ll still be responsible for 10-30% of your healthcare expenses, depending on your plan.

The annual out-of-pocket maximum is the total amount of money you will pay throughout the year. Once you’ve spent this amount of money on healthcare costs, insurance will begin paying 100% of your expenses through the end of the year.

Myth #4: Lower premiums will save me money.

You may be tempted to choose the plan with the lowest premiums, but in the long run, it could cost you more. 

This is particularly true if you have a chronic condition like asthma or diabetes that requires regular maintenance and medication, or if you or a family member needs emergency surgery.

Choose a plan that gives you enough coverage for your anticipated medical needs (including potentially unexpected needs) but doesn’t break your budget. You may not use all of your coverage, but you’ll have what you need if a medical emergency arises.

Myth #5: Health insurance covers any doctor I want.

Depending on the type of plan you choose, you may have limited options when choosing your doctor. 

HMOs, or Health Maintenance Organizations, are one of your least expensive health insurance options. You must choose a primary care physician from their network, and you can only see a specialist if they refer you. No out-of-network healthcare is covered except in an emergency. 

POS, or Point of Service, plans are similar to HMOs in that you need a referral from your primary care doctor in order to see a specialist. You do have the option to use out-of-network doctors, but you’ll pay less using in-network providers.

EPOs, or Exclusive Provider Organizations, only cover services if you use doctors, specialists, and hospitals in the plan’s network (except in emergencies). But their network is generally bigger than an HMO’s. Some may require a referral before seeing a specialist.

PPOs, or Preferred Provider Organizations, allow you to see any provider you want, though you’ll pay less if you use network providers. 

Myth #6: Health insurance only covers physical illnesses.

Many insurance plans now consider mental and behavioral health issues essential. So, your plan could cover counseling, substance abuse, and related issues. Some providers have better access than others, so before choosing a plan, read reviews about what it’s really like to access mental health care through their network.

Note: Different states and insurance plans offer different mental health benefits. Compare plans in the Marketplace to ensure you get the coverage you need.

The bottom line on health care options for the self-employed

As a business owner, you now have more control than ever over your healthcare choices. With the advent of health insurance exchanges, the SHOP program, and HSA plans, there’s never been a better time for the self-employed to take charge of their healthcare costs. Remember, to choose the right plan, take time to understand your healthcare needs before deciding on a plan. 

As a content creator, it’s easy to work yourself so hard, you exhaust yourself to the point of burnout. That can lead to expensive health conditions and even the need to slow (or pause) your business growth. Your content and digital products won’t create themselves without you feeling your best, so invest in yourself and your future by making smart healthcare choices!

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