How to Prepare for Open Enrollment as a Freelancer
It’s hard enough to figure out health insurance under an employer-sponsored plan. Even harder? When you have to do it on your own as a freelancer. As if you don’t have enough on your plate, right?
Here’s our quick guide on what your healthcare options are, as well as some guidance on which plan could be the best fit for you!
What Are My Healthcare Options?
As a freelancer, you’ve got several options. Let’s take a look at three of the most common ones:
Individual Marketplace Coverage
Also known as ACA (Affordable Healthcare Act) health insurance, these are individual plans that are available through government marketplace websites, AKA state exchanges and healthcare.gov, or via various certified partners (HealthSherpa and Stride among them). Depending on your income and state of residence, prices and types of plans can differ. But what you will get, i.e. the level of coverage, they’ll be similar (if not the same) as what you would be getting with an employer.
And — here’s the big upside — more than 75% of people who shop for individual ACA coverage qualify for subsidies to help pay for their health insurance. The subsidies are based on your income and family makeup, so go to healthcare.gov to see if you qualify.
The combination of good coverage and availability of subsidies make healthcare exchange coverage the best option by far for freelancers. But there are other options as well.
Also known as the Consolidated Omnibus Budget Reconciliation Act, COBRA allows you to stay on your employer-sponsored coverage “under certain circumstances” that would’ve otherwise meant loss of coverage.
So say, for instance, you get laid off or switch to part-time and are no longer eligible for company-sponsored health insurance. In this instance, you can choose to continue to be on that existing plan at your own expense. It’s for this reason that COBRA is often referred to as continuation coverage.
It’s important to note that you basically have one shot at getting COBRA coverage — when your eligibility status changes at work, i.e. you get let go or leave. You can’t opt in within 60 days of this status change. After that, you’re on your own to find insurance elsewhere.
Healthcare Sharing Ministries
These faith-based, co-op style plans are an alternative to traditional health care plans in that you buy a membership in which all members agree to come together to help one another pay medical expenses. Everyone pays a monthly amount and is responsible for covering a certain amount (like a deductible) before the rest of your medical expenses are shared among the members. Some people with little to no immediate medical needs find them to be a cost-effective way to get covered. However, buyer beware, membership can be restrictive—many require you to sign what amounts to a moral code before joining. Plus, they typically do not cover pre-existing medical conditions, nor do they cover things like birth control.
Which One Should I Pick?
The “right kind of plan” really depends most deeply on your health (both now and within the next year), as well as your annual budget. For example, if you’re totally confused by the options offered through the healthcare exchange and you just left your full-time job, you can opt for the COBRA plan from your ex-employer for the time being.
Or say you’re really into saving money and have heard great things about healthcare sharing ministries. Say you find one that has a great reputation and you’re confident that when the time comes, you’ve got claim-submission on lock. Maybe that option is your best bet!
The key here is to think deeply about what you think you need now, and what you may need a bit down the line (e.g. Are you generally healthy? Or dealing with a pre-existing medical condition? Planning on having a baby? You get the idea).
Do I Really Need Health Insurance?
It’s tempting to forego health insurance altogether since you may not need it all too much in the next year … so say you save the money up front. But then you get into an accident, or you find out you have a pre-existing condition and can’t get insured even if you wanted to. Not good!
Nobody wants to think about these things, but your health is at stake. Whatever you do, try not to go without. If cost is a concern for you, consider an HDHP plan that allows you to open an HSA. That way, you’re setting aside money just in case of an unexpected healthcare cost. Plus, you’ll be able to save big on taxes, or invest a little extra as you see fit.