Self employed health insurance — do you need it? + exploring your options

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Last year, I was facing a dilemma: If I kept my self employed health insurance from the marketplace, my monthly fee was going to almost double to $415/month from $230/month.

My out-of-pocket expenses were also going to increase by $1,000. (They were already at $6,000, so the next year they’d be $7,000 BEFORE my insurance would pay a penny towards my health expenses.)

That means, all-in, if I wanted to see any financial benefit from my self employed health insurance, I’d have to give Blue Cross Blue Shield $11,980 before they coughed up a penny.

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Why?

Because on January 6th, just after the new year, I’d be turning 30.

And apparently, according to the government, we become geriatric at age 30? 🤷🏼‍♀️ I don’t know.

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It seemed absolutely atrocious to me that I’d have to pay nearly $12,000 into a system under the guise that they’d “be there for me” if I needed them… just because I was self employed. Yeah, right.

My health insurance was already so expensive the year before that I didn’t even go to the doctor once, because I couldn’t afford it.

Not that I was planning on having a health breakdown, but I would have really liked to have gone to the doctor at one point when I was having knee pain… so…. I decided to do something different. Unfortunately, because of the state I live in, I only had the option to buy from ONE company through healthcare.gov.

So I spent HOURS researching.

Thankfully, I found an ACA-compliant plan that only costs me $135.91 per month. On top of that, I pay $59 per month for access to a direct primary care doctor… meaning I can make an appointment any time and as often as I want for the same monthly fee. (Shoutout to this podcast episode for helping me find those options.)

(In case you’re behind on the lingo, ACA stands for Affordable Care Act. A lot of people simply call it “ObamaCare.” It’s a law that encapsulates A LOT of things, but for the purposes of this article, it basically means that you have to have health insurance or pay a fine. Finding a health care plan that’s ACA-compliant means you won’t have to pay the fine.) 

Self employed health insurance: do I need it?

In short: yes.

The sad fact is, medical bills are so insanely high in the United States, that if you don’t have health insurance, you’re running the risk of absolute bankruptcy if anything happened to you.

Take me for example: a 30-year-old who eats an insanely healthy plant-based diet, goes to the gym multiple times per week, sleeps enough, does no drugs, hardly ever drinks, and has no illness in her medical history beyond the common cold and the occasional stomach bug.

I could have just paid the $695 per adult fee for not having self employed health insurance in 2018 and been done with it.

Chances were, I wouldn’t need to go to the doctor at all this year.

But then, in the middle of March, I got really, really sick. Out of nowhere.

I was in and out of my doctor’s office multiple times per week, saw specialists, had to get some prescriptions filled, and couldn’t work for a solid two weeks.

Thankfully, I’d found an approach to self employed health insurance that covered all my doctor visits, that only required out-of-pocket money for hospital stays (which I didn’t have), and gave me access to prescriptions & tests at wholesale costs.

I don’t want to think about what it would have done to my bank account otherwise… with the $150+ cost per doctor visit (for at least 10 visits) being the “cheapest” thing I’d have had to deal with.

self employed health insurance

Types of self employed health insurance: Individual vs. Group Plans — are you responsible for your employees?

If you’re reading this article on Millo, I’m assuming you’re either a solopreneur or a really small company with less than 50 employees.

If you do have 50 employees, however, know that you’re required by law to offer health insurance to all of your full-time employees.

If not, you can choose how you pay for it: from your own personal bank account, or from your company’s bank account.

As someone without full-time employees, I know that the only person’s health insurance I’m responsible for is my own, so I make it a company expense.

However, know that if you do have full-time employees, what you offer to one, you have to offer to others.

So if your company pays for health benefits for you as an employee, you have to offer it to others too.

If you are offering health insurance for multiple people, ask the companies you interview about group rates, and you’ll likely get a better deal. Otherwise, stick to an individual plan.

Questions to ask yourself before choosing your self employed health insurance

When you look outside of the marketplace for self employed health insurance options, the waters get a little murky.

There’s no clear-cut way to distinguish what’s best for you. And as far as I know, no one’s put in the effort to create a truly unbiased “compare and contrast” tool to find the perfect fit for you (and I can’t blame them).

But even BEFORE you start looking, have the answers to these questions handy, so you can know whether a certain plan would be a good fit for you or not:

  • Do you have dependents?
    • If so, does this plan offer a “group rate” where you can get discounts for having a family plan?
  • How much of a monthly payment can you afford?
  • How often do you go to the doctor?
    • And how much would you have to pay out-of-pocket before this plan started covering doctor visits?
  • What special benefits do you need?
    • Does this plan allow for them?
  • Do you qualify for ACA subsidies?
    • If so, how much? And how do they stack up to the costs vs. benefits of this plan?
  • Do you have any pre-existing conditions that this plan won’t fully cover?
    • If it doesn’t offer full coverage, what will be the added cost?

Having these basic guidelines in place will help you while you’re shopping so you can quickly eliminate plans that won’t work for you.

What to look for in a self employed health insurance plan

First and foremost, you’ll want to make sure the self employed health insurance plan is ACA compliant. (Or if you want to do the math on paying the fine & taking that risk, that’s up to you.)

A lot of health plans are ACA compliant and cost way less than what you’ll find in the marketplace. For example, I cut my monthly cost down from $415 to $194.91 ($135.91 for health insurance + $59 for my monthly doctor fee), and it’s a policy I can actually use because it doesn’t have a $7,000 out-of-pocket requirement.

But also, from one self-employed person to another, make sure you’re getting health coverage you can actually use.

Maybe that plan comes from the marketplace, but maybe it doesn’t. Be open to different options and be prepared to piece a plan together if need be. I’m now buying my self employed “health insurance” from a life insurance company.

It’s more work upfront, but if you and your family can get care when you’re sick or injured without breaking your bank account, that’s the most important thing.

Also, check out the customer reviews.

  • Are other customers happy with their service?
  • Do they make filing claims difficult?
  • What is the claims process like and how much time does it take?
  • What are their customer service hours?
  • What happens in case of an emergency?
  • Are doctors open to accepting this health insurance plan?

self employed health insurance

Where to look for self employed health insurance & when to shop

Contrary to popular belief, you can actually sign up for self employed health insurance at any time.

Yes, the marketplace has certain guidelines of when you’re allowed to sign up… but even they give out special enrollment periods for people who’ve lost a job or recently lost employer coverage for one reason or another.

But other health insurance companies don’t operate on their same model, and you can sign up after January.

As a general rule of thumb, I’d start your search on HealthCare.gov. You may not end up buying a plan through this website, but it’s the “official” government website, and you can use this as your benchmark for shopping for other plans.

After that, honestly, it’s a bit of a minefield. I wish I could say otherwise, but it just is.

Keep in mind, when you’re not buying from the marketplace, you CAN buy across state lines. I live in North Carolina, and bought my plan out of an office in Georgia. It’s still ACA compliant, and it still counts… and I don’t have to pay a higher cost just because of my zip code.

Also, don’t limit your search to companies that only sell health insurance. Like I mentioned above, I buy my self employed health insurance from a company that mainly sells life insurance.

I will tell you that I use Philadelphia American, a subsidiary company of New Era Life Insurance, for my health insurance policy that’s ACA compliant, along with a local direct primary care doctor. I’m super happy with my policy and the manager in charge of it, but you may want to get a quote first to make sure it’s right for you.

I’d also highly recommend this podcast that got me on the right path to choosing a better health insurance option for myself.

It’s a minefield, but it’s worth it

No, finding the “perfect” health insurance plan as a self employed individual won’t be easy.

And in all honesty, you may not ever find the “perfect” plan.

But with the cost of healthcare.gov plans skyrocketing, especially for those of us without access to subsidies, it’s almost always worth the time to investigate something different.

For example, this year alone I saved $2,644.08 (which is MORE than what I’m spending in total this year!)  just on my monthly payments, because I took the time to do about 10 hours of research.

Not to mention all the money I saved on doctor visits when I got sick in March, because I didn’t have to deal with meeting a $7,000 deductible before I got to use my benefits.

Those ~10 hours of research weren’t fun, but they were sooo worth it.

So, good luck, my fellow freelance friend.

My best advice is to follow the links I mentioned in this article, and to also talk to other self-employed people about what they do for self employed health insurance. The more you ask, the more you know, and the better decision you’ll be able to make.

Leave me a comment below to tell me about your health insurance tips!

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About Chelsea Baldwin

Chelsea Baldwin runs Copy Power, where she teaches how to reverse-engineer copywriting based on psychology to get your readers hooked on you forever. She wrote a free ebook that’ll help you keep your traffic from bouncing and get more leads and conversions on your site.

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