3 Self-Employed Health Insurance Questions Answered

If you are self-employed, whether you own a business or are freelancing as a 1099 contractor, you need health insurance. But navigating those waters, with all the plan options and self-employment requirements, can be daunting. You may have several questions about how to begin, where to look, and what health insurance plan to choose. But there are a few more prominent questions that most entrepreneurs have. Here are three self-employed health insurance questions that come up most often, and answers to shed light on what can seem like a challenging endeavor.

What Are My Options?

Self-employed health insurance options vary, and trying to decide what works for you can be a huge first step challenge. Depending on your healthcare needs and the nature of your self-employment business, the plans may differ. Regardless of which health insurance plan you select, it’s important that you at least move forward with identifying and securing coverage for yourself and your family.

Do I Have to Buy a Plan through the Marketplace?
If you run your own business, with no other employees, or are officially self-employed, you won’t be eligible for traditional group insurance coverage. What you can do is first introduce yourself to the Marketplace and purchase a qualified plan for yourself and your family. The Affordable Care Act, often called Obamacare, launched the Marketplace platform that offers a variety of health insurance plans, from several providers, for you to browse. Based on your self-employed income and household income levels, you may also qualify for premium tax credits or other savings.

Can My LLC Pay for Health Insurance?
If you’ve structured your company officially as an LLC (Limited Liability Corporation,) you, too, will begin your health insurance search on the Marketplace. Because you are a shareholder of your organization and are taxed as an S Corporation, you do also qualify for health insurance premium deductions. Consult with your tax professional to confirm your position, but many self-employed business owners who own at least two percent of the business and collect a salary can deduct premium payments.

Can I Get Self-Employed Health Insurance if I’m an Independent Contractor?
Many Americans run their own businesses but in an independent contractor capacity. Freelancers, consultants, and even ride-share drivers file as 1099 workers every year. If you fall into this category of entrepreneurs, you too will venture to the Marketplace for self-employed health insurance. The plans and coverage options vary in price and are designed to fit a host of budgets. You can discuss your deductions with your tax professional, but for most contractors, 100% of health insurance expenses qualify as tax deductions. These expenses include any premiums, non-prescription medications, glasses, and chiropractic visits.

Can I Afford Coverage?

Even the most successful self-employed business owners have a budget to which they need to adhere. Based on the data, many entrepreneurs will need to operate for a three to five-year period before seeing healthy revenue and profits. For those just starting out as new business owners, the budgets are tight, and affording health insurance might be a concern. Fortunately, the Marketplace offers a robust selection of insurance plans at a wide range of price points.

What Are the Income Limits for Marketplace Insurance?
As always, to understand what benchmarks best apply to your business, discuss your income thresholds with your tax professional. However, in general, the income limits for Marketplace health insurance are $12,490 to $49,960 for an individual and $103,000 for a family of four. Because the cost of living averages variey by region, some of the benchmarks are enforced based on percentages of poverty levels. Your household income totals must fall between 100% and 400% of the federal poverty levels to qualify for those much-needed premium tax credits that can significantly lower your year-end costs.

What If I Can’t Afford Health Insurance?
Health insurance premium costs can seem unaffordable. But deciding to go without insurance can put you at risk for far more expensive alternatives, should you face paying for a hospital visit or procedure without coverage. If the Marketplace premiums seem out of reach financially, you do have additional options that might offer savings. You might be able to find health insurance outside the platform or from an individual insurance provider. Other self-employed health insurance options include joining affiliate or trade groups to leverage group coverage savings. Or you can discuss your income levels with your tax professional and see if there are ways to increase your deductions, like contributing to a retirement account. Falling within the income thresholds for the Marketplace plans will qualify you for cost-saving subsidies.

What Technically Qualifies as a Self-Employed Health Insurance Deduction?
Self-employed health insurance deductions are key to leveraging the Marketplace subsidies. For those who qualify, health insurance coverages are made affordable. Savings include up to 100% of long-term care, health, and dental premiums as deductions. And these extend to self-employed individuals, as well as their spouses, dependents, and qualifying non-dependent children.

Where Do I Begin My Search?

One of the most frequently asked questions from business owners, when it comes to exploring self-employed health insurance options, is where does one begin the search? The process doesn’t have to be challenging, and finding the right insurance coverage for you and your family at affordable rates, is easy.

What If I Have Several Employees?
If you are self-employed and have up to 50 employees, you may want to explore options to offer those staff members health or dental insurance. Some small businesses may qualify for the Small Business Health Options Program (SHOP) and can do so conveniently and affordably. And you won’t have to wait around, uninsured, for an open enrollment period to explore your SHOP plan options. Businesses of any size can also take advantage of individual coverage HRAs (ICHRAs) for additional benefits in the form of tax-free reimbursements. Use the Marketplace to provide for yourself and your teams.

How Do I Decide on a Plan?
Before selecting a health insurance plan through the Marketplace, you’ll want to have an idea of what kind of coverage you need. You may be looking to only insure yourself, for example. Consider your current health conditions, needs for dental, or any healthcare specialists you routinely consult. If you are looking to protect other family members, you’ll want to be sure your plan includes coverage for their needs, too. As you calculate the premium costs and subsidies to compare with your budget, be sure to review the in-network requirements, out-of-pocket benchmarks, and any co-pays that might add up in the end.

What If I Need Help Choosing a Marketplace Plan?
Begin your health insurance search with W3LL! Despite your best efforts to understand the complexities of the Marketplace and securing self-employed health insurance, you might want a little help. Our team is available to offer complimentary assistance in choosing the best Marketplace health insurance coverage. Have a partner to help guide you through the available plans, answer your questions, and understand your costs. Compare plans and start your enrollment process with free expert assistance.

If you still have questions about exploring your self-employed health insurance options, contact us today or start browsing with W3LL.

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