Being self-employed has its pros and cons. On the pro side, a self-employed person is in control of their own fate. On the con side, being self-employed means not having the same access to certain things, like group health insurance. But being self-employed does not entirely close the door to good health benefits.
A Legitimate Form of Employment
Self-employment is not as much of an outlier is many traditionally employed people think. But unfortunately, far too many people consider self-employment somewhat illegitimate. They think it is only for people who cannot hack it in the traditional workforce. Yet reality tells a different story.
Among the more than 32 million small businesses operating across the country, just over 27 million are run by owners and their families. They have no employees outside of the family. Approximately 9.6 million of them are incorporated, while the remainder are sole proprietors.
Both groups of self-employed individuals work as landscape contractors, plumbers, painters, tech consultants, computer repair techs, photographers, and on and on. They provide valuable services for which they are paid handsomely. Why shouldn’t they have access to good health benefits?
You Have Many Choices
If you are self-employed, whether you have employees outside of your family or not, your legal business arrangement and the size of your company do not preclude you from obtaining good health benefits. In plain English, you have many choices. It is a matter of learning about those choices and figuring out what is best for you.
Based on a small business with fewer than 50 employees who may or may not be family members, here are the health plans you can choose from:
1. Individual Market Plans
You always have the option of buying traditional health insurance on the individual market. You can buy it for yourself or your family. Individual market plans are more expensive than group plans, but you might be able to get a better deal through the local Chamber of Commerce or small business association.
2. ACA Marketplace Plan
If you cannot afford insurance through the individual market, you can look into ACA Marketplace plans. You might be eligible for federal subsidies that would make ACA insurance easily affordable. Again, you can buy insurance for yourself or your entire family.
3. Federal SHOP Plans
SHOP plans are also ACA Marketplace plans with a twist. They are designed for small businesses that are either incorporated or organized as LLCs. You are not eligible as a sole proprietor working alone. If you do have up to 50 employees who are not your family members, you should be able to get a SHOP plan.
4. Self-Funded Health Benefits
Self-funded health plans are plans funded entirely by employers and usually administered through third-party organizations like Las Vegas-based StarMed Benefits. They say there are self-funded options for the self-employed. Self-funding is a lower-cost alternative to obtaining health benefits without buying insurance.
5. Health Reimbursement Arrangements
Last but not least is a health reimbursement arrangement (HRA). This is a unique type of employer-sponsored financial plan that provides reimbursements for qualifying healthcare expenses paid for out-of-pocket. There are different types of HRAs, so you would need to have one tailored to your particular needs.
As a self-employed individual, you are in the company of millions of others. Whatever you do constitutes a valuable contribution to the U.S. economy and culture. Fortunately, you don’t have to sacrifice good health benefits to keep working as a self-employed business owner. Take a little bit of time and dig into the details. You will probably find a health plan that works for you.