New Options in Health Insurance for Freelance Business Owners
Freelancers can now join professional associations to purchase health insurance, but options end soon.
Open enrollment for the Affordable Care Act (ACA) marketplace opened Nov. 1 and ends Dec. 15. Plans take effect Jan. 1, 2019.
The end-of-year scramble follows changes the U.S. Department of Labor finalized in June 2018 following a presidential order to modify the annual health insurance marketplace.
For years self-employed business owners fought for the same access to health care coverage offered to employees in group plans sponsored by employers. Most freelancers couldn’t afford coverage on the open market due to high individual costs from a limited number of options. Some pre-existing conditions left these hard-working entrepreneurs uninsurable for health care.
Under Obamacare (ACA) the self-employed were still left without coverage despite claims to insure more freelancers. Costs skyrocketed under Obamacare (even for group plans through employers) and many self-employed people earned too much money to qualify for government subsidies.
The proverbial rock and a hard spot crushed freelancers trying to stay compliant with the law that mandated annual coverage or face a tax penalty. It added insult to injury for freelancers struggling to earn enough money to pay for expensive health plans and avoid tax punishment.
Legal Changes Allow Health Plan Access
The Labor Department’s June 2018 ruling opened access to health insurance choices by allowing associations – religious, professional, community – to meet large-employer insurance requirements.
Long-standing associations serving farmers, religious organizations or community organizations are examples of associations offering health plans to members. Others, such as Texas Freelance Association and IPSE-US, serve a diverse collection of self-employed professionals within the association.
Associations can act as a single large employer and provide health plans to smaller employers and independent, self-employed people. Association members can be in the same industry throughout the nation or in multiple professions across a similar geographic region.
Banding together as a single, larger group, freelancers can pursue competitively priced health plans through associations that follow the new ACA-compliant guidelines. This is similar to a large employer offering group health insurance plans to its employees.
Labor Department estimates show more than 4 million people may gain health insurance coverage under the association option.
Healthcare Enrollment Opens For Freelancers
Allowing associations to group members and offer health insurance plans seemed logical to most business owners for years. Politics stood in the way until the recent Labor Department changes.
Debate still rages over pros and cons of changes to ACA requirements allowing associations to offer health plans.
All debate aside, freelancers who are part of a participating association now have new healthcare options with plans starting Jan. 1, 2019. Open enrollment continues through Dec. 15. Freelancers need to research options and secure a plan before the open enrollment deadline.
Research Health Plan Options
With any health insurance plan, you’ll need to review all options, including cost, level of coverage, family member options and medical care – doctors and hospitals – available near you. These subjects are very individualized, and options vary with each plan and health insurance provider.
Don’t be afraid to ask questions or get multiple quotes regarding similar coverage.
Key insurance policy concerns include:
- Coverage – search for full coverage for individuals and family members, including pre-existing conditions (required for ACA-compliant plans)
- Cost share – deductible amounts for individuals and families; max lifetime coverage amount; serious illness; major surgery; emergencies
- Essential health benefits – services such as nearby doctors, labs, mental health, maternity, medicines, inpatient/outpatient care, rehabilitation
- Monthly premiums – budget for this plus expected deductibles and savings to cover emergencies
Budget Now For Health Care Costs
Health care is one of the biggest expenses every freelancer must account for in their business plan. Health situations affect everyone at some point, and severe health conditions can lead to financial ruin without proper insurance.
Texas Freelance Association, a partner of The Freelance Conference, is working with Decent Health as an association health care plan provider. For more information, contact Texas Freelance Association.
More people are joining the freelancing career culture – and this includes significant others. Some freelancers have a partner whose employer offers group insurance, but not all.
When all household income earners are living life free from corporate tethers health insurance through an association is now a viable option.