You can work from anywhere, but are you covered while you’re there?
There’s often some confusion between being a freelancer and being self-employed. If you’re self-employed, it’s pretty much business as usual except you’re the boss. You’re earning income from your own enterprise and paying taxes on it.
If you’re a freelancer, you’re one of over 57 million Americans with that lifestyle. You’re also part of a growing group who contribute around $1.4 trillion to the U.S. economy. Freelancers are projected to form the majority of the workforce within ten years.
Freelancers are a tough and enterprising bunch. Surely with such statistics they’re entitled to health insurance? These days, they do have more options than ever before. Here’s our guide to what they are.
The different faces of freelancing
People become freelancers for different reasons, and operate under different circumstances. For instance, if you’re now a freelancer because you recently left a job for any reason, this means you probably lost your job-based insurance. You can still find a plan via the Health Insurance Marketplace (HIM).
You have to act within 60 days of your original insurance ending. Your options here even apply if you quit or were fired. This government guide will help you discover if you qualify for out-of-pocket health costs and savings on your monthly premiums.
If you’re a freelancer with children, you may also qualify for the Children’s Health Insurance Program. A second alternative is remaining on your old employer’s health insurance for up to 18 months via COBRA continuation coverage.
How a freelancer can estimate their income
Estimating your freelance income (and your family situation, if appropriate) will help you get even more clarity on your qualifying status. Things vary from state, so here’s the page if you live in Florida to see where you stand. You may also find this health insurance marketplace calculator a useful tool.
If your income is fairly low, there are still options. A freelancer who is married or living domestically in a committed relationship may be eligible for insurance coverage under the policy of their partner. This is called Domestic Partner Insurance.
Such a domestic partnership can protect freelancers with all the benefits of their spouse/partners’ policy, and may be a desirable option if the freelance income isn’t particularly high. The good news is that if you’re a freelancer with children, they can also be covered.
If you are covered as a freelancer, combining your policy with your spouse or partner’s can have even more positive benefits.
Consider a HSA
HSA stands for Health Savings Account. The IRS provides in-depth information which we’ll summarize here. HSAs allow you to lower health costs by putting money aside to offset the cost of deductibles, co-payments and other medical expenses. HSAs have the positive feature of being untaxed dollars.
They’re limited by the fact that they can only be used in conjunction with a High Deductible Health Plan (HDHP). In short, HDHPs are those with deductibles of at least $1,350 for an individual and $2,700 for families. In an ideal world, your HSA would be a back-up to your policy.
Despite the HDHP limitation, a solo HSA could be the option best suited to you.
Can a freelancer afford NOT to have health insurance?
The safe answer to that question is “no,” both for freelancers and everybody else. Marketplace coverage can protect against steep medical fees: the average cost of a 3-day hospital stay is around $30,000. When you’re freelancing, your income can be unsteady and so marketplace health insurance can be hugely beneficial.
In some cases, marketplace health insurance may even save you 90% of your covered expenses after deductibles. Freelancers will also have the comfort of out-of-pocket expenses being capped. After that maximum has been reached, the rest of the cost of care is covered by the plan.
There can also be a “penalty” fee of up to $2,085 if you can afford health insurance but don’t have it in place, regardless of your job status. There’s the option of short-term HI policies, but we don’t recommend them. It’s important to note that short-term health insurance isn’t considered “real” health insurance here, and won’t protect freelancers from a possible penalty fine.
Being vigilant with your medical bills can cut costs
Every dollar counts for freelancers, so double-check those medical bills. You should ask for itemized bills from your medical provider breaking down costs in detail for your procedure and medications. Your provider might have overcharged you by accident (or intentionally, as is sometimes the case).
In fact, medical billing can be full of mistakes and stresses, as this resource from the National Patient Advocate Resource demonstrates. Being a freelancer can be hard enough without paying things you may not even have to.
We hope this blog has helped you with your freelance health insurance concerns. If you’re not currently a member, you may like to join the Freelancer’s Union. Membership is free, and their health insurance page offers information which may be of assistance.
Whenever you’re weighing up insurance options, it’s always best to discuss them with a qualified professional. You’re more than a freelancer; you’re a person with individual circumstances that make your needs unique. When you’re ready to discuss which health insurance is right for you, Avante is here to listen.
Avante Insurance is a South Florida family owned and operated agency providing an array of insurance services to meet the individual needs of our customers. If you need any information, call us at 305-648-7070, request an insurance quote or contact us with any questions or comments.