Health Insurance for the Self-Employed
In the latest data offered by the U.S. Bureau of Labor Statistics, more than 15 million Americans were self-employed. For the ten percent of the American workforce that operates their business with no employees, one of the most difficult challenges is obtaining a robust health plan that meets their needs as an income earner for their household.
With the implementation of the Affordable Care Act (also known as Obamacare), the options for the self-employed have grown dramatically. Not only can you find and obtain a health plan on one of the state or federally operated individual insurance marketplaces, but, if you meet certain eligibility criteria, you may receive government subsidies that can save you hundreds of dollars a month on your premiums.
Take Advantage of Obamacare
Despite recent efforts to repeal it, the Affordable Care Act is still the law of the land. That is good news for you, especially, if you also meet certain eligibility requirements, including:
- You reside in the United States
- You are a citizen or legal resident
- You are not currently incarcerated
If you meet these criteria, you qualify to purchase a health plan from your local health insurance exchange.
If you also want to qualify for government subsidies, then you must also have an income within the following limits:
Family Size Minimum Income Maximum Income
1 $11,880 $47,520
2 $16,020 $64,080
3 $20,160 $80,640
4 $24,300 $97,200
Known as the Premium Tax Credit, the government subsidy reduces the monthly premium for health plans found on the health insurance exchanges.
You must file an annual income tax return verifying your income and your health coverage status throughout all 12 months of the year. If you made more income than is allowed, you may have to pay back some or all of your PTC. The same applies if you made less income than is allowed, but you may qualify to join Medicaid if your state expanded its eligibility requirements.
You should also know that the Affordable Care Act also has a provision commonly known as the Individual Mandate. The Individual Mandate requires you to have health coverage or pay a financial penalty; that is why you may pay a fine if you are not covered throughout the year. So if you stop paying your premiums, you may pay more than you save at tax time. The fine for 2017 is currently set at $695 per adult and $347.50 per child, with a maximum penalty of $2,085.
Medicaid for Self-employed
Even if you own your own business, you may still qualify for health insurance through your state’s Medicaid program. Although Medicaid is a federally funded program, it is administered by individual states. Each state has its own eligibility standards, so you should inquire at your state Medicaid office to determine if you are eligible for their version. If you do qualify, you may be able to get health coverage through a variety of available health plans at little or no cost. Medicaid primarily serves the poor, disabled, pregnant women, elderly and children.
In 2010, when the Obama administration enacted the Affordable Care Act, it included a component that allowed states to raise their eligibility requirements for Medicaid in return for additional federal funding. Thirty-two states, including the District of Columbia, adopted new federal standards that households with income up to 133 percent of the poverty level may now qualify for Medicaid.
Every state has their own application and approval process, but it is usually worthwhile to apply even if you think you may be accepted into the program. As a self-employed worker, you may not always have accurate records of your actual income because you don’t have pay stubs. In many cases, your bookkeeping may not reflect your take-home pay because tax and Social Security deductions are incurred quarterly or annually. If your state allows it, submit your most recent tax returns to support any claims of diminished income. Many state Medicaid agencies are willing to take a closer look at reported income if you can verify your claims with some documentation.
If You Aren’t Eligible for ACA Programs
If you fail to qualify for the subsidized Obamacare health plans or Medicaid, you may resort to some possible alternatives. Your first option is, of course, to enroll in a health plan from the ACA-sponsored health insurance marketplaces. You may not get a tax credit to help pay your premiums, but you can still enjoy benefits like free annual checkups, free preventive care, catastrophic coverage and discounted prescription drugs. There are Bronze, Silver, Gold and Platinum tier plans, each with less or more benefits and corresponding premiums. You may also find dental plans on the marketplace for very affordable rates.
If you do not find a health plan on the exchanges that meets your needs, you are free to shop around with private insurers and insurance brokers like Boost Health Insurance. Like the plans on the Obamacare exchanges, private health insurance policies must include certain features. First of all, no insurer can deny you a policy nor can they raise the premium based on a pre-existing condition, so feel free to discuss your health needs and concerns. Secondly, all health plans must include Essential Health Benefits like emergency services, outpatient services, hospitalization and maternity care.
Finally, if you are 65 years of age or older, you may qualify for the federal government’s insurance program for seniors, Medicare. You may apply to enroll in Medicare in the months prior to your 65th birthday, and you have the option of joining traditional Medicare or a private insurance plan that is paid in part or in full by Medicare. Known as Medicare Advantage plans, these subsidized plans often provide outstanding benefits that equal or exceed those of traditional Medicare.
If you are searching for health insurance options as a self-employed worker, you can find many of the answers you need at Boost Health Insurance. Our friendly, knowledgeable health insurance professionals can provide the latest information about Obamacare, Medicaid, Medicare and private health insurance options.
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