Health Insurance Options for Self-Employed People – Part 1

Why is Health Insurance Important and What are the Different Plan Types

Over the next few posts, I’ll be discussing health insurance options for self-employed people, including why it’s important, the different plan types, the different terms you need to be familiar with, questions to ask and criteria to look at when choosing a plan, the application process, as well as a few companies that provide health insurance to self-employed people. In this post I’ll discuss why health insurance is important and what the different plan types are. 

Why is health insurance important?

Health insurance is important for three reasons:

1. It protects your health – You’ll have access to quality health care, plus you’ll be able to get critical care, and having health insurance encourages a healthier lifestyle because people who have health insurance are more likely to take advantage of regular check-ups and preventive care when they know it won’t cost them an arm and a leg.
2. It protects your finances – When you have health insurance, you can get discounted rates for medical care, because insurance companies negotiate. Without this coverage, you’ll be charged twice as much for an office visit. It also protects you from unexpected medical costs – even if you have to pay for certain costs out of pocket, being covered can help save you from bankruptcy if you’re injured or hospitalized.
3. It protects your business – Health insurance shields your business from unexpected medical costs because it limits your personal liability for medical costs. It also helps you hire and retain the best workers because many people who are applying for jobs are looking for jobs with good health benefits.

What are the different plan types? 

There are two different types of health insurance plans you can take advantage of, depending your needs – individual and family plans, and small business and group plans. The differences between these types of plans are outlined below.

• Individual and family plans – These insurance plans are purchased by individuals to cover themselves and their families. Self employed people often purchase these kind of plans, although some may qualify for small business or group plans.
• Small business and group plans – Small business and group plans are sponsored by employers – the employer and employee usually share the cost, and coverage may also be extended to dependents. In certain states, small business owners who don’t have other employees may also qualify for small business or group plans. There are special tax incentives available to businesses that provide group coverage to employees and no one in a group can be turned down because of a pre-existing medical condition.

That’s it for this post – in the next post, I’ll discuss terms you need to be familiar with, questions you need to ask and criteria you need to look at when choosing a health insurance plan.