Health Insurance
Being self employed is fantastic! There is no one to tell you what time you need to be at work or what you have to wear or to pay for your health insurance and for half your payroll taxes. What? Gotcha! Many new entrepreneurs overlook the need for health insurance and just how much it will cost them when they strike out on their own.
You MUST Have It!
Right after I got out of college I shook the dust of Indiana off my feet and headed down to someplace really fun, Miami. I had a fantastic time working odd jobs and trying new things out for a year until, one visit home my father gave me one of those fatherly lectures; not about finding a career but about finding health care! “What if something happens to you, what do you think your mother and I would do, just let you die or suffer? You know we would spend our every last dollar trying to save you, is that something you want on your conscience?” Grief stricken at the thought of my parents staring at my lifeless body in a casket, contemplating their future with no son and no money, I went to grad school for finance, ended up in accounting, and the rest is history.
“So what?” you shrug. Well, no one ever thinks it is going to happen to them but it always happens to someone! So, if you don’t get health insurance for your sake, do it for your mom, she’s worried sick!
Mom & Dad
“Alright,” you grumble, “but where do I get health insurance that won’t cost too much?” Try starting with dear old Mom and Dad. You see, with the new Obama-care health insurers are mandated to offer health insurance to all children up to age 26, irregardless of whether they are in school or not. In fact, most of the big insurers, including United Health Care, WellPoint, CIGNA, and Blue Cross & Blue Shield are already in the process of implementing this. Also, a few states already require that insurance be available for children up to age 26, or even older.
Spouse’s Job
Hey, this is one of the reasons so many self employed are married to school teachers; they can still get the good benefits that way! An obvious resource but one that shouldn’t be overlooked.
Day Job
So what if the significant other doesn’t have a job or their current job doesn’t offer health benefits? Well, head over to your nearest Starbucks, Whole Foods Markets, or local government branch and pick them up an application! There are some employers who still have a reputation of providing quality health benefits at an affordable price for their employees . Better yet, pick up two applications because you may want to consider getting a day job yourself until your business takes off. Check out employers with flexible or alternative hours that will leave you time to work on your business after hours. Hey, once I even worked as a parking lot attendant and could have worked on my business even as I got paid (and insured) on my regular job. Of course, I squandered that time studying.
Trade organizations
If you’re too old (or an orphan), not married, and don’t think that a second job would work for you than the next step is to look toward any trade organizations that you might be a member off that might have a health insurance package. Also try your local chamber of commerce, AARP if you’re over 50, and the Small Business Services Bureau. A fabulous resource is Health Insurance Info Net by the Georgetown University Health Policy Institute that gives up to date information on a state-by-state basis; including sections for small business and the self employed.
Insurance broker
It is the insurance broker’s job to help you find the right insurance package for your needs and the option shouldn’t be overlooked. Just do remember that, as with any broker, your interests and those of the broker are not always in alignment and therefore shop around first to get an idea of what your other options are. Comparing health plans is tricky, because there are so many variables all of which will be important to different people.
COBRA
If you’re leaving a job to go out on your own, don’t forget to get signed up for COBRA before you go. COBRA basically gives you the chance to continue your current insurance, under your now ex-employer, for up to 18 months after you leave that employer. This buys you time and allows you the chance to shop around some. With COBRA, however, you pay 100% of the cost of your coverage, so no employer subsidy. Do not let your insurance lapse! When you eventually pick up a new insurer you don’t want the to say whatever you need taken care of was a pre-existing condition.
What’s your experience with health care? Did you find it a difficult part of the transition from being employed to becoming an entrepreneur?
Please leave your questions or offer your solutions below. As the WebCPA and the author of WebBizFinance.com, my job is to help you grow your business and solve your business finance and accounting problems!
Tyler
