Reader question:

I’m about to start my own business. What do I need to know about health insurance?

Abigail

Great question.

Having self employed health insurance is more important than even having health insurance while you are employed by a company. Consider the fact that all of your health insurance is funded by yourself, and if you don’t have it, should something happen to you that puts you in the hospital for a few days, you’ll be out of work. And if you’re self employed, you don’t get paid for things like sick days and vacation time, so not only will you have a huge hospital bill, but you will also be out several days of work with no recompense.

Getting health insurance if you are self employed is financially responsible even if nothing happens to you medically while you have it. The self employed are allowed to claim their health insurance costs on their tax returns as a business expense. For self employed people looking for a good health insurance plan, there are health savings account, which are tailored specifically for the self employed.

If you intend to be self employed, you need to find out what you will do about health insurance before leaving the job you’re at now. Looking for health insurance if you happen to have a pre existing condition, or your family does, can be difficult, and you might have to end up getting insured through your state’s high risk pool, which can be costly.

You might want to save costs and guard your personal information by not employing a health insurance broker. This is understandable, but if you choose to go this route, you will need to put much more effort and research into your search. You will need to understand the different terms and policy speak that come along with health insurance plans so that you can be sure that the plan will cover you and your family. Or you could choose to go with a broker. They cost, but they also know more about you, although they tend to be pushy.

As mentioned before, a good plan for the self employed is a health savings account. These are trusts with a bank or credit union which are tax exempt and are paid into by you, in the form of cash. In order to work, they have to come side by side with a health insurance plan with a high deductible. It gives you greater coverage than your average plan.

Cheers,

Fashun Guadarrama.