When it comes to healthcare & small business, it’s probably no surprise, but self-employed people, who do not have employees, are categorized as independent contractors. This means they need to buy their insurance as though it is for an individual.
According to a recent report by the Georgetown University Health Policy Institute’s Center on Health Reform, close to 1.5 million people will be going the self-employed route due to the changes with the Affordable Care Act (ACA).
Options to consider include:
Skip health insurance altogether by doing zilch…
Problem with this choice are the fees, which is the higher of 1 percent of a person’s annual income, or $95 per person—it’s expected to reach a maximum of 2.5% or $695 per individual.
If you’re Medicaid eligible, you may be exempt from those penalties; check out the government’s website: HealthCare.gov.
Stay with what you have…
If you’re insurance was in place before March 2010, then there’s a chance it can be grandfathered in.
Keep in mind that since most self-employed people opt for catastrophic coverage, they will still have to shop to make certain their policy meets the new requirements by law.
Go with a plan ‘outside’ the exchange…
It’s legal, which means you’re buying your healthcare coverage through your insurance agent, or maybe one of the private brokerages online.
A big downside to this approach is you may end up paying higher premiums; this, because the exchanges monitored by the government are in fact subsidized.