Health Insurance Tips for Self-employed Business Owners

Those whose jobs include health insurance benefits have it easy. The company that employs them pays a portion of their premiums. But what if you’re your own boss, if you’re not working for someone else? If you are one of those courageous self-employed individuals, or you’re planning on starting your own business either now or after retirement, this article will give you useful tips on how you can enjoy affordable self-employed health insurance even after quitting your current job.

Hold on to your earlier plan under COBRA
The best option for continuing to enjoy your employer-sponsored health insurance for some time even after leaving your job is through COBRA – the Consolidated Omnibus Budget Reconciliation Act of 1986.

COBRA allows people to extend their current health insurance coverage at permissible group rates for 18 months maximum after leaving their jobs, provided that their former company has 20 or more employees and they weren’t fired from their jobs for incompetence or gross negligence. More information on COBRA coverage can be obtained from the U.S. Department of Labor.

The down side to this plan is that as a self-employed individual, you will have to bear the entire cost of the insurance coverage. This will be a lot higher than what you might have been paying as a company employee. The Kaiser Family Foundation states that employees usually pay just 28% of their health insurance costs.

Decrease your premium cost in advance
This will require planning ahead of time. Before leaving your job, try and join the most economical health insurance plan made available by your company during the period of open enrollment that is closest to your quitting date. This will ensure a lower insurance premium to be paid later under COBRA.

Act before the time limit expires
Your COBRA eligibility ends after 180 days, and the law guarantees you the benefit of health insurance provided that you seek coverage under a brand new policy within a span of 63 days after that. Continue Reading »
Self-employed Health Insurance