You've Got Options: Self-Employment Insurance
Updated: May 5
In the age of the "side-hustle," more and more individuals are giving self-employment a try. Being your own boss can be a great feeling: setting your schedule and working from anywhere in the world can feel highly liberating. Especially for those used to a rigid 9-5 and a set office. With all the freedom of self-employment, however, comes some uncertainty. Chasing down clients for invoices is no one's idea of a good time, and the joy of working from a coffee shop can wear off quickly. But for most, the most significant uncertainty comes from health insurance coverage –– or the lack thereof.
While many think you have to sacrifice this security to be self-employed, health insurance options are still out there! There are a few different ways to get coverage. (Take Command Health) There are a few benefits and drawbacks. In this article, we will discuss the different options available to self-employed individuals and information on how to choose the best plan for your needs.
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Options for Self-Employed Health Insurance
Small-Group Health Insurance Plan
No Insurance for the Self
Small-Group Health Insurance Plan
There are a number of ways to receive access to small-group health insurance plans, whether you choose to purchase them directly from the insurance company, from a private broker, or from the state's health insurance marketplace. This is a primary option for self-employed individuals who have a small team, and small-group insurance plans have numerous options to choose from –– like managed care or a high-deductible health plan.
Like any solution, there are perks and disadvantages to this method of receiving health care coverage. While this option is tax-free, it is also a more expensive means of attaining health insurance and can be subject to wildly fluctuating annual health insurance premiums. If affordable health insurance is a priority, keep reading to explore our other options.
Health Reimbursement Agreement (HRA)
A more affordable health plan than the small-group health insurance plan, a health reimbursement agreement (HRA) allows self-employed small business owners to reimburse their employees for health insurance costs on a pre-tax basis. Under an HRA, individuals set aside a fixed amount of resources each month and have access to benefits with the same tax advantages of a small-group insurance plan –– without the extra hoops to jump through. The two most common HRA options are:
Qualified Small Employer Health Reimbursement Agreement (QSEHRA);
Individual Coverage Health Reimbursement Agreement (ICHRA)
These options both share the core benefits of an HRA (including lower monthly premiums,) but an ICHRA can be scaled across various types of employees and can be integrated into a group plan.
No Health Coverage
The cheapest approach to self-employed health insurance is also the riskiest, and one we do not recommend: Opting for no health coverage at all. While this can be a short-term health insurance strategy for healthy individuals, it is not a viable option in the long run. This approach leaves you vulnerable to high medical expenses should you be involved in an accident and need health care services. Should your health status not be pristine, opting to go without a health insurance provider is not worth the risk to save money.
Explore Health Plans with Trusted Referral Network
There are ways to get good health care coverage without breaking the bank, and the team at Trusted Referral Network has the resources you need to discover individual health insurance plans as a self-employed individual.
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