When you choose to live the American dream and own your own business or be self-employed, one of your biggest financial choices will be what you choose for self employed health insurance. When you work for someone else in corporate America, it is easy to overlook the how much health insurance actually costs making self employed health insurance decisions of the utmost importance.
How Does Self Employed Health Insurance Work
When you work for a corporation, you may be fortunate enough to have health insurance for their employees, but when you’re self employed, it may be difficult to find affordable insurance. Self-employed health insurance works in much the same way that a company plan works. You select a coverage plan and pay a premium for that plan.
Is Self Employed Health Insurance More Expensive?
Insurance plans for self-employed individuals may seem more expensive, but it is not. It just seems that way because individuals typically are coming from a corporate job where the majority of their health insurance premiums were paid for by their employer. Having to pay 100% of the health insurance premium price may be a shock. Also, paying for comparable coverage may also be difficult as big companies get better plans due to the sheer volume of people on the plans.
How To Select An Insurance Company for Self-Employed Health Insurance
Selecting a company for self employed health insurance seems like a daunting task, however it is relatively simple. The first thing you need to do is determine the type of coverage you need.
How to determine the type of self employment health insurance coverage I need
- Who is being insured? Just you or your entire family?
- Do you have any medical issues right now that require prescription drugs or regular medical attention?
- How often do you get sick?
- What type of work will you be performing and could it cause injury?
Once you have determined the type of coverage you need, you can begin shopping around the various insurance companies and attempt to find a plan that fits your health insurance needs and budget.
What Insurance Companies Offer Self Employed Health Insurance Coverage?
Nearly all insurance companies offer some sort of health insurance plans for self-employed individuals. Some of the top self-employed health insurance companies are:
- Blue Cross Blue Shiled
You can also use various internet sites to shop and compare rates for you. Often times this is a free service and the companies receive a commission from the insurance company you end up choosing. If you are short on time this may be a good option.
Deducting Health Insurance Premiums If You’re Self-Employed
If you are self employed, you are also eligible to deduct your health insurance premiums from your federal taxes.
Eligibility is determined month-by-month
You can only claim the health insurance premiums write-off for months when neither you nor your spouse were eligible to participate in an employer-subsidized health plan.
Earned income limitation
The deduction cannot exceed the earned income you collect from your business – meaning you can not deduct $5000 worth of premiums if your business only makes $4500 for the year. They don’t let you buck the system in that regard.
Partners and LLC members
Partners and LLC members who are treated as partners for tax purposes are considered to be self-employed. You do not need to be a sole proprietor in order to take advantage of the tax deduction.