Health Insurance Options for Independent Consultants

By MBO Partners | April 8, 2020

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As an independent professional, cutting ties with the constraints of a corporate workplace can also mean losing some of the perks—including health insurance benefits that many employers offer. However, this factor seems to be outweighed by the many benefits of going independent. Eighty-two percent of full-time independents say they are happier working on their own and 69 percent say it is better for their health.

As a group, independents believe it is no more or less risky to leave all your employment eggs in the employer’s basket than to spread them across several clients or to protect them in their independent nest, even without the benefits provided by traditional employment. And, there are many benefits options available to you as an independent professional. Here are five common and financially-savvy ways to secure health care coverage.

1. COBRA

For new independent contractors who are preparing to leave full-time employment, COBRA coverage may be a temporary option. COBRA provisions allow individuals to continue to receive health benefits from their former employer for up to 18 months after termination, whether voluntary or involuntary, as long as the termination isn’t due to “gross misconduct.”

Though the 18-month limit and the high premiums make COBRA a short-term solution, it can help transitioning independent consultants maintain continuous coverage while finding an alternate solution. More information about COBRA eligibility is available at the U.S. Department of Labor website.

2. Partner’s Plan

If your significant other has insurance through their employer, it may be possible to be added to their plan. While this option was once almost exclusively limited to legal spouses, coverage for domestic partners is now mandated in some states and voluntarily offered by a growing number of companies. This means that many unmarried couples, whether same-sex or heterosexual, can now be added to their partner’s employer-provided insurance plans as long as they meet the state or company’s requirements of “domestic partner.”

3. Individual Plan

Individual health insurance coverage allows the uninsured to purchase coverage directly from insurance providers. These plans are highly customizable, offering a wide range of options regarding deductibles, copayments, and options such as prescription coverage. The monthly premium will vary greatly depending on options and personal health history, but the cost is generally higher than an employer-provided plan and cheaper than COBRA coverage. You can obtain individual plans through state-operated “exchanges,” and select options that suit you or your family. You can learn about the individual insurance options available to you at HealthCare.gov.

4. Small Business Plan

If your consultancy has another employee—whether it’s a partner, a part-time assistant, or even your spouse—a small business group insurance plan may be an option. With a small business plan, you cannot be denied coverage based on pre-existing conditions. Some states allow independent consultants and other self-employed professionals to purchase business plans even without other employees. To find out the regulations regarding small business group plan qualification in your state, visit National Association of Insurance Commissioners website.

5. Group or Association Plan

Though often overlooked, joining various groups or associations could provide another potential health insurance option for independent consultants who don’t qualify for a small business plan. Group plans are generally cheaper than COBRA and are limited in the restrictions they can place on pre-existing conditions. Associations such as AARP often offer plans to their members, as do more specialized business groups or even city chambers of commerce.

For more information about health insurance options you may be eligible for, contact us today.

 


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