Benefits of Short Term Health Insurance for the Self-Employed
If you’re self-employed, you’re on your own for health insurance. Unlike others in the working world, you can’t rely on a group plan from your employer. As you do your own insurance shopping, you may find that the flexibility and affordability of a short term health plan make it the best bet for your needs. Temporary coverage offers plenty of benefits when you’re self-employed.
After losing job-based health insurance, you typically qualify for a 60-day special enrollment period, during which you can sign up for an individual health insurance plan. If you get wrapped up in making plans for your new business venture and forget to enroll in an insurance plan, you won’t be able to buy private health insurance until the next open enrollment period, which starts in November and runs for about six weeks.
Forgetting to replace your employer-sponsored insurance isn’t the only reason that you might need a health plan mid-year. Even if you’ve gone without insurance for a long time, a friend might convince you that remaining uninsured is risky. If you already have insurance of the traditional sort, you might be looking for a more affordable alternative.
If you find yourself in such a predicament, short term health insurance is there to help. You can buy a plan at any time of the year, and coverage can begin as soon as the next day. By October 2018, you’ll be able to purchase a plan with a term of up to just under a year, and you might be able to renew it for up to two years after that. Flexible timing makes short term plans an attractive alternative for people whose schedules are inherently flexible.
For those who have always received insurance through a large employer, there can be some serious sticker shock when shopping for individual health insurance policies. Depending on your household income and the time of year when you buy a plan, you may be able to get premium subsidies by shopping through the health insurance marketplace. However, if you don’t qualify for a large subsidy, the cost of an individual major medical plan might be painfully high.
In 2018, customers without subsidies pay an average monthly premium of $522 for a single-person health plan. Even if you can afford that this year, you might find that the plan jumps out of the affordable range next year. Premium costs tend to rise each year. The average cost of a silver health insurance plan for one person was 34 percent higher in 2018 than it was the year before.
Short term health insurance typically costs quite a bit less than marketplace plans. The average monthly premium is just over $100 each month, and it doesn’t usually rise sharply from year to year. If you can’t fathom the idea of spending thousands of dollars every year on a health insurance policy, a lower-priced short term health plan may be better for you.
Research shows that self-employed people are some of the most satisfied workers, which means you might not have plans to change career paths anytime soon. If you do get a different job, though, it could bring with it different insurance options. There’s also the chance that your spouse could get a new job that includes healthcare benefits.
If you suddenly find yourself covered by a major medical health plan, you can quickly and easily discontinue your short term health insurance policy. Most temporary health plans allow you to cancel at any time without a financial penalty. You might not receive a refund for the remainder of your current month, but you shouldn’t owe a cancellation fee or any future premiums.
Until your new policy kicks in, however, it’s a good idea to keep your short term health insurance in place. Unlike temporary health plans, there may be a waiting period before you’re eligible for coverage from a job-based insurance plan.
Sometimes, being self-employed can take you all over the country. You might hop a plane to recruit a new client or drive across the state to complete a job, or you might have the freedom to work on the go as you drive across the country in your RV. As you travel, it’s important for your health insurance to go with you.
Many major medical plans restrict you to a certain network of providers. Plans without national networks may only work with doctors and hospitals in one specific area. If you seek care elsewhere, you may be responsible for a larger portion of your bills or even the entire cost.
Short term health insurance is more flexible than that. Most don’t restrict you to a particular network, so you can use the doctors and hospitals of your choice. No matter which provider you use, the insurance company will contribute toward your covered treatments. This isn’t universally true of all short term plans, but temporary coverage tends to have broader networks and open access to providers across the country.
A short term health plan doesn’t cover as many services as a traditional insurance plan does. While some might see this as a drawback, you can also look at it as a way to maintain control over your healthcare spending.
Traditional plans have to charge sky-high rates in order to provide coverage for a wide range of services, including maternity care, prescription drugs, mental health services and preventive treatment. You can’t get a break on your premiums just because you don’t plan to use all those services.
If you’re shopping for a short term health insurance plan, however, you can look for one that offers only the types of coverage that you actually expect to need. If maternity care or mental health treatment isn’t important to you, you can pick a plan that doesn’t include them. As a result, you’ll probably have a much lower premium than you would with a cover-it-all major medical plan.
You could choose to set aside a portion of the money you save so that you’ll have it on hand if a medical need arises. When you need a checkup or an antibiotic that’s not covered by your temporary health insurance, you’ll be able to take the funds out of your savings.
As a small business owner or an independent contractor, you’re responsible for the success of your endeavors. You have plenty of responsibilities on your plate and more than enough thoughts running through your head every day. You shouldn’t have to add worries about healthcare costs to your mental load.
Buying a short term health insurance plan can help you let go of some of your financial worries. You can rest in the knowledge that if you suddenly become sick or hurt, you have insurance that will help with the bills. That’s a much better feeling than worrying that you might someday be responsible for paying hundreds of thousands of dollars in medical bills entirely on your own.
Others who rely on short term health insurance can confirm that this trust is well-placed. In a survey of people who had filed an insurance claim while on a temporary plan, 69 percent said that they were pleased with the coverage that the insurance company had provided. Another 27 percent reported being partially satisfied.
Navigating health insurance as a self-employed person can be tricky, but short term plans offer a straightforward coverage option. They provide affordable protection for times of transition and peace of mind when you’re striking out on your own.