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What You Need to Know About Self-Employed Health Insurance

HealthPlans of NC

Financial Considerations When Getting Self-Employed Health Insurance

If you are or are considering becoming self-employed, it is crucial to understand the ramifications it may have on your health insurance. You may no longer receive coverage under your employer’s insurance plan. Therefore, it is essential to consider your financial situation and choose an affordable health insurance plan.

What Are Available Options for Self-Employed Health Insurance?

There are different options for self-employed individuals when selecting a health insurance plan. With the assistance of a licensed insurance agent, you may find the plan that works best for you.

1. COBRA Health Insurance

Consolidated Omnibus Budget Reconciliation Act (COBRA) allows individuals who no longer work with the company to remain covered by their employer’s health insurance. You must be enrolled in your employer’s group health plan to be eligible. Furthermore, it is required that your company has at least 20 employees. Smaller businesses do not qualify for COBRA.

COBRA Health Insurance

Essential Things to Know About COBRA

When considering COBRA, there are important pieces of information to know. Typically, you have two months to decide whether or not you want COBRA health insurance. If you do, you must pay entire monthly premiums and an additional 2% administrative fee. COBRA plans provide coverage for 18 to 36 months. COBRA will stop providing coverage after enrolling in a new health insurance plan.

2. Purchasing Health Insurance Through the Insurance Marketplace

You can purchase long-term coverage from the health insurance marketplace. The open enrollment period is from November 1st to January 15th. However, you can enroll in Medicaid and CHIP (Children’s Health Insurance Program) at any time. You may also be eligible for a special enrollment period if you recently lost coverage or have another qualifying event.

What to Consider When Choosing Self-Employed Health Insurance?

It is important to understand the different insurance plan types, as they each have different coverage characteristics. By speaking to an experienced insurance agent, you may find a plan that meets your and your family's needs.

Health Maintenance Organization (HMO)

Under an HMO plan, you must visit in-network primary care providers. While this plan type offers less flexibility, it is generally more affordable. Furthermore, you must live or work in the HMO’s service area to receive coverage. Therefore, this plan works best for those who don’t require frequent travel. In addition, you typically need a referral from your PCP to visit a specialist. However, there are exceptions for medical emergencies and OB/GYN care.

Preferred Provider Organization (PPO)

For those who want more flexibility in their coverage plan and are willing to pay higher fees, a PPO plan may be best. With this plan, you are allowed to visit out-of-network care providers. However, this comes at the cost of higher monthly premiums and copays/coinsurance rates. PPO plans do not require referrals to visit specialists.

Health Savings Account (HSA)

If you receive coverage through an HDHP (High-Deductible Health Plan), you may enroll in an HSA (Health Savings Account). With this option, you can withdraw funds tax-free to help pay for health insurance expenses. This can help cover coinsurances, copays, and deductibles. In 2023, the contribution limits for an HSA are $3,850 for self-only coverage and $7,750 for family coverage.

Tiers and Categories of Self-Employed Health Insurance Plans

There are different tiers for health insurance plans. Under the Bronze tier, you pay the lowest monthly premiums. However, you also pay the highest coinsurance rate at 60/40. In addition, you have a higher yearly deductible.

With the Silver tier, you have a coinsurance split of 70/30. 

Finally, the Gold tier has the highest monthly premium but the lowest yearly deductible. The coinsurance rate is 80/20.

Ask your insurance agent

Discover The Costs Involved With Self-Employed Health Insurance Plans

Along with benefits and coverage options, costs should be highly considered when choosing a health insurance plan. Specifically, self-employed individuals may have to cover monthly premiums fully. You also must understand your yearly deductible, coinsurance percentage, and copayments. Therefore, it can be pretty beneficial to speak with an insurance agent. By doing so, you can better understand these fees.

Discover Savings Options When Getting Self-Employed Health Insurance

You are eligible for premium tax credits if your income falls between 100% and 400% of the federal poverty level. This will lower the cost of your monthly premiums. Furthermore, those who use less than their qualified premium tax credit receive a refundable credit when filing taxes. In addition, you may be eligible for a cost-sharing reduction. With this, you have lower copayments, coinsurance, and deductibles. Also, you have a lower out-of-pocket maximum. However, to qualify, you must be in a Silver tier plan.

You can receive a quote to discover which plan you’re eligible for.

What Other Options Are There for Self-Employed Health Insurance?

While the health insurance marketplace is accessible, there are other options. If you are under 26 years old, you can receive coverage through your parent’s health plan. Qualifying individuals can also enroll in Medicaid.

Need Assistance In Getting Your Self-Employed Health Insurance?

If you need help accessing the best self-employed health insurance in North Carolina, it’s worth getting guidance from an experienced and licensed health insurance agent. At Health Plans of NC, we understand the importance of having comprehensive health coverage. So contact us today to find out your options or compare plans. Our goal is to help you find the plan that works best.

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