Self-Employed Health Insurance - What You Need To Know About Going Out On Your Own

podcast Jan 01, 2023
insurance when self-employed



If you’re beginning to form an exit strategy for leaving your corporate job, I’m sure one of the first things you looked into was what your options were for getting health insurance when self-employed. Losing benefits is one of the bigger fears and hesitations when people are considering leaving their job and going to work for themselves, and for good reason—getting health insurance when self-employed is a complicated task, and an expensive one to get wrong. That’s why I’ve invited a guest to tell us about the process of getting health insurance when self-employed: Oxana Parfenova!

Oxana is fantastic at helping people save money on insurance and get proper coverage for their families, and she has some incredible insight to offer into what can often be an extremely confusing topic, so I’m going to let her have the floor from here on out.



Finding Insurance When Self-Employed: The FAQ


The Options

Oxana: There are plenty of options for obtaining health insurance when self-employed, which is actually part of why it can become so confusing so quickly. It’s easy to get lost in the mire of insurance terminology, so let me lay this out for you:

Typically, the group insurance plans are the best, because your employer contributes to them. You can pick different levels of coverage, they're not crazy expensive if you're not adding the family, and some employers will even take care of the whole family, so it really depends on what you have. But when you go outside of the employer and start shopping for insurance when self-employed, you will be offered a COBRA option first.

COBRA is a continuation of your current policy, but you'll have to pay for it at full price rather than having your employer cover it. Because you are considered self-employed, if you have your own LLC or report your income through a 1099, you'll be able to write off all those premiums at the end of the year as a tax deduction. That’s great, but COBRA can be really, really pricey.

The other way to get medical insurance when self-employed would be through Marketplace, which is the Affordable Care Act. I’m sure you’ve heard of it—it’s open enrollment right now, so it's literally everywhere.

Marketplace is available as soon as you leave your job. They give you a sixty-day grace period to enroll once you lose your employer coverage, so even if you quit in the middle of the year or decide to go out on your own in the middle of the year, you’re still eligible to enroll.

If you don’t go with either of these options, there are also private insurances available. Those are typically not good for everybody; they're not very comprehensive as far as preexisting conditions go, so that’s one thing you need to think about whenever you are losing your employer coverage.

If your family is in good health, you can potentially qualify for private plans. If you have somebody who has anything going on with their health, the COBRA or the Marketplace options would be the best two routes for obtaining insurance when self-employed.



Shopping for Plans

If you want to shop around, it’s very simple to do. You can go directly to—make sure you do not go to .com or any other website extensions, it has to be .gov—and there you'll be able to window shop and compare prices. You can play a little bit with your income, as well—for a lot of self-employed people, when you do the write-offs at the end of the year, you can adjust your income to what you want it to be, more or less.

I have a lot of clients that are self-employed, and they're able to check what the income should be in order for them to qualify for certain rates, which is helpful. But you don’t have to submit it right when you run it.

There's also an alternative to filling out a starter application. It's called It's a bit more user-friendly. When you go to it, you'll be able to compare prices without starting the application.

Now, if your goal is to get to a certain dollar amount within your business and you know what your family situation looks like, you can drop that in and get an idea of what your costs will be for investing in insurance when self-employed. However, you have to be very careful with that income when you officially choose a plan, because Uncle Sam doesn't like you if you don’t report that accurately.

When you apply for insurance when self-employed, they’ll ask you what you’re projected to make, and if you put a certain number down just to lower your premiums and end up making more at the end of the year, when you file your taxes, they'll re-calculate that tax credit that they gave you upfront and charge you that difference.


Getting Overwhelmed

Even with this information, the whole process of getting insurance when self-employed can be very overwhelming, especially if you're not educated about health insurance. My suggestion would be to contact an experienced agent if you can. They can help guide you through the whole process of finding insurance when self-employed and make it much easier for you.

But just in case you can’t hire an agent, here are some key points to look at when you're taking a look at the options for obtaining insurance when self-employed:

The premium is what you pay monthly, then you have a deductible. Typically all those Marketplace plans will have a deductible; however, your preventative care will be covered 100% before you meet that deductible. So if you only use your plan for annual checkups, don't worry, you don't have to satisfy that deductible. That will be free. Now, if something does happen to you and you need medical assistance, that's when the deductibles come into play.

Once you reach that deductible, there is a certain co-insurance factor to pay attention to. Every plan has different percentages that the company will contribute versus what you will contribute until you reach your maximum out-of-pocket cost.

Once you reach your maximum out-of-pocket cost, the company has to cover a hundred percent of all of the bills moving forward, except for certain things like copays. If your plan has a copay, that's not subject to a deductible, so just keep that in mind.

Health insurance is not one-size-fits-all. Sometimes I encourage people looking for insurance when self-employed to get a plan with set copays. Sometimes—for example, if they're pregnant—I tell them to get a plan without the copays. Due to the delivery bills, they will hit their maximum out-of-pocket no problem, and then they won't have to pay anything after that. It really just depends on everybody's situation.



Work with Oxana!

Thanks for coming on and sharing with us, Oxana!

Of course, it’s impossible to answer every complex question you might have about finding insurance when self-employed in a blog post—that’s why Oxana recommends speaking with an agent if you can. You can reach out to Oxana herself for a free, no-obligation consultation if you like, or the other agents that she works with. Between the five of them, they cover over 40 states, though they can essentially help anybody. Even if you live in the states that Oxana doesn’t cover, she can always point you in the right direction!

To hear more from Oxana about the more complex areas of obtaining health insurance as a business owner, listen to Episode 112 of the Profits + Prosecco podcast here:




Instagram: @oxanacare or @simplehealthquotes





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