Self
Employment Tips For Lowering Your Health Care Costs
Author:
Dominic Messina
THE
BAD NEWS If you're one or the growing ranks of Americans who are self employed,
you know how expensive it is to get comprehensive health care coverage. Oh
sure, it's available...
just not at the same price that large businesses pay as they qualify for
group rates.
Worse
yet, the premiums which small businesses (less than 200 employees) have for
heath insurance coverage is increasing at twice the rate that it's increasing
for large (500+) employees according to William M. Mercer Inc. (www.wmmercer.com),
a consulting firm specializing in employee benefits. Not surprisingly, an
estimated 40 percent of small-business owners do without insurance, according
to the Insurance Information Institute (www.iii.org), because they believe
they can't afford it.
Because
of their high price, too many self employed individuals settle for health
coverage that is inadequate. Such business people are threatening not only
themself and their family's health, but also their business' very existence
should they ever become injured or seriously ill.
THE
GOOD NEWS If you're planning to leave or recently have left full-time paid
employment, you can still retain your existing health insurance thanks to
a law known as COBRA (Consolidated
Omnibus Budget Reconciliation Act) of 1985. COBRA can provide a bridge for
the newly self-employed as it allows you to retain the same insurance coverage
at the same price that you had
before. As a former employee using COBRA, you have to pay the full premium
that your employer was previously paying or supplementing. That is still
cheaper than an individual policy, since the coverage is purchased at a group
rate. When it expires, you have the choice to continue with that same plan
-- at an individual rate.
The
problem is that COBRA only lasts 18 months, and after that those who are
self employed are on their own. However, there are some options that self
employed business people have to reduce
how much they pay for health care coverage. These are:
1.
Use The Internet To Become Better Informed Whether shopping for the lowest
health insurance rates or wanting to ask medical questions of experts, learning
to do research on the internet can make you a more informed consumer, thus
bettering your chances of lowering your health care costs. The better educated
you are about health care, the more you can avoid unnecessary and/or expensive
medical insurance.
2.
Get Coverage From Your Employed Spouse A common and easy way to get long
term health coverage is to add yourself to your employed spouse's existing
policy, and use the extra premiums
you'll have to pay as a tax-write off, of course.
3.
Join With Other Self Employed People There are strength in numbers so
investigate joining a professional or trade organization that offers its
members coverage at a group rate discount. Two such groups are the National
Federation of Independent Business (www.nfib.com) and the National Association
for the Self-Employed (www.nase.org). However, before joining a group just
for its health insurance plan, one should consider the cost of membership
in addition to the insurance premiums.
4.
Lower Your Level Of Health Insurance Coverage If you are healthy and
don't require much medical care, why give the money to the insurance company
for low-cost claims when you could keep
it yourself? If you choose a higher deductible or a higher co-pay, the money
you save in monthly premiums might actually be more than you spend out of
your pocket in a year.
5.
Reduce Your Chances of Getting Sick You know the old saying about an
ounce of prevention being worth a pound of cure? Well, this is especially
true when it comes to reducing your health
care costs. According to Marilyn Furry (Associate Professor Of Extension
Education - Penn State's College of Agricultural Sciences), the best advice
to follow to avoid high health insurance premiums as well as out-of-pocket
health care expenses is to do the following:
(a)
Take advantage of free health screenings at local clinics, hospitals or health
fairs (b) Know early warning signs of potential health problems and consult
a physician ASAP (c) Compare fees and costs for medical, pharmacy and surgical
procedures (d) Keep accurate medical expenses records so you can itemize
these deductions on your taxes
6.
Join A Discount Health Benefits Club Perhaps the best way to cover any
existing gaps in your health insurance is to join what is known as a Discount
Health Benefits Club such as Ameriplan
(www.ameriplan.com) or MediSavers (www.medisaver.com). These clubs offer
their membership savings on prescription drugs, dental visits and other health
services by charging a fee to connect members with doctors, dentists, vision
centers, and chiropractors.
Rising
medical insurance costs force many self employed professionals to eliminate
coverage in areas like dental, vision and prescription drugs. But with these
areas covered when one joins s discount health benefits club, any gaps in
the self employed dental, vision and prescription drug coverage are
eliminated.
Also,
because 'discounted health benefits' aren't insurance, they can be used in
conjunction with existing health insurance to lower certain costs and even
supplement coverage for both the
self employed as well as the self insured. Due to their ability to supplement
existing health insurance, discount health benefit clubs must be considered
a strong health care alternative for the self employed.
AS
MORE PEOPLE BECOME SELF-EMPLOYED, MORE OPTIONS WILL APPEAR
Perhaps the best advice a self employed person can get on reducing their
health care expenses is to keep informed about changes in the small-business
benefits arena. Organizations such as Working Today (www.workingtoday.org)
and the National Association for the Self-Employed (www.nase.org) are building
networks and lobbying Congress to improve access to better health and retirement
plans for independent professionals. Consider lending your voice to theirs
and maybe someone will
here you.
About
the author:
Dominic Messina has been a health insurance professional since 1983 and currently
sells Ameriplan discount health benefits to individuals and organizations
from his home office where he struggles to keep his cat "Zorro"
from jumping up on his desk. You can email Dominic at ameriplan_dm@yahoo.
