It is estimated that by the year 2020, 40 percent of America’s workforce will be comprised of freelancers, so it’s important for all self-employed individuals to find comprehensive information about healthcare in the workforce of today’s world. Here are the new plans and regulations under the Affordable Care Act.
Self-Employed Status Requirements:
- Individuals who operate an income generating business, and have no employees, are considered self-employed. Those who hire independent contractors are not considered employers and do not have to provide health insurance benefits to their independent contractors.
- Individuals who hire employees and report the employee’s income on W-2s each year, are considered employers. These people, and their employees, are eligible for healthcare coverage through the SHOP market place.
Self-Employed Health Insurance Options:
- Self-employed individuals may seek insurance coverage through the federal or state health insurance exchange if they believe they are eligible for a tax subsidy to help pay for their insurance, or the self-employed can apply for a plan through the private marketplace.
- Catastrophic insurance is for individuals who are below 30 years old or have received the hardship exemption. These people may purchase a catastrophic plan in order to meet the shared responsibility requirements. Catastrophic plans may have lower rates than many comprehensive plans; however, the out of pocket expenses are generally higher.
- Health Savings Accounts for Self-Employed Individuals can be paired with most ACA insurance plans. These products allow you to pay for health costs on a pre-tax basis.
One of the most prominent choices for self-employed individuals is purchasing healthcare coverage from private websites like HealthCare.com, where you can find insurance that matches your needs.
Advance premium tax credit
Self-employed individuals may be able to receive subsidies known as premium tax credits. This is based upon family modified adjusted gross income and individual income. The greater the income, the smaller the credit. Eligible filers may choose to have all, or a sum of the credit, paid directly to the insurance provider. This will reduce monthly out of pocket premium costs. The following guidelines apply in order to qualify:
- Individuals who have no access to affordable healthcare coverage through a government or employer plan are eligible.
- They must purchase coverage through the federal marketplace.
- The household income must fall between 100% and 400% of the FPL or Federal Poverty Line.
- Individuals may not be claimed as a dependent by any other person.
Self-Employed Health Insurance Taxes
Health insurance premiums may be tax-deductible if you’re self-employed.
Short Term Alternatives for Self-Employed Freelancers
There are short term insurance alternatives which last between 30 and 364 days (with options for extended coverage pending approval). These plans were designed to offer coverage to uninsured individuals who have lost coverage from an employer, are newly divorced, are age 26 and no longer eligible for coverage on their parent’s plan, and more situations. Most of the benefits generally concentrate on catastrophic coverage, which means comprehensive and preventive care are typically not covered. Temporary, short term insurance instead proves protection from major financial setbacks.
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