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How Do Freelancers Get Health Insurance?

How Do Freelancers Get Health Insurance? | Very Good Coverage

Freelance work is becoming more and more popular, but health insurance is something many don’t understand. What is the best way for freelancers to get health insurance?

Health insurance is one of those things that you might not like paying for every month, but if anything ever happens you’ll certainly be glad to have it. With the high cost of healthcare across the nation, having quality health insurance is a must. Most employers offer subsidized health insurance plans to their employees, but freelancers do not have that luxury. So how do freelancers get health insurance?

Freelancers can get health insurance in the same ways that other self-employed workers can. Some of the best options include joining a spouse’s plan, finding a plan in the healthcare marketplace, and buying private coverage. In this article, we’ll cover those options and more so you know exactly what you need to do!

Freelancers are in the same boat as other self-employed individuals when it comes to finding health insurance. Over the years as freelancing has gotten more popular, more and more data has been compiled on the best ways for freelancers to get health insurance. As a freelancer myself, I had to go through the same song and dance when it comes to health insurance. So everything you read below is from personal experience and extensive research in the field.

What Options Does a Freelancer Have for Health Insurance?

Health insurance can be a difficult topic to understand or even stay on top of. There are so many different options out there, it’s a struggle to know which ones are available to different types of workers. Let’s take a look at some of the best options out there for freelancers to find health insurance.

Should Freelancers Join Their Spouse’s Health Insurance Plan?

One of the best options for freelancers to get health insurance at an affordable price is to join their spouse’s plan. If you’re a freelancer that’s married and your spouse or domestic partner has health insurance through their job and employer, you might be able to join their plan and receive the same coverage. If you’re thinking about doing this, it’s important to look at the details of their plan and see how much it will cost to add yourself to it and also what coverage is provided.

Sometimes spouses that have separate jobs will keep their own health insurance through their employers so that they have coverage tailored to themselves. If both partners are using the same plan, you may have to not only pay the additional premium but possibly even enroll in a different plan so that the coverage is more comprehensive for you both.

So take a look at everything involved before making a decision, but joining your spouse’s plan is usually the most cost-effective way to get health insurance as a freelancer!

Does the Affordable Care Act Help Freelancers Get Health Insurance?

In an effort to provide more healthcare options to a wider breadth of people, President Obama signed the Affordable Care Act (ACA) in 2010. Also known as Obamacare, the ACA was designed to create a marketplace for health insurance. This marketplace allows people from all over the country to find an affordable health insurance plan that fits their needs and provides all the essential health benefits that they need.

One of the best things about this healthcare marketplace is that the type of employment doesn’t matter. So it’s perfect for freelancers and other self-employed individuals that are unable to get coverage through their employer (since they are their own employer!).

Open enrollment is offered from November 1 - December 15 for coverage the following year, but if you have a qualifying life event — marriage, divorce, having a baby, losing a job — then you can enroll at different times.

Freelancers and COBRA Coverage

COBRA (Consolidated Omnibus Budget Reconciliation Act) is a program that enables individuals to keep their current employer-sponsored health insurance plan for up to 18 months if they are separated from a job. So if you’ve recently started freelancing due to separation from a previous job, COBRA coverage will allow you to keep your old plan.

But the kicker with COBRA is that it’s not cheap. Since most employer-sponsored healthcare plans include a substantial employer subsidy on the premium, you don’t pay the full amount. But if you’re separated from that job, they don’t have to pay part of the premium anymore. So with COBRA, your coverage will stay the same, but your premium can go way up.

Can I get Health Insurance Through the Freelancer’s Union?

If you’re a member of the Freelancer’s Union or you’re able to join, you could be able to get health insurance through the organization. Membership into the Freelancer’s Union is free so if you’re able to join, there’s no reason not to. And you may find an affordable healthcare plan in your area.

The only issue with using the Freelancer’s Union is that the health insurance plans that they offer are limited to a select few states. These states include New York, California, Connecticut, Colorado, Florida, New Jersey, Pennsylvania, and Texas. So your options may be very limited, but it’s worth it to check out!

Is Private Health Insurance an Option for Freelancers?

The short answer is yes, private health insurance is always an option for freelancers, but the premiums for a quality plan can be extremely high. But if you make a solid income from freelancing and don’t qualify for plans under the Affordable Care Act, it might be one of the only options.

One thing to consider when looking for health insurance is the deductible you’re willing to stomach. Typically, lower deductible plans with comprehensive coverage will be far more expensive than a basic plan with a very high deductible. If you’re young, single, and healthy, a high-deductible plan with low premiums might not be a bad idea!

How Much Does Freelancer Health Insurance Cost?

We wish there was a blanket statement that could cover the typical health insurance cost for freelancers across the nation. But sadly there isn’t. Health insurance is one of those things that will be different not only plan to plan but also person to person. The total price you pay for health insurance as a freelancer will depend on a number of things including:

  • Level of coverage you need
  • How many people will be on the plan
  • What your deductible will be
  • Your current state of health during enrollment
  • Government subsidies or tax benefits you qualify for
  • Where you live

That isn’t even everything that goes into it, just the most common factors that will affect the price. But to give a roundabout estimate just for planning purposes, taking all of the above into account you can expect to pay anywhere from $200 - $1,000 per month. This would amount to $2,400 to $12,000 per year just for your premium. It’s not cheap!

With such a wide range of costs, it could be hard to get an idea of what you can expect to spend. But let’s take a look at a couple of quick examples. A single freelancer looking for basic coverage in a low cost of living area could pay less than $200 per month for their premium. A freelancer that’s married with two kids — all of which will be on the plan — living in Manhattan can expect to pay north of $1,000 per month just for their premium.

With those two scenarios from both ends of the spectrum, you can interpolate and try to get an idea of what you can expect to pay for health insurance. But the best way to know how much it costs is to start looking at a few of the above-listed options and get a couple of quotes. Prices will differ for everyone, but health insurance is something that you really don’t want to be lacking if you ever need it. Health care can get incredibly expensive very quickly.

Should Freelancers Contribute to a Health Savings Account?

A Health Savings Account (HSA) is a triple tax-advantaged savings account that people can open and use for healthcare purposes. And when we say tax-advantaged, we really mean it. An HSA has more tax benefits than any other type of account out there, with three major breaks: contributions are tax-deductible, earnings within the account grow tax-free, and qualified withdrawals used for healthcare expenses are not taxed. So the money is never taxed!

With all the benefits of an HSA, it sounds like a great option that you should contribute to any chance you get (up to $3,600 per year as of 2021). But they’re not available for everyone. HSAs are only available to those who have a high-deductible health plan (HDHP). So if you haven’t enrolled in an HDHP, you can’t use an HSA.

But don’t take that as a reason to immediately go search for an HDHP that you can enroll in, because high deductibles can really cost you a lot if you need to use your insurance more than you anticipated. If you do have an HDHP, you absolutely should open and contribute to an HSA. You’ll be able to use the money within for any healthcare expense — except the premiums themselves — and it will save you a lot of money on taxes. Take advantage!


Greg McKnight

Read more about Greg McKnight

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