One larger hurdle prevented me from making the leap to self-employment sooner: health care coverage.
I worried that leaving an employer-backed benefits plan would mean that I couldn’t afford a visit to the doctor. The classic barrage of questions started chasing each other around in my head. What if I needed emergency surgery? Was long-term care in my future? The potential financial hardship was worrisome.
Thankfully, I discovered several short-term health insurance plans available to independent contractors. Diving into what options stood before me helped me to grasp control of what I thought was a potential disaster in the making.
Learn About COBRA
If you’re in the United States and leaving a full-time employer to freelance, you may be offered a continuation of your coverage from your current health care provider through the Consolidated Omnibus Budget Reconciliation Act, more commonly known as COBRA.
In short, this program offers a limited period of health care coverage as you transition to new work. After you’ve settled into your new solo profession, you’ll need to purchase your own benefits plan directly from an insurance provider — or, you can join a group plan that offers a discounted benefits package, such as a freelancer’s union.
Ask About Insurance Provider Packages
If your current employer doesn’t offer health care benefits, you have a few more options for coverage. Try contacting the insurance provider who covers your home, vehicle or renter’s insurance. I was surprised to find out that State Farm, which covers my business equipment, home and car, also offers health care packages. As a bonus, these plans are often discounted when bundled with other insurance coverage.
Consider Family Health Care Options
In the past, I talked to my insurance provider about short-term disability insurance and medical benefits when I was between an employer’s plan and not yet married (a.k.a. able to be on my significant other’s plan). That brings me to the third health care option for freelancers: If you’re married and your spouse has benefits, you’re likely eligible to sign up for a family or spousal plan that will extend coverage to you, too. Currently, my health care coverage is provided through my husband’s employer.
Join Professional Organization Coverage
During my research, I was thrilled to find that several organizations realize the need for long- and short-term health insurance for self-employed individuals — and many offer group plans for members. The Society of Professional Journalists (SPJ) offers coverage for freelancers who are members. Other industry-specific organizations are following suit, so it’s worth checking into before making the leap to self-employment.
Of course, these plans can be costly and may require a revamp of your monthly budget, but the upfront cost far outweighs an emergency medical situation that could quickly skyrocket into the tens of thousands of dollars. Making short-term health insurance coverage a priority protects your number one business asset: you.