Health Insurance For Small Business Owners With No Employees: If you run your own business and have no employees or are self-employed, your business is usually not group insured. You can purchase qualifying health insurance for individuals and families through the Marketplace.
As a self-employed person or freelancer, you are not alone. There are more freelancers today than ever. A 2019 survey by the Upwork and Freelancers Union found that 57 million Americans will be freelancers in 2019. According to the same survey, 53% of workers between the ages of 18 and 22 work as freelancers.
The appeal of self-employment or freelance work lies in flexibility and work-life balance. But you must also master all aspects of your work and life. Health insurance is an important consideration if you are an independent contractor or consultant as you may have multiple insurance options.
Let us help you take advantage of these options today at no extra cost!
How Do I Know If I Health Insurance For Small Business Owners With No Employees?
If you don’t have an employer or employee but do bring home taxable income, you will most likely need to find independent health insurance through an individual or family plan. Some examples of people who might enroll in independent health insurance include:
- Independent contractor
If that description sounds like you, it’s important to explore your options for self-employed health insurance. By insuring yourself regardless of your employment status, you can avoid paying a fine if you are discovered. Remember, starting with plan year 2019, if you can afford health insurance and choose not to get it, you no longer owe a federal tax penalty.
However, states may have different rules, and you may have to owe a state fee for detection. If you’re not sure what the rules are where you live, read our article on whether your state requires health insurance.
Remember that if you only have one employee other than yourself, you may qualify for small business group health insurance, which is suitable for people who are responsible for insuring their employees in addition to themselves.
Do Small Business Owners Need Health Insurance For Small Business Owners With No Employees?
Some people work as freelancers for employers. If you’re a small business owner who employs freelancers, you might be wondering if you should get health insurance. Under the Affordable Care Act, businesses with fewer than 50 full-time employees are not required to have health insurance.
However, some small businesses may still choose to voluntarily offer health insurance to full-time employees. For more information, visit this page on eHealth’s healthcare plans for small businesses. When it comes to freelancers, rules can vary by location, state, and the insurance company.
In general, small businesses are not required to offer health insurance to freelancers. In some cases, however, employers can extend group health insurance to their freelancers. If you are a small business owner and decide to offer group health insurance to your freelancers:
- You do not have to pay part of the premium.
- If you share in the cost of premiums, the self-employed may need to declare those premiums as taxable income.
- Freelancers who pay their premiums may be able to deduct the cost from their income tax.
- If you are self-employed, are self-employed, learn more about self-employment insurance options
Self-Employed or Freelancer: Does it Make a Difference?
According to the IRS, “A person is an independent contractor if the payer has the right to control or direct only the result of the work, and not what is done and how it is done.” The payer may have a client organization with individual contracts or be the general public. But there is no employer-employee relationship. Physicians, accountants, and attorneys in private practice are typically classified as independent contractors.
A freelancer is a temporary independent professional who provides products and services to multiple organizations. Freelancers often work for many clients and take on as many projects as their schedule allows. Freelancers are journalists, copywriters, graphic designers, and web programmers. Whether you consider yourself an independent contractor, freelancer, or other self-employed people, you’re probably on your own to get your health insurance.
Health insurance for the self-employed and self-employed is necessary. If you are ill or injured, do not work and you will not receive paid sick leave. You face potentially staggering medical costs.
How To Get Health Insurance For Small Business Owners With No Employees?
You can find health insurance for small business owners with no employees through one of several avenues as an independent contractor, freelancer, or consultant. These options include:
- Health insurance plan for parents, spouses, or domestic partner
- Affordable Care Act Individual and Family Health Insurance Plan
- Short-term health insurance
- COBRA coverage
Each of these options has advantages and disadvantages, as well as several factors that determine your eligibility. Let’s take a look at each plan type to see what works best for you.
Health insurance plan for parents, spouses, or domestic partner
You may be eligible to enroll as a dependent in a group sickness plan sponsored by the employer of a working parent, spouse, or domestic partner.
- Group health insurance is often cheaper than individual health insurance, as employers and unions usually subsidize part of the cost.
- Group health insurance may also include additional benefits such as: such as visual aids, dental care, and prescription medications.
- If you are single or 26 years of age or older, you are not eligible for group insurance from a spouse, partner, or parent.
- The employer may also not subsidize coverage for dependents in group health insurance, which can make coverage costly.
- In addition, you cannot select the coverage you need; They take advantage of the insurance coverage offered by the employer or union.
Affordable Care Act Individual and Family Health Insurance Plan
As an independent contractor or consultant, you may be able to purchase ACA health insurance and if it’s right for you, eHealth can help you find the right individual health insurance plan. Open enrollment for ACA subscriptions begins in November and typically ends in mid-December. Plans sold during this time usually start on January 1st of the following year.
So if you registered for a subscription in November 2020, your coverage will start on January 1, 2021. If you miss the open registration, you may be eligible for a special registration due to living conditions.
- When you purchase an ACA subscription, you can be assured of ACA coverage and consumer protection.
- It’s also relatively easy to compare the “metal” coverage levels – bronze, silver, gold, and platinum insurance – to determine which meets your personal needs for affordable coverage.
- Your out-of-pocket expenses may also be lower, especially if you’re eligible for a tax subsidy.
- If you don’t qualify for a tax subsidy, ACA plan coverage can cost more than you can comfortably afford.
Short-term health insurance
You may be able to take out short-term medical insurance for temporary insurance coverage.
- You can take out short-term health insurance at any time as there is no open enrollment period.
- Short-term policies are also typically less expensive than comprehensive health insurance policies offered by private insurers and the government stock exchange.
- Short-term policies typically offer less than 1 year of coverage and there is no guarantee that you will be able to extend coverage.
- Short-term policies may not cover the benefits you need because they don’t have the same required minimum coverage as ACA plans.
- Some states restrict short-term policies or even prohibit their sale.
If you recently left the employer as a full-time employee, you can continue your employer’s group health insurance plan for 18-36 months, depending on the circumstances.
- You have the protection of ongoing health insurance while setting up as a self-employed or freelancer.
- It continues with essentially the same coverage that you had with your previous employer.
- COBRA coverage is likely to be more expensive than purchasing independent contractor health insurance.
- Your coverage will typically expire within 18-36 months.
Work as a freelancer or consultant
All plans on the Marketplace cover the same categories of essential health care and may not exclude treatments based on pre-existing medical conditions. You also have the choice between lower premiums and a higher deductible if you need care, or higher monthly payments and a lower deductible if you need care.
You can only enroll in Marketplace coverage during the annual open enrollment period unless you have a qualifying life event during the year.
Looking for help with coverage? Find a real estate agent or broker near you. Brokers and real estate agent are health insurance experts and can help you find the coverage you need once they complete registering with the Marketplace, usually at no additional cost to you.
How much does health insurance for small business owners with no employees cost?
You want good coverage, but you also don’t want to pay an arm and a leg for it. Let’s take a look at how much you’ll have to pay for health insurance if you’re self-employed.
Many factors come into play when it comes to the cost of health insurance: who you should cover (spouse, children?), the amount of coverage you need, whether you smoke, your age, where you live, and more. But if you buy health insurance in the market, the average person pays $438 a month. The average family pays around $1,779 a month. But if you’re eligible for tax subsidies, you might not have to pay as much.
Health Insurance For Small Business Owners With No Employees Tips
Okay, as a self-employed person you also double your HR manager! There is no one to call if you have questions about your allowances. No panic! We have a few tips if you are looking for standalone health insurance.
1. Consider agencies that can help
In the world of the self-employed, it’s easy to be alone and clueless. There is no sense of security when you work for a big company. So it’s a good idea to get in touch with organizations that offer something similar, such as the Self Employed Association. Membership can give you access to discounted health insurance plans, health savings accounts (HSAs), and other assistance.
2. Use the self-employed tax reduction
We’re talking about money, folks! Being your boss also means dealing with times when things move slowly. That’s why it’s important to know how to make your money work harder when getting health insurance. This is possible with the self-employment allowance. It’s just one of many self-employed tax deductions you can take advantage of.
If you qualify for this deduction, you may deduct 100% of your health insurance premiums from your adjusted gross income each year when you file your income tax return. Note, however, that this is a self-employed health insurance deduction for individuals and their dependents, not small businesses.
Here are a few things you need to do to be eligible:
- Do not display other forms of health insurance. You must prove that you have health insurance and are not already covered by an employer’s group plan or someone else’s policy, such as a family member, or your spouse’s policy, is mentioned. You also cannot claim the deduction if you are eligible for coverage under your spouse’s group plan but choose not to claim it.
- Evidence of your income as a self-employed person. You must have the income to claim a deduction. And if you have a few different self-employment income streams, you can only claim the deduction for one of those streams. The one with the highest income is probably the best choice!
- And if you’re tearing your hair out trying to figure out how to file your tax returns, don’t worry. Check out these tax filing tips for freelancers, along with the pros and cons of quarterly filing.
3. Find a health plan with a high deductible
If your health insurance has a high deductible, it means lower monthly premiums. And we like that because it saves you monthly costs! You just have to make sure you can pay the higher deductible if you need to. And this is where the Health Savings Account (HSA) comes in. An HSA is a tax-advantaged savings account linked to a high-deductible health plan (HDHP). The money you save in your HSA can be used to pay for tax-free eligible medical expenses! You can also reduce your income taxes by putting money into your HSA.
4. Get advice from an independent insurance agent
If you’re responsible for finding health insurance that’s worth more than the paper it’s written on, don’t leave it to chance or the internet to find the best one for you!
An independent insurance agent, such as those found in our Endorsed Local Providers (ELP) program, is the expert to turn to.
Conclusion – Find an independent health plan that’s right for you
Comparing health insurance for small business owners with no employees plans as a self-employed or freelancer can be confusing. You can find local agents ready to walk you through your healthcare options and track down the best health insurance deals in your boss’ exciting world!
This article is for general information only and may not be updated once published. Please consult your tax, accounting, or legal advisor rather than relying on this article for tax, accounting, or legal advice.