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Understanding Your Health Insurance Options As An Independent Contractor

The Affordable Care Act arrived with great fanfare. It has enabled millions of uninsured and under-insured Americans to access health insurance. However, independent contractors and small business owners have often found themselves facing the greatest difficulties.

For some, securing a healthcare plan and other employee benefits has gotten harder, not easier.

Businesses with fewer than 50 employees are generally exempt from the requirement to offer a health plan to their employees. In that environment, few options were made available for the independent operators who now face a patchwork of different options.

Like other employee benefits, finding health insurance options is up to them. Yet, uncovering a plan that is both affordable and robust can be a challenge even greater than establishing plans for retirement or other employee benefits. Options are often unclear and difficult to compare.

Here are the options that self-employed people have been turning to:

1. Healthcare Marketplace

ACA’s Marketplace-based plans are the most obvious first step, but they don’t meet everyone’s needs. While Marketplace plans all meet the same basic standards per tier, costs can vary greatly by state. Likewise, states have different rules about penalties if you do not hold coverage.


Health insurance access provided by a previous employer or a family member may remain intact for up to 36 months. However, COBRA plans can be more expensive than alternatives. Likewise, losing COBRA coverage does not necessarily enable you to start an ACA plan right away.

3. Short-Term Health Insurance

Short-term insurance plans are available to cover brief gaps in coverage as the holder waits for the ACA open enrollment period each year. While the costs are low, the breadth of coverage can leave much to be desired. Likewise, people with pre-existing conditions can be left out.

4. Associations

Some professional associations offer health insurance as a member benefit. However, these plans do not always offer a great deal of coverage. In some cases, association fees may well outpace the value of the plans. It’s crucial to do plenty of research before relying on this coverage.

5. Professional Employer Organizations (PEOs)

Professional Employer Organizations are specialized outsourcing firms that provide a variety of business services, including things like payroll and accounting. Many of these organizations can also provide health insurance plans, although the quality varies widely.

Healthcare is the most important of employee benefits, yet most entrepreneurs and independent professionals find that none of these options can truly suit their needs. Personalized advice from true experts in health insurance is crucial to making the right decisions.

We can help you navigate your options and find a long-term employee benefits strategy that works.

To learn more, contact us today.