Probably my least favorite part of being self-employed is being responsible for paying for and dealing with health coverage for myself and my family. (My husband is self-employed too, so we have no employer-sponsored coverage options.) I recently had to deal with the major hassle of picking a new plan because our existing plan was no longer being offered. So, as our expiration deadline loomed, I spent painful hours of my precious free time downloading plan benefits summaries, comparing plans and doing my best to make the optimal choice among ridiculously complicated (and expensive) options.
I’m basically happy with the plan I chose (it’s a high-deductible PPO that will save our family $300/month compared to our previous more traditional PPO), but engaging as a consumer with this dysfunctional system just always leaves me feeling ill and depressed for our country. Call me a socialist, but I say just tax me and offer a single-payer health care system. While that’s not happening anytime soon, the Affordable Care Act (ACA) enacted in 2010 does make some meaningful improvements over the status quo.
I recently updated my book The Women’s Small Business Start-Up Kit with some of the basics of the ACA that are of particular interest to self-employed folks. The 2nd edition containing this updated material will hit bookstores mid-April (about one month from now). Here’s an excerpt:
Health Reform Under the Affordable Care Act
The Patient Protection and Affordable Care Act (ACA) was enacted in 2010 and will have a significant impact on the health care landscape. Its provisions are being phased in incrementally, and by 2014 most of its key provisions will be in effect. Bear in mind that some provisions are being challenged in court, so even though the ACA is now the law of the land, there may be changes in the coming years.
While the complexities of health care reform are beyond the scope of this book, below I’ve listed a few of the provisions of special interest to people transitioning to self-employment.
- Protections for patients with pre-existing conditions: Starting in 2014, insurance companies will be prohibited from refusing to sell or renew policies because of an individual’s pre-existing condition. (Between 2010 and 2014, the Pre-existing Condition Insurance Plan—a temporary plan that essentially serves as a bridge until 2014—ensures access to insurance to uninsured people with pre-existing conditions in every state.) If you have a pre-existing condition and are considering leaving your job and its group plan, these ACA provisions improve your ability to purchase individual insurance.
- Availability of insurance through state exchanges: The ACA requires states to establish insurance exchanges by 2014, to allow individuals who don’t have coverage offered by an employer to buy coverage on their own. Small businesses will also be able to buy group plans through these exchanges. The concept for these health exchanges is that they will offer a transparent and competitive insurance marketplace for affordable health benefit plans that meet certain benefits and cost standards. This offers another option for self-employed people to purchase insurance, but you’ll have to wait until 2014.
How do you handle health coverage as a self-employed person? Do any of you forgo coverage altogether? I’m not terribly risk-averse but I could never do that and be able to sleep at night, though I know at least a few people who have chosen that route. My fingers are crossed that the major provisions of health reform will survive the legal challenges and make health care accessible for everyone in this country. But only time will tell how it will play out. In the meantime, stay well!