How to save on healthcare benefits… or get them for free
Being a self-employed COPYWRITER can seem almost too good to be true.
… run the show
… charge what you’re worth
… work as little (or as much) as you choose
… have no inventory or supplier issues
… can, literally, work from anywhere
But… It’s ALL You
Your newfound freedom does create new responsibilities. One of the biggest? Keeping you (and your family) healthy.
Remember, YOU are the primary product — if you (or loved ones) get sick, production dwindles or stops. Revenues will follow. You should invest carefully (both your time and money) in health care benefits to minimize downtime and distractions.
In today’s Affordable Care Act (“ACA”) environment, you should weigh all your options when choosing health coverage, including…
- Should you use an agent or do-it-yourself?
- What kind of health plan makes sense for you and your family?
- Should you (and your agent, if any) use your state’s healthcare exchange?
- Do you qualify for tax credits (“premium subsidies”) to reduce monthly payments?
- Does it make sense to consider Medicaid?
Agents Now Optional
If you regularly purchase complex products online, and have time to shop… you may not need an agent.
Your state’s health exchange is designed to show all the information you need to choose coverage. Many internet-savvy families now do this themselves.
You can also shop outside the exchanges and buy direct from insurance companies if you want. In fact, some coverage options may not be available through the exchanges, so it’s a good idea to look outside. That way, you’ll be able to make an informed decision.
Many online “quote engines” will provide you with a spreadsheet of non-exchange insurance plans in plenty of detail. Google “health insurance quotes” to find options.
If you’re new to the process, or get lost in the details — or just don’t have time to think through every option yourself… a good agent can help.
An experienced agent can save you time and cater to your needs, resources, and personality.
Look for agents or brokers who have been in business at least five years and who represent multiple insurance companies. Ask if the agent is certified in your state’s exchange. That way, you know he can help you evaluate both exchange and “off-exchange” coverage.
Good agents get VERY busy during open enrollment (this year’s enrollment period is 11/1/16-1/31/17), so don’t wait until the last minute to make an appointment.
Choosing Health Plans: Is Bronze Your Gold?
ACA seeks to standardize health plans. Policymakers decided there were too many insurance plans and variations, so ACA imposed the current “metal” standard to simplify choices. The “metal” tiers are Bronze, Silver, Gold, and Platinum. Within each “metal” tier, different companies offer a range of plans and deductibles.
The more valuable the metal, the more basic benefits the plan pays (… and the more you pay in premiums).
After any deductible is met, the plans SHARE costs with you. Your share is capped each year (the “out-of-pocket maximum”). Here’s the current breakdown:
- Bronze: lowest premiums but highest out-of-pocket cost-share (insurer pays 60%, you pay 40%)
- Silver: higher premiums but lower out-of-pocket costs (insurer pays 70%, you pay 30%)
- Gold: expensive premiums, but more coverage (insurer pays 80%, you pay 20%)
- Platinum: most costly but pays the best (insurer pays 90%, you pay 10%)
Once the out-of-pocket maximum is met, the plan should pay 100% of in-network costs.
The SILVER plan tier has an “extra savings” version, with reduced copays and deductibles, for lower-income families.
Buyers under age 30, or those in financial difficulties, may select a separate CATASTROPHIC plan costing less than most Bronze options. To take advantage of this option, you’ll have to verify your “financial difficulties.”
Look for Health Savings Account (H.S.A.) policies, which let you contribute to a specialized account (and pay out-of-pocket medical expenses tax-free). H.S.A. plan premiums are often the lowest in each “metal” tier.
Insurance companies in each state issue the same (or similar) tiered “metal” plans both through the exchanges and “off-exchange.”
Choose based on your budget, any available subsidy (more on subsidies in the next section), physician selection… and peace of mind. If you just need the lowest premium, that’s easy to find. If you want to spend more to limit copays and deductibles, or stay with your doctor, options abound.
INSIDER TIP: Compare health plans by their potential annual cost for a big claims year (imagine that you meet your deductible and pay all the out-of-pocket expenses). To do this, add a year’s premiums to the plan’s out-of-pocket maximum. This is the most you’d spend on in-network treatment in that year. You will find that lower-premium, high deductible coverage… which seems to “pay less in benefits”… actually pays about the same as some higher-priced plans… and cost you less during the year if you don’t use them.
Healthcare Exchanges: Premium Assistance
To make insurance “more affordable,” ACA offers tax-credit assistance to help pay premiums.
This means that if your income is below a certain level, the government will help pay part of your monthly cost. Think of it this way: the exchange uses part of your estimated tax refund, in advance, to pay toward your monthly premium.
The tax credit varies based on income and household size.
This “subsidy” is ONLY offered through the exchange.
The exchange also automatically redirects the lowest-income (or no-income) applicants into Medicaid, to make sure everyone gets coverage.
NOTE: Some families, especially the self-employed, are surprised by this “re-direction.” Not everyone wants to be on Medicaid or CHIP. You are not required to accept this option — but you may need to go “off exchange” to bypass it.
If this happens, exchange “Navigators” can help. They are exchange staff trained in both your state’s Medicaid laws and insurance basics. Contact your local Social Services office to get connected with a Navigator.
INSIDER TIP: Before applying through an exchange, check to see if you can get a subsidy. Plug your annual income into a free online calculator, like the one here.
You’ll see quickly whether you can get subsidized premiums, or can even go straight on to Medicaid.
Enter realistic numbers. This avoids surprises during enrollment… and even nastier surprises next April. (If you receive more in the way of subsidized help than you should have, you may be hit with penalties during tax time.)
Why Go “Off Exchange?”
Income too high for subsidies? The hours needed to use the exchange may not make sense… or you may find the exchange’s public-assistance approach isn’t right for you.
Buying outside the exchange is much faster. “Off-exchange” web applications take only minutes vs. multiple hours and repeated attempts due to peak volume exchange time-outs or even “planned outages.”
Remember: exchanges stack together complex federal, state, and insurance company policies and procedures. Your application goes through dozens of filters, all with potential snags.
Exchanges sometimes lose applications, or stall them for income verification.
The exchange treats subsidy applications the same as Medicaid applications… that is, as public assistance.
This means you must declare, then verify, your income.
You could be asked to submit copies of pay stubs, W-2 forms, even tax returns during this process. If your documents are incomplete, illegible, or raise further questions, more items may be needed.
Delays crop up while you wait for your items to “come to the top of the pile.” Your documents may be misrouted or even mislaid. You may not find out quickly about any hiccups unless you stay on top of the process… which is not easy.
It may be worth it though, to get the best possible price on your health plan.
INSIDER TIP: Keep copies of everything, carefully document every phone call, and don’t be afraid to ask for help. Besides the Navigators I mentioned, exchanges employ Certified Enrollers to assist applicants. Exchange-certified agents can also help.
Free Health Care… Strings Attached
Many buyers feel ambushed by high insurance prices. Rates inside and outside the exchange rose up to 22% for 2017 (and even more in some regions).
Some families are taking a second look at the exchange’s “free” options (Medicaid and its state variations). Zero cost healthcare can make a huge difference for the newly self-employed… but it has to be worth it.
True public assistance requires heavy, ongoing income (maybe even asset) verification. The paperwork can seem endless, and new requests can pop up any time. Self-employed households may have to scramble for all the documents needed — especially in their first non-salary year.
INSIDER TIP: If you qualify for Medicaid, apply directly through your state. Their process is better established than the exchange, and could take less time… but it’s not like shopping on Amazon. Be prepared for delays, mistakes, lost documents, or apparently gratuitous requests. Public program requirements can seem counterintuitive — even when needed. Don’t hesitate to call and ask questions.
Don’t Forget the Tax “Creep”
A looming issue in today’s healthcare:
Everyone has to buy “qualified” health coverage — unless you are exempt.
Visit www.Healthcare.gov for the exemption list. Most exemptions require proof. You might be surprised at some of the exemptions allowed!
Fees (due at tax time) for “uninsureds” who are non-exempt creep up each year.
The 2016 tax year fee is $695.00 PER PERSON — or 2.5% of gross income — whichever is HIGHER.
Buying inexpensive insurance may actually cost less than paying that penalty fee!
The new healthcare landscape is complex… but offers thrifty freelancers different ways to save. Every dollar diverted from needless healthcare costs can build your business faster.
Reducing healthcare worries also helps you focus on building that business…
… and the faster you build it, the sooner the dollars will take care of themselves.
David Whiteside, a freelance writer since 2014, is also an exchange-certified insurance agent and Medicaid case manager.