As a freelancer, you know that you're responsible for your own health insurance. But what else do you need to know?With the repeal of the Affordable Care Act's (ACA) individual mandate at the end of 2017, you're no longer financially penalized for not having health insurance. While some freelancers might greet this as welcome news – it's one more monthly payment to skip – not having health insurance can lead to financial disaster if you have an emergency you can't afford. Here's what you need to know about this year's Open Enrollment period—including ways to save on monthly premiums—and why it's worth it for freelancers to buy health insurance.
Open Enrollment runs until December 15, 2018. If you miss this window, you won't be able to get health insurance coverage for 2019 unless you qualify for a Special Enrollment Period or live in a state that has extended periods. Keep in mind that you can enroll in Medicaid and the Children's Health Insurance Plan (CHIP) throughout the year.
The repeal of the individual mandate means that many premiums will increase as fewer people buy into the healthcare marketplace. The Trump administration has relaxed regulations so that insurers can now offer short-term plans that are less costly – but also less comprehensive. Make sure that the plan you choose offers at least a minimum level of benefits. Freelancers who miss the open enrollment period might be tempted to buy a private health plan on exchanges such as eHealth, HealthInsurance.com or HealthPlanOne. But keep in mind that Healthcare.gov has stated that only in limited cases do health plans sold outside open enrollment count as qualifying health coverage. It's generally best to buy a plan (or keep or change existing ones) through Healthcare.gov. There are multiple ways to apply.
Your monthly insurance bill will depend on your income. If you make between 100% and 400% of the Federal Poverty Threshold – in 2018, less than $48,240 for a single-person household – you're eligible for premium tax credits that will reduce your monthly bill and qualify you for extra savings on out-of-pocket costs. Use Healthcare.gov's tool to enter your estimated income and get a sense of how much you'll save each month.
One of the benefits of freelancing is that you can work from anywhere. But the state in which you reside and pay taxes will have a significant impact on the availability of healthcare plans and what you'll pay for them. Some states have enacted measures to counteract federal-level changes, with the aim of lowering rates for consumers, so your premium might actually decrease. Other states have welcomed the administration's loosening of regulations and are offering less costly insurance that doesn't meet the ACA's minimum standards. Use this tool to see how premiums have changed in your state.
As a freelancer, you can easily open an IRA – a tax-deferred account – and put money in to reduce your modified adjusted gross income. By lowering your taxable income, you'll increase your subsidy. You can also decrease taxable income by subtracting, for example, paid student loan interest, paid alimony, and any classroom-related expenses. Be sure to also compare plans on your state's health exchange. In general, silver plans are a safe bet, but depending on your health coverage needs, you may be suited for a less costly plan. Once you've purchased a plan, make sure you see doctors in network.The Affordable Care Act remains the law in the United States and it works best for everyone when both healthy and less healthy people (including those with pre-existing conditions) buy into the marketplace. This balances the cost of care and leads to reasonably priced premiums for all – even (and especially) for freelancers.
Will you buy health insurance this year? What should all freelancers know about finding affordable and comprehensive healthcare? Share your story in the comments below—and then sign up for coverage if you need it today.
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