Affordable Health Care for Freelancers
In this episode of Design Domination, I am talking about health insurance for self-employed, freelance designers. Stick around to find out some health insurance alternatives that you may not even be aware of that will save you money.
I felt compelled to talk about this because, right now, since it’s open enrollment time again, my husband and I are looking at health insurance options.
The company he works for has only offered it for the last two years. Other than that, we’ve had to get our health insurance on our own. That’s been almost 20 years for me and more for him. So I have a lot of experience looking for health insurance.
I really despise a lot about the health insurance industry, but I won’t get into that.
Health insurance is often a large expense, especially for freelance designers who don’t have the option to get insurance through someone else’s plan. It can cost so much that you might feel afraid to go out on your own because of that. I know when I went out on my own almost 20 years ago, that was what several of my colleagues mentioned as the reason for not working only for themselves full time. The cost of medical insurance has only gone up from there.
Anyway, if you are looking for health insurance as a freelance designer, there are some options you may not be aware of. And they may be much more affordable for you, depending on your situation.
I recently compared a particular health insurance plan from a major provider with a health insurance alternative with a similar deductible, options and coverage. The difference was an astounding $850 a month. Per month! That’s more than $10k a year!
Self-Employed Health Care for Freelancers
So I want to just make you aware of some of the health insurance alternatives but also what to consider with them.
I say they are “alternatives” because these are not technically “health insurance.” They are called “health sharing plans” or “medical sharing plans” or “medical cost sharing.”
Medical bills that you incur that meet their requirements will be shared by the company, and other members’ monthly payments are used to pay for your bills. And vice versa.
Who They’re For
These types of plans are usually best for people who:
- are in generally good health;
- are not eligible for a tax credit based on their income;
- can’t get insurance through a spouse, employer or government program;
- missed the open enrollment period;
- can’t afford to or don’t want to pay hefty medical insurance premiums; and
- only want coverage in case a major health event occurs.
Guidelines
Health sharing plans usually require that you agree to or abide by a statement of faith or code of ethics. Not all of them are faith based, but most are.
Their guidelines are about helping other individuals when they need it and living a healthy lifestyle.
Flexible Enrollment Times
Because it’s not health insurance, you can also enroll at any time. You don’t have to wait for the open enrollment period each year or a certain event to happen that would qualify you for enrollment at another time of year.
Monthly Payments
The subscribers — or members, as they might be called — pay a set amount each month, and that gets applied to the medical bills of other people in the program. This is similar to what you’ve come to know from insurance companies as “premiums.” Each health sharing company gives it their own unique name, such as a “monthly share amount,” a “monthly gift amount” or something else.
You can give more money if you wish to help others in need.
Coverage
Because they have a code of ethics — religious or otherwise — they usually don’t cover any condition or illness related to alcohol. If you smoke, you may not be able to get coverage, or you may pay an additional fee per month. Most, if not all, of the companies I looked at would not deny you for any health reason other than smoking.
Some cover preventive, routine medical visits and checkups. Some do not.
Some of them include prescription coverage and telehealth video calls.
Most health sharing plans cover pre-existing conditions but have special terms, such as covering them after you’ve been a member for a year or two. They also have their own definition of what constitutes a pre-existing condition. Most put a timeframe for a pre-existing condition being something up to two or three years back in your medical records.
They may not offer dental and vision. If they don’t, they may offer discounts. Some have add-on plans for dental and vision.
Choice of Providers
Many health sharing plans don’t require that you use a certain network. They may have a network of doctors that they do consider in network though. So, if they do have a network, you would need to check their network of doctors if there is a certain one you can continue seeing and make sure you’re still covered or if you might pay a little more to do so.
Payments
Some of the health sharing companies require you to ask your medical provider for a self-pay rate, a discounted rate. People who have health insurance get a discounted rate, and they know this.
Then they will have you submit your bills to them. They will what they call “share” them when they get to a certain threshold. That may be a certain amount per illness or incident, or it may be once you’ve exceeded an annual amount, similar to a deductible, in other words.
Other companies may require you to have the provider submit the information to them directly, and then they will get the bills reduced on your behalf then share your bills, if they should be shared at all — according to their guidelines.
Health Insurance Requirement and Availability
You also have to check with each program to see if it counts toward any requirement for health insurance that your state may have.
I also noticed that one of the medical sharing plans I looked into was not available in a few states. So always check that too.
HSAs
Because they are not health insurance, you may not be able to use an HSA with their plans. If you have an HSA, you could potentially contribute up to the maximum amount allowed prior to switching to a health sharing plan. I would ask your accountant about this to see what they suggest. That’s what I did.
Maximum Benefit Amounts
Some health sharing plans may have a maximum amount they will pay out per incident, illness, year or lifetime. Some offer add-ons at a low cost that will increase these amounts.
Financial Considerations
While a health sharing plan can potentially save you a lot of money in monthly payments and out-of-pocket medical costs, there are some things to take into consideration when weighing the financial costs of medical insurance versus a health sharing plan.
Application and Admin Fees
These are one time and usually minimal, but some companies charge an application fee.
One company I checked into charged a 12% administrative fee in the first few months.
Annual Amounts
Some health sharing plans may have an annual amount that is similar to a deductible. But they call it something else. For example, one company calls it an “annual personal responsibility.” What they call it varies per company.
Per-Incident and -Illness Amounts
They may have instead or in addition to that something they might call a “per-incident amount.”
I know one company we looked at had a $1,000 per-incident amount. So if your bills were less than that, they might not be shared, unless other criteria are met. Again, this varies by company.
You could incur many costs per year that fall under that threshold and may not be shareable. But one company I checked into gives a 90-day time period for this, meaning if you incurred several bills within that timeframe for the same illness, then they would share them if they collectively totaled more than $1,000.
Prescriptions
If you take any medications that cost a lot, be sure to see what they cover.
Tax Write-offs
Tax write-offs are something you’ll need to ask your accountant about. I am not advising, just sharing what I learned from a conversation with my CPA about my own situation.
You can usually write off your medical insurance premiums as a freelance designer. However, you cannot write off your monthly medical sharing payments.
Again, that’s because it’s not technically health insurance and so your monthly payments are not technically “premiums.”
If you’ve paid a lot in premiums in the past and written them off, you may end up paying more in taxes without that write-off.
When I asked my accountant about this years ago, the difference was not small. It was more than $4,000. So you do need to consider that because that could make or break the difference that you would save between going with a health sharing plan or a conventional medical plan.
But you may be able to offset that amount in other ways, maybe by contributing more to an HSA or to your retirement account or to your favorite charity. You’d have to ask your accountant.
That’s money you get to keep for yourself but elsewhere, or donate it instead of paying higher premiums to the insurance company or throwing more money at the IRS.
Health Sharing Plans for Christians
I mentioned earlier that many health sharing plans are faith based. There are a lot of options for Christians.
The most popular ones, which have been around for decades are:
I have a friend and a neighbor who’ve used MediShare for years and have been happy with it. My husband had it for a few years but didn’t need it. So I can’t say much other than the application process was easy and the people were friendly when we asked questions.
I think the Samaritan Ministries plan was the only plan that requires you to get a church leader to sign a form on your behalf.
Some other Christian health sharing plans are:
Health Sharing Plans for Jews
If you are of the Jewish faith, there is an option called United Refuah . This was the only one I found.
Health Sharing for Any Faith
There are a few companies that serve people of any faith:
Non–faith-based Health Sharing Plans
I also found some non–faith-based health sharing plans too:
Supplementing the Medical Sharing Coverage
Because the monthly payments for health sharing plans are usually quite a bit less than a traditional medical insurance plan on your own, you could potentially supplement the health sharing plan with a catastrophic or other type of insurance policy.
A few years ago, we looked at Cigna , Aflac and United American .
Cigna and Aflac offer supplemental insurance policies for cancer, heart attack and stroke. Aflac also has one for dental .
United American has a critical illness protection policy for things such as a major organ transplant, heart attack, stroke, total loss of eye sight or hearing and end-stage kidney failure.
These are typically lower cost but can provide financial support when your medical insurance or a health sharing plan doesn’t cover something or if you exceed what your benefit is.
They often give you the option of a rider, which is like an add-on to the policy, to increase the benefit each year or some other benefit.
Some of them pay you a lump sum upon diagnosis that you can use however you see fit, whether that’s for the medical care itself or for paying someone to grocery shop for you if you cannot do it yourself, or even child care, so you can go to your medical appointments.
Research Health Sharing Plans
When researching health sharing plans, be sure to check out the guidelines, like you would with any conventional medical insurance plan.
Check out their reviews on Facebook to see what people have been saying. Check our their Better Business Bureau ratings and their reviews. I saw several health sharing plans that were rated A and B by the BBB but had horrendous reviews.
Of the negative reviews that I saw, many reviews were misunderstandings about expectations. Some people seemed to have not read the guidelines and expected things to work as medical insurance.
Other negative reviews seemed to revolve around their business practices.
Many though had very positive reviews.
I want to mention Freelancers Union because they are able to offer health insurance for freelancers. However, it’s only available if you’re in New York, New Jersey, Connecticut or Pennsylvania. That may or may not save you something if you’re still looking for a traditional health insurance plan.
I really hope this information will be helpful the next time you’re looking for health care coverage because I know just how frustrating it is.
At this time, I don’t know which one we’re going to go with.
But if you do opt for a health sharing plan or if you’re already in one, I’d love to get your feedback in a comment below or via email .
Originally published as a podcast and transcript are available at https://creative-boost.com/health-care-for-freelancers/
