Health Insurance for Self-Employed People
In this lesson, we will discuss some of the challenges of finding good health insurance when you are self-employed in your own business. I'll also share some of my own experiences with the process, and what I learned along the way.
I am self-employed and recently had the "pleasure" of looking for health insurance. Let me tell you, it's not an enjoyable experience. For one thing, I was baffled by the upfront investigation the insurance providers put me through. I never had to answer anything but basic health questions when getting covered through an employer.
But getting health insurance when self-employed is another thing entirely. It took a series of phone calls, multiple requests for health records from doctor's offices, and even an attempt at third-party investigation. That's right -- the insurance provider wanted me to sign away my rights for consumer protection and privacy so a third-party investigator could look into every aspect of my life. Why? Because they are looking for reasons to deny future claims.
This is how the health insurance system works in this country, especially when you are self-employed and getting your own insurance policy. Basically, they will research your medical history in advance so that they can file more claims under "pre-existing condition" later on, when you file a claim. Health insurance has gotten progressively worse in the U.S., year after year. If you are self-employed, this is even more true.
It's a broken system. It's a system that needs serious reform. But for now, it is what it is. Here are some tips on getting health insurance when you are self-employed, based on my own experiences with the process.
1. Don't Let Your Current Insurance Lapse
If it's not too late, don't let your current coverage lapse when making the transition to self-employment. By this mean, I mean you should get Cobra or some other form of insurance extension when you leave your "day job" and move into full-time self-employment.
If your insurance coverage lapses, you'll end up paying more in premiums and you'll be more susceptible to pre-existing condition clauses. Don't ask me why it works this way -- it just does. Generally speaking, a health insurance company wants to see at least 18 months of continuous coverage.
2. Research Your Options for Group Coverage
Look into professional trade groups and unions, through which you can often get group rates. The Freelancers Union is a good example of this. Sure, you pay union dues to be part of the group, but the insurance rates are typically lower and you may not be subjected to such upfront scrutiny. This is a popular health insurance option for self-employed people. It's worth looking into.
3. Be Factual but Brief on the Phone
After you apply for insurance, you'll eventually receive a phone call from one of the screeners who work for the company. They will ask you a bunch of questions about your overall health, medications you currently take, previous injuries and hospital visits, etc. During this call, you should be factual but brief. Do not volunteer any information -- just answer the questions they ask, and nothing more.
Why should you watch what they say? Because the person who calls you is trained to dig up any information that might be used to deny future claims. This is how the health insurance industry works, especially when it comes to self-employed people on individual plans. The entire business model is designed to make as much money as possible while eliminating "losses" wherever possible. When the insurance company has to pay money toward a claim, they consider it a loss. So they will do everything they can to avoid paying your claims, often by using the dreaded pre-existing condition clause.
That's why you have to watch what you say during the screening call. Be factual, but as brief as possible. Otherwise, you're just giving them more ammunition to use against you some day. It's sad but true.
This article offers basic advice about health insurance for self-employed entrepreneurs, based on my own experiences. But there's a lot more information available online, and you would do well to read as much of it as possible. Below, I've provided links to some helpful articles you can start with. All of them cover the self-employment angle of health insurance.
Do you have an experience to share about getting health insurance? If you're self-employed and have some advice to share with the readers of this blog, you can email it to editor@homebuyinginstitute.com.
I am self-employed and recently had the "pleasure" of looking for health insurance. Let me tell you, it's not an enjoyable experience. For one thing, I was baffled by the upfront investigation the insurance providers put me through. I never had to answer anything but basic health questions when getting covered through an employer.
But getting health insurance when self-employed is another thing entirely. It took a series of phone calls, multiple requests for health records from doctor's offices, and even an attempt at third-party investigation. That's right -- the insurance provider wanted me to sign away my rights for consumer protection and privacy so a third-party investigator could look into every aspect of my life. Why? Because they are looking for reasons to deny future claims.
This is how the health insurance system works in this country, especially when you are self-employed and getting your own insurance policy. Basically, they will research your medical history in advance so that they can file more claims under "pre-existing condition" later on, when you file a claim. Health insurance has gotten progressively worse in the U.S., year after year. If you are self-employed, this is even more true.
It's a broken system. It's a system that needs serious reform. But for now, it is what it is. Here are some tips on getting health insurance when you are self-employed, based on my own experiences with the process.
1. Don't Let Your Current Insurance Lapse
If it's not too late, don't let your current coverage lapse when making the transition to self-employment. By this mean, I mean you should get Cobra or some other form of insurance extension when you leave your "day job" and move into full-time self-employment.
If your insurance coverage lapses, you'll end up paying more in premiums and you'll be more susceptible to pre-existing condition clauses. Don't ask me why it works this way -- it just does. Generally speaking, a health insurance company wants to see at least 18 months of continuous coverage.
2. Research Your Options for Group Coverage
Look into professional trade groups and unions, through which you can often get group rates. The Freelancers Union is a good example of this. Sure, you pay union dues to be part of the group, but the insurance rates are typically lower and you may not be subjected to such upfront scrutiny. This is a popular health insurance option for self-employed people. It's worth looking into.
3. Be Factual but Brief on the Phone
After you apply for insurance, you'll eventually receive a phone call from one of the screeners who work for the company. They will ask you a bunch of questions about your overall health, medications you currently take, previous injuries and hospital visits, etc. During this call, you should be factual but brief. Do not volunteer any information -- just answer the questions they ask, and nothing more.
Why should you watch what they say? Because the person who calls you is trained to dig up any information that might be used to deny future claims. This is how the health insurance industry works, especially when it comes to self-employed people on individual plans. The entire business model is designed to make as much money as possible while eliminating "losses" wherever possible. When the insurance company has to pay money toward a claim, they consider it a loss. So they will do everything they can to avoid paying your claims, often by using the dreaded pre-existing condition clause.
That's why you have to watch what you say during the screening call. Be factual, but as brief as possible. Otherwise, you're just giving them more ammunition to use against you some day. It's sad but true.
More Insurance Advice for the Self-Employed
This article offers basic advice about health insurance for self-employed entrepreneurs, based on my own experiences. But there's a lot more information available online, and you would do well to read as much of it as possible. Below, I've provided links to some helpful articles you can start with. All of them cover the self-employment angle of health insurance.
- http://www.nytimes.com/2008/03/27/business/smallbusiness/27sbiz.html
- http://www.businessweek.com/smallbiz/content/may2007/sb20070516_652331.htm
- http://www.bankrate.com/brm/news/biz/soho/20000911.asp
- http://articles.latimes.com/2007/mar/27/business/fi-insure27
Do you have an experience to share about getting health insurance? If you're self-employed and have some advice to share with the readers of this blog, you can email it to editor@homebuyinginstitute.com.
Labels: health
posted by Brandon at
10:47 AM
