There are countless benefits to being your own boss, but one topic that sometimes gives freelance writers pause about being self-employed is health insurance. Not having access to health insurance through an employer is a big deal—there is no getting around that—but it doesn’t have to be a deal breaker. Make buying health insurance part of operating your business, and have a plan for how you’ll manage it. It’s a necessary operating expense, not a luxury, and including it in your budget from the start will make it easier to incorporate into your plan. Are you feeling a little behind on making a strategy? This information will help you navigate the world of health insurance for freelance writers.
Is it Necessary to Have Health Insurance?
In the US, if you don’t buy health insurance, then you are subject to a penalty, which can be stiff. Depending on your circumstance, the penalty could be as much as the cost of a basic health insurance plan. This makes not having insurance unattractive. The penalties exist to encourage people to invest in health coverage, so they are not budget-friendly.
Operating without health insurance is a risky proposition for other reasons as well. One accident or unexpected illness could lead to tens of thousands of dollars in medical bills, even for a single ER visit. These bills can not only derail your freelance writing career but also cause significant hardship for your family. The vast majority of experts agree that rolling the dice on going without insurance is simply not worth the risk.
Know Where You Stand in the Insurance Marketplace
Now that you know that skipping insurance is not a smart choice, the real first step is knowing where you stand in terms of your insurance options. The pricing of insurance policies is highly personalized. They vary depending on a large number of factors, including:
- Your age.
- Your income.
- Where you live.
- How many people you are insuring.
Your health history will also impact the cost of your insurance. Although insurers can no longer refuse to give you insurance because of a pre-existing condition, any health condition you have may necessitate that you choose a more expensive plan. For example, if you are a type one diabetic and have to pay for an insulin pump and continuous glucose monitor, buying a plan with a low monthly premium but high deductible won’t make financial sense.
Research all of the plans that are available to you on the market, and compare them closely. You can do this using an insurance broker or by simply doing some investigating of your own. Exhaustive research is key here—leaving stones unturned could mean you miss out on affordable options.
When you know what plans are available for you, you will also find out some other important information: your eligibility for subsidies. Government subsidies for health insurance are available to some people, depending on their household incomes. Generally, you need to earn less than 400% of the poverty level to be eligible for a subsidy. Again, other factors can impact whether you get a subsidy or not. Keep in mind that you have to buy a plan from the ACA, or Affordable Care Act, marketplace to get a subsidy. You should also remember that you can only enroll in a new plan during open enrollment in November of each year, unless you have a special circumstance, such as a change in employment status as you make the leap from an employee to a freelancer.
Look at Off-Market Options
Your best option for health insurance may not be in the marketplace. For many people, the obvious option is to join a spouse’s plan, if that spouse has insurance through an employer. Although your spouse will need to pay more for coverage after adding you, that expense is likely to be significantly less than enrolling in an individual plan.
If you have recently left a job, COBRA insurance through your employer may be available. COBRA is not cheap, but it may be comparable in price to an individual marketplace policy for better coverage. For some freelance writers, it is a good transition to use.
The Freelancer’s Union offers freelance writers the ability to buy health insurance as part of a group. This may come with lower rates than an individual plan. The advantages of using a Freelancer’s Union plan depend on where you live; the available plans differ from state to state. If you live in a state with favorable policies, you could save a significant amount of money.
Some other options for freelancers that are available on a limited basis include flat-fee doctors that offer membership-based care for a monthly fee and group plans available through local Chambers of Commerce. These options are of course dependent on living in a place where they are available.
Factor Insurance into Your Fees
Freelance writers often suffer from from severe sticker shock when they start shopping for insurance. Insurance is not an insignificant cost, but it is a cost of operation. As such, it should be reflected in the fees that you charge your clients. Add about 20% to your base fee to cover overhead costs, including health insurance. A mistake many freelancers make is not passing these costs along in any way to clients for fear of missing out on work. In reality, all businesses factor these expenses into their rates. Doing so is important for the health of your freelance writing business, and of course, you.
As a freelance writer, each November, you will have to re-enroll in a health insurance plan for the next year. That gives you an opportunity to evaluate how your current plan has been working for you. This is also a good time to make any necessary changes. Don’t forget to factor any increases in your insurance costs into your writing rates.
At Writers Work, we’re here to help you build a freelance writing business on your terms, with a wealth of clients looking for writers like you as well as invaluable advice for sustaining your career. Create a profile on our platform, connect with potential clients, and find out more about how we can help you make the most of your freelance writing career.