Worse yet, the premiums which small businesses (less than 200 employees)
have for heath insurance coverage is increasing at twice the rate that it's
increasing for large (500+) employees according to William M. Mercer Inc.
(http://www.wmmercer.com), a consulting firm specializing in employee
benefits. Not surprisingly, an estimated 40 percent of small-business owners
do without insurance, according to the Insurance Information Institute
(http://www.iii.org), because they believe they can't afford it.
Because of their high price, too many self employed individuals settle
for health coverage that is inadequate. Such business people are threatening
not only themselves and their family's health, but also their business' very
existence should they ever become injured or seriously ill.
If you're planning to leave or recently have left full-time paid
employment, you can still retain your existing health insurance thanks to a
law known as COBRA (Consolidated Omnibus Budget Reconciliation Act) of 1985.
COBRA can provide a bridge for the newly self-employed as it allows you to
retain the same insurance coverage at the same price that you had before. As
a former employee using COBRA, you have to pay the full premium that your
employer was previously paying or supplementing. That is still cheaper than
an individual policy, since the coverage is purchased at a group rate. When
it expires, you have the choice to continue with that same plan -- at an
individual rate.
The problem is that COBRA only lasts 18 months, and after that those who
are self employed are on their own. However, there are some options that
self employed business people have to reduce how much they pay for health
care coverage. These are:
1. Use The Internet To Become Better Informed.
Whether shopping for the lowest health insurance rates or wanting to ask
medical questions of experts, learning to do research on the internet can
make you a more informed consumer, thus bettering your chances of lowering
your health care costs. The better educated you are about health care, the
more you can avoid unnecessary and/or expensive medical insurance.
2. Get Coverage From Your Employed Spouse.
A common and easy way to get long term health coverage is to add yourself to
your employed spouse's existing policy, and use the extra premiums you'll
have to pay as a tax-write off, of course.
3. Join With Other Self Employed People.
There are strength in numbers so investigate joining a professional or trade
organization that offers its members coverage at a group rate discount. Two
such groups are the National Federation of Independent Business (http://www.nfib.com)
and the National Association for the Self-Employed (http://www.nase.org).
However, before joining a group just for its health insurance plan, one
should consider the cost of membership in addition to the insurance
premiums.
4. Lower Your Level Of Health Insurance
Coverage. If you are healthy and don't require much medical care,
why give the money to the insurance company for low-cost claims when you
could keep it yourself? If you choose a higher deductible or a higher
co-pay, the money you save in monthly premiums might actually be more than
you spend out of your pocket in a year.
5. Reduce Your Chances of Getting Sick.
You know the old saying about an ounce of prevention being worth a pound of
cure? Well, this is especially true when it comes to reducing your health
care costs. According to Marilyn Furry (Associate Professor Of Extension
Education - Penn State's College of Agricultural Sciences), the best advice
to follow to avoid high health insurance premiums as well as out-of-pocket
health care expenses is to do the following:
- Take advantage of free health screenings at local clinics, hospitals
or health fairs
- Know early warning signs of potential health problems and consult a
physician ASAP
- Compare fees and costs for medical, pharmacy and surgical procedures
- Keep accurate medical expenses records so you can itemize these
deductions on your taxes
6. Join A Discount Health Benefits Club.
Perhaps the best way to cover any existing gaps in your health insurance is
to join what is known as a Discount Health Benefits Club such as Ameriplan (www.ameriplan.com)
or MediSavers (www.medisaver.com). These clubs offer their membership
savings on prescription drugs, dental visits and other health services by
charging a fee to connect members with doctors, dentists, vision centers,
and chiropractors.
Rising medical insurance costs force many self employed professionals to
eliminate coverage in areas like dental, vision and prescription drugs. But
with these areas covered when one joins s discount health benefits club, any
gaps in the self employed dental, vision and prescription drug coverage are
eliminated.
Also, because 'discounted health benefits' aren't insurance, they can be
used in conjunction with existing health insurance to lower certain costs
and even supplement coverage for both the self employed as well as the self
insured. Due to their ability to supplement existing health insurance,
discount health benefit clubs must be considered a strong health care
alternative for the self employed.
