Healthcare for Freelance Writers: 11 Viable Options
One of the biggest obstacles that keeps many writers in the US from embracing the freelance life is healthcare.
I feel your pain there, since I left a particularly cushy corporate healthcare plan at a big newsweekly chain behind when I started freelancing in 2005.
Did I mention I am the sole support of a family of five? Yeah.
I’m not going to sugarcoat it: You will pay more as a freelancer. Lots more.
But this problem is solvable. And you shouldn’t let healthcare worries stop you from becoming a freelance writer.
One bright spot is that your premiums will generally be a tax write-off that lowers your gross income. So there are some savings on that end that make it not as costly to self-pay as you might think.
Another ray of hope for U.S. writers is healthcare reform. If it stands — the Supreme Court will decide in the next few months — we should see new, more affordable state insurance pools for solopreneurs arrive in 2014.
While we wait for that to arrive, here is a look at the currently available options for healthcare. I’ve had healthcare for seven years as a freelancer and used a variety of healthcare plan options, so the list below is informed by my own experience.
If you are leaving a job that had healthcare, you may have the option to stay on your existing plan for up to 18 months under this federal program. Recently, due to the downturn, there were also federal subsidies that lowered laid-off workers’ premiums. These are subject to change, so if you are going onto COBRA, be sure you know all the current rules on whether you might qualify for any special help with premium payments.
The price for COBRA premiums will be higher than you were paying as an employee, but coverage is often better than you can get solo. I did my one pregnancy while on a COBRA extension (if you get pregnant while you’re on it, they can’t kick you off until after the birth).
2. State low-income/pre-existing condition pools
Each state must offer an option like this for people who cannot get or afford insurance otherwise. Rates can be high, but check with your state insurance commissioner to find out what’s available.
Each state sets its own rules for who qualifies, and the number of participants may be limited. But if you have no other options, this is worth looking into.
3. Your local chamber of commerce
Many chambers offer healthcare plans to their members. I was insured through my local chamber’s group plan for several years. Know that you’re free to join a chamber two counties over if they’ve got a better healthcare deal and/or the membership dues are cheaper.
Know that you’re free to join a chamber two counties over if they’ve got a better healthcare deal and/or the membership dues are cheaper.
This writers’ organization offers health insurance in New York and New Jersey, and has a variety of HSA and PPO plans in other states. It also offers national dental care. You have to be a paid, AvantGuild-level MediaBistro member to sign up for these services through them.
5. The National Writers Union
Currently offering dental and vision group plans, the NWU also is assisting writers with finding suitable individual healthcare coverage in their home state. The NWU has 1,200 members and is affiliated with the United Auto Workers union.
6. The Freelancer’s Union
This organization is offering a variety of insurance products including group health rates, life insurance, and recently started offering a program for that other missing link for freelancers: a retirement plan. Membership is free, and the organization has more than 175,000 members in all 50 states.
If you only know Costco for the cheap food and clothing deals, check out their business services. (Full disclosure: I know about them because I’ve written for Costco Business Services in the past.) Right now, the club-store chain is offering its business members a Costco deal on group insurance rates in California, Oregon and Washington. Watch for news, as the retailer intends to add additional states.
8. Small-business plans
While it’s increasingly rare, some insurers do offer business health insurance to one or two-person companies. It’s worth doing research with an independent broker or on sites such as ehealthinsurance to see what you can find. This is an option I’ve used, and it can give you a better tax deduction for the premiums and other associated costs.
Know that you can tax-shelter even more of your healthcare costs by selecting a plan that includes a health savings account or HSA. This will let you deposit thousands tax-free (amounts vary by year and whether you’re married, single, or have kids) with which to pay your out-of-pocket medical expenses, beyond what you pay in healthcare premiums.
If you deposit $5,000 and are in a 25 percent tax bracket, for instance, the HSA saves you $1,250 you would otherwise have paid in taxes. As you can see, the savings are fairly substantial.
9. Individual plans
This past year, I found switching from a one-person business plan to an individual plan saved me nearly $4,000 for the year. You hear individual plans are the most expensive, but it’s not always true.
Remember, each state sets rates with each insurer, and there’s a lot of variety in coverage, deductibles, and premiums. Shop around.
Remember, each state sets rates with each insurer, and there’s a lot of variety in coverage, deductibles, and premiums. Shop around. There are individual HSA plans, too, so look for that option.
10. No insurance
Since my dad sold insurance this idea terrifies me…but many young, healthy writers who don’t own a home or other major assets simply do without health insurance. Or you might purchase coverage just for particular situations — I have a friend who took out a small policy against any injuries she might sustain playing on an adult soccer league team, for instance. And your car insurance will contain some medical coverage in case you’re in an accident, but often coverage is minimal.
If you have no health insurance, I’d beg you to consider getting at least a low-cost plan that covers catastrophic illness and injury. Without it, you could find yourself deep in debt and receiving very low-quality care if the worst happened.
11. Move abroad
You may laugh, but I know people who’ve moved to Mexico, Canada, Australia, and other points overseas to gain more affordable healthcare options. There are plenty of blogs dedicated to helping people evaluate options and move overseas, too, such as Move Me Abroad and Expat Intelligence. This is an area to research carefully, as some countries require foreigners to have their own private insurance.
Fast Changes in Healthcare
Final tip: Whatever healthcare option you go with, start from scratch researching the issue each year. The health insurance scene is changing fast.
Rates go up and down — mostly up — and new plans get introduced. Health insurance will cost you, but that doesn’t mean you shouldn’t watch for any opportunity to save money on your premiums.
What have you done about health insurance? Leave a comment and tell us how you solved the health-insurance problem.
You should always seek independent financial advice and thoroughly read terms and conditions relating to any insurance, tax, legal, or financial issue, service, or product. This article is intended as a guide only.