If you are a private contractor Health Insurance can be a big concern.
Purchasing insurance as an individual can be expensive and the availability of plans may not be the same as offered in other businesses.
The first place to look for Health Care options is with your business insurance broker. The same company that handles your liability insurance can often offer plans at a decent price to cover you and your family.
The next option you may want to think about is finding a part time job with any large company that offers its employees insurance. This is only good for individual contractors that have the extra time to work a part time job simply to acquire insurance and not really for the pay. If your spouse is employed then taking their insurance option may be one of your best bets.
Tax Deductions
Depending on your business type deductions for health care coverage are allowed. You should talk with your accountant to decide the best method for deducting your health care costs. You may even want to change the formation of your business from one category to another.
You still have to earn enough to cover your health care costs but it is possible to write at least a portion of the expense off on your taxes. Federal Laws may change and individuals could end up being taxed for benefits. Make sure you talk with your tax accountant before you get started.
Shopping for Plans
When you examine the options in your Heath Care packages you should compare the deductible, copay and percentage of coverage for expenses to your monthly premium.
Often when you are not sick you may believe that a plan with a low monthly premium is best but you must add your deductible and your premium to get an idea of what you will be paying when you are actually sick.
Guaranteed Renewable Plans are best because you get to decide whether to continue your coverage as appose to having your plan canceled at the end of its term.
Catastrophic Coverage This is when your expenses exceed your primary plans maximum limits. Catastrophic plans can be purchased as an add on to your regular plan.
Lifetime Maximum – make sure you understand the fine print behind maximum coverage for your plan.
Services Covered – Most plans do not cover Maternity unless you specifically ask for that coverage. Other procedures may not be covered too so make sure you understand any disallowed services up front.
Prescriptions and Dental coverage may not be covered or may only be partly covered in many plans. Understand your deductible and limits on these services.
Fee Increases or Termination of your policy
Insurance companies can decide to raise the fee or change the terms of your policy often on an annual basis. They may also be able to Terminate your Policy without giving you a reason. It is extremely important that you understand the fine print concerning fees and termination.
Plan Types
Fee-for-service plans, also known as indemnity plans, allow you to choose your doctor or hospital, usually with no (or minimal) restrictions. This option allows you to try a specialist recommended by a friend or visit a medical center down the street.
On the downside, you’ll probably pay more — and possibly receive less reimbursement from the plan for preventive services such as checkups.
Health Maintenance Organizations (HMOs) — less cost, less choice
HMO plans are known for low cost, low hassle and, as the tradeoff, limited choice of doctors. Where choice is a concern, a hybrid — an HMO with a POS option — offers more flexibility.
Traditional HMOs rely on agreements with a network of health care practitioners and hospitals to provide health benefits at a reduced price. Some even have a staff model, in which all of the doctors and other health care providers are employed by the HMO.
Advantages
* Total costs are usually lower than fee-for-service or preferred-provider (PPO) plans
* A wide range of services is included, including preventive care like checkups
* Little or no paperwork — just show an insurance card at appointments
Disadvantages
* Choice of doctors, hospitals, and prescription medications is restricted
* Your primary care doctor will need to pre-approve any visits to specialists
* Lack of choice and volume of patients in the plan could mean it takes longer to get an appointment
Preferred Provider Organizations
A PPO is a cross between a fee-for-service plan (focusing on doctor choice) and an HMO (focusing on low cost). Like an HMO, the PPO plan uses a network of preferred providers to give you access to a range of health services at reduced prices. But like a fee-for-service plan, a single physician will not manage your care. Also, you can decide to see out-of-plan doctors and still get some coverage. However, the plan will pay more of your costs if you see an in-network doctor.
High-Deductible Health Plans
Offer coverage only after you reach a deductible that is significantly higher than in traditional insurance plans. Because these plans have such high deductibles from about $1,000 to more than $10,000 they tend to have much lower premiums than traditional insurance.
Final Note
No matter which plan you decide on you should understand all of the options available. This will allow you to make the best initial decision and make any changes as needed.
You should also understand that depending on where you purchase your plan its cost and features may change. This means if you had a plan with a former employer the plan name and provider may be the same but as an individual the coverage and cost could be slightly different.
There are many organizations that can help you get reduced fees on coverage. If you belong to a trade organization or even a local club ask about member benefits.