Starting and maintaining a small business requires a great deal of focus and energy. While concentrating on establishing a foothold in the marketplace, raising capital, and conducting a marketing campaign, it can be all too easy to let other important aspects of your venture fall by the wayside. One of the most common of these is health insurance. After all, when you’re just starting out, you are the single most important element of your operation, and that makes taking care of your own health a priority. Fortunately, you have a few options.
1. The Affordable Care Act
The Affordable Care Act is designed to offer affordable health coverage to people like you. If you live in a state that has its own ACA website, start there. If not, go to Healthcare.gov. Yes, it’s had its issues, but it is functioning much better these days. Go through the application process and review your options. Depending on your income and other factors, you may qualify for a tax credit which can reduce the cost of your premium.
If you recently quit a full-time job, you have the option of continuing the health insurance provided by your employer via COBRA. It normally allows you to keep benefits for 18 months after you leave, albeit at a higher rate, and is available for up to 60 days after either your benefits end or you receive the COBRA notification letter from your employer. If you opt for COBRA during this time, your benefits are reinstated as of the date your original coverage ended. Note that small companies which employ fewer than 20 workers are exempt from having to offer COBRA.
3. Private Health Insurance
There are many private health insurance options at your disposal, one of which is a high deductible health plan (HDHP) – the more elevated your deductible, the lower your premium. The lowest deductible you can choose for 2014 is $1,250 for an individual and $2,500 for a family. The highest is $6,250 and $12,500 respectively. These numbers may seem extreme, but if you’re currently paying $400 per month for health insurance, for example, that means you’re spending almost $5,000 per year already. If you were to live a healthy lifestyle and visit the doctor rarely, you could cut your expenses by a considerable sum.
4. Spouse’s Plan
If your partner has health insurance through an employer that offers family coverage, this is an option worth investigating. The premium is going to go up, but not as much as it would if you bought an individual plan. Just keep in mind that, generally speaking, additions can only be made during the open enrollment period.
5. Join a Professional Organization
Several organizations offer health plans. Try the National Association for the Self-Employed or the alumni association at your alma mater. Other professional groups such as guilds and bar associations may also have benefits available. Check out any organizations you’re currently a member of to see if they can help.
6. Take a Part-Time Job
You can also find part-time work to maintain your health coverage. This may not sound ideal if you’re eager to get going on your venture, but if it can save you significant dollars – not to mention stress – it’s worth considering. There are many national companies that still offer health benefits for part-timers. Just do a little digging and chances are you can find one that suits you.
7. Network for Expert Advice
In order to explore all available options, speak with a trained health insurance professional. Instead of just picking a name from the Internet, however, try contacting insurance experts you already have relationships with. They may know someone who can help. You can also ask family and friends to recommend folks they know and trust in the industry. This way, you can be sure that the advice you’re getting is accurate and unbiased.
If you’re struggling to finance health insurance for your kids, consider a children’s health insurance program (CHIP) or Medicaid. This way, you can get a separate individual plan for yourself and obtain insurance for your children on the cheap. If you decide to go with an HDHP and it’s your only coverage, consider partnering it with a health savings account, a great way to set money aside for future medical expenses. The funds you contribute to an HSA are not subject to federal taxes and they roll over to the following year. Keep in mind, though, that withdrawals can only be made for qualified medical expenses – if you take money out for any other reason, you’re subject to taxes and penalties, unless you’re over age 65. For 2013, the HSA contribution limit is $3,250 for an individual and $6,450 for a family. These contributions earn interest and grow tax-deferred. You can find out more information about health savings accounts at your bank.
What are you plans for health insurance if you’re starting your own business?
Joe Harper is a business owner and entrepreneur who writes about money management, staffing, human resources, and health/fitness.