A
Few Thoughts on Health Insurance
Without a
doubt, the most frequently asked question I hear is, “What about
health insurance?” While I understand why it comes up so often,
it shouldn’t be the first concern when starting a business.
We all know that the health insurance industry has gotten
out of control and even large companies have cut back on employee coverage.
Your challenge as a self-employed person is to find the best deal you
can—and then get on with the more interesting aspects of your business.
Although I’m not an expert on insurance, I do have years of experience
shopping for my own health coverage. Here’s what you need to know:
Think
entrepreneurially. Health insurance is one of the costs of doing
business. As an entrepreneur, you get to decide what benefits and perks
you want to give yourself. Health coverage is just one aspect of the bigger
benefits picture.
Go
shopping. If you’ve always been covered on the job, you
may never have done this. There are several Web sites where you can compare
coverage and prices. Start at eHealthinsurance.com
and Digitalinsurance.com.
Talk to an
independent insurance broker, not just agents for a single company. A
good one will help weed out the plans that don’t fit your situation.
You can locate an independent rep via referral from a self-employed friend
or in the Yellow Pages. Since these folks are usually self-employed themselves,
they should bring insight to your special needs and concerns.
Also check
out the coverage now offered by Costco, which may save you money.
Change
your requirements. Instead of shopping for coverage that includes
all those little incidentals like doctor visits, realize that your most
urgent need will be for a large medical expense. I recommend that if it's
appropriate (i.e., you’re in good health), your main need is for
major medical coverage. Not only will you save enormously on monthly premiums,
your out-of-pocket expenses will probably be far less than if you included
those things in your coverage.
Be
aware of the benefits. As a self-employed person, your health
insurance premiums will be a tax deduction.These days, health insurance
premiums for
self-employed people are 100% tax-deductible. So if you pay, say, $500
a month for health insurance and you're in the 25% tax bracket, that's
a tax savings of $1,500.
A further
help in the tax department is the new Health Savings Account, where you
can make contributions, then reclaim the money to pay medical and prescription
bills. It’s another tax deduction. If you factor the tax savings
in, the true cost of premiums goes down.
Join
a group. You may be eligible for membership in a professional
association or alumni group which offers health insurance at group rates
to its members. Even so, it makes sense to compare those programs with
plans that you can purchase on your own. You may find a suitable plan
for less money from an independent broker.
Review
your plan periodically. I’ve changed carriers several times
when premiums soared. While shopping for health insurance may not be your
favorite activity, it makes fiscal sense to compare your plan with other
options every year or so.
There's
more where this came from.
Order Winning Ways now!
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