Affordable Health Insurance Tips for the Self Employed

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Last updated on November 15, 2018 Comments: 25

The gig economy is thriving, with more and more workers choosing to leave their careers and go the freelance route. There are plenty of upsides to this decision, the biggest usually being the flexibility and autonomy involved.

However, there are also a few things to consider before handing in your resignation and going rogue. The biggest is: how will you find (affordable) health insurance when you’re self-employed?

Salaried vs Self-Employed

A few years ago, I decided to become a freelance writer and editor full-time. The benefits are wonderful, after all. I make my own schedule and have an incredibly flexible lifestyle–a definite must, considering that I have a special-needs child with his own demands. Plus, if I want to head to the beach for a week (as I’m doing next month), I simply bring my computer along. The freelance life has some excellent benefits.

Unfortunately, there are also some downsides. My biggest hurdle, by far, has been acquiring adequate health insurance.

As a freelancer, my options are pretty limited. I don’t have an employer footing part of the bill for premiums, and my cost isn’t subsidized due to a large group of enrollees at my workplace. My plan doesn’t automatically come with vision or dental coverage, either. All of this is chosen and purchased come open enrollment time, and believe me: it’s not cheap.

For instance: the average annual premium paid by employees (after their employers subsidized a portion of the cost) was a mere $1,478 in Virginia last year. This breaks down to about $123 a month for health insurance coverage for one person–sounds pretty affordable to me! Conversely, let’s take a look at how much I’m paying a month for sub-par coverage that also includes a $7,000 annual deductible and a ridiculously high cost-share: $406 a month.

That’s why for some, health insurance alone might be reason enough to stay in a salaried position. This is especially true if you have children and their other parent/your spouse doesn’t have affordable family coverage for them. Depending on how much the freelance life is worth to you (we’re talking your income as much as your quality of life here), you may even choose to stay in your desk job for a few more years. If so, you can always freelance on the side and earn extra income.

But let’s say that you are absolutely, positively set on being self-employed. What are your best options for finding affordable coverage?

Go Part-Time

Some employers will offer health benefits to part-time employees. It might be worth asking your company if they would be willing to keep you on the group health insurance plan if you went to part-time status, giving you the best of both worlds.

There are plenty of other companies that offer part-time and freelance employees, too. Depending on who you will be working for as a freelancer, it’s worth asking if there are any health benefits (either in the form of a group plan or a health care reimbursement) available.


If you’re newly-self-employed or haven’t yet jumped ship, COBRA is an option. This temporary health care option offers you the ability to continue your same group coverage after you leave your position, at a rate lower than you’d pay if buying individual coverage elsewhere.

COBRA is available for the 18-month period following your employment change. There are a few caveats that determine whether COBRA is an option, namely that your company has at least 20 employees, so be sure to ask HR if it’s available to you.

COBRA isn’t cheap, though. You’ll be offered the same, or a similar, plan as the one you had previously. However, instead of your employer subsidizing a significant portion of the cost, you’ll usually be left footing the entire bill. This means that you can wind up paying three or four times the premiums you were paying before.

Of course, this is still usually cheaper than buying the same plan on the open market, since you’re still included in the group plan. The difference is that your employer isn’t covering part of the bill for you anymore.

Spousal Coverage

If you are married or will be getting married soon, you might be in luck. If your spouse’s employer offers health insurance coverage, you can buy into the policy along with them. This is usually the cheapest option for the self-employed, and gives you the best of both worlds.

Of course, you’re at the mercy of the plans offered by your spouse’s workplace, which might be lacking compared to your needs/desires. However, if your goal is to get the most affordable coverage possible, buying in with your significant other is ideal.

In some states, this is an option even if you’re not married! You can sometimes jump in on an employer-sponsored health care plan with a domestic partner or common law spouse; just be sure to check your own state’s laws and regulations to see if this is an option.

State Coverage

If you don’t have a spouse’s plan to piggyback on and COBRA isn’t an option for you (or at least, a cost-effective one), it’s time to shop around. This means looking into the Healthcare Marketplace for plans within your state.

The open enrollment period occurs during the last quarter of the year. This is when you can shop around and choose the plan that will best suit you for the following calendar year. If you have recently lost coverage (by resigning from your position or getting fired/laid off), you will typically qualify for a special enrollment period, or SEP.

Qualifying for a SEP means that you can shop around for health insurance through the Marketplace regardless of the month, buying coverage that will last you through the end of the year. Keep in mind, though, that this period is only valid for the 60 days following your loss of coverage. Wait longer than that to apply, and you’re out of luck!

If you are confused about coverage options or the best plan for you, you can utilize the assistance of an assister, agent, or broker. These individuals provide you with healthcare advice and guidance free of charge, helping you find CHIP, Medicaid, or individual purchased plans.

Shop Around

Can’t find what you want in the Marketplace? Then start looking elsewhere online.

Websites like will offer you quotes and coverage options based on your (and your family’s) unique needs. This kind of aggregator will provide you with quotes from various companies, which you can compare side-by-side until you find what you want. Once you find the right fit, you can even apply easily online.

Go With a Group

Just because you left your workplace doesn’t mean that group options (and therefore, group pricing) are out the window. It all depends on where you live and the organizations you’re a part of.

For instance, The Freelancers Union offers to link you with group health coverage plans that are perfect for the self-employed. They’re not offered in all areas, though, so be sure to check your ZIP code on the site. Organizations like AARP also offer group health plans.

Watch the Specifics

If you’re trying to make your new coverage work with your new income, you probably want to save money wherever you can. That’s where minding the specifics of your plan will come into play.

Your most important factor is probably your premium. This is the actual cost for coverage each month, whether you use the insurance or not. If you want to lower your premium without reducing the quality or level of coverage, your best bet is to raise your deductible.

Your deductible is the amount of money you’ll need to pay out of pocket each calendar year before your insurance company will kick in and foot the bill. This includes cost-shares, depending on the services required, but can easily be in the thousands of dollars.

By raising your deductible, you open the door to cheaper premiums. Just keep in mind that if you break your wrist and have a $7,000 deductible to meet, you’ll be writing a hefty check for care even though you have valid insurance coverage. As with any other type of insurance, be sure that you can actually afford the unexpected expense of a high deductible before you officially raise it.

Some plans offer coverage for frequent office visits at little or no cost, while others will make you pay out of pocket for those appointments. If you have small children who get sick or injured a lot, choose a plan that won’t cost you an arm and a leg in doctor’s visit fees. Conversely, if you very rarely visit the doctor, choose a plan that costs less but provides fewer in-office visits.

Health Savings Plans are a great way to pay for medical expenses with tax-free money as well as save for future expenses. Many employers offer them along with their group health care plans, but the self-employed are usually out of luck.

There are some individual plans that will offer an HSA along with their coverage, but it comes at a cost: you’ll usually only find these with high-deductible health plans with limited care coverage. Or, if you find one with a low-deductible plan, you can expect the inclusion of an HSA to raise the premiums even higher.

Buying health insurance is a difficult process, even if it’s just choosing the right plan offered by your employer. When you decide to be self-employed, though, the process becomes even trickier. Finding coverage that is not only affordable but also meets the needs of you and your family can be tricky.

By shopping around, utilizing resources like brokers and agents, and even shopping for group plans through a part-time employer or organization can all be great ways to snag the right plan for you.

Article comments

David Scott says:

The problem with jumping on your spouse’s work plan is that, unless you have kids, it can usually cost more than if you just buy your own. Why? Because you end up paying for a “family plan” even if you’re just a couple

Anonymous says:

I agree with the HSA. I left a job where we had an HSA and because my family didn’t go to the doctor much, we ended up with several thousand in the HSA. That money continued to grow and has been funding my hustand’s health issues for the past 2+ years. I’m currently investigating an HSA for our family again (right now have an individual plan that I don’t feel is worth the cost).

Anonymous says:

You are a better person than I am. Thought about going it on my own and the endless agonies of these type of things are endless agonies

Anonymous says:

Many insurance companies nowadays will cover a domestic partner just the same as a spouse. Our insurance plan at my work is with Cigna. I was able to include my long-time girlfriend. The only documents needed were an affidavit, a statement from a checking joint account, and of course you must have the same home address.

Anonymous says:

As Beth mentioned you cna try some professional associations of even your alma mater. has some decent plans and are targeted to people like you. Take a look at it.

Anonymous says:

When I was paying for my own health insurance I did some research right off the bat and found that that my COBRA payments would be more than if I just got the same plan on my own. So I just went with that for awhile until I got a full time job with benefits. However, I really do wish I would have shopped around more.

Anonymous says:

That was my point from the beginning. If you are fairly healthy and your state allows insurance rates to float based on risk, private insurance for a young person should always be cheaper than group insurance via COBRA.

Anonymous says:

When I went freelance I tootled around on and ended up with a plan offered by Aetna for $425+ a month. When Aetna decided to pull out of Texas I lost my coverage. I’ve been without health insurance for a couple of years but now I’m shopping again. Oh joy. I’ll be curious to see what you come up with.

Anonymous says:

Definitely sounds like you should propose to your long time girl friend at last!

Let me be the first to tell you congratulations on the engagement! 🙂

Donna Freedman says:

I paid for Blue Cross after my divorce-related COBRA ran out. Now I’m in Group Health, an HMO, and I pay $338 a month. Annual exams and minor illnesses require only a $20 co-pay. The mammograms are covered, too.
No machine runs for more than 50 years with some maintenance issues, so insurance is not something I’m willing to do without.

Anonymous says:

Kyle beat me to it. A HDHP with a HSA might be a good route for you to go.

Luke Landes says:

High deductible plans tend to rub me the wrong way. It’s true that I don’t use a lot of the benefits offered by a health plan, but I want to feel confident that I can be covered for anything, relatively anywhere (even if out of network).

Anonymous says:

Many high deductible plans are basically just crappy insurance. But some high deductible plans are great insurance that just have a high deductible. My insurance is high deductible but it covers everything in our out of network and I can go to any doctor, etc. I just have to pay a high deductible.

Anonymous says:

Interesting replies Flexo and Jim. I’ve read so many articles advising HDHP with HSA that it almost seemed good by default. Must remember to do the research.

Anonymous says:

You should look into a high-deductible plan coupled with a Health Savings Account. There are plenty of good options under $100 per month. Of course, you’ll have to pay a lot more out of pocket when you visit the doctor but unless you are a regular hospital visitor, you should save a lot of money most years.

Anonymous says: is a nice site to do comparison shopping for health insurance. Make sure to read ALL the fine print on any plan so you don’t overlook the a clause that limits your coverage.

I had the same thought as Apex that $2500 to $3000 is awfully low price. But it may be right. That could be the price if its a high deductible plan with HSA coverage for just 1 person. My companies COBRA premiums are in the $2500 to $5500 range for a single person with the $2500 being high deductible HSA plan. To cover a family of 5 is much more expensive and then the plans COBRA start arund $10k and hit as high as $22k a year.

Anonymous says:

I retired at sixty. That would not have been possible without Retiree Health Care from the USAF. After looking at the rate tables you have I once again realize how lucky I am. Every time I came to the reenlistment decision I had a good reason to stay in the AF. The wife was pregnant, we really wanted that tour in Germany, or Jimmy Carter was president. Never once did I consider Health Care all that important – Wow – what a difference 35 years can make. I can’t help you with your decision but I would advise against risking everything by going without it.

Anonymous says:

“I expect it to cost from $2,500 to $3,000 for the year, as the company will no longer subsidize the majority of the expense to the insurer.”

Are you sure about that? Have you looked into it? That sounds low to me.

“This would be much less money than shopping the market for individual health insurance, at least until healthcare reform takes effect.”

Are you sure about that? Have you looked into it? If you are healthy without any chronic or pre-existing conditions, a private plan should be cheaper than group insurance because you are not in a pool with less healthy people than you. If you are not healthy or in higher risk classes like over-weight, smoker, etc, then that changes everything obviously.

I had looked into it myself about 6 years ago for a business I was considering and that was definitely true. I could buy private insurance cheaper than the COBRA payment for the group insurance at my company. I live in MN so it could be different in different states but it makes sense. There is nothing special about group versus private insurance. Group pools risk and private you take it all yourself. If you are a better risk private should be cheaper, if you are a worse risk it should be more expensive or even unavailable to you if you are too high of a risk.

So did you actually price it and have hard numbers or is this based what you expect to be true?

Luke Landes says:

The only thing I’m unsure about right now is the full COBRA price for my current insurance. I’ve priced the individual plans, and there is a wide range from $300 to $1,000 per month. The lower cost plans have limited benefits. The goal isn’t to fond the cheapest plan, that’s easy. The goal is to find a plan that is best for me taking benefits and price into consideration.

Anonymous says:

So the price you quoted here of $6400 seems kind of high for an good quality individual plan (and $3000 seems kind of low). Was that for a plan that was identical to the one you have now that you would be getting through COBRA? Obviously the best test is to compare two identical plans and the only way to do that for you is to compare an individual plan that has the exact same coverage as your current employer provided plan. If that is cheaper through COBRA than as a private plan and you are in good health and not a high risk category then I must admit to being surprised, but facts are facts and if that is the case then clearly you should choose COBRA.

Luke Landes says:

Yes, the $6,400 is the Aetna HMO plan with a deductible and coinsurance, the same plan I would have with my (soon to be former) employer in 2011. What’s interesting is that my employer is switching to this plan from the Aetna HMO $15 coinsurance plan. As an employee, the 2010 plan would cost just a little less than the 2011 would, but the private annual premium for that plan is $24,000! It looks like my employer would be charging more for a plan that costs 73% less on the open market. Take a look at the rate chart I linked to in the post.

Once I hear what I will have to pay for COBRA, I’ll update the information.

Anonymous says:

So I am a little confused about a few things.

First of all these rates are listed as state wide rates that do not vary based on health status. Is this a NJ law that prevents this? If it does then effectively NJ has basically mandated state wide group coverage. Not that bad of a thing as it puts everyone in the same boat. However if that is the case then I do not see why an individual policy and a group policy from a company would not be exactly the same price. If the group policy is lower in price because the company has been able to negotiate a better deal than the individual policy then the state mandated rules regarding equal rates for everyone in private plans is screwing people over cause clearly the group rates can be cheaper. I assure you this is not the case in MN. If the group policy is the same as the individual policy then I would expect your COBRA rates would be equal to the rates on this chart. But again, I don’t fully understand what this chart applies to.

I also don’t know if health care is generally much more expensive in NJ but I assure you there is no way you could buy an insurance plan in MN for a single person that cost anywhere near 24K. 4-5K should be pretty standard and a cadillac plan should still be under 10K for a single person. Heck in the Obama health reform bill there was talk of taxing cadillac plans more and that talk was somewhere around 17K for a family and I think that got raise to 25K and then phased in over 6 years or something. If 17K was being considered for a cadillac extra tax plan for a family plan what the heck is a 24K single person health insurance plan? Do they give you a manicure while you are getting your checkup? I honestly cannot get my head around those numbers.

Anonymous says:

I have the chance to be married to someone who has a very nice health insurance plan. So, not a big matter for me. Also, I live in Quebec, so health insurance is not the same issue over here…

Anonymous says:

Some people marry for love, some people for money, others for health insurance!

Good luck, this is the biggest priority for anyone who is working independently because you never know what can happen to your health on any given day. I just had a friend whose been unemployed for a while now and he slipped and fell and hurt his knees pretty bad. But since he has no health insurance he is just telling himself to “walk it off” for now… You can’t walk it off if you have a heart attack or something else that is very serious. Good luck Flexo!

Anonymous says:

I’m not sure if this helps as I’m in a different country, but here I know there are certain insurance companies that pair with professional associations. For instance, Ingle offers insurance packages for members of the Professional Writers Association. (Yes, Canadians need supplementary health coverage too!) It might be worth a look to see if something similar exists where you are.