Growing number of self-employed older adults do not
have health insurance
Are you planning to join millions of other baby boomers and seniors by
starting your own small business, either as a career change or for
supplemental income during retirement? If you haven’t thought about self
employed health insurance, it’s time to start. '
Millions of Workers Don’t Have Self Employed Health
Insurance
Securing reliable, affordable self-employed health insurance is one of
the most challenging aspects of going out on your own. It isn’t easy,
and it isn’t cheap. Self employed health insurance is one of the major
obstacles that stand in the way of self employed entrepreneurs and small
business owners.
Maybe that’s why so many self-employed people end up without health
insurance. Of the 27 million working people in the United States who are
uninsured, 63 percent are either self-employed or work for a small
business or are owners of that small business, according to the Employee
Benefit Research Institute (EBRI).
Many Baby Boomers and Seniors are Self Employed
Self employment is an important career option for people in mid-life,
and it is an option that many seniors and baby boomers choose.
In 2002, 5.6 million workers age 50 and above (16.4 percent of 50-plus
workers in the U.S.) were self-employed, compared to 10.2 percent (13.8
million workers) for the workforce as a whole, according to
Self-Employment and the 50+ Population, an AARP Public Policy Institute
Issue Paper by RAND researchers Lynn A. Karoly and Julie Zissimopoulos.
Many People Over 50 Choose to be Self Employed
In general, self-employment rates tend to rise with age. In 2002, for
example, people age 50 and up were only 25 percent of the workforce, yet
they accounted for 40 percent of all self-employed workers. While some
of those 50-plus entrepreneurs had been self-employed through most or
all of their careers, many others made the transition to self-employment
in mid-life, often as part of their transition to retirement.
About one in three self-employed workers age 51 to 69 made the
transition to self-employment at or after age 50. And that trend isn’t
slowing down.
According to a Merrill Lynch survey, 13 percent of baby boomers (nearly
10 million Americans) plan to start their own businesses when they
retire from their current jobs.
Be Your Own Boss Without Risking Your Health. Finding
self employed health insurance first is part of any valid small business
plan.
If you’re thinking about becoming self employed, or taking a job with a
small company that doesn’t offer health insurance, you would be wise to
begin looking into the various self-employed health insurance options
that are available right now.
According to EBRI, the 13.4 million Americans under age 65 get their
self-employed health insurance as follows:
2.6 million have individual policies
3.5 million are insured through their own business
3.3 million are covered by their spouse’s insurance or by some other
policy
0.7 million are insured as part of a public program
3.5 million are uninsured
Self-Employed Health Insurance Options for Older Adults
After you turn 65, you may be eligible for Medicare benefits, even if
you’re still working in your own business. Be advised, however, that you
may need supplemental health insurance to cover what Medicare won’t.
Finding the right self-employed health insurance can be difficult, but
it’s not impossible. There are new resources and plans that can ease the
burden, help you escape the corporate rat race, and enable you to
achieve your dream of being self-employed without putting your health at
risk.
Find the right self employed health insurance coverage at
a price you can afford
If you are self-employed, or planning to start your own business now or
after you retire, the following tips will help you find the best
self-employed health insurance coverage options that will fit your
budget.
Keep the Health Insurance You Have, For Awhile
The easiest way to ensure that you continue to have good health
insurance after you leave your corporate job is to keep the same
coverage by invoking your rights under health provisions in the
Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986.
Under COBRA, you can leave your job and keep your current coverage for
up to 18 months at group rates, so long as the company you’re leaving
employs 20 or more people and you weren’t fired for gross negligence or
incompetence. For more information about COBRA coverage, check with the
U.S. Department of Labor.
Even so, expect the price tag to be a shock. Once you’re self-employed
you’ll have to pay the full cost of the coverage, which is likely to be
much higher than the amount you were paying as an employee. According to
the Kaiser Family Foundation, workers typically pay only 28 percent of
their insurance costs.
Lighten Your Load Before You Leap
If you have the luxury of planning ahead and leaving your job on your
own timetable, consider signing up for the least expensive health
insurance plan your company offers during the open enrollment period
closest to your departure date. That way, you will have a lower cost
self-employed health insurance premium to cover under COBRA.
Don’t Let Time Slip By
Under the law, you are guaranteed access to health insurance as long as
you find a new policy within 63 days after you reach the end of your
COBRA benefits. If you fail to arrange for new coverage within that
timeframe, your health insurance application could be rejected or the
new policy could exclude a pre-existing condition for up to a year.
Marry Well
There is an old adage that says the best way for a self-employed person
to ensure his or her success is to have a working spouse. The same holds
true here. If you’re married, there is a good chance that joining your
spouse’s plan will cost less than most other options, including COBRA.
Do Your Homework Self Employed Health Insurance Homework
If you decide you need your own self-employed health insurance policy,
check out ehealthinsurance.com, which comes highly recommended by the
likes of Money magazine, Kiplinger, the National Federation of
Independent Business and financial guru Suze Orman.
This online resource lets you compare dozens of health insurance plans
that are available in your area with just a few keystrokes, and even
provides information about the insurance companies’ financial health.
Learn the rules that apply to your situation and follow them. This is
especially important if you or someone in your family have chronic
health problems or a pre-existing condition.
Find a Reputable Self Employed Health Insurance Agent
If you prefer to deal directly with an agent for your self employed
health insurance, do your homework. Interview a few different agents,
and compare the price and coverage of the self-employed health insurance
plans they offer.
Before you sign anything or make any payments, check with your state
insurance commissioner’s office to find out if any complaints have been
filed against the agents or the insurers they represent.
If you need help finding a reputable agent, check with the National
Association of Health Underwriters.
Pay More to Pay Less - A Self Employed Health Insurance Savings Account
may be you best option
Another way to lower your self-employed health insurance premiums and
still get good coverage is to choose a plan with a high deductible, and
combine it with a tax-free health savings account (HSA). You deposit
pre-tax dollars into your HSA, and use that money to pay medical
expenses that aren’t reimbursed by your health insurance. You can find
more information about health savings accounts and HSA-eligible
insurance plans at
SelfEmployedWeb.com.
Join the Crowd
If your business grows and you start hiring employees, you may be able
to save money by getting health insurance for your business through a
professional employers association that provides health insurance and
other services to small businesses. The can help you find a group that
meets your needs
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