Small Biz Owners: What do you do for healthcare insurance?

  Yuck! 
  Originally uploaded by Elizabeth Salib

Being self-employed is a haven for many entrepreneurs, but the part that absolutely bites is the struggle to find reasonably priced health insurance. In fact, sometimes it's a struggle to find insurance at any cost.

Consumer advocate Clark Howard says:

"The problem now is that we don’t have a health care market for individuals and families in America. People are reluctant to start businesses because they don’t know how they’re going to get health care. And that hurts the economy. Yes, health care is morphing into more of a personal responsibility, and we need to realize that."

I'm doing research on some healthcare assistance/insurance places that are a little outside the norm, and have so far come up with Sam's Club, CostCo, and a very interesting one called Medi-Share that a friend alerted me to.

Medi-Share is actually not an insurance company at all, but is "Biblical healthcare", and they say it "brings Christians together to share medical bills with one another." I need to look into that one further, because although I love the idea behind it, I just want to be sure it's on the up and up.

I've talked to other entrepreneurs who save 10% of their income for emergencies, in lieu of having health insurance, which is an alternative solution for anyone who might have trouble getting accepted by the health insurance overlords who don't want to insure anyone who might actually get sick.

Then there are also the Health Savings Accounts (HSA) which I also need to investigate. I'm not sure if you can simply open the HSA or if you have to apply in the same way you do to get insurance. Seems like the HSAs I've seen are through insurance companies, which isn't really helpful to folks who are having trouble getting accepted.

The darn thing is, unless you're in Olympic condition with no previous medical issues, it is very difficult for a self-employed person to find health insurance, and it's even more difficult to find it at a reasonable cost.

I'll keep on looking into this, but I wanted to ask you guys--what do you do for healthcare?

Does anyone have an HSA or do the "Biblical healthcare" thing or something else?

Comments

[Jim McFadden]

Hi,

I am a small business owner who went the Health Savings Account route. I found loads of information and available plans at HSA for America: http://www.health--savings--accounts.com

They also told me about a little known tax break for business owners call a Health Reimbursement Arrangement ( http://www.health--savings--accounts.com/HRA.htm ) which allows a business to write off health releated expenses.

If you are a small business owner or own your own business, you owe it to yourself to check out an HRA and see if it is right for your situation. It could save you thousands of dollars during the year. I know it is for me.

I hope this helps.

Jim

[Sonia Simone]

I'd love to read some good solutions to this one!

Saving 10% of your income won't cut it, unfortunately. Say you're doing nicely and making $100K a year. $10,000 basically covers a hangnail. For a couple or family, you can easily spend $10K a year on insurance, never mind medical bills.

My local chamber of commerce has an insurance program, although I haven't checked it out. My current strategy is to have one half of a legally-connected couple (my half, as it happens) with a day job, and the other half remains open for entrepreneurial activity.

I used to have insurance through an organization called the National Association of the Self-Employed, but either they don't exist any more or they no longer offer insurance.

It's not like you have to get brain cancer to run the bills up. Appendicitis, broken arm--there are tons of things that aren't life-changing, but will cost a fortune to treat if you don't have insurance.

[Sharon Sarmiento]

Hi Jim,

Thanks so much for that info--it is soooo helpful. Yes, I think I'm going to go the route of the HSA, and I found out that with that you have to have the high deductible health insurance too. So, we'll see how it goes with getting accepted. I've heard that nowadays it's very hard for an individual to get accepted by the health ins companies. I will look at both of those sites you mentioned. Very hepful! Thank you :-)

[Sharon Sarmiento]

Hi Sonia--thanks so much for chiming in. You're info is very helpful too!

Yeah, I see what you're saying--saving $10K a year for insurance purposes there is a chance that you might go over that cuz the hospital/doctor bills can be sooo high.

I guess if you're going to do that, you'd better be very healthy and you'd better not have any accidents or anything (as if you can prevent that sort of stuff!). But it's a sort of "hope it's good enough" solution.

That's interesting about the local chamber of commerce having health ins--I need to check that out. Yeah, for entrepreneurs, it definitely takes some of the risk away if your spouse is employed and getting health insurance for the family. We single folks are on our own tho! :-)

And the worst part is that even if you're willing to pay the money for ins, it's not a given that they will accept you--it's very hard for individuals with previous med conditions to get accepted, even if they're currently healthy.

In the research I've done, it says that most small biz owners go for catastrophic coverage, meaning that they get the super high deductible ($5K-$10K) and they pay for everything under that themselves, either out of pocket or w/ the HSA.

It's a toughie, and hopefully things will change so that small biz owners don't have to go w/out insurance.

[Davida]

Hi Sharon,

Have you checked out ehealthinsurance.com? Depending on where you live, you can get some good rates. For instance, I currently live in NYC and the cost of insurance for my 7 y.o. daughter starts at $500. But we are moving to Durham, NC in a couple of weeks and the insurance rates are much lower and I will end up paying ~$260 per month. Health insurance is one the reasons I am moving from NYC. As an entrepreneur, I am not willing, nor can I afford, the high insurance plans they offer in New York, so I found a place to live where I feel I can have a good quality of life. So far ehealthinsurance.com is the only option I found that will work for me. If you haven't heard about it, I suggest checking it out. Let me know what you think.

Take care,
Davida

[Sharon Sarmiento]

Hi Davida,

Thanks so much for sharing that info. I will definitely check out ehealthinsurance.com.

I also went to the site that Jim recommended http://www.health--savings--accounts.com/ and there was a ton of good info on HSAs, which I'm still going over.

One thing that is sort of mind numbing about getting your own insurance is all the research that goes into it--and the language the insurance cos use is not exactly the most easily understandable.

But this is one of those things that has to be done. Thanks again Davida. :-)

[John Bynum]

I also came across this website called anyhealthinsurance.com. They seem to be a new company trying to compete with ehealthinsurance.com. You can give it a try as well.

Good luck!