Self-Employed Or Employed Part Time? 4 Things You Should Know About Health Insurance

December 17, 2013

With the launch of public health insurance exchanges back in October, much attention has been paid to new options under the Affordable Care Act (ACA) for the uninsured and for full-time employees of small businesses. But ACA provisions also offer options for other types of workers, notably the self-employed and part-time workers.

Just how many people fall into these categories? It turns out, quite a few.

In fact, an estimated 42 million Americans are self-employed. And, of the approximately 155 million employed Americans, about 27 million work part time.

If you fall into one of these two categories – or know someone who does – here are four things to consider when exploring coverage alternatives in the age of the ACA.

1. There are more existing options than you might think.

First, it’s important to know that there are options available to you outside of the ACA, but that you might not know about. For example:

  • If you don’t have insurance of your own, you might be eligible for coverage through your spouse’s employer-sponsored insurance. While this benefit has been trimmed from many employer group policies to cut costs, approximately 12% of plans still include coverage for spouses.
  • If you are a part-time worker, it’s worth asking your employer if the company offers health plans to cover you, even if you have to pay for them yourself.
  • Affiliations can also be sources of health insurance. If you are part of a union or professional association, you might be able to purchase health plans offered for members.
  • Veterans, check your eligibility for veterans benefits.
  • If you are over 65, you are eligible for Medicare. And despite concern from seniors already on Medicare, the ACA does not affect you. You can determine your eligibility for Medicare here.

2. You have three new options under the ACA

If none of the options above are available to you, then consider the new ones made possible with the passage of the ACA. Here they are:

  • Dependent coverage has been extended under the ACA to include children until they turn 26 years old. This means if you are under 26, you can remain on your parents’ insurance until you reach that age.
  • Some states have opted to expand their Medicaid program with federal funds, enabling previously excluded individuals to be covered. The expansion includes people under 65 years of age who are living at 138% or below the poverty line. If you live in a state that has expanded Medicaid to more people, you may now qualify based on your income. Click here to see if your state opted to expand Medicaid coverage.
  • If neither of the above applies to you, you can option purchase individual health plans on public exchanges. In fact, even if your employer currently offers health coverage to part-time workers, they might direct you to the public exchanges anyway. And some employers, including Trader Joe’s and Home Depot, are offering cash to their part-time workers to help offset the cost of healthcare purchased on the exchange.

3. You might qualify for a federal subsidy

If buying a health plan on your state’s exchange is your best choice, you’re ready to shop for plans. The most important thing for you to know is that you may be eligible for a federal subsidy.

Generally speaking, the ACA provides sliding scale subsidies for people who earn up to 400% of the U.S. poverty level, which is about $46,000 for an individual and about $94,000 for a family of four. Knowing how much of a subsidy you qualify for lets you know how much you can afford to spend a plan. To find out, you need will need to visit your state exchange website where you will be led through the process of determining your subsidy eligibility.

As a self-employed or part-time worker, you may not know you exact income right now or how it might fluctuate during the year. But make sure to have good estimates in mind when you go online.

The next step is to use your state exchange’s comparison tools to compare coverage levels, premiums and out-of-pocket costs for different plans. Be sure to consider the fact that the cheapest coverage may not offer the benefits best suited for you.

Consider if and when your eligibility will change, which is linked to fluctuations in your income. If you are currently at the lower end of the income scale, and your income declines, you could become eligible for Medicaid. If your income goes up, you might lose all or part of your subsidy.

4. There are places where you can go for advice – and it’s free

Thanks to a $67 million federal grant for training and authorizing navigators to walk people through enrollment options on the exchange, navigators and assisters can be great resources for exploring plans under the ACA.

In addition, there are web brokers who are authorized to both help you explore and enroll in plans of the federally managed exchange. Some web brokers serve individuals and others are offering their services to employers to help them help their part-time workers sort out eligibility comparing and purchasing plans on public exchanges.

And a Q&A published on the NPR website answered a few questions posed by some self-employed workers about their options under the ACA.

Maximizing the odds

If you are self-employed a part-time worker, the road to the right health plan is not always clear and finding the right plan takes time and effort. And while open enrollment deadline for purchasing plans on public exchanges is March 31, 2014, waiting until the last minute could mean you end up with a less-than-optimal plan.

A combination of doing your homework to determine your eligibility for available options, and consulting knowledgeable experts, will help ensure you have the best plan possible to meet both your financial and health needs.

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