Millions of U.S. workers and families get health insurance from their employer’s group health plans. At the same time, many employees entertain dreams of the day they can make the transition to self-employment or retirement.
Once these employees leave their company jobs, they must replace lost group medical plans with coverage with reliable, affordable, and high-quality health insurance for an individual, family, or small business.
Affordable Health Insurance for Early Retirees and the Self-Employed
For those too young for Medicare, concerns over obtaining health insurance outside employee group plans may appear to present an obstacle to self-employment or retiring early. In truth, many early retirees and the self-employed have affordable, high-quality health insurance choices. Still, figuring out the best individual or family health insurance can be challenging. This overview explains various options and where to get help from a trusted advisor.
The Health Insurance Marketplace
Sometimes called ACA health insurance or Obamacare, medical plans from Healthcare.gov or state marketplaces may offer a good alternative for many families. The marketplace’s major medical plans must provide essential health benefits, like prescriptions, wellness and preventative care, maternity, and mental health.
Also, many individuals and families qualify for subsidies that help reduce the cost of premiums. Based on income, some will also qualify for additional assistance that reduces out-of-pocket costs, like deductibles. The original rules allowed subsidies for households with incomes less than 400 percent of the federal poverty level (FPL). Many assume they make too much money to qualify for government subsidies, but the guidelines are reasonably generous.
For example:
- The Department of Health and Human Services posted the federal poverty level for an individual in 2023 as $14,580.
- The current federal poverty level for a family of four equals $30,000 in 2023, so an income less than $120,000 would still qualify for additional help.
Marketplace plans accept enrollees during Open Enrollment each fall. However, various circumstances can trigger a Special Enrollment Period (SEP) at any time. For instance, people who lose their employer’s health insurance or move to another county or state should qualify for a SEP.
ACA rules can vary by state. For instance, some states have more extended Open Enrollment Periods, provide their own state marketplaces, have expanded Medicaid coverage or not, or rely on the federal marketplace at HealthCare.gov. In some areas, the marketplace might only offer HMOs, which can be a negative for people who are used to more flexible PPOs. An independent advisor, who acts as a licensed health insurance agent, can help clients navigate their local system to find the best options.
Short-Term Health Insurance Policies
Some people need a short-term health insurance solution. Short-term health plans can offer adequate protection, especially for relatively healthy people. In contrast, some people exercise to renew or reapply for their policies and end up keeping their short-term coverage for several months or even years.
For instance, early retirees or new entrepreneurs might require coverage until the next Open Enrollment Period, Medicare eligibility begins, or they can establish a small business group.
Short-term health insurance may offer an excellent way to obtain quick coverage at affordable rates. To ensure satisfaction with a temporary policy, it’s best to understand the pros and cons of this solution.
Some benefits of short-term health insurance plans could include:
- Typically, these plans last from one to 12 months.
- Sometimes, plan members can apply for an additional term if needed.
- These short-term policies can offer more affordable premiums than the ACA.
- Some insurers offer PPOs, and the ACA might only offer more restrictive HMOs.
- Often, applicants can begin coverage as soon as the day after the application.
On the other hand, short-term health plans will underwrite applicants, so they don’t have to accept everybody as Obamacare does. The short-term plans may decline people with pre-existing conditions or accept the applicant but exclude coverage for these current health issues. These plans also don’t have to offer all of the mandated benefits that marketplace plans do, so they may not provide services for mental health, preventative care, pregnancy, etc.
These features could make short-term policies a good choice for people who want coverage in case of an emergency or an unexpected illness or accident and who don’t expect to need treatment for a chronic healthcare issue.
Non-ACA Private Health Insurance
Besides short-term health insurance, some other non-marketplace health plans can include:
- Association plans: Members of various organizations may qualify for sponsored health insurance. Since these don’t fall under the ACA, they may not offer all the mandated benefits. They also won’t qualify for premium subsidies or tax credits, but the members may have the option to deduct the premium from taxes.
- Discount plans: Discount plans don’t function like primary medical insurance. Instead, they typically allow access to a network of participating providers who agree to charge plan members lower prices. Discount plans can’t replace major medical, but some might find them helpful to supplement a high-deductible health plan.
- Indemnity and limited-benefit plans: Some insurers offer indemnity plans that offer to pay fixed amounts for various healthcare services. Sometimes, these plans target specific issues, like accidents or cancer. Again, these don’t replace major medical products, but many people find them helpful as a supplement to help protect their finances against unexpected healthcare expenses that medical plans don’t cover.
Small Business Group Health Insurance
Healthcare.gov says that small businesses with as little as one full-time employee, besides the owner and the owner’s spouse and dependents, can qualify for a SHOP policy through the ACA.
With SHOP, a small business can qualify for premium tax credits if it pays at least 50 percent of the employee’s premiums and meets other qualification criteria.
Offering group medical benefits can help you and your family get covered more affordably. Also, offering valuable health benefits also helps attract and retain loyal employees.
Get Professional Help Finding YOUR Best Coverage!!
You obviously need health insurance to protect your finances and ensure access to high-quality providers. You probably have several options, among various types of insurance, dozens of insurers, and complex government rules. All this can definitely make it tough to find the ideal and right plan.
I understand that each individual and family has unique needs, preferences, and financial situations. Thus, I will take the time to understand your unique situation and help compare the best health insurance options for your situation and budget. My clients view me as a trusted advisor. I’m an independent agent, so I work for my valuable clients and not for an insurance company.
Even better, my services and suggestions will not cost you any more. They will help you typically save money on premiums and more importantly, on healthcare costs. Contact me today or call me directly at 216-835-1255 to talk about your plans for self-employment and retirement, and I’ll help you understand your best coverage options!!