Adulting time, folks. Insurance is one of the more complicated aspects of freelancing. But, especially for those who travel as they work (#workanywhere), health insurance is a must-have. So, let’s talk health insurance for freelancers.
There are many aspects to freelance writing, and to be honest it can have its tiresome side. This is not a rant (okay, maybe a little), and I hope you will find some useful nuggets of information in today’s post.
While many salaried workers envy their freelancing counterparts, being an independent contractor has unique downsides. One of the most difficult parts of being a freelancer is procuring healthcare at an affordable rate. Unlike people who are working for a company that offers health care, independent contractors are unable to procure group rates when buying insurance.
The goal of the Affordable Care Act (ACA) is to provide everyone with insurance for a fair price. On October 1st the marketplaces will be opened up, providing new options for Americans. If you have yet to sit down and really learn what is going on with this piece of legislation, now is the time. Below you will find some of the essential knowledge that you need to understand the ACA.
1. The Basics Of The Marketplace
The marketplace is built to accommodate people with all different levels of income. The premiums for the plans offered will have a cap based on a percentage of the insured party’s income. The income itself will be seen in relationship to the Federal Poverty Line (FPL), falling between 138% to 400% of the FPL.
The plans will be categorized by a straightforward tier system, with the lowest amount of coverage being offered at the more affordable bronze level. For consumers willing to pay a higher premium for more coverage, they can choose from the silver, gold or platinum levels .
2. Medicaid: An Option Beyond The Marketplace
In the past Medicaid‘s availability was limited, only covering those with an income 100% of the Federal Poverty Line and below. However, the federal government has expanded eligibility for Medicare by allowing people with an income up to 138% of the FPL to take advantage of the program. Another big change is that single childless adults are now able to be covered by Medicaid.
You should know that it is ultimately up to each state to decide what they will do about Medicaid. States have accepted the federal Medicaid expansions in varying amounts, however, some have rejected it entirely.
3. The Penalty For The Uninsured
The ACA has mandated that all individuals need to have insurance. Those without insurance will face a fine. While the fine will start out at the reasonable sum of $95, it will be raised over the next several years. By 2016, the fine will be tied to inflation.
As the sole-proprietor of your business you will be seen as an individual, in turn making you subject to the individual mandate.
4. What You Are Guaranteed
The government has created a list of essential health benefits which every plan sold at the marketplace is required to cover. You can get a full list of the essential health benefits by visiting the entry on the glossary of healthcare.gov here.
The ACA has also made sure that people with pre-existing conditions cannot be turned down for that reason. People who need healthcare the most can rest assured that they be covered.
5. Tax Credits Keep It Affordable
To make health insurance more affordable for Americans the government is offering tax credits to individuals with a lower income. It is possible to receive multiple tax credits as well based on a number of factors, including marital status and the number of your dependents. If you are younger than 65 and make between 100% and 400% of the Federal Poverty Level, you will receive a tax credit.
For those looking to get an idea of what their tax credit will be, the Kaiser Family Foundation’s Subsidy Calculator Site here can help you out.
Preparing For Change
The ACA gives freelancers, who live with the risk of being without work at anytime, the guarantee that they will have medical care. Similarly, every American can rest assured that they will have access to affordable care.
Michael Cahill is the Editor of the Vista Health Solutions Blog. He writes about the health care system, health insurance industry and the Affordable Care Act. For more information and examples of how the ACA may impact you, visit the Vista Health Solutions health insurance marketplace page. Follow him on Twitter at @VistaHealth.