Don't Do It Yourself

How to Choose a Heatlh Insurance Plan as an Independent Contractor

health plan for independent contractorsOne of the biggest challenges an independent contractor faces is paying for health insurance. Health insurance is important, since you never know when you could experience a catastrophic health problem. Unfortunately, paying for health insurance can be difficult when you are an independent contractor, since you don't have “the man” picking up part of the tab.

When you don't have an employer subsidizing your health insurance plan, it's difficult to pay your bill sometimes. But it can be even worse if you don't have health insurance and you end up sick or hurt. One hospital stay, even when you have insurance, can be challenging enough. Without it, a serious health problem can be devastating.

If you are looking for health insurance insurance as an independent contractor, here's how to go about it:

Figure Out What Coverage You Need

Your first step is figuring out what type of coverage you need. Consider your family's health care needs. This includes how often you need to visit the doctor, what prescriptions you normally need, as well as other services that you might need, from mental health services to chiropractic visits.

If you have a lot of visits or health care needs, you will need to choose a plan that has low out of pocket expenses. The monthly premium might be higher, though. However, it's usually more manageable, when you have a lot of health care needs, to pay a higher monthly premium than try to meet a high deductible.

For those with fewer health care needs, it makes sense to have a higher deductible, since you might not meet it. In fact, I have a high deductible plan for my family of three. We each only go to the doctor once a year (preventative care) and we have few prescription needs. So we have a high deductible plan, with a relatively low premium, and we paired it with a Health Savings Account. Think about your needs, and what sort of plan would work best for you.

Comparison Shop

Once you know what type of plan you need, it makes sense to shop around. You can use web sites like and eHealth to compare plans for individuals and families. Also, you should be able to start shopping for plans on state health insurance exchanges quite soon, under the PPACA. There are different options available, none of them offered by the government. These plans are all offered by private companies on exchanges overseen by states (or the federal government, or even a third-party, if the state refuses to offer an exchange), or multi-state consortiums.

Shop around for the best deal for you and your family. Unfortunately, even the lowest-priced plans can be expensive. You might need to check to see if you qualify for a subsidy from the government (starting in 2014) to help you pay health insurance premiums. You can use a handy tool from Kaiser Family Foundation to find out if you qualify.

It's never easy to shop for health insurance, and it's especially challenging as an independent contractor. However, if you want to make sure that you have the right health insurance coverage for you and your family, you will have to do your best.