Self Employed Health Insurance Explained
Self-Employed Health Insurance
The business owner, who wants to secure self-employed health insurance, must first asses his or her needs. Such an assessment will aid the business owner to sort through the provisions associated with each of the various plans providing some type of self-employed health insurance.
Determinants of a Plan for Self-Employed Health Insurance
When the business owner seeks to determine the best plan among the many that offer self-employed health insurance, then he (or she) needs to study the answer to several questions. For example, the business owner must look closely at any plans to increase the size of his (or her) family. Such plans would underline the need for a plan that included maternity coverage.
Does the business owner or the spouse take an expensive medication? If so then the business owner needs a plan that will cover the costs of that medication. Otherwise the business owner could be paying for both a little-used health insurance and an expensive medication.
Does the business owner or the spouse expect to need preventive care? Perhaps one member of the concerned couple would soon want a Pap test or a mammogram. Perhaps another member of the concerned couple would eventually seek the results of a PSA test. If preventive care is expected, then that should guide the choice for a self-employed health insurance.
Does the business owner or the spouse have a chronic health condition? The person who is faced with the challenge of a chronic health condition, such as diabetes, knows that he or she will need to see a specialist. Such a person generally does not feel comfortable with an HMO, where the patient must seek permission to see a specialist. That business owner would probably find greater satisfaction in coverage by a PPO.
Ways to Lower the Costs of Self-Employed Health Insurance
There are a number of ways to lower the costs of self-employed health insurance. Some ways are more painful than others. For example, the business owner can lower the costs of his (or her) health insurance by raising the health plan's deductible, co-pay or coinsurance.
A less painful way is through use of a Health Reimbursement Arrangement (HRA). By using an HRA, a business owner can deduct medical expenses under certain circumstances. If the spouse of the business owner works part-time or full-time in the business, then the business owner can take advantage of the HRA.
Use of flexible spending accounts helps the business owner to lower the costs of self-employed health insurance. By using such accounts the business owner and the employees can set aside pre-tax dollars for anticipated medical expenses not covered by health insurance. For example, the business owner might set aside money for an eye exam and prescription glasses.
By using flexible spending accounts, the business owner can reduce the amount of money that needs to be reported to the IRS. Thus the business owner will owe Uncle Sam less money, and therefore the business owner will find greater enjoyment in the profits from the business.
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