How do you get free health insurance for self employed individuals? That’s a great question and these days a lot of people are asking it. While there is never a free lunch, I have pieced together a few ideas here that might make your self employed insurance situation easier – if not free. We’ll need to start by slightly adjusting our ideas about what is free to make the concept a bit easier to understand.
First, let’s think back to a time when you were employed. Did you have free health insurance then? Nope. Your employer did provide the insurance for you, but most likely at a cost. Now let’s say that cost to you was $100 per paycheck. In that case, every pay period or every two weeks, you shelled out $100 to keep your health insurance and dental insurance and vision coverage plans in place. Not bad? I would agree, especially if you provide the insurance coverage for an entire family.
Now, here’s my question – was it free insurance coverage? Yes, you were paying one hundred dollars every few weeks, but what was the total cost of the insurance plan? If you are like most employees in the world, you probably paid about ten to twenty percent of your employer’s total contribution. So your employer in this case may have paid a whopping $400 on top of your bi-monthly contribution. Now we’re talking! That sounds pretty close to free to me.
But if you are self employed or a small business owner, you are the employer per se. You do not have someone above you providing a greater contribution to help defray your costs. However, with every trade off comes a new list of advantages and disadvantages. If you are like most solo professionals, you probably pursued doing business on your own for one or more of the following reasons – you wanted to make more money, you wanted to enjoy more freedom, or you were seriously unhappy working for someone else.
Now we’re getting somewhere. Let’s take the first option as an example. Say you were making $50,000 per year at your former job. Then, you realized you could double your income if you went out on your own. Now you are earning $100,000 as a salary. Now let’s think about that free health insurance we’re trying to figure out here. With your employer, you were contributing about $2500 per year to your health insurance plan. Now, let’s say you’re paying out the full $500 at the same frequency. Now you’re looking at $13,000 per year. Subtract that from your doubled salary and you begin to see how that health insurance really takes care of itself!
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