3 Simple Health Reform Steps for Freelancers and Sole Proprietors

Road sign "Freelance" on the white backgroundOkay, maybe simple is a slight exaggeration.

There is little that is simple about health reform’s Affordable Care Act.

Recently, I read a few posts targeted to freelancers about health reform that contained bad information.

Not only bad – but flat out wrong.

Being a freelancer and sole proprietor myself, and with over 30 years in the healthcare/insurance industry, I wanted to try to help.

I know this can be overwhelming so I’ll break this up into 3 separate posts.

  1. What to do first
  2. What you need to know
  3. When to do what

As noted in my big ol’ disclaimer below, I am not an attorney. So, no matter how many years of experience I have, do not take my word on the subject.

Check things out for yourself.

Getting Started

I have procrastination tendencies.

I understand not everyone finds the subject of health insurance exciting. However, if there is one thing freelancers/sole proprietors know, it is how costly health insurance can be.

So, while you may be in denial, you owe it to yourself to find out what your options are under the Affordable Care Act (ACA).

The following suggestions are for the sole proprietor – not the small business owner with employees. Are you ready to jump in?

1. What to Do First

I am biased as a licensed insurance broker, but I recommend speaking with an insurance broker or agent about your situation.

Whether you go it alone or work with a broker, find the answers to these three questions.

  • What am I required to do for health insurance?
  • What health insurance am I eligible for?
  • Do I qualify for any financial help?


Freelancers Required

What am I required to do?

I am going to help you find the answer to that first question.

  • Health reform’s individual mandate requires most individuals to have health insurance
  • The insurance must cover a minimum level of coverage

There are individual exceptions to the health insurance requirement. This Kaiser Family Foundation flow chart helps determine if you are exempt. Most people will not be exempt from having insurance.

The minimum coverage requirement should be handled by the insurance industry. The Internal Revenue Service (IRS) identifies coverage satisfying the minimum essential coverage.

Think of the minimum coverage like car insurance. Most states require you have a minimum amount of coverage.The same is true (or will be) with health insurance.

The insurance companies know what is required, so you probably won’t have to worry about satisfying the minimum required.

NOTE: If you do not have insurance coverage starting January 1, 2014, you could incur a tax penalty.

  • In 2014 – $95 per adult and $47.50 per child
  • Up to a maximum of $285 per family
  • OR – equal to 1 percent of family income – whichever is greater

The penalty amount increases in 2015 and 2016.


Freelancers eligible

What health insurance am I eligible for?

You may have options for insurance coverage besides the policy you purchase yourself.

  • Does your spouse have insurance through his/her employer?
  • Are you eligible for Medicare  – age 65 or older or other qualifying conditions
  • Are you eligible for other coverage (such as those shown in IRS list) 

Coverage through your spouse’s employer is often your least expensive option. It depends on the premium and the amount the employer contributes.

Compare the amount paid by you and your spouse for employer coverage and insurance you purchase yourself.


Freelancers financial

Do I qualify for any financial help?

If you have not heard, starting in October 2013, you have an option of purchasing insurance through your state’s insurance exchange for coverage effective January 1, 2014.

I’ll get into the exchange a bit more in Post #2, but if you do purchase your insurance from that marketplace, you may be eligible for a premium tax credit.

The credit applies to low and middle incomes.

  • The good news is you may be eligible for some financial help in purchasing health insurance
  • The bad news is you may have to pay part or all of it back if you earn more in 2014 than you estimated

The subsidy amount is paid directly to the insurance carrier.

Kaiser has a Subsidy Calculator you can use to determine if you are eligible.


So, what did we find out?

  • Purchase insurance – Most individuals have to purchase health insurance for 2014 or pay a penalty.
  • Employer-sponsored coverage – If you have an option for coverage through your spouse’s employer, it’s probably your best bet in terms of cost.
  • Enroll in health exchange – You can sign up starting October 1, 2013 for 2014 insurance through your state’s health insurance exchange.
  • Financial assistance – If you purchase insurance through the exchange, you may be eligible for financial assistance on premiums.

The second post will cover What You Need to Know about health reform.

The final post offers a timeline so you know when to do what.

Please share your thoughts and questions in Comments.



Helping you Keep it simple, clear & uniquely yours – contact me for help with your business writing needs. Visit my business blog, Simply stated business.


Notice of Disclaimer –Cathy Miller is not an attorney or health care provider and cannot provide legal or health care advice. The information provided is for your general background only, and is not intended to constitute legal or health care advice as to your specific circumstances. We recommend you review legislation with legal counsel and visit your physician for health care issues.

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  1. says

    Great timing, Cathy! Before paying bills last week, I decided to check the balance in my checking account and noticed my health insurance provider – who does automatic withdrawals – had taken out far more than usual. Twenty-three percent more. The problem? They didn’t notify me of a rate hike.

    Not only did I sent them a sternly worded complaint letter, I cc’d it to my state’s Department of Insurance and to my insurance broker. (She said she’s frustrated at my provider because they haven’t sent renewal notices for any of her clients insured by them.)

    While awaiting the outcome of that fiasco, my broker said she’ll be able to help find a new provider through the exchange, once that all goes into effect. I discovered I should be eligible for a slight subsidy as well. So instead of replacing my current carrier now, we’ll shop around for the best policy within my budget and wait for January. To quote my broker, “It will definitely be less expensive than not going through the exchange.”

    Now I can’t wait for your second and third posts on this subject!

    • Cathy says

      Wow, Paula. I can’t imagine them not sending a renewal notice. Of course, here in Idaho, mine sends the 20+% rate hike knowing there is very little I can do about it.

      BTW-be sure to start looking for the exchange enrollment period to start in October for a 1/1 effective date. I’m glad this was timely for you. I typically post to this blog just once a week, but I am going to try to get Part 2 & 3 out more quickly.

      Thanks for stopping by, Paula, and for sharing your story.


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