You are the HR department now
When you leave a job to work for yourself, the plan that came with it usually ends. People tend to look at three options: continuing the old plan through COBRA (a federal rule that can let you keep an employer plan for a limited time), joining a spouse's plan, or applying for a private plan. Each has trade-offs. Our COBRA alternatives guide walks through the first one.
A private plan is one you apply for yourself, directly with a carrier. You choose it, and it stays yours if your clients, your city or your work change.
Feast, famine and invoices that pay late
A big retainer lands, then a project ends and the next one is not signed. A client pays weeks after the invoice. Meanwhile your plan bills on the same day every month.
Think about how a plan feels in the lean stretches. Ask what the deductible is (what you pay before the plan shares costs), what the out-of-pocket maximum is (your ceiling for covered care in a plan year) and what the copays are (flat amounts for visits and prescriptions). A smaller monthly payment often comes with a bigger share left to you at the doctor's office. You can apply any time of year, so you can look after a good quarter or in the middle of a bad one.
Working from anywhere
Freelancers work from home offices, coworking spaces and airport lounges. Some spend part of the year in another state. If that is you, ask where the plan's network reaches. Some plans have networks that reach beyond Florida, and others do not. Also ask whether the plan includes telehealth and how it works.
If a full-time job comes back
Contract-to-hire offers and a return to a W-2 job happen all the time. If an employer plan becomes available, you can compare it with your private plan then. Employer plans sometimes start after a waiting period, so ask your advisor how to line up dates so you are not left without a plan. The terms for ending a private plan depend on the carrier and the plan.
How a private PPO plan works
With a PPO (preferred provider organization), the plan gives you a network of doctors and hospitals it prefers. In-network care usually costs less, and care outside the network is paid under that plan's own rules. Our plans are private and medically underwritten, not ACA Marketplace plans.
Medically underwritten means the carrier asks about your health and may approve you, decline you, or exclude certain conditions. Every plan has exclusions and limitations, so none covers every benefit. A private plan tends to fit freelancers under 65 who are in reasonably good health. It may not fit if you or someone you want to cover has an ongoing health condition. Answer every question truthfully, and tell your advisor early if you are worried.
Taxes: a general note
Freelancers who pay themselves through a corporation can face different rules than sole proprietors, so the tax side is worth a conversation. The IRS self-employed health insurance deduction is figured on Form 7206 and reported on Schedule 1 of Form 1040. This is general information, not tax advice. Talk with a tax professional about your situation.