Health insurance options for independent contractor?
June 22, 2010 9:48 AM   Subscribe

I'm considering leaving my full-time job to become an independent contractor. What are my health insurance options?

I plan to look into COBRA options, but I imagine there's a set time period that I'd be allowed to use that. Wondering about what to do beyond that. I considered the National Association for the Self-Employed but saw too many negative reports on that.

I'm the primary breadwinner in my home, and we have two kids, an 18-year-old and a 2-year-old. We live in Chicago's western suburbs. I looked at and saw options as low as $350/month, but I'm guessing I'll need to pay much more than that.
posted by weederman to Work & Money (5 answers total) 11 users marked this as a favorite
I think this would require you to do a little shopping on your own, as it's very specific to your family member's ages, health problems, and budget.

AFAIK, you can just call or go online and get quotes from insurers. Good luck!
posted by Lizsterr at 10:18 AM on June 22, 2010

Best answer: Those low-cost health insurance plans are minefields. The short version is that they don't cover what they seem to imply they cover. You are wise to avoid the NASE. It's just a front for a bottom-feeder "insurer" called MEGA.

Also, the amazingly low prices you see quoted on ehealthinsurance and other such sites are best-case-scenario teaser rates. Basically, there are probably three people in the entire country who will qualify for those rates, at least from legitimate insurers. Your actual rates will be determined during the underwriting process.

For private coverage on a family of four (barring any serious existing conditions) expect to pay about three times that $350/mo quote. Hopefully, you can get in for less. And that will probably carry $25 office visit co-pays, and around a $2000/4000 individual/family deductible set. The specifics will vary from insurer to insurer. That will NOT include dental or vision. Dental will be a very costly add-on.

If you already have a set of family doctors, make sure they are in-network for whichever insurers you are considering. Networks can also vary depending on the plan you are purchasing.

After you go through underwriting, you should get a copy of your contract policy for review. Study it carefully to make sure the coverages are what you can live with. There can be gotchas. For instance, we went through underwriting with a large insurer and, when we got the policy, we saw that the mental health coverage was limited to a $2500 lifetime benefit...including medication! Since our son was in counseling for depression, we knew this was pretty useless. So, we had to reject the policy and continue shopping elsewhere. That same insurer required that we make estimated payments during the underwriting process. So, we were making double payments for the two months underwriting took. They did reimburse us those payments, though.

Keep your wits and stay alert for the scams. They are out there. You might want to look into working with an independent insurance broker. Shopping for insurance is a serious time suck.

Good luck!
posted by Thorzdad at 10:34 AM on June 22, 2010 [2 favorites]

COBRA will be good for 18 months. Depending on the timing, you might be able to benefit from the recent Healthcare reform legislation and continue buying into your current plan after COBRA has expired.
posted by hworth at 11:51 AM on June 22, 2010

I used and am quite satisfied with my experience there. You can do so much online there -- look at different options, deductibles, providers, and so on, and compare prices from different insurance companies in your state. I have no connection with them, just a satisfied customer.
posted by exphysicist345 at 6:44 PM on June 22, 2010

I've heard from close friends who freelance that this is a good resource for getting lower rates as a freelancer. Coverage varies by location, but it's worth checking out.

Freelancers Union.
posted by ohisee at 11:52 PM on June 22, 2010

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