It's good to be a freelancer: You can commit to work you believe in. You have the flexibility to set your own schedule. And you can work as much (or as little) as you'd like. But with this freedom comes the responsibility of purchasing your own health insurance plan, so it's good to understand your options.
What choices do you have?
Whether you call yourself a freelancer, independent contractor, or self-employed, you typically have two primary options for health care coverage depending on your state:
A plan through the Health Insurance Marketplace, which gives you the option to enroll in health plans in different states with a variety of monthly premiums during the open enrollment period. If you’re 65+, you can also qualify for (Medicare). But even though Medicare provides comprehensive benefits for retirees and independent contractors over 65, you may need supplemental insurance to cover the things that Medicare doesn't.
Short-term health insurance, which has been on the rise for healthy workers in the "gig economy."
What is short-term health insurance?
Short-term health insurance is temporary insurance that provides specific coverage in certain medical situations like an unexpected accident or illness. However, it doesn't include the same basic coverage requirements as qualifying plans outlined by the Affordable Care Act (ACA).
For example, short-term health insurance doesn't cover maternity care, ongoing mental health conditions, or pre-existing conditions. But short-term plans do offer coverage for doctor office visits, emergency room care, hospitalization, and select lab tests. And like other health insurance plans, short-term health insurance also has set copays, deductibles, coinsurance, and out-of-pocket maximums for different provider services.
Some short-term medical insurance plans can have a preferred provider organization (PPO) network, meaning you must use certain doctors to receive the in-network price. Others may allow you to visit any doctor. And some plans have an all-access policy, allowing you to visit your preferred doctor.
If you're pregnant or have a pre-existing condition, short-term coverage may not be the right choice, as most pre-existing conditions — including pregnancy — aren't covered. However, if you need health insurance for a short period of time to cover emergency-related medical expenses at a budget-conscious price, a short-term health plan may work for you.
What are the benefits of short-term health insurance?
Whether you're starting your own business, transitioning to become a full-time independent contractor, or just filling a gap in your coverage, short-term health insurance may help you cover unplanned medical expenses. No matter your situation, evaluating the benefits of each short-term medical plan is essential.
No long-term commitment
When signing up for short-term insurance, you can choose how long you want the coverage to continue. The coverage automatically ends after that date, but you may have the option to reapply depending on your state of residence.
In 2019, the U.S. Department of Health & Human Services (HHS) finalized regulations allowing individuals and families to purchase short-term health plans for up to 364 days and in some states, extend the length of the policy for up to three consecutive years. Shorter-term policies for as few as 30 days are also available, and you can cancel at any time.
When it comes to short-term insurance, you can apply and enroll at any time of year. Meanwhile, the ACA open enrollment period is between November 1 and December 15 each year (in most states), so if you want to enroll in a federal marketplace plan, you have to wait until the open enrollment period.
But if you need insurance outside of the open enrollment period, you may not qualify for an ACA plan unless you're facing an unexpected life event such as a death, birth, or divorce.
No waiting period
With short-term insurance, there's almost no waiting period for coverage to start like there is with many long-term insurance plans. In many instances, you can get coverage as soon as the day after you apply.
Good for many life stages
Short-term health insurance helps to fill the gap for many stages in your life. For instance, college students are increasingly working in independent contractor roles like Uber or Lyft drivers. Under the ACA, college students can stay on their parents' health plans until they’re 26, but not every parent can afford to keep their adult child on their plan.
As a freelancer, you may receive medical insurance benefits under your spouse's plan. If not, short-term health insurance can come to the rescue in these types of scenarios.
What to look for when comparing plans in your local area
You should compare health insurance plans in your local area to make the best choice based on your needs. While each person is different, selecting a short-term health plan typically comes down to benefits and costs. Keep these factors in mind when choosing insurance:
Look at how many doctor visits come with the premium and what each copay includes. You should also consider how many times you typically visit a doctor, and whether the visits are only for emergencies or accidents.
Hospital stay benefits
Temporary health insurance comes with hospital coverage. When choosing an insurance plan, look closely at hospital stay benefits to help you choose the right policy.
Limitations and exclusions
Short-term health plans in your local area may have limitations and exclusions, otherwise known as services that are limited or not included in your policy. Some examples of items not covered may be alcoholism and drug abuse, pregnancy care, and treatment for pre-existing conditions. If you understand what is and isn't included, choosing the right plan becomes easier.
For the most part, short-term insurance lets you stay with your current doctor or choose the right one for your needs. However, not all plans allow this, so it's wise to check each plan to make sure you have this option.
Some short-term insurance plans have a PPO, where you can choose any doctor who accepts this kind of insurance based on the network. When you stay within the listed provider network, the out-of-pocket costs can be lower overall.
Prescription drug coverage
While most short-term insurance plans don't offer prescription drug coverage, some plans do: Many brokers have options that allow you to add prescription coverage for an additional fee. It's no secret that prescriptions can be costly, so weigh your costs and options when choosing a policy.
Some short-term medical plans offer a telemedicine benefit. Telemedicine gives you access to healthcare providers online or by phone 24/7. Whether you live in a small town or a big city, telemedicine is a convenient, interactive way to get non-emergency health care, and usually at a lower cost than seeing a doctor in person.
Get a quote
Getting a quote through our secure online application only takes a few minutes with fast approval, if you’re eligible for a short-term health plan.
Just be prepared to answer a few questions and provide personal information (name, date of birth, gender and zip code). You won't have to answer any immediate medical questions to get your quote.
If you're approved for a plan, coverage may begin as soon as the next day, and you can cancel at any time.
After all, you're working for yourself, so you should find a health care plan that works for you.