Working a Freelance Job? Consider These 3 Health Insurance Options
Many freelancers worry about how to get health insurance. Here are some solutions for this problem.
The number of people working as freelancers is rising steadily. In 2016, roughly 53 million Americans engaged in some kind of freelance work, making up an astounding 35 percent of the country's labor force.
The Rise of the Freelance Economy
The rapid rise in freelancing is largely due to the growth of freelance platforms such as Uber, Lyft, Upwork, Freelancer, and AirBnB. Breakthroughs in financial technology have also encouraged people to become their own bosses and sell their services to various clients. Mobile and e-commerce payments are now swifter, more reliable, and practically seamless, which has made it easier for freelancers to complete transactions in a safe and convenient manner.
Freelance work has many attractive benefits, such as having control over one's own work schedule, being able to work from anywhere, and not being tied to a single job. There is, however, one aspect of the lifestyle that continues to be a challenge for freelancers: health insurance.
Without a single, stable employer, freelancers miss out on the group benefits that are a perk in many traditional workplaces (see An Overview of Commercial Group Life and Health Plans to learn more about these). Because freelancers work for themselves, they are responsible for obtaining their own health insurance policies.
Although they can't take advantage of an employer's group health plan, they're not entirely out of luck. Here are three health insurance options available to freelancers.
The Freelancer's Union
The Freelancer’s Union is a union headquartered in New York City that represents more than 350,000 freelancers and offers a variety of health insurance options to its members. By joining the Freelancer's Union, independent freelancers can purchase health insurance plans that would be otherwise unavailable to them as individual purchasers.
The Freelancers Union is still in its early years, so its scope is limited and it does not yet provide coverage for freelancers in every part of the country. However, since there is a pressing need for supplying health insurance to the growing population of freelancers, the organization could soon grow and extend its offerings nation-wide.
The National Association for the Self-Employed
Like the Freelancer's Union, the National Association for the Self-Employed (NASE) is an association that provides a number of benefits to its members. Members can, for instance, enjoy discounts from Quickbooks, Office Depot, LegalZoom, and Turbotax, but the chief benefit is the health insurance options that are made available to them.
To access the benefits provided by NASE, freelancers have to pay an annual membership fee of $125 (or $25 for students). While this is not a trifling sum for many self-employed workers, the benefits associated with joining the organization may well make it a good investment.
If you're thinking of joining the NASE, you can even get a health insurance quote before you make your decision and pay membership dues (simply fill out the form on this page). Getting a quote in advance can help you decide whether joining the organization will be worth your while.
Private Individual Health Insurance
And, of course, freelancers can also purchase private individual health insurance.
Purchasing an individual policy gives you a lot of flexibility, since it allows you to shop around for the ideal coverage option rather than being restricted to those offered through a particular union or association. However, you won't be able to take advantage of the lower premiums that are typically available through group health insurance policies.
Be sure to look into the options listed above before deciding to purchase an individual policy. You might discover that one of these organizations offers all the coverage you need at a lower price (if you are considering an individual policy, see these 10 Tips for Choosing the Right Health Insurance Policy).
Health insurance is an extremely important asset. A single hospital visit can easily cost thousands of dollars—not something many people can afford on a freelancer's salary. And even those who can afford it would save themselves a lot of financial strain by having a good policy in place.
As the freelance economy continues to grow, we will likely see many more health insurance options tailored for freelancers. But, for the time being, the Freelancer's Union and the National Association for the Self-Employed, and private individual health insurance companies offer great options that will protect your finances and allow you to keep pursuing your passion (thinking of leaving your job to pursue a freelance career? Find out What You Need to Know About Health Insurance Before Quitting Your Job).