June 2002
Health Insurance for Independent Consultants
By Christine Kim
There are several options for health insurance available to independent
consultants: individual insurance, small business group insurance,
associations, insurance pools, and HR/Payroll outsourcing.
If you are in good health, individual insurance is usually the
most affordable. However, if you have a pre-existing condition —
such as chronic allergies or you are pregnant — you may be
rejected for individual health insurance or pay a higher premium.If
you are rejected for individual insurance, group insurance is a
good alternative because you are guaranteed coverage. Insurance
carriers are required by law to provide insurance to small businesses
regardless of medical history. As an individual, you can get group
insurance through professional associations or as a small business
if your consulting group has at least two full-time members.
Ed Elkin, an insurance broker
who works with independent consultants, offers these tips:
- If you are self-employed and buy your own health coverage, you
are eligible to deduct a percentage of the cost of your premium
from your federal income tax. This deduction is 60% for 2001,
70% for 2002, and 100% in 2003 and thereafter.
- If you are in good health and don't anticipate high medical
expenses, investigate a medical savings account (MSA). You will
need to purchase an MSA high-deductible insurance policy. You
then set up a Medical Savings Account where you can deposit up
to 65% of the major medical deductible for individual coverage.
If you don't use the entire amount, you can roll it over to the
next year. You must be self-employed or in a small business (2-50
employees) to qualify. Most health insurance carriers offer this
plan.
Individual Insurance
There are dozens of web sites that provide information on the major
health insurance carriers in California such as Kaiser, HealthNet
or Blue Cross. A good starting point is ehealthinsurance.com which
lets you compare all the different plans available to you, based
on your age, number of dependents and location.
Group Insurance
Most of the major health care providers in California offer health
insurance plans for small businesses. The advantage to group insurance
is that you are guaranteed health insurance regardless of your medical
condition. You also have access to more robust offerings for dental,
vision, acupuncture and chiropractic care. However, your insurance
may be more expensive than if you were paying for individual insurance.
Visit www.ehealthinsurance.com
to compare prices between individual and small business plans.
Each insurance carrier's requirements may vary slightly but in
general, the minimum requirements are:
1. Company must have between 2-50 employees
2. Company must have at least two members who have worked 30 hours
a week (20 hours/week if the members are founders) for 50% of the
last calendar quarter.
3. Company must be a legitimate business that conducted business
for 50% of the prior calendar quarter
4. Company must be able to show a business license or articles of
incorporation
5. Employees must have workman's compensation
Associations
Professional associations such as Media Alliance (a nonprofit )
often offer health insurance as a member benefit. The rates may
be a little more expensive than what you can get with individual
insurance (possibly $30/month more), but you will be guaranteed
health insurance because you will be part of a group insurance plan.
Some associations that offer insurance:
Payroll and HR Outsourcing
If you outsource your payroll needs, companies such as ExecuStaff,
AdminiStaff, TriNet
offers health benefits.
Resources
About the Author
Christine Kim is a marketing consultant with 14 years
of experience working with both small entrepreneurial and large
corporations including Apple Computer, Netscape and Palm. She
often acts as an interim director of marketing or senior marketing
manager and specializes in developing integrated marketing programs
to acquire/retain customers and build awareness about her client's
products and services. Contact her at ckim100@pacbell.net.
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