Would you quit your 9-5 if you didn't have to worry about healthcare costs? - Be Passionate and Prosper | Grow Money, Investing, Online Business (2024)

I ask this question because many people I coach say they can’t leave their 9-5 to explore owning their own business or retiring early because they worry about healthcare costs…

The reality is, there are many people who want to own their own business, but the one thing holding them back is healthcare. They are scared that their family won’t be protected if they leave the corporate world.

Are you trying to make the leap into owning your own business, and you have been contemplating this for some time? Maybe you have even run the numbers and decided that the gap was just too big.

As a coach, I’ve heard from so many people who are hesitant to go freelance or own their own business because they are afraid that they either won’t be covered by healthcare or the cost would be too high.

It’s sad to hear that people would put their dreams of owning a business on hold because of healthcare.

Let me tell you that there are actually many options for health insurance if you are a business owner or freelancer. You shouldn’t let the fear of healthcare stop you from pursuing your dream of owning your own business.

When I started my first business, I had to do the homework of looking into all the options available to me and my family, and in the end, it was totally worth it.

Here’s a list of some of the ways you can get healthcare coverage along with some options to consider while you transition into owning your business full time:

1. Pay for healthcare costs through your business

If you already have a business with employees, and you are earning a steady income, the most obvious option is to apply for health insurance through your business. This is a good place to start if you are wanting to keep your healthcare costs low. To begin your search, check out the federalSmall Business Health Options Program. Your state may have many other alternatives to consider.

In most states, you need at least two people working to qualify for a business plan, but these rules are regulated by each state and can vary.

With my first business, I enrolled with Kaiser through a group business plan. I was able to obtain insurance for my employees and family at a very fair rate.

Make sure to compare costs not only between insurance providers, but also compare the rates for applying under a business plan as opposed to obtaining an individual/family plan. Sometimes it’s cheaper to obtain insurance under an individual/family plan.

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2. Self-employed health coverage

If you are self-employed and don’t have any employees, then a great place to start looking for health insurance is the Individual Health Insurance Marketplace. This marketplace is for US residents only. If you are outside the US, I would suggest searching the words “Individual Health Insurance (and add your country or state).

If you are in the US, your state may have it’s own marketplace. For example, my husband and I searched the federal marketplace above, and we were directed to the California Insurance Marketplace because we reside in California.

You can enroll for individual health insurance if you are a freelancer, consultant, independent contractor, or a self-employed worker who doesn’t have any employees.

Part of the process for applying for self-employed health insurance is being able to estimate your net income for the current year (not the past year). When you apply, you’ll also be able to find out if you qualify for premium tax credits and other savings.

There is usually an open enrollment period, so you will want to research and carefully plan when you make a switch. Also, if you experience a major life event, such as a move, job loss, or divorce, there is usually a special enrollment period which allows you to join (just make sure not to wait too long after the life event).

3. Spouse’s policy

If your spouse is working full-time and their company provides health insurance, it’s worth running the numbers to see if adding you to the plan is the most affordable option.

In many cases, you can get added for free or for a small additional premium, so it’s worth looking into.

My best tip for this: Take the time to compare healthcare costs. When we were shopping plans and my husband was working, we realized his company plan was actually a really great deal for our entire family. He had to pay a little extra from his paycheck for our health coverage, but it was worth the savings.

4. COBRA

In the event you must leave a company where you had health insurance, you have the right to extend your coverage, usually for up to 18 months, by paying your own premiums.

In 1986, the Consolidated Omnibus Budget Reconciliation Act (COBRA) was passed and helped to protect workers in the event that they needed to reduce work hours or quit.

Note that you will end up paying the entire premium, so whatever you used to pay out-of-pocket plus the share your employer used to pay. With COBRA, the health insurance premiums can be costly, but it could be a great alternative while you are researching alternative plans.

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5. Local chamber or business group

Another option for health insurance coverage if you are self-employed is to look into your local business or professional organizations.

I sold real estate for a brief period of time, and the local association as well as some of the brokerages offered group plans.

Also, my local Chamber of Commerce offered a group plan for members which was pretty affordable.

Look into national organizations you might be able to join which offer group plans when you become a member.

7. Affordable Care Act

The Affordable Care Act or ACA provides a health insurance marketplace for people who may not be able to normally obtain health insurance. If you are a legal U.S. resident, you can visit this marketplace to obtain quotes from various insurance companies.

The ACA ensures that people with low income, or have a high risk for a major disease, or have a pre-existing condition, can still qualify for healthcare. With this new act in place, you will no longer be declined for coverage.

If you are not low income, but you are still looking for a way to cover your healthcare costs, you can still use the healthcare marketplace atHealthcare.gov to research plan types.

8. High-deductible insurance might keep your healthcare costs lower

One way to save on your insurance premiums is to opt for a high-deductible health insurance plan. These plans often have the lowest cost month-to-month, and they provide a cap to your out-of-pocket costs when something major comes up.

With a high deductible plan, you will usually end up paying for most routine medical care. However, your plan may provide you with discounted rates for certain types of visits or care.

These plans may have a $10,000-$20,000 deductible. That sounds high, but with the lower monthly cost, you might be able to set aside money in a savings account so it’s there in case of a medical emergency. If you stay relatively healthy during the years you are on a high deductible plan, you may come out ahead financially.

9. Health Savings Accounts can help pay for healthcare costs

If you choose a high-deductible healthcare plan, you may want to consider choosing a plan which allows an HSA or Health Savings Account. The HSA allows you to save money on your taxes as well.

Any medical costs which are not covered by your health insurance plan can usually be paid for from your HSA account. There are many rules tied into having an HSA and you should consult with your CPA about those.

11. Pay cash or trade

Many medical professionals run their own businesses or offices which means they might be willing to negotiate if you pay all-cash for services.

You could also do a trade if you offer a product or service that they might be able to use. You just need to be willing to ask and see what they are willing to do.

12. Utilize urgent care to keep healthcare costs low

If you need medical attention, but it isn’t a life threatening emergency, you could opt for using an urgent care center. Of course this option does not cover your care in a hospital, prescription or other medical costs. But if you went with a high deductible plan as explained above, you could still receive emergency medical care when needed while also getting basic care at an affordable cost.

My tip for finding good urgent care centers near you is to look on Yelp and read the reviews. My husband and I use a local urgent care for many of our non-emergency medical visits. The care is exceptional and the prices are very affordable.

Final words about how to choose what type of healthcare is best for you and your family

Your health care situation is going to be unique so it’s important to take your own personal needs (as well as the needs of your family) into account.

You may want to research the ideas above and take some time to compare costs as well as the plan benefits. Sometimes it’s not just about keeping the costs low. There are many things to consider when it comes to health care.

If you are self employed (or hoping to start your own business), the cost of health care might be a bit of a shock. But with a blend of some of the ideas above, you might be able to find a scenario that feels affordable.

The most important thing is to not go uninsured if at all possible. I have met many people who thought they didn’t need health insurance and later down the road regretted their decision. Just one major hospital stay put them into serious debt for quite some time.

If you are trying to make the leap to leave your full time job to start your own business, doing a little homework about healthcare ahead of time can be very worthwhile. It will help you plan how much you need to make before you make the transition.

What about you? What health care scenario sounds like a fit for you? Comment below or share your ideas for affordable health care here!