Finding the right health insurance for the self-employed can be challenging, and many would-be entrepreneurs admit that employer-sponsored health insurance is what keeps them working for someone else. Without the benefit of group underwriting, self-employed persons often find themselves unable to qualify for health insurance due to pre-existing medical conditions; something that isn't a factor in an employees' group health plan.
There are, however, several health insurances for the the self-employed, especially those without pre-existing medical conditions. For self-employed persons who have a working spouse, often the easiest option is to sign up for coverage under the spouse's employer-sponsored health plan. If this is not an option, the next place to look is in individual and family major medical plans. The underwriting for these plans is much stricter than for group health insurance, but once obtained, the insurance cannot be canceled on an individual basis. In other words, once a person has obtained an individual health plan, he or she cannot be singled out for rate increases or cancellation.
For health insurance for the self employed persons who are unable to qualify for individual coverage due to a medical condition, a couple options still exist. Each state offers what is know as Guaranteed Issue health insurance. It is generally prohibitively expensive relative to the benefits provided, but it is something. There is no underwriting involved, and as long as the insured can afford the premium, the coverage is provided. The other option for those who find themselves unable to obtain health insurance is known as Accident & Injury insurance. While it doesn't cover any medical conditions, it does provide insurance in the case of accidents and injuries.
A form of health insurance for the self employed that is becoming increasingly popular is a Health Savings Account. A Health Savings Account can give the self-employed the benefit of full coverage at an affordable price, and provide valuable tax benefits as well. The plan works by combining a high-deductible major medical plan (hence, low premiums) and a tax-deferred savings account that allows the self-employed person to withdraw money tax free to cover medical expenses up to the annual deductible amount.
Of all health insurance options available to the self-employed, the Health Savings Account will be the most affordable in most cases, and the only option to provide a vehicle for tax-deferred savings. While individual major medical plans may be affordable for young and healthy applicants, the rates rise steadily for older and/or less healthy applicants, with no guarantee the policy will even be issued. As a last resort, state-provided guaranteed issue risk pools provide a minimum of coverage, but at exorbitant rates.