The following article is from our friends at Catch Benefits for informational purposes only. It is not intended to provide, and should not be solely relied on for professional health coverage advice or guidance. You should always consult your own health coverage advisors before choosing or purchasing health insurance.
One of the biggest benefits of working for yourself is the freedom to define what work looks like––you call the shots, decide when to work, how to work, and who to work with. The upside of this freedom and flexibility is undeniable––it’s why one in every ten workers is choosing independent work. But making it on your own has its downsides––it often lacks the perceived security of “a good job with benefits.” While many people trade the freedom of solo work to keep this kind of security, it doesn’t have to be that way. Self-employed workers can get access to the same kind of benefits that traditional employees enjoy. This is particularly important when it comes to health coverage. It’s also particularly complicated when it comes to health coverage. HMOs and PPOs, special enrollment periods, premiums, deductibles––it's hard to understand what any of it means.
This article will break down the confusing landscape around health insurance and help you understand the key things you need to know about getting coverage when you’re self-employed. And with Catch’s easy-to-use health insurance recommendations, you can get covered by the time you’re done with your morning coffee.
Why This Matters Right Now
Back in January, President Biden signed an Executive Order that reopened the health insurance marketplace so that Americans without coverage could get the insurance they need! Running until August 15, 2021, this Special Enrollment Period (SEP) is available to all Americans––with no need for a qualifying life event.
Even better, on July 1st, the government announced new savings through the American Rescue Plan for these marketplace plans. If you received any unemployment compensation in 2021, you can now find even lower-cost plans on the marketplace and save extra money on out-of-pocket expenses. Some individuals will even be eligible for $0 premiums. But in order to qualify, you must get coverage by August 15th. Catch can help you find the coverage you need and access these new savings. Answer a few questions and we will recommend plans for your specific needs. You can also compare hundreds of plans and get covered in less than 10 minutes.
Pro tip: This Special Enrollment Period is available in the 36 states served by the Federal health insurance marketplace. Of the 15 States that operate their own health insurance marketplace, Colorado and Rhode Island have extended this Special Enrollment Period to August 15th.
Let’s Jump In
First up, a reminder that health insurance protects against the financial costs that come with keeping you healthy. The terms below are important to understand so that you know what costs you're responsible for and what costs are covered by insurance.
Health insurance is an agreement between you and an insurance company. Generally speaking, that deal is:
- You agree to pay a monthly fee (premium) to the insurance company. As long as you pay on time, you are covered.
- In exchange, the insurance company agrees to pay for some of the costs you might have during the year. Whether or not you have these costs depends on how healthy you are next year.
How do you know what’s covered? It’s all in the plan details. But don’t worry. When you’re shopping for coverage, Catch makes it easy to see how costs break down for each plan, including costs for common care like prescriptions or emergency room visits. This makes it easy to compare and pick the best plan for you.
Important Terms to Understand
Copayment or Copay
This is the amount you’re charged each time you receive certain medical care or purchase certain medical equipment or drugs. Each plan has different copays for different services.
For example, a plan may charge you a $25 copay for a doctor’s visit or a $15 copay for prescription drugs.
A deductible is the total dollar amount you must pay before your insurance kicks in and starts paying a portion of your medical bills. While an annual physical or other preventive care may be covered immediately, most health care costs will not be paid by your insurance company until you have paid your full deductible amount.
For example, you have to pay for prescription drugs and the cost of seeing your doctor until the amount you’ve paid out-of-pocket reaches the deductible amount. Plan deductibles reset each calendar year.
Remember when we said the insurance company agrees to pay some of the costs you might have? Well, after you meet your deductible, your health insurance will start paying a portion of your medical expenses. You’re still on the hook for a small portion of these expenses—this is known as coinsurance.
For example, let’s say you have 20% coinsurance on your plan. After meeting your deductible, for every $100 bill you receive, your insurance company pays $80 and you will owe $20.
What happens if you get a really big medical bill? There has to be a limit to what you need to pay in a year, right? This ceiling is known as the “out-of-pocket maximum” for your plan. It’s the total amount that you are potentially responsible for in a year including your deductible, copayments, and coinsurance. Importantly, your monthly premiums do not count toward this maximum amount.
For example, say you got into an accident riding your bike and your total medical costs (ambulance, doctors, surgery, drugs, etc.) totaled $25,000. You have health insurance with a max-out of pocket of $13,000. That means that once you have paid $13,000 out of pocket, your insurance will pay the remaining $12,000.
There are different plan types that you should be aware of:
- HMO or “Health Maintenance Organization” Plans: These plans have a physician network that provides care. Unless it’s an emergency, you must use a physician within the network or risk having to pay your full medical bill out of pocket. You will also need to get a referral from your primary care physician in order to see a specialist like a podiatrist or a dermatologist. These restrictions help keep costs down which means these plans are often cheaper options.
- PPO or “Preferred Provider Organization” Plans: Similar to HMO Plans, PPO plans also have provider networks. However, with a PPO plan, if you use an out-of-network provider, a portion of your bill may still be covered. You also won’t need a referral to see a specialist—you can access them directly.
- EPO or “Exclusive Provider Organization” Plans: Similar to an HMO plan in that you’ll need a primary care physician from within a specific network. While you’ll need to stay in that network for any non-emergency care, you are able to receive care from a specialist without a referral from your primary care provider.
Benefit Levels (Metal Tiers)
You may have noticed that health insurance plans are categorized into different levels called metal tiers. There are four different tiers: Bronze, Silver, Gold, and Platinum.
Plans are grouped based on the number of medical costs that are covered for the average person. Importantly, metal tiers do not mean the quality of healthcare is better or worse. Bronze plans have the lowest monthly cost but cover the least amount of medical costs for the average person.
- Bronze: Covers 60% on average of your medical costs; you pay 40%
- Silver: Covers 70% on average of your medical costs; you pay 30%
- Gold: Covers 80% on average of your medical costs; you pay 20%
- Platinum: Covers 90% on average of your medical costs; you pay 10%
Generally, you qualify for a Special Enrollment Period if your life changes enough that you need to reconsider what health insurance coverage you have. Outside of the regular Open Enrollment period (November 1 - December 15th every year), this is the only period of time where you can choose a different health plan than you already have. You typically have 60 days from a qualifying event to get new coverage. Some common qualifying life events include:
- Moving to a new address
- Turning 26 years old
- Losing your existing health coverage
- Getting married or divorced
- Adopting or having a child
Importantly, during this period you can also change your marketplace plan if you previously enrolled in health insurance during open enrollment.
As said, the Special Enrollment Period this year has been extended to include all, without a qualifying life event, and extended from February 15th to August 15th.
Ready to get covered? Still confused? Have questions? Start at Catch Health Insurance for Aisle Planner Members and put in some basic info. Catch will give you personalized recommendations and let you know what your savings can be. Catch is a licensed healthcare broker––if you still need help, chat through the help function and someone will personally work with you to get the coverage you need.