Health Insurance Considerations

Keeping the bases covered in your home-based business should include appropriate health insurance coverage for you and your dependents. Basically, you have two choices—individual or group health insurance.

Individual Health Insurance Policies
An individual health insurance policy is a contract between you and an insurance company. With an individual policy, you can create a plan to match your specific needs and the needs of your family. The cost of the policy is based on coverages you choose and the amount of deductible you agree to pay.
Types of coverages might include doctor visits, prescriptions, hospital stays and other related items. If you’re single with no dependents and have had few medical needs in the past, you may choose a limited number of coverages. If you have a family with various medical needs, however, you may choose an expanded version.
Because the expanded coverage policy covers more medical situations, it would also come with a higher premium than a policy with limited coverages. The premium you pay for the policy is further impacted by the deductible amount. Typically a larger deductible means a lower premium. Common deductibles are $250 and $500 annually.
Most individual health insurance plans are subject to medical underwriting. That means the cost of your policy and whether you are accepted into the plan will depend upon your health and pre-existing medical conditions. This isn’t necessarily the case with a group health insurance plan.

Group Health Insurance Policies Your second option for health coverage is a group insurance policy. Group plans are typically less expensive than individual health insurance policies, but they may offer more limited coverages than their individual counterparts.
A group policy is a contract between you and the group that worked with an insurance company to create the policy. You may or may not have this option available. Check with professional organizations and other affiliations to determine if this is available to you. Your local chamber of commerce also may offer a group health insurance plan to member organizations.

Making the Decision Before choosing among the health insurance options you discover, do your homework. Ask around. You can find out a lot by talking to other self-employed professionals about their experiences with the choices available to you.
Also talk to your health care provider about the plans in your area. Most physicians and their staff members will have a good idea about user-friendly plans in your area.

Barbara Cunningham, CunninghamB@missouri.edu
Business Development Specialist
Clay County, Missouri
University of Missouri Extension