When you make the leap from being an employee to being self-employed, you gain a lot of important things. You gain freedom to do the work that you want to do, when you want to do it, and for clients that you choose to do it for. You gain the ability to stay home with your children if that is something that is important to you. The list of things that you gain from making the move to working from home can be a long one, and that is a good thing.
As great as all of those things are, it is also important to think about the things that you give up when you leave the world of traditional work. I’m not talking about your cubicle, or the juicy office gossip around the water cooler. I’m talking about things like health insurance, retirement plans, and other benefits that sometimes come along with being an employee. Some of us don’t lose much in this regard when we walk away from our job because some jobs do not provide any benefits. For example, I have never been lucky enough to have a job that gave me any kind of health insurance, retirement plan, or anything else. When I made the move to self employment, I did not give any of those things up because I did not have them. For some people, though, the benefits that come with their job are substantial enough that they are worth almost as much as their pay check. Whether you have left or will be leaving a job with benefits or you are leaving a job that does not provide benefits, it is definitely important that you think about how you will take care of things like health insurance and retirement savings once you are on your own.
This post is the first of a short series on benefits for the self-employed, and today we are going to talk about health insurance. Some people transitioning to self employment will be able to obtain coverage or keep existing coverage under a health insurance plan that a spouse has through his or her job. Others will need to find coverage for themselves and other family members. If you are leaving a job that has health benefits, be sure to extend those benefits through COBRA. With COBRA, you can pay to keep your coverage for up to eighteen months after you leave your job, which will give you some time to research what your next step will be.
Self-employed people have the option of purchasing an individual policy on the open market or purchasing one through a professional association. Be wary of plans offered through so-called professional associations, as some of these plans have recently come under scrutiny by the Federal Government because some so-called “associations” are set up to serve as a method of marketing health insurance. People that buy their insurance from these “associations” often end up paying more than they would if they were to buy it on the open market. Health insurance premiums and coverage vary greatly, so be sure to invest some time into researching your options before you decide which plan to purchase.
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