As daunting as starting a business can be in the beginning, one of the most anxious times is when you are getting enough clients to consider leaving the employment that is paying the bills. One reason thousands of people stick with their full time jobs to the detriment of their business is the health insurance provided by their employer. Other massage practitioners are working uninsured, or paying for insurance on the individual market, which can come with high deductibles and might not have prescription coverage (which is the case with my plan.)
Starting January 1, 2014, the uninsured and those buying individual health insurance can purchase low-cost insurance on exchanges (also referred to as the Marketplace) set up by the Affordable Care Act (ACA aka Obamacare). Those with employer-sponsored insurance can also use the exchanges, see the next section. Many states are running their own exchanges; other states have chosen not to, and their residents can purchase from the federally-run exchange.
In either case, you can go to http://healthcare.gov/, answer a few questions including your state, and it will direct you to the proper place for you to check out the plans. This site also has a wealth of information on the Act and how it pertains to you.
You will be able to choose from a range of plans, from Bronze (very low cost, but higher deductibles) to Platinum (higher monthly payments, but they pay more toward your healthcare.) All plans will cover routine preventative care in full, such as physicals, cholesterol test, mammograms, etc. The state of Connecticut, for example, has three companies participating, and each will have the full range of plans, for slightly different premiums. Premiums may increase with age, but not for gender, health status or pre-existing conditions.
In fact, after this year, most plans, including employer plans and ACA Marketplace plans, will not be able to deny you coverage or charge more for pre-existing conditions, another factor that holds us in our full-time jobs. (Some grandfathered individual plans will still be able to do this, so definitely check out the Marketplace if you have one.)
You may be qualified for additional savings
If you make less than $28,725 a year ($58,875 for a family of 4), you will qualify for a federal subsidy. Officially it is a tax credit, but it can be paid in real-time directly to your insurance company to lower your monthly premiums. For example, a 45 year old with an income of $27,000 will receive $254 a month toward insurance. This apparently only applies to silver plans (the cheapest silver plan is a $500 deductible, $2,250 max out-of-pocket, co-pays for sick visits/ hospital stays, low co-pays for prescriptions- a high quality plan). In the above example, the Connecticut plan premium quoted on the web site was $423, leaving $169 a month for the individual to pay. My current plan costs $310 for fewer benefits than even a bronze plan, so even without a subsidy, I will either save money or get a far better plan.
If you have employer-sponsored insurance and choose to buy instead on the exchange, you may still qualify for a discount if the plan is very expensive or has poor coverage (plan pays less than 60% of medical costs). Your employer will not contribute toward the cost of an exchange plan.
I am unclear on whether you can still deduct the portion of your premium that you pay yourself against your self-employed profits. You will want to check into that before you file for 2014.
If you make less than $15,800 a year for 1 person ($32,500 for a family of 4), and your state has chosen to expand Medicaid (provided for in the ACA but the Supreme Court ruled that states could not be compelled to comply and some have chosen not to offer the benefit to their low-income residents), you could qualify for Medicaid, which is free or very low cost coverage. If you make less than $11,500/$23,500, you probably qualify under the original Medicaid rules, regardless of state. The map below shows which states that are expanding:
How do you learn more or sign up?
Again, go to http://healthcare.gov/ and you will be directed to the proper place. There are no risks to using the site.
Open enrollment is from 10/1/13 to 3/31/14. After that, you won’t be able to sign up until the next open enrollment period in the fall, unless you have a qualifying life event (divorce, child, moving state, etc.).
To speak to an actual person trained to help with your particular situation:
Small businesses (50 or fewer employees):
Call: 1-800-706-7893 (9-5 EST)
To find people to help in your area:
What if I don’t want or can’t afford health insurance?
If you choose not to carry health insurance in 2014, in addition to paying for your health care, individuals will pay a tax penalty of $95 or 1% of your income, whichever is higher. Penalties will go up significantly in later years.
Remember that not carrying health insurance can be devastating to your finances, and your business, if you have a serious illness or injury. Even the lowest bronze plan in CT has an out-of-pocket maximum of $6,500, which is great insurance against financial disaster. Just like we protect our cars and homes with insurance against the unforeseen, we should consider insuring our bodies and families against disaster and to allow for routine care to keep us healthy. After all, for massage practitioners, our bodies are our business.