The ‘Gig Economy’ is the future of work; at least until robots take over. While some things are evolving, one thing that hasn’t [yet] is insurance. This means that many independent contractors easily feel overwhelmed when it comes to getting insurance.
However, it doesn’t need to be this way. Even with the repeal of the individual mandate, there are still many options for the self-employed to get the insurance coverage they need. This is where this article comes in as it will give you the insider’s guide to insurance in the gig economy. Are you looking to get coverage, then read on.
Back to School
The first thing you need to do when considering insurance coverage as a self-employed contractor is to go back to school. Not physical school, rather to educate yourself on the ins and outs of insurance and how it works when you are buying it for yourself as opposed to being a member of a group.
One lesson we can learn is that supposed exchanges don’t always work. However, this does not mean that they should be discounted altogether. In fact, becoming member of an industrial group or a syndicate might be a great way to save on insurance coverage.
Unfortunately, this didn’t work out as planned when it came to Obamacare. But its failure wasn’t due to the exchanges themselves; rather it was due to imbalances which doomed many exchanges from the get-go.
A big part of going back to school when it comes to insurance is to educate yourself on the various policies available to you and how they will work. In some cases, the policy might appear to be attractive but a combination of a high deductible and the insurers who reluctant to pay claims.
As such, you want to go online and check out the reputation of the insurer in question. For example, you are considering car insurance and you want to get it under your S-Corp or LLC. By looking at Mercury reviews, you can get an idea of what policyholders say about Mercury Insurance Company. In fact, you should do this for every carrier you are considering.
Beyond this, remember to look at the fine print of your policy including the schedules for premium payments and renewals. Knowing this information will help you to better plan your cash flows – something that is all important for the self-employed.
Don’t Freak Out
Insurance can be expensive. Did you know that the average health insurance policy in the U.S. costs just under $10,000 per year? That is a lot of money. As such, you need to be rational when comparing policies. Sometimes the least expensive plan makes the most sense, but that is only if you don’t need help with medication or regular procedures.
By keeping a cool head, you can break down the components of the plan and then compare different plans based on their merits. Doing so will help you to make a decision that makes the most sense for your situation.
This approach shouldn’t just apply to health insurance as you should also use it when looking at life insurance, car insurance, and any other coverage that you or your ‘business’ might need.
One thing to keep in mind when you look at plans is that an insurer’s first offer is just that – their first offer. Sure, it’s difficult to ‘negotiate’ with a two-ton elephant but what you can do is start to break down the terms of the policy to understand what is driving the costs and how these items impact coverage.
In fact, this is one of the best tools to right-size your coverage by balancing your deductible with your coverage. Doing so will help you to get the coverage you need at a price you can afford.
Hunt for Subsidies
I might be dating myself but I remember those commercials from the 80’s where you could send a request to a post office box in Pueblo, Colorado to get a catalog on all manner of government programs and subsidies.
While you might not need to send a self-addressed stamped envelope these days, the concept still works and it behooves you to go online to see if your state or the federal government have programs to help offset the cost of insurance for self-employed contractors. Granted, many of these programs will be for health insurance but there might be other programs that might help you get other forms of coverage.
Lastly, don’t forget to talk to your accountant or tax planner to see which insurance costs can be deducted from your taxes. While this isn’t exactly a subsidy, it is a great way to save.