Career Center Blog

September 16, 2010

Health care relief for Washington state's self-employed


NWjobs

A recent news item from the Washington State Office of the Insurance Commissioner made my week. According to the OIC, come October 1, freelancers, sole proprietors, independent contractors, and other self-employed folks will have an easier time finding and qualifying for affordable health insurance.

Thanks to Senate Bill 6538, rather than being forced to buy health insurance on the individual market -- if they can even qualify for it, let alone afford it -- one-person businesses will be able to qualify for group health insurance coverage, with no health screening required. Until now, only small businesses of two to 50 employees could qualify for such group plans in Washington state. 

In case you're new to the self-insurance game, allow me explain why this has the potential to rock a lot of freelance worlds: Group plans tend to offer more bang for your insurance buck; coverage tends to be far more comprehensive than the high-deductible, catastrophic plans those of us in the individual insurance market often get stuck with. Perhaps even more significant, there are no 250-item health questionnaires to fill out and no infinite bans on pre-existing conditions, which is of course great news for self-employed people with chronic conditions or a less-than-perfect medical history.

According to Rich Roesler, an OIC spokesperson I talked to this week, these group plans may still require a nine-month waiting period for coverage of pre-existing conditions, but they won't be able to indefinitely deny coverage of such conditions or illnesses. As Roesler puts it, "It's a very big deal, especially for older people who are self-employed."

So exactly who qualifies in the state's eyes as a "business of one"? To qualify for one of these group plans, small business owners must have run their business for the past year or more and must have made at least 75 percent of their income from it (51 percent for farmers). As proof, Roesler says, self-employed folks seeking such group plans should expect to be asked for a copy of their IRS Form 1040 (tax return) and Schedule C (Profit or Loss from Business form) or Schedule F (Profit or Loss from Farming form).

How does (a business of) one go about finding a group plan anyway? Roesler recommends talking to your health insurance agent or broker. If you don't have one, ask a fellow freelancer for a recommendation -- many of us do.

And finally, how will the new federal health care reform affect all this? According to the OIC, it won't. In fact, the new federal health insurance legislation passed this year makes the same provision for businesses of one. But that reform doesn't go into effect until 2014. The state law is just getting self-employed folks to this happy health care place sooner.

Michelle Goodman is the author of "My So-Called Freelance Life" and "The Anti 9-to-5 Guide." E-mail Michelle at mgoodman@nwjobs.com

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This is great news! Does anyone know of any insurers that are offering this yet?
Thanks!!!
Debra

Any answers to Debra's question? Is there some kind of pre-existing group self-employed individuals can join? How does this work?

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I suggest calling your insurance agent for details, which is free and is what the state insurance commissioner's office is recommending. If you don't have one, ask a trusted freelance pal or small business owner who they use.

I was so excited to read this news, especially since it came on the heels of my (annual!) 20% increase in my monthly individual coverage premium.

In researching group-of-one coverage, I learned that the premiums are actually higher than what I am paying for individual coverage. A broker I spoke to pointed out that, although the premiums are indeed higher, you get a lot more for your money, especially much lower deductible. That's nice, but if the cost of premiums are already too steep for you like they are for me, group-of-one coverage may not be doable.

BTW, you can't go look up rates on the insurance company website like you can individual rates. Instead you'll need to fill out a form and request a quote.

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Karen Burns Karen Burns is the author of The Amazing Adventures of Working Girl, a career guide based on her 59 jobs over 40 years in 22 cities.

Kristen Fife Kristen Fife is a senior recruiter, career mentor, blogger and resume consultant based in the Seattle area.

Lisa Quast Lisa Quast is a certified career coach, mentor, business consultant, former corporate executive and author based in the Seattle area.

Randy Woods Randy Woods writes about job-search tools, networking techniques and other tips to help you land your dream job.

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Matt Youngquist is the president of Career Horizons, a career counseling firm.

Natalie Singer is a Seattle writer, editor and small-business owner.

Michelle Goodman is the author of "My So-Called Freelance Life" and "The Anti 9-to-5 Guide."

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