Mother Knows Best
Written by Amy Souza | Posted by: Anonymous
Health insurance is one of the necessary evils in life, especially for the self-employed. Its expensive, for sure, but if you dont have it can lead to financial ruin if you get sick. If you are thinking of pursuing a freelance career, be sure to consider your health insurance options.
When I made the switch from full-time associate producer to freelance producer and writer, I knew what my Mom would say: "Will you make enough money? And what will you do for health insurance?"
Money is one thing; you need to pay rent and you probably want to eat regularly. But health insurance is something that often gets overlooked, blown off because it costs too much. Im here to tell youjust like youre Mom wouldthat some form of health insurance is crucial, so much so that you need to factor it in to your monthly budget. End of story.
Luckily, I was already covered by my employer so Im able to continue in my PPO through COBRA for only $200 a month. That sounds expensive, but, really, its not that bad. Though your insurance premium may end up being one of your most expensive monthly bills, my advice is to have at least some coverage. Because you never know what could happen.
So, that said, just what are your options? Well, if you currently have coverage through a full-time employer like I did, youre most likely eligible to continue that coverage through the federal program called COBRA. This nice little acronym stands for the Consolidated Omnibus Budget Reconciliation Act of 1985, but you dont really need to know that. Through COBRA, you pay 100% of the monthly premium, plus additional administrative fees. So if you currently pay $30 a month and your employer forks over the other $70, youre responsible for the full $100 premium through COBRA, plus a small percentage. This is a great option because it allows you to keep your same coverage, your same doctors, and its effective for 18 months. Some companies (usually small ones) are exempt from COBRA regulations, however. Check with your employers human resources person to get the details on continuing your coverage.
Another option, of course, is to get coverage through your spouse. Even if youre not married, you may be eligible for Significant Other coverage, if his or her employer allows that and if you really are significant to each other. Which means–youll have to sign a notarized form saying that, yes indeed, you two live together and plan to continue living together. Its not quite as formal as marriage, but it is legal and serious nonetheless. This is how I had health insurance throughout graduate school in California. One downside was that it was an after-tax benefit, meaning we paid taxes on the money we paid out as a premium. (In contrast, married couples with the same coverage had their premiums deducted before taxes.) Still, the $80 a month was well worth it just for the time I came down with a nasty case of food poisoning and had to be rushed to the emergency room.
Another option for you younger folks is to see if you can continue your parents coverage. Most plans dont allow this unless you are in college, but some do, so check it out. It cant hurt to ask.
So if youre not eligible for COBRA, youre single, and your parents coverage cant include you, what do you do? Start with a little research. If youre a member of the Association of Independent Film and Video (www.aivf.org), you may have access to health care through them. Not all states are covered, however, so it depends upon where you live. Theres also the National Association for the Self-Employed (www.nase.org). Their three levels of membership range from $97 to $565 a year, and all entitle you to enroll for health insurance. Again, some research is necessary, due to state liabilities. And then theres the Mass Media Alliance (www.mass-media.org), which offers health insurance discounts to members. You can also check out small business organizations in your state, as well as other professional organizations that you belong to.
When shopping for health insurance, you first need to consider how youll use it. Do you go to the doctor a lot? If so, you may want to consider an HMO or PPO or a fee-for-service plan with a low deductible. If you rarely see a doctor or just plan to use it for emergencies, then a plan with a higher deductible makes sense. You can get a lot of information through Internet research, for sure, but youll probably want to talk to a human for more specific information. Here are some basic terms youll want to know before picking up the phone.
A deductible is the amount of money you have to shell out before the insurance company will pay out a nickel. Someone with a $250 deductible who takes a $500 trip to the emergency room will have to pay the first $250 out of pocketthe other $250 will be subject to the plans payment plan. A higher deductible equals a lower monthly payment.
Fee-for-Service Plans mean that you pay a percentage of the cost every time you go to the doctor. Typically, the payment breakdown is 80/20, where the insurance company pays 80% and you pay the other 20%after you meet your yearly deductible, of course. Most plans have an out-of-pocket maximum that youll have to pay each year. But, they may also have lifetime limits on the amount the insurance company will pay. Youll probably want a lifetime limit of at least $1 million.
A Health Maintenance Organization, or HMO, usually has no deductible, a co-pay for each visit (usually between $5 and $20), and requires that you have a primary care physician refer you to any specialists you might need to seemost of whom must also be members of the HMO. HMOs get a bad rap for putting their financial concerns above patients health. The key is finding a good doctor whom you trust.
A Preferred Provider Organizatoin, or PPO, usually has no deductible and also has a co-pay for visits, but you dont need a primary care physician. Rather, you choose a doctor from within a specific network of doctors (thus the term "preferred provider"). You can also see a doctor outside of the network, but instead of just a co-payment, youll have to pay a percentage of the cost (usually 20%). PPOs offer you more flexibility, but premiums can be higher than for HMOs.
A Point of Service, or POS, plan is similar to a PPO, except that you may have a primary care physician who coordinates your care.
As with any other service, its best to shop around until you find a plan that offers you the coverage you want at a price you can afford. And though you may want to tempt fate and skip insurance altogether, think like your Mom for a minute and choose the cautious route.