Health Insurance 1

Health Insurance: Protection You Can't Afford to Do Without

One of the biggest drawbacks to self-employment and business ownership is the high cost of health insurance. If you are working for a company that offers health insurance and quit to start your own business, you lose not only the steady paycheck but also the company's contribution toward your health care insurance. If you aren't married, if your spouse is unemployed, or doesn't have health care benefits, you can expect to pay hundreds of dollars a month for coverage.
And that price tag puts health insurance out of reach for many small business owners and employees of small businesses. Writing in The Hill in February 2004, Sen. Olympia Snowe (R-Maine) noted that there are about 43 million people in the United States have no health insurance. Of those, approximately 24 million, (60 percent) are employed by a small business or are a member of a family whose income derives in some way from a small business.
And the coverage isn't what it used to be. While rates climb, benefits offered in small business plans keep declining and while copays go up and some insurance companies are placing limitations on the dollar amount and number of prescriptions you can purchase over the counter at the drugstore.

According to a study released by the Kaiser Family Foundation, the percentage of American workers enrolled in conventional insurance plans (also known as indemnity or fee-for-service) declined from 73 percent in 1988 to 5 percent in 2003. The nonconventional plans apparently have done little to make health insurance affordable for small businesses and the self-employed. But despite the high cost of insurance, gambling that you won't need health care benefits is risky business. Read on to find out why, and what your various options are.

I’m only 27 and never get sick. Is there any reason I can't wait a few years to get health insurance?

Just because you seldom get sick doesn't mean you couldn't develop some type of long-term illness or be involved in a serious accident. A single illness or accident could put you in the hole with doctor and hospital bills totaling $20,000 to $30,000 or more if you don't have health insurance,

I'm planning on quitting my job to start my own business. Can I convert my company health insurance policy to a personal one?

If your present employer has twenty or more employees and you become ineligible for insurance under the company group plan due to a "qualifying event" (see below), you may be entitled to continue the plan for up to 18 months under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). If you become disabled, the continuation period is extended to 29 months. You will have to pay the premiums out of your own pocket, however. At the end of the continuation period you have the option of changing it to an individual conversion policy under the health care policy's regular conversion options. Some states require an “extended” benefits period for up to 12 months covering those who are disabled at the time their coverage ends. Extended benefits provide coverage for the disabling condition only, and require no premium payment.

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