Managing Your Own Benefits
Self-employment also means handling your own health care.
Reviewed By Michael Smith
Workers leaving their 9-to-5 jobs to set up shop for themselves often look forward to the freedom of being their own bosses, setting their own hours, and charting their own courses.
Then sometime between the office goodbye party and the final paycheck, reality hits. Self-employed workers are also their own benefits managers, responsible for finding and paying for their own health insurance and any other benefits they may need. Where to start?
Keeping the Company Plan
In its 1998 survey, the U.S. Department of Labor's Bureau of Labor Statistics found that more than 10 million people are self-employed, either full-time or part-time.
The soon-to-be self-employed who are leaving a job with health care benefits may be covered under a federal law commonly called COBRA (the Consolidated Omnibus Budget Reconcilation Act of 1985). Under this act, group health plans sponsored by employers with 20 or more workers must let ex-employees continue their coverage for up to 18 months, although the worker pays the entire premium and it can be pricey.
Another option is to investigate whether you can be added to your spouse's plan.
Striking Out on Your Own
If neither of these applies to you, begin your research by examining your health insurance needs, advises Gene Fairbrother, a spokesman for the National Association for the Self-Employed. Look at what health care services you've used in the past, and figure out what you may need in the future. "When it comes to health insurance you can't just plan for today," he says.