There are many benefits to becoming a freelance worker. For one thing, you can generally set your own hours and schedule rather than being locked into preset hours. If you have multiple obligations, like the children or aging parents you care for, which makes it difficult to commit to a standard work schedule, then freelancing could be a good choice.
Also, as a freelancer, you’re not tethered to a specific office location. If you want to relocate to a part of the country where the cost of living is more moderate, you might have that option.
But there are certain pitfalls you might encounter as a freelance worker. For one thing, you might struggle with a lack of paid time off. And while you could always pad your savings account to try to give yourself that option, you might struggle to take a break from the grind not from a financial perspective, but from a workload perspective.
Another downside of being a freelancer? You don’t get employee benefits like access to a retirement plan and subsidized health insurance. And the latter is a big deal, because buying health insurance on your own can be costly.
In a recent Everly survey, only 58% of freelancers said they have health insurance. But the 42% of freelancers who don’t have coverage may be making a massive mistake.
The danger of going without health insurance
Even if you’re a pretty healthy person who rarely gets sick, you’ll never know when a random illness or accident might land you in the emergency room. Without health insurance, your bills could total thousands of dollars.
Plus, you never know when you might need a diagnostic test that costs thousands of dollars if you have to pay for it in full. And so in many cases, the cost of health insurance will be more than pay for itself if a medical issue or injury pops up.
How to get health insurance as a freelancer
If you’re a freelance worker who’s married, your most cost-effective option for health insurance may be to get onto your spouse’s workplace health plan, if they have access to one. Otherwise, you can purchase a plan from the health insurance marketplace, which was established by the Affordable Care Act.
Now, you have to follow the rules for obtaining coverage through a marketplace plan. You can sign up during open enrollment, which runs from Nov. 1 through Dec. 15 every year. The process of signing up for coverage can vary by state, and you may be eligible for a health insurance subsidy, depending on your income (this option is usually available for lower earners but phases out for moderate ones).
That said, if you had health insurance through a job but lost your coverage (say, by going freelance), you may qualify for a special enrollment period to sign up for a marketplace plan. This means you won’t have to wait until the annual open enrollment period.
Whether you’re new to freelancing or have been doing it for years, it’s important to factor the cost of health insurance into your budget and make room for it. Going without insurance has the potential to be a very costly mistake. And the last thing you want to do is regret your decision to go freelance due to a pile of medical bills.
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