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Independent contractor health insurance

Independent contractor health insurance

Independent contractors are accustomed to handling everything on their own, including tax preparation, business development, and retirement planning. You’ll likely also need to discover, sign up for, and pay for your own health insurance, at the risk of adding to your list of things to do.

Finding the best health insurance at a reasonable cost can have an even greater influence on your health than correctly filing your taxes on your finances. However, it doesn’t follow that this activity must be as challenging as it seems.

Here are some reasons why looking for the best health insurance in 2022 will be worthwhile and some tips on how to make the process simpler for yourself.

Why having health insurance is a smart financial move

You could be inclined to view health insurance as a responsibility, similar to your car payment or your mobile phone bill, because health plans include a monthly price. You will have to pay someone for it every month, after all.

Even while health insurance typically requires a financial outlay now, you can view it as a valuable asset because it shields you from having to cover considerably higher medical costs down the road should you require care.

Lower medical bills and fewer surprises

You might believe that you won’t require medical attention for some time. Maybe you’re young and healthy, or maybe you’ve managed to put off going to the doctor a lot up until now. However, a lot of medical demands are unpredictable. You never know when or if you’ll get pneumonia ($187.34), break your arm ($2,500), or find out you have a genetic condition like cystic fibrosis ($131,000 annually).

You benefit from health insurance in a number of ways by paying less out of pocket for these and other services. Your plan bargains lower rates on behalf of its members and contributes to the cost of a portion of these reduced prices. Health plans also place a cap on the overall sum that you will be required to pay for medical expenses each year. That is comparable to a treble discount on medical care.

An overall healthier life

Health insurance not only covers medical costs when you are sick or hurt, but it also lowers your overall medical costs by averting the need for many treatments in the first place. This is accomplished by health insurance, which fully funds preventative care.

Annual physicals with your doctor, tests for depression and alcoholism, and examinations of any worrisome moles that you hadn’t seen until last week are all examples of preventative treatment. With the help of these services, medical issues can be identified early, which will speed up and simplify treatment—or possibly keep you from needing it at all.

Why health insurance costs less than ever before

Health insurance is a cost that many individuals strive to avoid even if it might be beneficial. The premium for your plan, which is the monthly cost, will, however, probably be less than you anticipate.

More people than ever are now eligible for financial aid because to the American Rescue Plan, and more aid is given to those who need it most. In 2022, four out of five Americans will be eligible for Affordable Care Act plans costing $10 or less per month, according to the Centers for Medicare and Medicaid Services.

If you’ve previously thought about purchasing a health plan but were turned off by the cost, you should comparison shop once more right away. What you discover might suit you.

Advance Premium Tax Credits

Advance Premium Tax Credits comprise the majority of the aid that is offered (APTCs). You can apply for an APTC, which is based on your income, when you apply for coverage.

If you are eligible, your tax credit will automatically be deducted from your monthly health insurance premiums, lowering your overall cost without any additional work on your part. If you don’t make the same amount of money every month, like many independent contractors do, the hardest part is accurately calculating your income.

How to properly estimate your income to get the lowest price

Your annual income, or more particularly, your modified adjusted gross income, will determine how much you pay for a health plan (MAGI). Your total income less specific credits and deductions, including business expenditures, self-employed retirement plan contributions, and the child tax credit, is your MAGI.

You’ll have to estimate it because you might not know your annual income until the end of the year. Start with your MAGI from this year or last year, whichever you believe will more closely match your income next year, to obtain an indication of how much you will make. Then, depending on whether you anticipate earning more or less, estimate upward or downward.

It’s crucial to estimate as precisely as you can. Based on your projected income, you must disclose how much Advanced Premium Tax Credit you received when you file your taxes. If you overestimate your income, you can owe more in taxes and be required to make up the difference.

When filing your taxes, you may receive a larger tax refund or have a lesser tax bill if you overstate your income in order to be eligible for more premium tax credits. However, your plan’s monthly cost will increase in the interim. More significantly, paying more now puts you at risk of choosing an unnecessary cheaper plan that doesn’t adequately cover your demands. This might have a detrimental impact on both your finances and your health.

Concerning knowing these tax laws, don’t worry. With the help of questions about you and your company, TurboTax Self-Employed will determine the tax breaks and credits you qualify for. To obtain assistance along the way or to be paired with a dedicated TurboTax Live Self-Employed tax expert with experience in self-employment taxes, you can connect live via one-way video to a TurboTax Live Self-Employed tax expert with experience in self-employment taxes. The English and Spanish-speaking tax experts at TurboTax Live can complete your tax returns from beginning to end or only review, sign, and file them. All in the convenience of your home.

What to consider and where to look for the best plan for you

When selecting a strategy, there are four primary factors to take into account:

Network:

Some insurance policies, such as HMOs, only cover you if you visit their network of physicians, pharmacies, and other service providers. Other plans, like PPOs, charge more when you travel outside the network. Typically, a plan will be less expensive the more limiting the network is.

Plans are categorised into metal levels according on how much of your medical costs they cover. About 60% of your expenses are covered by bronze plans, 70% by silver, 80% by gold, and 90% by platinum. The least expensive plans are called bronze plans, and the most expensive ones are called platinum plans.

Drug coverage:

Whether your medicines are covered and how much you’ll pay for them differs depending on the plan, so be sure to check the formulary, or list of approved medications, for your particular prescriptions. Comparing numerous plans at once might be difficult, but if you use Stride Health, you can enter your medications and find out right away which plans will best cover them.

Doctors:

Not every doctor participates in every health plan. Call the office of the doctor you wish to continue seeing to acquire a list of acceptable insurance policies, then compare those plans. Alternately, enter your doctors’ information into Stride to restrict your search to the plans that your preferred providers accept.

How to maximize your benefits after enrolling in a plan

Use the plan you discover once you’ve enrolled in it. All that recommended preventative treatment can only keep you healthy if you really get it. So make an appointment to see your doctor. If you have more aches and pains than usual, a persistent cold, weight loss objectives, or other problems, it’s the ideal approach to start the dialogue.

Having access to a group of professionals who can assist with your benefits, coverage, or claims questions, like as the Member Experience team at Stride, can help you get the most of your health plan.

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