In California, anyone looking to become self employed or someone who already is self employed will need to consider how and where to obtain quality health insurance coverage at a good rate.
Fortunately, in the state of California, you can obtain COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage as you enter your self employment experience and start your new business. COBRA insurance coverage allows a newly self employed individual the freedom to begin working on a new business or professional project without worrying about the consequences of losing coverage. When you embark on your new self employment venture, you’ll automatically become eligible for COBRA coverage, though it is still a good idea to sit down with your employer’s Human Resources Officer to seek help and advice for making a smooth transition.
If, for example, you fall ill during your COBRA coverage period, then you can still maintain your original coverage by making back payments. COBRA health insurance policies simply reinstate what your employer was providing and then allow you to make up the difference. If you were paying $100 per month to cover your part of the insurance premium and your employer was paying $400 per month for health insurance, then you will be required to pay the full $500 of health insurance coverage per this California law. As a COBRA benefits holder, you are effectively getting access to the cheaper rate your employer has been paying during your regular employment.
There are also many health insurance options available for the self employed in California even if you do not opt for COBRA coverage or if your COBRA period has elapsed. Be prepared to pay a much higher deductible than usual for these types of insurance plans, though you can find affordable premiums if you are healthy, young, and fit. Health Savings Plans or Health Savings Accounts (HSA) are another option to consider. Essentialy, a Health Savings Account will allow you to tuck away a portion of your self employed earnings and earmark the funds for health expenses only. The money can be deducted from your earnings tax free, helping to defray the overall costs of coverage.
Group health coverage is another option to consider for the self employed living in California. Unfortunately, many newly self employed individuals do not qualify for affordable individual plan health coverage because they already have what health insurance companies call a pre-existing condition. In these cases, you may need to locate a group, organization, or other network to purchase insurance at a discounted rate and to avoid problems with pre-existing medical conditions that may disqualify a self employed individual for proper health coverage.