Self-Employed Business Owners and Group Health Plans:

As a self-employed, small business owner, you may want to look into group health insurance as a way to save money on your health care costs. Current regulations state that a business with 2-50 employees is eligible for a group health plan. In addition, there are tax benefits for self-employed business owners with a group health plan.

Thanks to new laws, a group health insurance provider can no longer turn down a small business that is interested in a group health plan. Previously, very small businesses and the self-employed found it very difficult to find a group health plan. This new regulation is called Guaranteed Issue and forces a group health insurance provider to sell a group health policy to any small business, regardless of their size.

There are also new laws in place that are referred to as Guaranteed Renewal. This means that a health insurance company cannot refuse to renew your policy, even if you become ill and become a burden on the insurance company. Your policy can only be cancelled by the insurance company if you are guilty of defrauding the insurance company or if you have not paid your premiums.

If you do not have another employee besides yourself, there are still ways that you can join a group health plan. There are specific types of group health insurance plans that are referred to as an association health plan. These are usually offered through a trade or credit union and provide members who would not otherwise be eligible with the benefits of a group health plan.

If you are eligible for a group health plan, you can contact your insurance representative to begin the process of selecting your plan. The insurance company will have to provide you with all of their available group health plans, regardless of the size of your business. This prevents insurance companies from “hiding” beneficial or cheaper plans from small business owners.

You may want to consider finding a group health plan that is HSA eligible. Health savings accounts are a great way to make tax-free contributions and tax-free payments for health care needs. A health savings account provides you with a way to put money aside and earn interest on this money, tax-free. This money can be used to pay for health insurance premiums, prescriptions and medical services. Your payments are also exempt from income tax, making this a great way to pay for your health care needs and save money on your taxes.

In order for a group health plan to be HSA eligible, it will need to have a deductible that is higher than $1000 per year. In addition, an HSA eligible group health plan cannot charge a co-pay for medical services. Although you will have to meet a higher deductible each year, the tax savings can more than make up the difference, making this a strong alternative to lower-deductible health plans.

If you are self-employed and have more than 20 employees, you will need to provide COBRA coverage for your employees. This means that if they are terminated or leave your employ, you will need to continue to provide them with access to your group health plan for a specific amount of time or until they find a new plan. You will need to check with your insurance representative for more information on COBRA requirements and regulations.

Being self-employed doesn’t mean that you can’t have access to the savings and tax benefits of a group health plan. As long as you have more than 1 employee, you are eligible for group health coverage.


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