Avoid this expensive self-employment health care coverage error

Avoid this common and costly self-employed medical care insurance mistake
If you are a person who has recently started a business and need health care insurance coverage, you probably have several options and it may be tough to determine which choice is best for you. You may have the option of keeping your COBRA coverage from your most recent job, you may be able to get coverage through your spouse's place of employment, you may be able to get coverage on your own as an individual and you may have the option of buying a medical insurance policy through your business.

The biggest error you can make is to believe that all of the choices are equal or more or less equal. Often a newly self-employed person will accept their COBRA option or the options offered through their spouse's place of employment and never shop around to see if they could get a better price or policy. This is understandable. It is hard to start a business and taking the easy way out regarding your health insurance allows one to devote more time to other business-related decisions.

As reasonable as this is, it is a error because it can be very costly. The most costly option available that will cover you well will probably cost twice as much as the least costly choice.

Each choice listed above has its pros and cons. For this reason, the best option for you may not be the best choice for someone else.

Accepting the COBRA choice from a previous place of employment has the advantage of allowing you to stay with your present policy. It also requires the least amount of paperwork and no medical questions.

There are, however, two major drawbacks. The first is that the policy is a short term solution. This means that when your COBRA eligibility ends, you will need to find another answer. If you have an accident or get diagnosed with a significant illness between now and then your choices for other health care plans may not be as good as they are today. The second drawback is the likelihood that this alternative is one of the more pricey alternatives.

Another option you may have is to get your a medical insurance policy through your spouse's place of employment. This can be a good alternative. However, many employers are now only subsidizing the cost of their employees' health care coverage and not the cost of their employees' dependents insurance. This can result in a higher cost than you might get from one of the other options.

Another problem with purchasing coverage through your employer's plan is that your coverage will end when your spouse's employment does. It can also end if his or her employer sponsored health care policy decides to stop offering health care insurance coverage to its employees.

Buying coverage through your business is another alternative. However, do not expect a group insurance discount. Group insurance costs more than the typical policy you can purchase on your own. The reason for this is that group insurance contracts typically have to take all comers. This forces the insurance company to charge more for these policies than a policy you can acquire on your own.

The best option for most people who have one-person businesses is to sign up for a medical care insurance policy as an individual or as part of a family plan. If you have medical issues that prevent your purchasing a policy on your own, one of the other options will probably be better for you. However if you are in good health care, you will probably be much better off with a policy you acquire on your own.

The author, Alston Balkcom, has an insurance agency in Connecticut and focuses on CT health insurance and Life insurance in Connecticut