Self-Employment and Health Insurance: Are Group Plans Worthwhile?

According to the U.S. Census Bureau, self-employment grew from 17.6 million in 2002 to over 18.6 million in 2003, a 5.7 percent growth rate, and in 2005, the number rose to 20 million. The U.S. lost 600,000 jobs in January 2009, the highest loss in 16 years, according to the U.S. Department of Labor. Now if self-employment is rising while we're in a recession, how are these entrepreneurs able to afford the rates?

There are multiple ways to get deals on health insurance when you are self-employed or not working for a traditional employer that deducts money from your paycheck. If a self-employed person is in college, there are healthcare deals for undergraduate and graduate students. It is also possible to be added to your parents' healthcare plan as long as you can provide proof that you are attending school for a required amount of hours. Visit the student accounts department or the local health facility at your college or university for details.

If a self-employed person is married, he can ask his wife to add him to her health insurance policy. Or, if a self-employed person is still under the age of 21 (some companies have varying ages), even if she is not in school, then a parent can add her to the parent's policy depending on the healthcare company.

But what some self-employed people don't realize is that they can save some extra money if they add just one other person to their health insurance policy. With Blue Cross and Blue Shield's small group plan, the additional employee must work full time with a minimum amount of 30 hours per week. In the case of Illinois BCBS, 51% of the eligible employees must reside in Illinois and no more than 24% may reside in Wisconsin. A minimum of 50% of employees working 30 hours or more per week have to participate in the group plan, so if the second employee decides to go with an alternate plan, group insurance won't work. However, if at least two of four employees will get the insurance, then a person can be eligible for this small group plan.

A test run of a 27-year-old single female who gets individual insurance would pay a minimum of $328.83 to $392.21 with a $20 co-pay. However, with group rates for an additional employee who is 28 years old; single; and female, the numbers are slightly smaller--$313.22 monthly with a co-pay of $20 and the rates continue to decrease according to the deductible. Other considerations apply--such as age; smoking habits; whether the employees are on Medicare; and coverage of other family members--and will make these rates vary.

So if you are working for an entrepreneur, need health insurance, and you two (or more) have the ability to set the money aside for health insurance without going to outside sources, check with your local health care provider today to see if you can get better rates. Without health insurance, you risk an emergency happening and not being able to turn to anyone to help you with these bills. And paying full rates versus a deductible will leave your wallet empty.