Starting your own business is already a stressful affair, and adding healthcare into the mix does not alleviate any of the pressure.  Thankfully there are coverage options for young entrepreneurs that will fit the lifestyle of you and your business.

Starting Out

It is unlikely you will be making steady income when you first start your business.  Begin by estimating your annual income to determine how much money you can save through tax subsidies offered by the government to help pay for healthcare.  This is not an easy task when you are starting out, however you can always update your annual income.  Take a look at this website can help you through the process of estimating your income.

You may qualify for Medicaid when you start out, allowing you the opportunity to have low-cost or free health insurance.  Like Marketplace health insurance, this is adjustable if your annual income fluctuates.  Some states have expanded Medicaid coverage, which allows you to qualify on income alone.  Generally, the average income for an individual is $16,500 annually, and $22,000 for a married couple with a child.  Your child may qualify for insurance through the Children’s Health Insurance Program (CHIP).

In the event your small business has employees who will also need coverage, make use of the Small Business Health Options Program (SHOP).   This provides coverage for you and any employees on your payroll.  Also, you may qualify for a special tax credits worth upwards of 50% of the premium cost if your business has only a few employees.

If you are Leaving Another Business

There are options for obtaining coverage if you leave a job that provided your insurance to start your own business.  There is always the Consolidated Omnibus Budget Reconciliation Act (COBRA), which is a law that requires businesses to continue coverage for group health plans.  However there are options that may be better suited for you when you see the full price tag for your health plan post-employment.

You can apply during Open Enrollment from November 1st until January 31st 2017.  About eight out of ten people with Marketplace coverage are eligible for subsidies, which costs around $50 – $100 monthly.  Special Enrollment is also an option for you if you lost your job and it is within 60 days.

The catastrophe plan is an option if you are looking for an affordable option that is focused around protecting you from worst-case scenarios.  These plans carry cheaper premiums but very high deductibles.

Something to be aware of is the “One Catch clause”, which boils down to if you are claimed as someone’s tax dependent – then you will not qualify for saving on a Marketplace plan.

The Penalty

You are required by law to have health coverage that meets the minimum requirements that is set by the Affordable Care Act.  The penalty you could face in 2017 is the higher cost between 2.5% of the household income or $695/adult ($347.50/child).

I understand the difficulty of starting a business, and health insurance is a priority for you and your employees.  Make sure you pick the right plan for yourself, which you can do by checking out the estimated cost of your insurance plan based on your region and income.  You may benefit from a healthcare broker or navigator; free help is available here.

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