Health care 101 for Freelancers: What you need to know.  

As a freelancer, you enjoy the freedom to choose your projects and your work schedule. But with that freedom often comes a big question: What will you do about health insurance? And once you start looking at plans, how can you be sure you’re picking the right one?

You may have had group insurance before, either through an employer or a spouse’s plan. Or you might be entirely new to shopping for health insurance and feel overwhelmed. Either way, it’s helpful to understand a few key terms and know what pitfalls to watch out for when finding the best option for your situation.

Health Insurance terms defined: What freelancers need to know

Two plans can look similar but have nuances that make them very different. For example, one plan might have a lower annual out-of-pocket maximum, which means it will cover 100% of your medical costs sooner, saving you thousands over the year. Here are a few key areas to carefully evaluate.

Co-pays and deductibles

A common source of confusion is co-pays and deductibles. A co-payment is a fixed amount you pay at the time of service, while a deductible is the amount you pay out of pocket before your insurance covers your costs.

For example, you might have a $30 co-pay for each doctor’s visit after meeting your $1,500 annual deductible. If you receive a $150 bill for a doctor’s visit and haven’t met your deductible, you’d pay the full $150 out of pocket. Once you spend $1,500 in medical costs to meet your deductible, you’ll only need to pay a $30 co-payment.

Co-insurance and annual out-of-pocket maximums

After you meet your deductible, you may still be responsible for a percentage of your medical costs, which is where co-insurance comes in. Co-insurance is usually a percentage of the cost of a specific service.

For example, if you visit the emergency room and your plan requires 10% co-insurance and you’ve already met your deductible, you’d pay $100 on a $1,000 ER visit. But if you haven’t met your deductible, you’d pay the full $1,000 bill.

Your plan will also have an out-of-pocket maximum, which caps what you’ll pay for covered services in a year. This includes your deductible, co-insurance, and everything else. For example, if your out-of-pocket maximum is $5,000 and you’ve already met your deductible, your insurance plan will typically cover 100% of the costs for the rest of the year.

In-network versus out-of-network care 

Do you have a favorite primary care doctor, dermatologist, or other physician you want to keep seeing? If so, you’ll need to pay close attention to in-network versus out-of-network coverage.

In-network providers have negotiated rates with health insurance companies, meaning lower costs for you and your benefits plan. Out-of-network providers haven’t made these arrangements, which could lead to higher out-of-pocket expenses.

Some plans might not cover out-of-network care at all, while others might offer partial coverage but with higher co-pays or deductibles.

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs)

HSAs and FSAs are both tax-advantaged accounts for qualifying health care expenses, but they have some key differences.

HSAs: This account belongs to you, and the balance can carry over from one year to the next. For example, if you worked with a staffing agency that offers an HSA and decide to leave in the future, you can take the account with you. Or if you saved $1,000 in an HSA last year but only used $200, that’s okay. You can carry over the balance and still access it the next year.

FSAs: An FSA typically belongs to your employer and may have a “use it or lose it” provision. You typically can’t take it with you or roll over balances from year to year. 

Another important consideration is that HSAs and FSAs only work with certain health care plan designs. So, if you already have an HSA and are looking at new health plans, ask: Is this an HSA-eligible account?

Comparing Plan Types 

In addition to understanding what you’ll pay for with a plan (and when), it’s important to know that plan types vary. Some are considered “major medical insurance,” while others offer more basic coverage (also known as “skinny plans”).

Major medical insurance provides comprehensive coverage for a wide range of health care needs, including hospitalization, emergency services, and often mental health care. These plans usually have higher premiums but offer more extensive coverage and lower out-of-pocket costs when you need care.

Skinny plans, or minimum essential coverage plans, offer limited benefits. They typically cover things like preventive care, immunizations, and some generic prescriptions, as required by law. However, these plans don’t cover more substantial medical expenses, such as a hospital stay or ER visit.

One last thing to keep in mind is that not all plans are the same, even if the same insurer provides them. You might think, “Oh, it’s a Blue Cross Blue Shield plan; I’ve had them before.” But the plan you had with a previous employer isn’t necessarily the same as the one you’re looking at now, as plan designs can change based on the insurer’s offerings and the company’s selections.

Do staffing agencies provide benefits? 

Deciding to freelance can be scary, especially when you think you can’t get health insurance through an employer any longer. However, with Aquent, you only need to work 20 hours a week to become eligible for benefits and access group insurance.

This flexibility allows you to work on one assignment or manage multiple ones while still enjoying the benefits and maintaining the freedom that draws many to freelancing in the first place.

Group insurance is usually cheaper because of the cost-sharing between the employee and employer. Plus, if you’re with the right company, you’re not just offered benefits—you’re offered quality benefits, including comprehensive major medical insurance, not just skinny plans.

The bottom line is that navigating health care as a freelancer doesn’t have to be overwhelming. By understanding key terms, exploring your plan options, and knowing you can access group health insurance through staffing agencies, you can choose the path that works best for you and your needs.

Career Advice (4)
Retention Strategies (29)