Seven Things Gig Workers and Freelancers Should Know to Get Health Insurance Before It’s Too Late

By George Kalogeropoulos, CEO, HealthSherpa

There has been ample conversation this week about why enrollments in ACA-compliant coverage obtained through healthcare.gov are down more than 10 percent from the same time period during last year’s open enrollment period (OEP). Top reasons given are the removal of tax penalties for the Individual Mandate, increased availability of such low-cost alternatives as short-term health plans, and steep declines in the government’s marketing budget pertaining to ACA coverage.

All of these variables are likely to prove impactful once we are through the 2019 Open Enrollment Period (OEP19) and have a chance to take a closer look at them. But while we’re in the final stretch and finding coverage for everyone who’s eligible is critical, we want to focus on a group that may be at greater risk of getting the wrong coverage or missing out altogether — 1099 workers, AKA the “gig economy.”

Why would these workers be at greater risk? Often, 1099 (which refers to the tax form they receive for contract-based employment) workers have multiple jobs but none qualify them for company-sponsored health coverage. So, they’re on their own to navigate a process that’s very complex and potentially costly if you don’t know where and how to look.

As a Web-Based Entity (WBE) that sells only ACA-compliant plans through our private marketplace (and that recently became the first and, to date, only private marketplace where you can complete your entire ACA enrollment outside of healthcare.gov), we at HealthSherpa have a unique perspective on these variables and how they may impact gig workers.

Here are seven things that freelancers and gig workers should ensure as they get out there and get covered before it’s too late!

You MUST enroll by December 15 in most states. ACA coverage, like most employer-based coverage, requires you to enroll during an annual open enrollment period (OEP). That means that in most states you have until midnight Saturday (here’s a list of deadlines by state). After that, only a change in life status, like having a baby, qualifies you to pick up coverage before 2020. You may have heard that you can enroll in a short-term health plan anytime throughout the year. That’s true but if you want to enroll because you’ve become sick or had an accident, don’t expect to get it because short-term plans can deny coverage based on pre-existing conditions.

Most people qualify for subsidies. According to healthcare.gov (and our own) enrollment data, nearly 90% of customers shopping for individual health coverage qualify for a subsidy to help pay their monthly premium, and nearly that many also qualify for cost-sharing reductions (CSRs) that help reduce their out-of-pocket costs when they have to use their insurance throughout the year. The ACA provides subsidies for people who make up to 400% of the FPL annually. That equates to $48,560 for an individual, $100,400 for a family of 4, and $169,520 for a family of 8. Gig workers tend to have income that would qualify them. If you are young and single and killing it with your income, then congratulations but it will unfortunately impact what you pay for insurance. But more than half of HealthSherpa customers find quality plans with a monthly premium of less than $31.

Use reliable websites and brokers/navigators. About two-thirds of states use healthcare.gov or a Certified enrollment partner like HealthSherpa for their coverage. The rest have a “state-based exchange” (although HealthSherpa has registered agents that can help you get covered in most of those states as well. To see your options in your state, check out this list on healthcare.gov. And always be sure you’re going with a reputable source. Robocall scammers are a serious problem and you should never enroll based on a recorded message you received.

Beware of plans that aren’t ACA-compliant and those who try to get you to buy them. The Trump Administration expanded the availability of short-term plans to individuals this year. Some brokers are offering them exclusively or selling them first because they can be less expensive than the pre-subsidy rate for ACA-compliant plans—and because brokers get paid more to sell them. But they are NOT comprehensive health coverage — they’re more like cut-rate, collision-only auto insurance that only helps you if you get hit by a bus. ACA-compliant plans offer mental health coverage, maternity care, prescription drug coverage, annual physicals, and free flu shots, among other things and all mandated. Short-term plans offer none of those things. Make sure you know what you’re buying and look for disclaimers, or just ask the broker you’re using, about whether a plan is ACA-compliant.

Know your income. Technically, your subsidy is an “advanced premium tax credit” (APTC), meaning your annual taxes are being diverted to pay a portion (or all) of your health insurance premium. Contract workers may not have consistent income, which can make it tougher to estimate what you may make in the coming year. But you are likely more familiar with how to claim deductions and expenses that can reduce their income and increase the subsidy amount(s) for which you qualify. Be honest about your income but also don’t be too conservative about your income so you don’t miss out on lowering your healthcare costs.

Compare cost and coverage levels. Individual coverage is organized into metal-level tiers that let you know what you’re getting for your money: Platinum (best), gold, silver, and bronze. For most people’s personal health circumstances, silver is more than adequate coverage, which is why it’s selected by about three-quarters of individual market customers. But read the “plan details” before making your final selections to ensure you’re getting what you need for your personal needs. If plan details aren’t available where you’re shopping, find somewhere else to shop!

Look beyond premium costs alone. There are many variables to consider when looking at your insurance, so don’t just find the lowest-cost plan and call it a day. You will also want to look at deductible, which is what you pay out of your own pocket before your insurance kicks in for a lot of services; the copay, which is how much you pay vs. how much your insurance pays for things like doctor visits and prescription drugs, and coinsurance, which is how much you may pay vs. your insurance even after meeting your deductible. Look for sellers who have “decision support tools” that help you see the differences in what you might spend out-of-pocket (i.e. beyond the monthly premium) if you have a medical event.

Health insurance is a critical part of both your physical and financial well-being. Don’t miss your opportunity to protect yourself and your family in 2019 and beyond!

(If you’re ready to enroll, please visit us at HealthSherpa.com.)