About Family Health Insurance for the Self-Employed

While being self-employed has many perks and pluses, not having a boss has its drawbacks as well. For instance, you do not have the option of employer-sponsored health insurance. If both spouses are self-employed, the entire family may be uninsured. Fortunately, you do have some options to help you insure your family.

History

While most Americans have probably had the benefit of employee-sponsored health insurance plans their entire lives, that has not always been the case. The first insurance plans in the United States became available during the Civil War era and only covered injuries caused by steamboat or rail car accidents. A group of Dallas teachers formed the first modern health insurance plan in 1929. By the '40s and '50s, health insurance offered through employers was standard.

Function

Family health insurance is insurance that pays at least a portion of medical bills for an entire family. An insurance policy is a contract between an individual and an insurance company, which defines the amounts and types of medical coverage that will be provided by the company as well as the monthly or annual rate that the individual will pay for the coverage. Policies are typically renewable on an annual basis, but may be renewed on a monthly basis--generally at a higher premium.

Types

There are a few different types of health insurance that a self-employed person can choose from. Traditional indemnity plans typically allow you to choose any doctor and seek service without any type of referral. Preferred Provider Organizations prefer you stay within their network of care providers. Health Maintenance Organizations require that you only see the doctors they work with, except in real emergencies. There are also catastrophe plans, which only cover extended hospital stays or other severe situations.

Benefits

Traditional indemnity plans offer low deductibles and office co-pays, flexibility when choosing doctors or procedures, as well as affordable prescriptions, eyeglasses and other benefits. PPOs give you the option to use a network provider for a lower co-pay, and also offer you the flexibility to visit an out-of-network health care provider. HMOs tend to have the least expensive policies, as well as low co-pays and deductibles. Catastrophe plans are generally most affordable.

Considerations

Traditional indemnity plans usually have the highest monthly payments and, unlike an employee-sponsored plan, it might be more difficult to obtain if anyone in your family has a pre-existing condition. PPOs have higher monthly rates than HMOs or catastrophe plans, and you will pay more if you choose an out-of-network provider. HMOs are very strict, usually requiring that you visit your primary care physician before seeking attention from any specialists. Catastrophe plans do not cover office visits, prescriptions or preventive care. Ultimately, you need to decide what you can afford and what your family requires.

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