Affording Your Health: A Guide to Texas Health Insurance for Self-Employed Workers

Health insurance—it can be a burden for people to try to cover this cost themselves. 

Depending on your age, it can be over $700 per month in Texas. 

If you are self-employed, this cost may be an even bigger burden to you. So, how do you find affordable Texas health insurance? What are the biggest things that you should look out for? 

Read on for a guide on Texas health insurance for self-employed workers. 

COBRA Coverage

The first thing that you should be aware of when it comes to healthcare in Texas is COBRA. This is especially the case if you are newly self-employed. 

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act. This was established in 1985, and it allows people to continue their previous health insurance plan for a temporary period. 

This period lasts up to 18 months and allows you to keep some of the healthcare benefits that you had with your former employer. These benefits include medical, dental, vision, and more. 

However, there are a couple of catches if this is the route you want to go this route. 

The first one is that there is an additional fee on your premium. You have to pay an additional 2% fee to the ERS. 

Second, you need to think about what you want to do with Medicare in the future. The reason for this is that if you continue to take COBRA benefits before you are eligible for Medicare, you are going to have to enroll in the latter as soon as you are eligible. 

This is a big deal for some people because there are people that choose to delay enrollment in Medicare to get more benefits per year. So, you need to think about your long-term healthcare future before you sign up for COBRA. 

Short-Term Health Insurance 

Another option you may consider is signing up for short-term health insurance. These types of plans are good for people who are in a transition period or those that are only working a temporary job. 

For you, self-employment may only be temporary until you find another employer. If this is your situation, then there is no reason to lock into a long-term healthcare plan if you are not sure if you are going to use it that long. 

If you end up needing one of these plans in Texas, the coverage usually lasts under one year. However, this can extend up to 36 months if need be. So, if you see your current situation lasting less than three years, this may be a route that you want to consider. 

Spouse’s Plan 

Are you married to someone that has a full-time job? If the answer is yes, you could be eligible for their healthcare plan. 

Depending on your spouse’s plan, you may be able to join their healthcare plan as an immediate family member with ease. Most of the time, these types of plans do not see a significant raise in health insurance premiums from your prior situation. You may even get a discount because you are now covering multiple family members under the same plan. 

Talk to your spouse about this and get an idea of what kind of healthcare coverage they get. If they have coverage that fits your needs, this could be the easiest solution while you are self-employed. 

Determine Your Income 

The start of your self-employment journey may be a rocky one. It could mean a year where you have a lower income or you may not have a clear idea of what your income is going to be for the year. 

Well, depending on what your total monthly and yearly income is, you may be eligible for Medicaid. This is for people that meet a certain income threshold. 

Part of this is going to depend on what kind of household situation you have. Single people and heads of households are going to have lower maximum income thresholds than those that have dependents. The maximum income increases depending on the number of kids that you have. 

Review your household situation and see if you qualify for Medicaid. If you do not make enough income to go above that threshold, then you can get healthcare coverage for free until you increase your income. 

Look Into Tax Benefits 

Finally, as someone who is self-employed, you may have more tax benefits for your healthcare than the average W2 worker. This is especially the case if you are paying for your health insurance yourself. 

For example, let’s say that you are paying about $250 a month in health insurance premiums. That would add up to $3,000 for the year. 

In that situation, you may be able to deduct that $3,000 in payments off of your total income. So, if you made $50,000 for the year in net income, only $47,000 of that would be taxed here. Speaking to a tax professional may help you get even more tax benefits. 

Get Texas Health Insurance 

These are some of the biggest things that self-employed people should know about Texas health insurance. For those of you that are overwhelmed, know that getting coverage on your own is easier than you think. 

If you struggle to get your business going, you can use Medicaid. For those that want more time to look into other options, COBRA or short-term health insurance may be your best bet. 

However, you may be someone who is fully committed to self-employment. If so, get a quote here to find out the cost of the best health insurance coverage for you.