The ins and outs of Health Insurance when You're Self Employed

If you are self employed and looking for health insurance, you may be in for a rough ride. Since you don't have the benefit of a company program to pay for part of your insurance, you are looking at an expensive and possibly frustrating prospect ahead. Before you rush out and spend all your savings on the first policy you find, there are some basics you should know.

Like where to find health insurance. Try the Internet for starters, it'll give you a basis for comparison of various types of plans available, and even rates, on some sites. Low-rate plans may look attractive at first sight, but not so good when take a closer look. They could demand more in deductibles, or exclude your personal doctor from their panel. So take your time to assess the plans and what they offer before you choose a health plan, and before you sin on the dotted line.

And when you're researching health insurance plans, you might come across some terms that explain benefits of a plan for the self-employed person. These benefits are a great aid when it comes to selecting a suitable plan. But what do they mean?

HMO. You will hear this phrase quite frequently. HMO is a managed care plan, often costing less than a PPO (see following paragraph) but that has more exclusions. In addition, it carries a low rating. Most HMOs stipulate that you have a primary care provider who is responsible for referring you to specialists if necessary.

PPO. This type of insurance plan is one that offers you wider choices within a network. You can see ay provider in the network (most companies have a very wide network) and they are very handy if you happen to fall ill while traveling. You can go outside the network, but you will have to pay a little more up front to do this. An EPO is similar, but there is no coverage outside the network (this usually isn't offered to the self employed anyway).

Co-Pay. This is the money that is paid up front and usually ranges from $15 to $25. A variation on this is to pay 20% of the bill until you reach your deductible. Thereafter you pay nothing or a very nominal co-pay. Many plans have different co-pays depending on whether you make an office visit, an emergency room visit or are buying prescription drugs.

The term deductible refers to medical expenses you have to meet from your own resources. Your co-pays do not count as deductibles, but on a 20% option, office consultations do. And like insurance on your vehicles, a big deductible attracts smaller premium amounts.

Once you have identified your needs, look at the various scopes of coverage on offer. For example, is maternity, chiropractic visits or mental health care covered? Do the benefits of the plan adequately cater to your needs? In the end you may not find the perfect health plan, but you can come pretty close.

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