Moving from a full-time job working for someone else to starting a freelance business is the dream of many. But before you make the switch there are a lot of things to think about: health insurance being one of them.
If you were taking advantage of your employers health insurance benefits, be ready for sticker shock when looking at plans meant for independent workers such as freelancers. In the United States, finding and paying for health care has been an issue for many home-based business people, and many go without because of the price tag.
Freelancers don’t have easy access to affordable health care, and they don’t have paid sick days, either. And even some small businesses don’t offer health insurance as part of their employment package any more. But going without is soon going to be against the law.
The Affordable Care Act (or Obamacare, depending on what side of the fence you sit on), means that all people not covered by an employer sponsored health plan or public insurance program must purchase an approved private insurance policy or pay a penalty.
The good news? Supposedly there will be a marketplace where individuals and small businesses will be able to compare policies and buy insurance from whomever they like, and will be able to get subsidies if they purchase insurance from these health insurance exchanges. The bad news? The government is taking money out of our pockets.
According to this blog post, freelancers who live in New York, New Jersery, or Oregon will have a new option when it comes to getting insurance coverage, thanks to a partnership between the Affordable Care Act and the Freelancers Union, a nonprofit made up of over 170,000 members who are independent workers.
The Freelancers Union was just awarded $340 million in low-interest and no-interest federal loans from the U.S. Department of Health & Human Services to launch nonprofit, consumer-driven health plans in those three states. These plans, called CO-OPs, provide a model for the new healthcare system that is steamrolling our way that is more affordable, accessible, and responsive to the needs of workers. Enrollment starts in the Fall of 2013 with benefits starting in January 2014.
CO-OPs bring back the classic meaning of “insurance” for the new economy: workers joining together to build collective security and mutual support, free from the tethers of the profit-driven health insurance industry. “It’s like venture capital for healthcare,” said Sara Horowitz, Founder and Executive Director of the Freelancers Union in a press release. “By empowering nonprofit social entrepreneurs to compete with private insurers, CO-OPs provide a powerful new tool to bring more affordable options to the most people.”
The Freelancers Union, which is free to join, already provides health insurance to 23,000 New York members and their families. Their individual plans currently range from $225 to $602 per month.
The number of freelancers and people running a home-based business has only increased over the years, thanks in part to technology that has made it easier to do business just about anywhere. The Freelancers Union estimates that there are 42 million freelance workers in the U.S.—that’s 30% of the entire workforce. And that’s a lot of people who are going to need to get health insurance if they aren’t already covered on their own or by their spouse.
Last year, the Freelancers Union conducted a study that found that more than 80% of the 3,000 freelancers surveyed were unemployed or underemployed in 2009. And the economy hasn’t gotten much better. Without access to the same benefits as traditional workers, freelancers are forgoing buying health insurance because they just don’t have the money to do so. Thirty nine percent of those surveyed said they had to cancel or cut back on their health care coverage.
Recently, New York City council speaker Christine Quinn announced a “flagship clinic” that would offer affordable health care for the hundreds of freelancers who live in New York City.
“This kind of creative health care model has the power to connect more New Yorkers to primary care, take some of the burden off of struggling hospitals and strengthen our non-profit healthcare system,” Quinn said in her speech.
There are no specifics yet, but the Council has agreed to pledge $100,000 for the Freelancers Union to open its first clinic in Brooklyn as early as this summer. Subsequent clinics would then be added in each borough totaling five in all.
Is this a step in the right direction? YES! Once all of these clinics are running, they will serve about 50,000 New York City Freelance Union members a year.