Pa medical plans for self-employed persons are available to residents of Pennsylvania at very affordable rates. If you are an independent contractor, or work for yourself, live in Pennsylvania, and pay for your own healthcare, many of the bigger insurers in the state provide low cost plans that will provide the coverage you want at a price you can afford to pay.

Small business owners can easily find competitive options that could potentially save thousands of dollars each year. And usually these options cost much less than COBRA rates. Operating a small business is not easy, so we try to help as much as possible. Note: If you are self-employed but have no active employees, you and your business are not considered an employer.

Obamacare Affects The Self-Employed

It’s hard to believe, but almost 50 million persons in the US are working for themselves. Perhaps you’re one of them. An independent contractor or a part-time employee with another job on the side. Obviously, some businesses are quite larger than others. But providing affordable medical coverage always seems to be one of the biggest challenges. Regardless if  you live in a large city such as Pittsburgh, Philadelphia, Harrisburg, or Reading, or a smaller town such as Mt. Lebanon, Hershey, Chambersburg, or Dillsburg…Finding low-cost medical coverage is always a priority.

And to further complicate the situation, in 2014 laws and regulations changed and a penalty began to be imposed if you don’t own current coverage. If you’re on Medicare, you do not have to pay this tax. As a Senior, you may find helpful information on this web page in our site, even though most of the legislation does not impact persons over the age of 64. Medicare Supplement and Advantage plans have remained largely unaffected by the Affordable Care Act. Note: Effective 2019, the tax penalty ended. Therefore, purchasing “qualified” coverage is no longer required.

Since we study and understand these changes, we can provide useful and valuable information that could help you lower your costs. The “Affordable Care Act” impacts all of us, including the establishment of “Exchanges” which we will help you navigate through so you can purchase the correct coverage. “Metal” plans have replaced many of the popular policies that were available ten years ago. Previously-held grandfathered plans have disappeared.

Popularity Of HSA Plans

Perhaps the most popular and cost-effective option for  coverage is a Health Savings Account (HSA). An HSA is a tax-advantaged savings account that is utilized with a qualified high deductible health insurance plan (HDHP). As an alternative to traditional programs, current medical, dental and eye expenses, along with other qualified expenses, can be paid for on a tax-free basis. This type of coverage is a great way to retain comprehensive benefits, and still keep your premium fairly low. Group HSA plans are offered through many employers.

It is extremely flexible and you can start or terminate the account at any time. You never “lose” any funds at the end of the year and you can determine how you wish to invest the money you are not using. For instance, you could choose an aggressive portfolio, and possibly realize large rates of returns. Of course, this option increases your risk for potential losses. Often, a carefully-researched blend of mutual funds can offset some of the risk. The 2024 minimum HSA deductibles are $1,600 (single) and $3,200 (family). Many HSA options are offered in all Pa counties.

HDHP

The HDHP portion of the Pa HSA is simply a catastrophic policy that is issued by an approved insurer. The plan must be “HSA-eligible” and typically will provide 80%-100% coverage once the deductible has been met. Preventive benefits such as routine annual physicals, mammograms, colonoscopies and children’s wellness visits are not subject to the deductible. Other expenses will receive a “negotiated discount,” that will lower the out of pocket costs.

These discounts are usually 10%-25%. However, selected expenses may receive discounts up to 80%. Diagnostic tests often receive a substantial price reduction. Lab fees also typically receive a very large discount, especially from stand-alone facilities. It would not be unusual to see the cost of an MRI reduce from about $1,000 to $650. Even common procedures, such as an appendectomy, tonsillectomy, and hysterectomy would be priced much less.

Contributions

Self-employed persons may contribute to an HSA with after-tax dollars and take the “above-line” tax deduction. However, contributions to the HSA cannot be made on a pre-tax basis and deductions cannot be taken for SECA purposes. Also, your tax filing status (separate or joint) does not affect contributions. Any contributions deposited into the account do not necessarily have to be used the year the deposit was made. The HSA contribution limit is $4,150 (self) and $8,300 (family).

You can wait quite a few years and still have access to your money. And you can freely withdraw your funds at any time. There are also multiple choices you have regarding investing any excess funds that you have accumulated including fixed and variable options. The bank that handles the savings portion can advise you which funds are available. You can also utilize your own financial adviser or self-manage your funds. Of course, diversification of assets is typically a good long-range plan.

There have been a few changes that began in 2013 and are still impacting plans now. For example, drugs without a prescription can no longer be deducted. This includes many over-the-counter drugs along with vitamins. Also, interest rates have remained at historic lows, so your “fixed account” rates of return (extra funds in your HSA) are quite safe, but not generating much extra income.

Specific Plans

Some of the most affordable and cost-effective plans (under age 65) throughout the state are: Ambetter Choice Bronze + HSA, Cigna Connect Bronze HSA  6400 Indiv Med Deductible, Highmark my Blue Access PPO Bronze 7100 HSA, Independence Blue Cross Personal Choice EPO Bronze Reserve + HSA Eligible,  and Oscar Bronze Simple HSA. More options may become available in future years. The maximum contribution allowed will also be increasing.

Remember that you do NOT have to contribute extra funds into an HSA. You can elect to utilize the major medical benefits and network negotiations without taking advantage of any tax benefits. And at a later date, you can add the “side fund” that provides these tax breaks. The investment portion of the policy can change without having to change healthcare companies. There are always numerous banks that will provide the needed account.

Catastrophic Options

Catastrophic  plans are also available that are not HSA-eligible. Many Pa self employed persons utilize this type of coverage to keep premiums extremely low. While major medical claims are covered after the deductible, typically there is very little (or no) coverage for office visits and prescriptions. Deductible options used to from $250 to $10,000, with $2,500 and $5,000 the most popular choices. However, when Obamacare was implemented, a major change occurred.

“Catastrophic” Marketplace plans (during Open Enrollment) are now only offered to persons under age 30. If you are 30 or above, you may possibly be able to purchase this type of policy if you “can not afford premiums” of other Metal plans. Specific enrollment guidelines determine eligibility.It is possible that an income or change in number of family members could allow you to become eligible.

Preventive benefits, however, are provided without having to meet coinsurance or waiting period restrictions. Under the new Exchange plans, a “Bronze” contract comes the closest to matching “catastrophic” benefits and cost. if you otherwise can’t meet the age or income requirements. A subsidy, if you qualify, will lower your premium.

For example, a 40 year-old earning more than $40,000 per year and living in Westmoreland County, will pay only $10 per month for the cheapest Bronze policy (Highmark Together Blue EPO Bronze 8900).  A family of four with a household income of $100,000 will only pay $60 per month for the same plan.

Pre-Existing Conditions

If you have a pre-existing condition, you can still obtain coverage. Existing medical issues no longer cause a denial of coverage. A combination of serious conditions still will not be met by your application being canceled. Before 2014, the Pa Risk Pool was the only option. But it’s always best to check with a broker before you submit an application. Your conditions may be treated differently, depending upon the selected plan.

Eleven years ago, the Pa state insurance Exchange began to offer coverage regardless of any existing medical condition. Depending on your household income, consumers became eligible for a tax credit, which is the same as the subsidy previously mentioned. Since this subsidy is determined by the total number of household members and your modified adjusted gross income, you should recalculate the figures each year to avoid paying a penalty the following year.

We understand the challenges of looking for affordable health care when you work for yourself. We’re committed to helping you find the plan that best matches your request. If you’re trying to stay on a tight budget, there are some attractive policies that should help you. We specialize in finding low-cost medical coverage for the self-employed in Pennsylvania and we are confident we will save you money.