Entrepreneurs Need Health and Disability Coverage

Health and Disability Insurance for the Entrepreneur

One of the greatest concerns a self-employed entrepreneur has is finding affordable health insurance and often, as well, disability coverage. There are myriad decisions to make and a vast number of insurance companies to research. One way to research the companies in your area would be to call and request a benefits and coverages booklet so you can take a look at what they have to offer at your leisure. You could also look to the Internet to do this type of research.

Be sure to research the companies for a variety of issues such as the following:

1. Annual premium
2. Costs of policies with higher deductibles
3. Costs of policies with lower deductibles
4. Drug coverage benefits
5. Hospitalization
6. Dental and/or vision benefits
7. Waiting period for pre-conditions
8. Co-payment(s) for office visits

A business owner needs to also strongly consider purchasing disability insurance; like unemployment benefits, disability is not automatic for an entrepreneur. But the coverage can be essential in covering expenses should you be unable to pay them yourself. An individual policy can cover many options and help you immensely in the face of a disaster that renders you unable to work and run your business.

A disability policy needs cover the following:

1. Coverage of most/all daily expenses
2. Coverage of most/all routine monthly bills
3. Coverage of most/all auto payments and insurance premiums
4. Coverage of most/all weekly/monthly groceries and transportation costs

Be sure you shop and investigate costs and coverages as much as time allows to find the best insurance at the best rate. You never know when something might happen; you want the best coverage possible, just in case!

Understanding Health Insurance Selection Process

1. DOES YOUR PLAN COVER YOU ON AND OFF THE JOB?

Numerous health insurance plans have specific exclusions that eliminate your benefits for anything that could have been covered under Workers Compensation or similar laws. Now read that last sentence again.

COULD HAVE BEEN covered!?

That is correct. Most self-employed individuals and even some small business owners do not carry Workers Comp on themselves.

There are insurance policy plans that are designed to cover you on and off the job 24 hours a day, if you are not required by law in your state to have Workers Compensation coverage.

2. ARE YOU WRITING IT OFF?

Independent contractors (1099s), home-based business owners, professionals, and other self-employed individuals generally are not taking advantages of the tax laws available to them.

Numerous individuals who are paying 100% of their own costs are able to deduct their monthly insurance policy payments and just don’t know it. This alone can reduce your net out-of-pocket costs of a proper plan by as much as 40%. Ask your accounting professional if you are eligible and/or check out the IRS website for more information.

3. INTERNAL LIMITS

All true insurance plans use some form of internal controls to determine how much they will pay out for a particular procedure or service. There are two fundamental methods.

Scheduled profits

Many plans, some of which are specifically marketed to self-employed and independent individuals, have a clear schedule of what they will pay per doctor office visit, hospital stay, or even limits on what they will pay for testing per 24-hour period. This structure is normally associated with “Indemnity Plans”. If you are presented with one of these plans, be sure to see the schedule of benefits, in writing. It is essential that you understand these types of limits up front because once you reach them the company will not pay anything over that amount.

Usual and Customary

“Usual and Customary” concerns the rate of pay out for a doctor office visit, procedure, or hospital stay that is based on what the majority of physicians and facilities charge for that particular service in that certain geographical or comparable area. “Usual and Customary” charges represent the highest level of coverage on most major medical plans.

4. YOU HAVE THE ABILITY TO SHOP!

If you are reading this, you are plausibly looking into purchasing a health plan. Every day individuals shop for everything from groceries to a new home. During the shopping process, generally, the buyer evaluates all the value, price, personal requirements and general marketplace. With this in mind, it is very disconcerting that most people never ask what a test, procedure, or even doctor visit will cost. In this ever-changing health insurance policy market, it will become increasingly primary for these questions to be asked of our medical professionals. Asking about price will help you get the most out of your plan and reduce your out-of-pocket expenses.

5. NETWORKS AND DISCOUNTS

Almost all insurance plans and benefit programs work with medical networks to access discounted rates. In broad strokes, networks consist of medical professionals and facilities that agree, by contract, to charge discounted rates for services rendered. In Numerous cases the network is one of the defining attributes of your program. Deductions can vary from 10% to 60% or more. Medical network rebates vary, but to secure minimum out-of-pocket expenses, it is imperative that you preview the network’s list of physicians and facilities before committing. This is not only to secure that your local doctors and hospitals are in the network, but also to see what your options would be if you were to need a specialist.

Ask your agent what network you are in, ask if it is local or national and then find out if it meets your own personal claims before you buy!

Qualifying for Short-Term Disability

Oftentimes employees who need a brief break from work-related duties due to a particular medical condition or an injury are eligible for short-term disability benefits once he or she has depleted all of the sick leave to which he or she is entitled.

Many employers will provide their employees with short-term disability benefits of between 50-70% of his or her salary during the necessary leave of absence, however, larger employers may pay as much as 100% based on the employee’s length of employment. A typical short-term disability plan will pay benefits for a period of 13 to 26 weeks. This benefit will usually be computed as a percentage of gross weekly salary (without commissions, bonuses, or overtime).

One form of short-term disability is the Family and Medical Leave Act (FMLA) – The federal law provides job protection for those who must take time off for medical reasons. This law applies to all employees who are employed by a company with 50 employees or more in the “same geographical area.”

Basically, any employee who needs to attend to their own medical condition or take time off to care for a spouse, child, or parent for a medical reason is protected under the law if he or she was an ordinary employee working for an employer for at least twelve months or 1,250 hours in the most recent year.

A worker returning to his or her position after taking FMLA leave retains his or her job title, with the same benefits, pay, seniority level, and working conditions prior to the leave. The benefit is available for a maximum of only twelve weeks per year, but do not have to be taken consecutively.

Both state and federal short-term plans can offer income when you need to take a temporary leave from work, while at the same time they can guarantee the protection of your job and its entitlements.

To know more about the short-term disability benefits that may be available to you, a consultation with a short-term disability lawyer can provide you with the information you need.

Home-Based Business Insurance Decisions Are Important

When you are just beginning your home-based business purchasing insurance coverage for yourself and your family may not be one of your priorities but it is unwise not to make it such. If – or more likely WHEN – disaster strikes, having insurance will make the difference between your business’s success or its failure.

Though you may not require every type of insurance listed here, take the time now to consider your insurance needs; it will save you money as well as headaches down the road. Ultimately, the best way of determining your needs is to consult with an insurance agent. Explain the details of your business to him or her; he or she will then be able to determine what the best coverage will be for you and any employees you may have.

Health Insurance:

Your first consideration should be health insurance. If you have recently left an employer, you might be eligible for COBRA, which can provide temporary interim health coverage for those who are between jobs and would otherwise be without insurance.

Disability Insurance:

Disability Insurance guarantees that you will have some amount of income if you suddenly become unable to work due to an accident or illness. Individuals often feel that the peace of mind they receive from having this type of insurance is well worth the cost of such a policy.

Life Insurance:

Life Insurance ensures your family has money if you die suddenly. There are lenders who require you to have life insurance prior to lending you money; this guarantees repayment of the loan should you die unexpectedly.

Business Property Insurance:

Business Property Insurance protects you should you have a loss of inventory or equipment. If your business suffers loss due to flooding, fire or another disaster, business property insurance allows you to recoup your losses.

General Liability Insurance:

You will need to have General Liability Insurance for your business if you plan to have customers or clients come to your home. This type of insurance protects you should someone visiting your home be injured while on your property. It will typically pay your legal defense fees as well should you be faced with a lawsuit as a result of the injury.

Business Interruption Insurance:

Business Interruption Insurance helps your business recover from natural disasters by covering the income you would lose and paying the operating expenses that continue to accrue during such a time of crisis.

Workers’ Compensation Insurance:

Workers’ Compensation Insurance is absolutely necessary if you plan to have employees. Without it, you would be responsible for the medical expenses that arise from injuries sustained by your employees while working. Mistakenly, many business owners believe that they only need workers’ compensation insurance if they are employers of “dangerous” workers (construction workers, electricians, etc.) or if their employees work at a commercial office or retail location (somewhere other than their home).

These types of insurance will help ensure that you are prepared for any type of accident, disaster or crisis that may come your way as a business owner. By preparing yourself, you will save yourself and your company from significant financial loss in the end.

Travel Insurance

The key salesperson for your firm has an important client meeting and the flight, hotel, and other necessary travel plans have been made – more than $3,000 worth of plans that is. But something has happened and the trip must be cancelled; then what? Are you simply out $3,000 or can you count on business class tickets being refundable? Can you be certain that travel “waivers” offered by travel agencies will protect your company’s investment? The unfortunate answer is a resounding “No!” While you can hope for the best, you can’t be assured of the best outcome when it comes to refund promises and waivers. They are, unfortunately, quite poorly regulated and are typically applicable in only very narrow sets of circumstances.

Purchasing travel insurance is a way to manage the risk of changing expensive business travel plans. You can also add other coverages to a policy to provide the traveling employee with security.

Travel insurance can be purchased on a per trip basis or can be bought to cover all trips made by employees during a certain period of time, typically one year. These policies are designed for the businesses that send employees overseas frequently, particularly to rugged, less developed areas.

There are essentially five categories of travel insurance:

1. Emergency Medical Evacuation: This will provide the traveler with enough money to cover the cost of evacuation or transport to a medical facility if needed.
2. Travel Medical and Major Medical: Travel Medical insurance will cover the traveler for medical care needed during short-term trips. If necessary, this insurance will help the traveler find a doctor or hospital and assist with any language barrier as well. Major Medical provides coverage for longer-term travels.
3. Trip Cancellation: This will cover the expenses incurred when a trip is canceled. This coverage should be as broad as possible, expanding to cover cancellations for “any reason” if possible.
4. Accidental Death-Flight Accident: This travel insurance provides benefits to beneficiaries of the traveler should he or she die on the trip as the result of an accident or plane crash. This is quite similar to life insurance.
5. Luggage and Personal Belongings Coverage: Coverage is provided in the event that the traveler’s luggage or personal belongings are stolen, lost, or damaged during his or her trip. Always be sure electronics are included in this coverage as laptops and other equipment can be quite costly to replace.