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Working as a freelancer or contractor is a good option for millions of Americans who can do without corporate bureaucracy, office politics and the ever-present threat of being laid off.

If the so-called “gig economy” is how you earn a living, you might also think you can do without health insurance. But that could be a pretty serious mistake, according to consumer experts.

The reasoning is simple: Health coverage, like other forms of insurance, is there to protect against large financial losses. You can’t predict if or when you’ll get sick or injured. And most budgets can’t take the hit from an unexpected major medical expense.

Then too, the Affordable Care Act requires coverage, so there’s the matter of obeying the law and avoiding the risk of facing a federal penalty at tax time.

“The truth is, going without health insurance is a gamble,” according to consumer finance site NerdWallet.

 

How to Pay for It

No question about it: If you’re not on a full-time payroll with health benefits, it can be hard to pay monthly premiums and out-of-pocket expenses for medical care. The $300 or $400 a month you spend on premiums would come in handy for other things.

Purchasing on the federal exchange is the best way to get help paying for your plan if you don’t get health benefits through an employer. If you qualify for a federal subsidy, you can see your monthly bills cut substantially. Incomes for many people in the gig economy often fall below the maximums under the ACA, so it’s worth checking to see if a subsidy is available to you.

Freelancers and independent contractors are becoming a bigger part of the working world. An estimated 53.7 million Americans are freelancing this year, according to a study released in August by market research firm Edelman Berland. That’s 34 percent of the U.S. workforce.

Their top worry? The cost of health care, along with having unpredictable income. Both were cited as very or somewhat concerning for 76 percent of freelancers in the Edelman Berland study.

The study defined freelancers as anyone who earned income in the past 12 months from working as an independent contractor, temporary worker, moonlighter, freelance small business owner or “diversified” worker (think part-time receptionist by day and Uber driver by night).

 

What to Look For

Gig economy workers should focus on the same considerations as anyone else shopping for a health plan, including:

  • Monthly premium (and the federal exchange’s “metallic” levels of plans)
  • Copayments, deductibles and co-insurance
  • Network of doctors and hospitals
  • Federal subsidy eligibility

A special consideration for freelancers is whether any medical expenses are planned or expected — for example, a scheduled surgery, a chronic condition such as diabetes, or planning to have a baby. Anything you know about your life situation in 2016 should factor into your decisions on health coverage.

North Carolinians can start the process at BCBSNC’s website for individual coverage or at healthcare.gov. The Annual Enrollment Period for purchasing on the exchange began Nov. 1 and runs through Jan. 31, 2016. To be covered starting Jan. 1, 2016, you’ll need to sign up by Dec. 15.

[Top image: Shutterstock]

About Kyle Marshall

Kyle Marshall, a senior communications specialist at Blue Cross and Blue Shield of North Carolina, writes about the health care industry and provides communications counsel and support to the company's executive team.

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