AP 0468: How Do I Find Insurance When I’m Self-Employed?

AskPat 468 Episode Transcript

Pat Flynn: Hey, what's up, everybody? Pat Flynn here, and welcome to Episode 468 of AskPat. Thank you so much for joining me today.

We have another great question from Victor, but before we get to Victor's question, I do want to thank today's sponsor, which is FreshBooks.com, making it super easy for all of us to manage our business finances, from our income to our expenses, and even invoicing, too. They have an award-winning mobile app, so you can check the financial health of your business on-the-go. Plus, come tax season, which is coming up, coming up really fast, it's going to make it really easy for you to organize everything, all your sheets, and forms, and numbers, so that you can then move forward with your taxes and do what you need to do there, so that you can get back to business. So, if you want to check out FreshBooks for free, for 30 days, head on over to GetFreshBooks.com and enter “AskPat” in the “How did you hear about us?” section. Again, that's GetFreshBooks.com, enter AskPat.

Alrighty, and here's today's question from Victor.

Victor: Hi Pat, my name is Victor and I have a personal finance website at MoneyUseItWisely.com. My question is not about the business, but about life as a self-employed person. Today, I work for a company that writes integrated medical insurance, but if I decide to go off on my own, what are my options for covering medical expenses? I know that in the United States, especially, where you and I live, going to hospital without a medical insurance can be really, really expensive, and it might give only to bankruptcy. So, the question is … How did you switch from having medical insurance providers from an employer, to buying it on your own? What do you use? What's the company that you went for? Thank you for a great shows. Hello, both AskPat and the Smart Passive Income, and I wish you a great day. Cheers.

Pat Flynn: Hey, Victor. Thank you so much for this question, and it's a very, very important question, and a topic that doesn't get talked about very much. So, I appreciate you asking this question, and I'm going to do my best to tackle this, although I will say right up front, I am not a professional in terms of tax benefits, medical, any of that stuff. I am just an average dude who's trying to figure it out along the way, too. So, I'll share my thoughts, but I would recommend that anybody out there who's looking for more information on what they need for health insurance and that sort of thing, to connect with somebody who is in the know, in that space. Perhaps a health insurance agent, or somebody who you know, who's in a similar situation as you that you can get more information from, who's in your area. I mean, that's one of the things, it kind of depends on where you're from and where you're at in life, so I can't give you a “This is what you do.” I will say that it's a very important topic that, if you're making the transition, or have already, and you haven't thought about this, it's something that you need to think about and discuss. Especially, with the loved ones around you. But, you need to talk to people who are going to help you, too. So, I'll do my best just to share my own experience and hopefully, that will light a fire underneath some of you to really get moving on this.

So, when I got let go, back in 2008, I had insurance. I had health insurance and then, I obviously didn't have health insurance. And so I got connected really quick with Anthem Blue Cross, to get … just so I was paying a few hundred bucks a month, just to get something. There is this other thing, called COBRA, which is where you can continue with the same medical benefits that you have from your employer, for X amount of time, for quite a substantial sum of money. It's incredible how much that actually helps, not COBRA, but actually the employer benefits, in terms of health insurance and that sort of thing. It's a lot, and it's something that we don't always account for and we take for granted sometimes, but when you get let go, or when you are working for yourself and you have to figure this out, you realize just how important that was. There's a few things you can do, and here was my story.

So, I got on Anthem Blue Cross, just to get medical benefits, and I'm young, I'm pretty healthy, so it wasn't very much and it just made sense, and my business was already up and running, at this point. My wife, she was working somewhere but then she moved back home with her family, when I moved back home with my family, too, to save money for our upcoming wedding, and so she wasn't working. She didn't have any insurance at the time. Then we got married and everything was going well. We got our dog, Gizmo, in March 2008, and early March 2009, we went on our honeymoon. And then when we got back from our honeymoon, we were pregnant and that was awesome. Then all of a sudden, we started to think and we were like, “Oh my gosh, April, you don't have health insurance.” And we were like, “Holy moly, okay, let's get you on a plan, we'll be fine, that'll help pay for things.” But, at the time, we figured out that, because it's different now, I believe, but at the time, we couldn't get April on an insurance because she was pregnant. Being pregnant was a preexisting condition for all private health insurance companies, and because of that, and it makes sense, you know, they would have known they would have had to pay a certain amount for the pregnancies and stuff, even though she was perfectly healthy, they didn't want to do that, because it was known that that was going to happen. So, it was our mistake for not doing that at first. And so, we were really scared. Yes, the business was going, and we were just saving as much as we could, to make sure that in case anything happened, we'd be able to pay for it. Now, because we were going into the pregnancy uninsured, April was going in uninsured, we were able to get discounts from the doctors we were working with. They don't often work with people who aren't insured, but when they do, they often give those people a lot of leeway. But, even though we got that, and we were pretty frightened, just because we didn't know what was going to happen if something terrible happened. We would have been in the hole. That would have been terrible.

And I hope this story really is an eye-opener for some of you. I don't tell this story very much, because it was definitely hard times for us, but we got very lucky. Our son was born a month early, which freaked us out. April's water broke on December 23rd, 2009, and so we freaked out, because he wasn't even supposed to be born until the next year. The crazy thing was, I had figured out a solution for this, and it was a workaround at the time for this whole April having a preexisting condition. So, I had talked to a bunch of people and the number-one recommended thing to do, was to actually have April be an employee in my company, and serve her insurance though company health insurance. And so, we had spent a bunch of money trying to figure all this out. We'd worked with a lot of people, everything was going to go into place, and the plan was going to go into place on January 1st, but the water broke on December 23rd. So, we freaked out because we were just going to have it, just in time, but he decided to join us for Christmas, so those benefits weren't able to come through for us. And, so what happened was because he was a month early, also we were freaking out, because what if he was too much of a preemie. And he was a small baby; he was 5 pounds when he was born. But, luckily we were out in two days, and even though we were only out in the hospital for two days, it was still about a grand total of fifteen to sixteen thousand dollars that we had to pay out of pocket, for that stay.

And, again, we were really lucky nothing happened. But that was a huge learning point for us and a big lesson, and the reason why I think everybodyneeds to really think about this, if they don't have this solved or figured out already. Telling this story is crazy. It just makes me remember how crazy the times were. Now, of course, after that we got April on insurance, our son on insurance, under my plan and everything was set from that point forward. Then when we had our second baby, everything was perfectly fine.

It's going to depend on … What works for you is going to depend on where you're at, and you're going to have to talk to the right people for it. I just wanted to take this question to give you that story. Hopefully, let you know what I went through and some of the mistakes I made, so that you don't make those, too. Just make sure that you try to get as many options as possible, so you know you're kind of shopping around and comparing. The last thing you want to do is just wait, because sometimes we feel like we're invincible, and we're not. Things happen, and you just want to make sure things are covered, just in case.

I appreciate you asking this question, once again, and I hope if anybody has any comments or questions about this, hit me up on Facebook or Twitter @PatFlynn, use the hashtag #AskPat468, and that way I can know what you're talking about. Anyway, thank you so much for listening to this story, and I want to wish you all the best. I also want to mention that there's a lot of other … If you're in the U.S., there's a lot of other things you could think about, too. Make sure you bring up health saving accounts, HSAs, which are tax-advantaged medical savings accounts, which you could potentially get into. Also, if you have your own business, you can have business insurance, too. That's a whole other discussion that is weighing over my head, and it's probably changed since 2009, when I was dealing with that. So, contact a professional, get some help, do the right thing, and I wish you all the best and please stay safe, everybody. Thank you.

So, phew. What a question; what an answer. Victor, thank you so much, for the question. I really appreciate it. We're going to send you an AskPat t-shirt, for having your question featured here on the show. Thank you, all, for listening. I appreciate that. For those of you listening, if you have a question that you'd like potentially featured here, on the show, head on over to AskPat.com, and you can ask right there, on that page.

I also want to thank FreshBooks.com, for sponsoring this episode. I recommend them, especially if you do invoicing of any kind. If you are a freelancer, or do any consulting, or have any coaching students, or clients. It just makes it really easy to do it. I have also paid several invoices that have been issued to me via FreshBooks, myself, and it is hands-down the cleanest way to respond to an invoice and pay for it, so that you, the one issuing the invoices, you can get paid much faster and it's much more professional looking, too. Also, FreshBooks is, they're just everywhere. They're serving 3 million small business owners, they could help you, like they'd helped me. Completely streamlined organization of your business finances. If you want to check it out for free, for 30 days, head on over to GetFreshBbooks.com and enter “AskPat” in the “How did you hear about us?” section. Again, that's GetFreshBooks.com and make sure you enter “AskPat.”

All right. Thanks so much. I appreciate it. And here's a quote to end the day, by Stephen Covey. He said, “Be patient with yourself. Self-growth is tender; it’s holy ground. There’s no greater investment.” Thank you, all. Take care, and I'll see you all in the next episode of AskPat. Bye.