Health Insurance Options and Considerations for the Self-Employed

Andi Stamper

April 7, 2023

1099 Business

About the Author: Anthony “Tony” Habashi, The Man with the Healthcare Plan, has over 15 years of experience helping medical professionals, nearly 5 years of them in the health insurance space and is licensed in 40+ states. Tony has seen insurance and understands the trends in most if not all areas of health insurance. He and his wife, a nurse, started a health insurance agency when seeing the gap left while going 1099. In his free time, Tony works with his wife and three sons on their homestead.

Options and Considerations for the Self-Employed

The world of healthcare is changing. More professionals in the industry are choosing to work under the 1099 tax structure, freeing themselves from the constraints of the business of healthcare and returning to the passion of healthcare. This move to self-employment often feels risky to those who have been working in W-2 positions, where they are accustomed to certain benefits, including health insurance. The myth that health insurance is unaffordable has kept many providers from making the jump to 1099 work.

Finding the right plan for a newly self-employed healthcare provider does require some research. The best policy is one that achieves a balance among premiums, deductibles and coverage that makes sense for the individual. When searching for such a plan, self-employed people should:

Look for an insurer with a large provider network and a customer-friendly claims process.
Research Marketplace options (both Federal and State Marketplaces).
Consider joining an organization that offers group plans.
Talk to an agent or a broker who specializes in health insurance
Explore Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage. It may be expensive but can help in certain situations.

Three ways to start off on the right path:

Make sure to reach out to an agent that can help. Ask questions. Find an expert on health insurance and find out what the best options for you and your family might be.
Understand your options. Let the agent help you understand why one plan might have more advantages than another.
Understand the limits. A plan’s main costs include its premium (the monthly charge for coverage) and its deductible (how much a patient covers before insurance kicks in). When one is high, the other tends to be low.

Traps to Avoid

Don’t put your information online to get a quote. There are a lot of lead generation companies out there that promise a quote once you enter your information on their website. Your information can then be sold to hundreds of agents. The lead generation sites can make a tremendous amount of money from selling this information. You are more likely to receive unwanted calls from agents at all times of the day instead of connecting with agents on your schedule.
Don’t make your decision based on someone else’s experience. This is probably one of the biggest mistakes that can be made. There is no perfect insurance company out there, nor is there a perfect plan. Everyone is different and so each plan should be different to address the needs of the many and the few.
Let your medical needs dictate your price not a POSSIBLE deductible. While we want to get the most out of your plan, you also do not want to make your plan so perfect that you pay a huge amount for it. Making sure it is not too little, but not too much is something an agent can help with.

Keep in mind:

There is no perfect plan, whether you’re traveling or staying in one area, if you hardly use health insurance or use it frequently.
Everyone is different, and no one company is better than another. Insurance is basically math put into a policy; the more you financially expose the insurance company, the more they charge.
Self-employed workers can treat health insurance as a business expense and deduct premiums from adjusted gross income, reducing tax bills or increasing their refund.

Not paying for insurance can be less expensive in the short term, but uninsured people are just an illness or injury away from catastrophic financial consequences.

If you would like to schedule a free consultation with Tony, please click on the link:
https://calendly.com/themanwiththehealthcareplan/60-minute-probably-less-first-time-consultation

STEPS TO FOLLOW TO BUILD A 1099 BUSINESS:

Protect yourself and your assets by performing your contract work under the umbrella of a business entity. Think about what you’d like your proposed business to be named!
- Visit your Secretary of State website to see if your chosen name is available
- Check with your state’s Board of Nursing for state specific requirements
File applicable business set-up paperwork

The S-Corp Edge: How you structure your 1099 CRNA business will have far-reaching consequences, whether it is a sole proprietorship, a limited liability corporation (LLC), or an S corporation (S-corp).
An S-corp may offer several advantages over other business structures when it comes to taxation. In this structure, a business owner is called a shareholder, and the business owner is recognized by the IRS as an employee of the business. What this means is that the business owner must pay themselves a salary through the corporation. The S-corp pays their payroll taxes, which can in turn be deducted as a business expense. Income tax is paid through its owners’ tax returns based on their percentage of ownership. Moreover, any remaining profits have a lower tax rate than regular income. An S-corp may also allow 1099 CRNAs to avoid a higher tax level that other self-employed contractors pay for Medicare and Social Security.
A CRNA may structure their company as an S-corp serving as the sole owner, with their business income, tax deductions, and losses passing through to the owner, as opposed to being taxed at a corporate level – a potentially smart move for maximizing financial security in the future.

- Register for an EIN
Open a business checking account and credit card
Keep track of all your business expenses as these could save you money come tax time!
- Have an envelope for receipts or a folder on your computer where you scan these into
Be sure not to co-mingle your business and personal finances!
Remember, as a freelance CRNA, if you don’t work, you don’t get paid!
- Do you have at least six months savings should your contract abruptly stop?
Think about replacing your current benefits
- Health Insurance
- Health Savings Account/Dependent Savings Account
- Retirement Savings Account
- Life Insurance
- Disability Insurance
Procure malpractice insurance
Look for jobs!
Apply for state licenses where you want to work
- Each state needs a different CRNA license (and RN if they are not a compact state). Keep this in mind as some BONs can take 3-6 months to license a provider.
Have an employment attorney review your contract
Have your contract written to your business and deposit all earnings into your business checking
Keep A Schedule

As a W-2 employee, your taxable income and amounts taken out for taxes appeared on your W-2 form at the end of every year, without you having to calculate them. But when a firm pays more than $600 for services from an independent contractor, that income must be reported to the IRS.
What many 1099 CRNAs don’t realize is that they must pay taxes on their income as they earn it. Paying your quarterly estimated income taxes will be a new part of running your business successfully.
It doesn’t sound so difficult—keeping track of paying estimated income tax only happens four times a year. But the reality is a late payment can result in penalties and fines from the IRS. Keeping a schedule to help you stay on top of your quarterly estimated tax payments, and paying adequately to avoid underpayment, is imperative in avoiding penalties in the future. Not to mention providing peace of mind!

Make sure you have a trusted team of accounting and/or financial professionals who have experience with freelance CRNAs to guide you through this process!

CPAs
Financial Planners
Bookkeepers

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