BusinessWeek research shows that 31% of workers in the U.S. are self-employed, approximately 40 million individuals. Bureau of Labor statistics estimate that 40% of all workers in the U.S. will be self-employed in 2019. That’s a lot of people, and all of them have to provide for their own health insurance. Independent employees are a huge part of the economy, but they aren’t receiving the support they need. Will the economy be cured, as BusinessWeek suggests, if health care is more self-employment-friendly?
Self-Employment Taxes
Self-employed professionals are responsible for all of their own taxes; there is no employer to pick up a percentage of the cost. What’s that got to do with health care? In addition to supplying their own health insurance policies, self-employed workers cannot deduct the cost of their premiums, though large companies who provide health insurance to their employees may do so.
Health Insurance Options for the Self-Employed
Health insurance options for the self-employed are few. Professionals who do not have an employer to provide them with group-based insurance must seek out individual health insurance policies to provide coverage, with few exceptions:
- Massachusetts. Residents who live in Massachusetts are required, by law, to obtain health insurance for themselves. Persons living in the state who earn low income, as determined by the in-state health care law, are provided with government-sponsored health insurance.
- NASE. The National Association for the Self-Employed provides health care resources and policies for independent professionals. The NASE web site offers information on how self-employed professionals may find group policies to lower their health care costs.
Health Care Reform and Fixing the U.S. Economy
Early drafts of the infamous Health Care Reform bill, dubbed “Obamacare” by the right-wing media, included a government-sponsored health insurance program for self-employed and other individuals. The reform no longer offers this, though in 2014 it will provide professionals with a tax credit and an online shopping system that allows them to find more affordable policies.
It isn’t much of a fix for over-taxed, under-cared-for professionals. Many argue that the big fix for the U.S. economy lies in keeping taxes low for the extremely wealthy…but research shows that self-employed professionals may soon make up nearly half of all workers in the country. If those workers can’t afford to spend money because they’re paying for high health care and insurance costs, the only economy that’s being helped is that of the insurance companies.
KC Morgan - KC Morgan has been the featured writer in Self-Employment since 2006, using personal experience to create guides to being self-employed.
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