Health insurance for self-employed persons in Indiana is easily purchased at very affordable rates. Personal individual and family medical coverage often contains benefits featured in more expensive group plans, but many low-cost independent medical policies are offered by the most respected companies. Sole proprietors and independent contractors are entitled to several unique benefits including no lifetime caps on medical claims. Partnerships also qualify for cost-saving several benefits. Freelancers and consultants have many low-cost options for their private benefits.
Small business owners and independent workers often pay for their own coverage, and we understand this is a major challenge by shopping for the best options. Flexible coverage for part-time and full-time workers is also available. Employee contributions can vary, depending upon the plan you choose. Regardless if you have hundreds of employees or no employees, many healthcare options are available with possible tax deductions to your adjusted gross income (AGI). HSAs, and high-deductible options offer substantial savings.
If you are starting your own business, you can save money with customized budget-friendly plans and may be able to utilize a tax deduction. Coverage for spouses and dependents is also available. Typically, you must continue to file an annual return, and pay quarterly estimated taxes. A penalty may apply if you under-estimate the amount. Social security and self-employment tax issues can be assisted by a CPA or a qualified tax professional.
On and off-Exchange plans are offered in all Indiana counties along with many non-Obamacare options. Note: Persons that are self-employed with no employees are not considered an employer, and can not purchase “SHOP” coverage from the government. However, many private small-group plans are offered by multiple carriers.
Impact Of Obamacare And Other New Legislation
The Hoosier Marketplace options (created under Federal legislation) went into effect seven years ago. No longer do you have to medically qualify for your personal healthcare. And you are not charged a higher premium because of medications you take, or treatment you have incurred in the past. Also, your height and weight (BMI) has no impact on the price you pay for Exchange coverage, and future pending surgeries are not required to be disclosed.
Annual and lifetime limits have been removed and four carriers (Anthem Blue Cross, Ambetter, US Health And Life, and Caresource) offer subsidized and non-subsidized plans. Additional carriers may join next year.
Proposed legislative changes may take effect in 2023 that could create additional HSA and high-deductible plan options. Freelancers and employees of large companies may be eligible, along with applicants that are not covered under an employer-provided plan. However, Congressional approval is needed, which may be difficult to obtain. Although a “public option” may be added to Marketplace options, cheaper catastrophic plans have not yet been introduced.
Comprehensive and catastrophic plans are currently available, with several deductible and copay options. Platinum and Gold contracts feature the lowest out-of-pocket costs but are also the most expensive. Silver and Bronze contracts are more affordable because of higher deductibles and maximum out-of-pocket expenses. Their popularity has increased, since they are a cost-efficient option to protect against large rate changes. Unlimited primary-care physician office visits subject to only a copay are often available.
If you work for yourself, a popular type of coverage is a “high-deductible” contract (also discussed later in this article) that helps maintain lower premiums. Exchange plans are available with deductibles as high as $8,700 ($17,500 per family) during Open Enrollment. If you missed Open Enrollment, please contact us to review other alternative affordable options. 12-month plans are offered with coverage and price guaranteed. Telemedicine services are growing in popularity, but don’t provide major medical benefits.
Tax Deduct Your Medical Expenses
If you itemize on your federal tax return, instead of taking the standard deduction, you may be able to deduct a portion of your healthcare expenses. Schedule A permits the deducting of your premiums and additional long-term care, if qualified. You can not take the deduction in the “itemized medical expenses” portion of the tax return if you use Schedule A for the deduction. Also, the total amount of expenses must exceed 10% (previously 7.5%) of your adjusted gross income (AGA).
Expenses that were paid with funds from a flexible spending account (FSA) are not deductible. Many personal expenses are also no longer deductible, including investment expenses, expenses while moving from one job to another, unreimbursed employee expenses, and alimony payments. Since the standard deduction has been increased, itemizing expenses when filing a federal tax return has become less common.
The current 2022 standard deduction for single taxpayers and couples filing separately is $12,950. The current standard deduction for married couples filing jointly is $25,900. The head of household standard deduction is $19,400. There is no limit on the amount of itemized deductions that can be taken. The personal exemption has been eliminated and is not expected to return. Additional child tax credits may be added by 2025.
Indiana Small Business Health Insurance Assistance
We assist you in finding the best prices when researching hundreds of top-rated plans. We understand that small business owners need quality benefits but at a cost that won’t hurt your bottom line. We also know that having flexibility of coverage for you (and any potential or future employees) is a must. Regardless if you are a small business with less than five employees, or a large corporation with more than 100 employees, our free research and recommendations can lower your costs.
Monthly rates per employee, depending on the carrier and plan, can cost less than $250 per month. Companies with less than 50 employees, are not legally required to offer healthcare benefits. Often, local agencies and brokers have working agreements with smaller companies, offering their services and enrollment assistance. Personal consultations can be scheduled or virtual meetings can be arranged.
Marginal tax rates are 12% for income above $10,275 for individuals, and $20,550 for married couples filing jointly, 22% for income above $41,775 for individuals, and $83,550 for married couples filing jointly, 24% for income above $89,075 for individuals, and $178,150 for married couples filing jointly, and 32% for income above $170,050 for individuals, and $340,100 for married couples filing jointly. Itemized deductions are not subject to limitations, and the annual gift exclusion remains at $15,000.
You can tax-deduct the cost of your premiums when you receive your 1099 and file your federal tax return. And depending on what type of coverage you have, there may be other tax benefits. Of course, it’s always critical that you verify any deduction or credit with your tax consultant to avoid penalties and a possible comprehensive audit. Statewide and local associations may also offer helpful assistance. Help with business structures and determining the appropriate entity are also available. Note: Small business property and casualty coverage is also often available.
A current Small Business and Self-Employed Tax Center IRS link provides additional help. Resource topics that are discussed include: independent contractors, business structure, starting, opening, and opening a business, changing name of business, deducting expenses, employment taxes, filing past-due tax returns, calculating employment taxes, and webinars for small business owners.
Self-employed persons are required to pay estimated quarterly taxes and file an annual tax return. A self-employment, Social Security, and Medicare tax typically also must be paid. The company net profit (or net loss) will determine the amount of taxes due. Filing an “information return” may be required if you received or made a payment as a self-employed person or small business. A Social Security and Medicare tax must be paid if you work for yourself. Employees typically have these taxes withheld from their pay. Earnings of more than $400 require the filing of an income tax return.
A 1040-ES form is utilized when determining if quarterly taxes must be filed. The prior year’s tax return will be needed to complete the worksheet. Blank vouchers can be used for payments, or funds can be submitted electronically. If the business is fairly new, income should be estimated, with adjustments made, if needed. Schedule C is used when filing the federal tax return. Income from a sole proprietorship is also considered on Schedule C.
We work closely with small or large business owners to provide the lowest cost health care options that will still provide the needed benefits that are often required. We represent the most reputable companies such as Anthem Blue Cross Blue Shield, Kaiser, Humana, UnitedHealthcare, Cigna, and Aetna, so you can apply for direct rates. Smaller companies such as IU Health Plans, Ambetter, and CareSource also offer policies in many areas of the state.
NOTE: Many companies offer private plans in many other states, but not in Indiana. Also, several companies offer policies to Seniors or employers, but not through the “Marketplace.” Anthem previously offered private single and family medical contracts but discontinued their portfolio of plans. They recently began offering plans again in Ohio, so additional states may follow.
We also keep you well-informed so that you know when carriers no longer offer private coverage in the state, such as Medical Mutual and Aetna. Since only four carriers underwrite under-65 plans (Ambetter, Anthem, US Life, and CareSource), additional companies may begin to offer Exchange plans by 2023.
Catastrophic or High-Deductible Options
If you have become self-employed within the last 12 months, then reducing healthcare costs is probably a major priority. The best way to protect against larger claims and at the same time, keep premiums low, is through a “catastrophic” plan. Generally, these types of policies will cost hundreds of dollars per month less than a comparable office-visit copay option. But you are still well-protected, and you will retain the most important benefits. Major illnesses, such as cancer and diabetes will be effectively treated and covered.
An important distinction should be made. If you are purchasing (enrolling in) a Marketplace plan, there is a specific tier of policies that are not included in the four metal options (Platinum, Gold, Silver or Bronze). The “catastrophic” tier of plans has limited eligibility. For instance, you must be under age 30, or be able to prove that you can not afford the premiums on all other available Exchange contracts. However, federal subsidies are not offered in this tier.
For persons 30 and over, there are several inexpensive Bronze-tier options that will keep prices low, by maintaining a high deductible. Benefits are comprehensive, and a federal subsidy is available if your household income meets specific guidelines. Prescription drugs are covered, including expensive Tier 4 and specialty drugs. Listed below are several of the best options:
Caresource Marketplace Bronze
CareSource Marketplace HSA Eligible Bronze
CareSource Marketplace Low Premium Silver
Ambetter Essential Care 1
Anthem Bronze Pathway Essentials 6550
Anthem Bronze Pathway Essentials 5500
Ascension Personalized Care Balanced Bronze 1
Ascension Personalized Care Balanced Bronze 2
Indiana HSA Plans
Catastrophic medical coverage in Indiana is available as a “High Deductible Health Plan (HDHP), which provides low premiums with higher deductibles (typically $3,000-$6,900). With the exception of qualified preventive expenses, all medical claims are subject to the deductible. However, once the deductible is met, many plans pay 100% of covered expenses. 90% and 80% options are also available. Note: When comparing HSAs, the maximum out-of-pocket costs are more important than the policy deductible.
This type of coverage also works in conjunction with a Health Savings Account (HSA). However, there are many non-HSA policies that can be purchased. Generally, owning this type of policy is a “safe bet” (see picture below!) since you are limiting exposure to high out-of-pocket expenses and keeping premiums low. Gold-tier and Platinum-tier HSA plans are not offered. The two available Marketplace plans are described below:
CareSource Marketplace HSA Eligible Bronze – $5,400 deductible ($10,800 Family) with maximum out-of-pocket expenses of $7,000 ($14,000 Family). Coinsurance is 50%. Qualified preventative benefits covered at 100%.
Ambetter Essential Care 2 HSA – $6,900 deductible ($13,800 Family) with maximum out-of-pocket expenses of $6,900 ($13,800 Family). Coinsurance is 0%. Qualified preventative benefits covered at 100%.
An HSA will not be the perfect solution for every person that is self-employed. We take the time, however, to carefully consider your personal circumstances to determine if that type of policy is in your best interest. Although it’s hard to predict, if you anticipate going back to work for an employer within 12 months, an HSA may not be the ideal choice. Any unused funds will remain available if needed later.
Any remaining money that has been deposited into your account can be withdrawn and you will not lose any of the funds or be forced to pay a penalty. You can also leave the funds in an existing account, until you withdraw them for approved medical, dental or vision expenses. When you reach age 65 and are eligible for Medicare, remaining funds can also be used to pay many out-of-pocket costs.
U.S. Small Business Administration
The Indiana SBA local office provides many services that assist Hoosier State companies. Professional advice and counseling are available to help with expansion or the task of running day-to-day operations. Guaranteed loans with favorable interest rates are offered by local banks and financial institutions and venture capital funding may also be offered. Companies that purchase or sell international products can also benefit from free services. Veterans may have access to free loans while women business owners can take advantage of various business centers.
Small business employment covers many types of work. The largest industries are manufacturing, health care and social assistance, food services, retail trade, construction, professional services, scientific and technical services, administrative support, waste management, transportation, insurance and finance, and educational services.
Additional topics that should always be discussed include hiring and termination of employees, available tax deductions, permits and licenses, creating a business plan, understanding laws and regulations, and cyber security. Your website content should be constantly updated, with online purchases streamlined and consumer-friendly.
Limited Liability Companies (LLCs)
A large tax deduction is offered to LLCs. Although all requirements must be met, the cost of healthcare, dental, and long-term health coverage can be deducted for yourself, spouse, and children. Children (up to age 27) can also be included if they are listed as dependent on your tax return. If the LLC is considered a sole proprietorship, you are considered self-employed by the IRS, and are therefore eligible for all approved deductions that self-employed persons enjoy.
The deduction is offered during months you are eligible for employer-provided coverage. A spouse’s employer-provided coverage could also invalidate the deduction. The deduction is also not available if the cost of insurance exceeds the income earned from the business.
If you have a chronic illness or multiple major conditions, it is important to continue coverage with your existing company. If you are eligible for COBRA, you should strongly consider taking advantage of your offer, since benefits will be identical to the plan you lost, and about 60 days will be provided to ensure continuous coverage. You also may qualify for a “Special Enrollment Period,” which allows you to purchase subsidized Marketplace plans.
The “Exchange” policies contain mandated essential health benefits and do not require underwriting approval. No medical questions are asked and past and existing medical conditions will not be excluded. Since there is no cap (annual or lifetime) for benefits paid, chronic illnesses and catastrophic injuries will continuously be covered.
All conditions are accepted by insurers (Exchange plans), so it may be worthwhile to compare your COBRA premium with the cost of purchasing a new private plan. If you are nearing Medicare-eligibility, a review of Supplement and Advantage plans should be undertaken. The Open Enrollment period for Medicare begins three months before the month you reach age 65 and ends three months after the month you reach age 65.
Elimination Of State Risk Pool
The State Risk Pool was also a high-risk option until five years ago, when the program ended. As part of the “Patient Protection and Affordable Care Act,” it provided fairly inexpensive benefits to consumers that had been uninsured for at least six months and had been denied by two companies. There were also other requirements to meet. Ironically, future legislation may initiate changes that could bring back the State Risk Pool in 2022 or later.
Group insurance plans may be available, depending on your company data. However, in many situations, group rates are often higher and may not be the best choice. Typically, this type of plan requires all persons to be insured, regardless of medical conditions. This, of course, can raise the premiums for all members in a very small group, especially younger persons. But a larger group will be able take on more risk, since it is spread out over more persons and their dependents.
The SHOP Marketplace (Small Business Health Options Program) provides plans to small businesses that want to offer health and/or dental benefits to their employees. The company (or non-profit entity) must have 1-50 employees. However, there are no Open Enrollment deadlines, so coverage is offered throughout the entire year. Health and dental benefits are offered, and a small business healthcare tax credit may be available. The lowest SHOP employee monthly rates are shown below for selected ages:
Age 20 – $158.72
Age 30 – $283.69
Age 40 – $319.44
Age 50 – $446.41
Age 60 – $678.36
Age 20 – $183.13
Age 30 – $327.32
Age 40 – $368.56
Age 50 – $515.06
Age 60 – $782.69
Self-employed health insurance in Indiana is available, and we help you find affordable medical coverage at a rate that will meet the requirements of your own financial situation. The quotes and comparisons we provide are free (the quote button is at the top of the page) and you can always call or email us for personal assistance. And there is never a cost for utilizing our website or information.