As a rideshare driver, you risk your life on the roads driving your vehicle, and it is essential for you to have a life insurance if something happens to you just the way you have one for the vehicle. As an independent contractor, you won’t be eligible for benefits provided by Uber or Lyft, including health insurance. But you don’t need to worry about this problem because you get many benefits through having your insurance plan. So let’s see how individual insurance plans can help out the rideshare drivers.
1. What is the Affordable Care Act?
The ACA was a huge overhaul of the United States healthcare system, which had made lots of changes, and which affected millions of people from 2014 onwards. The main goals and the objectives were to increase the affordability and the quality of healthcare and make it easy for any individual (including contractors) to buy insurance.
2. The way how ACA aids to decrease the monthly health insurance expense
Beginning from 2014 plans, if you make up to 400% of the FPL (Federal Poverty Line), you might be eligible for a tax subsidy or credit. You just need to pay a small cash amount per month depending on your income. The Federal Poverty Line or the FPL amounts varies every year, but shouldn’t vary much from the ones for 2014 coverage. For instance, you as a rideshare driver could get subsidized insurance if the income is under $46,000 (family of 1) or $94,500 (family of 4).
3. What differs from where you buy a health insurance plan
Monthly percentages might differ between insurers such as United vs. Blue Cross or some form of plans like Bronze plan vs. Gold plan. Anyway, for some plans like the Bronze plan by Blue Cross, the monthly percentage is lawfully required to be similar even if you purchase a plan by way of a broker, healthcare.gov or straight through the insurer. The thing that differs is where the insurance corporation pays the charge for finding a new client.
4. When to enroll in an individual plan
As a rideshare driver, you can enroll in a personal health plan at some stage in the special enrollment or open enrollment. So what is Open enrollment and special enrollment? Open enrollment is a period in which the insurers provide insurance plans to individuals who would like to buy them for a discounted and an affordable price. For example, the open enrollment for the year 2015 was a three month period started from November 15th, 2014 to 15th February 2015. If you are outside this enrollment period, you can only enroll a common health plan if you be eligible for special enrollment. A special enrollment is a sixty-day-period that you are given if you have a qualifying event, such as change of employer, unemployed, disability, etc.
5. What do a deductible, premium, coinsurance, and copay mean
• Deductible- The deductible of a health insurance is a special offer or a discount where the original amount you have to pay for the insurance is reduced so that you have to pay what you can afford from your pocket.
• Premium- The premium is the amount that the sponsor or the policy-holder such as an employer or policyholder should pay for a health plan to purchase health coverage.
• Coinsurance- Coinsurance can be explained as the percentage of the total expense of a covered health care service we pay after we’ve paid the deductible. For example, if the healthcare plan’s allowed amount is $100 and the coinsurance is 30% the amount you have to pay out of the $100 is just $30 or a percentage of 30% and the insurance company will pay the rest. But if you haven’t paid your deductibles then you will have to pay the full amount of $100.
• Co-pay- The co-pay or the copayment is an unchanging amount you give for a covered insurance after the deductibles are paid.
6. Should you get an HMO or PPO? What about a Platinum/gold/silver/bronze plan?
PPOs and HMOs are two main types of insurance plans which are provided by health maintenance organizations. HMOs are a bit cheaper, but restrict on which hospitals and doctors you can see. So just as the cheapness, this is also a bit disadvantageous to buy. PPO (Preferred Provider Organization) is a category of a health plan which deals with medical suppliers, such as doctors and hospitals to build a network of contributing providers. You will have to pay a lesser amount if you use the hospitals and doctors who belong to the plan’s network. Also, an additional cost will be charged if you use hospitals, doctors, and providers from outside the network.
The health plans that you buy are leveled as bronze, silver, gold, and platinum from the cheapest to the best and are provided by most of the insurers now. They vary from each other on how much all our costs will be covered up on average (Platinum- 90%, Gold- 80%, Silver- 70% and Bronze- 60%).
7. Can you write health insurance premiums as expenses of the business?
You might be able to do, and this will reduce the taxable income, and you can save dozens of cash on taxes. There are few primary requirements:
• You must have a profit-making business
• You and your spouse can’t be entitled to an employer-subsidized plan.
And also, before you want to do this there are few other important things that you should be aware of too.
8. What if you end up without getting health insurance?
The above topics demonstrated why and how you could get a health insurance. But there are a lot of disadvantaged of not having a health insurance, and that is a huge risk for you.
• You should make sure that you are fully insured because a leg break caused by a small accident can cost you over $50,000 cash in medical bills.
• And also you will have to pay a percentage of 2.5% of the income as a penalty if you don’t get the least essential coverage.