Making the leap

[William Smyth]

I've been shooting weddings for several years now, all as a side job, my main job is working for a television station. A couple of years ago, I started my own business and it seems to be growing nicely.

I'm dying to quit the day job and concentrate on my own business. However, my biggest concern isn't booking enough clients (that's a big number 2). My fist concern is what to do for health care. Right now, I get medical coverage from my main job. My question, is for those of you working for yourselves, what have you done? Purchase it yourself? Rely on spouse's job to provide it? I've heard of some businesses joining together and purchasing healthcare as a group? What's worked for you?

[Chris Davis]

For almost 10 years we've belonged to a health coop. It's similar to insurance, but ultimately you are repsonsible for your own bills. All members are directed by the coop to pay their monthly share to a fellow member who has a medical need. We pay $285 per month and each month that check goes to another member as directed by the coop.

Some people are comfortable with that arrangement, and some aren't. If you want more traditional health insurance, then get some quotes. If your insurance quote is $900 per month, then you better be sure you can earn at least $900 per month more than you're making right now.

[Scott Hayes]

if you quit your day job, you should be eligible for COBRA on your health insurance, for like 15 months I think. check with your HR dept and see.

[Joel Peregrine]

Hi William,

We're going into our 8th year with the a Health Savings Account and its been working well. The deductible is very high but I try to remember that it is only insurance and insurance is not meant to pay all my medical bills, only the ones we can't afford. I just found this resource that helps to show what you can save:

Health Savings Account Information: Health savings illustrator from Assurant Health

Originally Posted by William Smyth

I've been shooting weddings for several years now, all as a side job, my main job is working for a television station. A couple of years ago, I started my own business and it seems to be growing nicely.

I'm dying to quit the day job and concentrate on my own business. However, my biggest concern isn't booking enough clients (that's a big number 2). My fist concern is what to do for health care. Right now, I get medical coverage from my main job. My question, is for those of you working for yourselves, what have you done? Purchase it yourself? Rely on spouse's job to provide it? I've heard of some businesses joining together and purchasing healthcare as a group? What's worked for you?

[Robert M Wright]

Realistically, (for better or worse or otherwise) it sure looks very likely that Congress will pass some sort of legislation that will probably change things fairly radically, particularly as far as health insurance options and costs for the self employed. It's far from certain (to put it mildly) what the final bill will look like though.

This may not be very reassuring, but trying to make long term plans, as far as getting health insurance when you quit your day job, at this point, seems to me a bit like heading out on a road trip without directions or a map - lord only knows where you'll wind up.

I suggest simply relying on the COBRA insurance for now, and see what happens after the dust settles in Washington.

[Noel Lising]

William, in my opinion you should not quit your day job until you have enough bookings to pass you by. I don't know how healthcare works there but that is the least of my worries. If I can maintain my day job and grow my business at the same time then that would be great. I need the security of a job, and the wedding business is just icing on the cake.

My 2 cents.

[David Barnett]

COBRA's an option, but it's expensive!! Usually ALOT more than you're paying now, just not the full rate. But you're job usually offers you really good coverage ($25 copays, $100 deductable). Try looking into one where you have a high deductible & hopefully you don't need prescription pills. Most large carriers have a low cost option (They advertise $100/mo but it's usually higher). Aetna & Blue Cross claim to, it varies by state I'm sure. Also, check into low budget plans, I see one for Farmers Insurance, and there was one a while ago something like Ascensus or something. If you're single this could be an option. If you're married esp with kids it's likely not the best idea & I suggest trying to go thru your spouses job if possible.


For the record though, I'm not self employed, just wanted to share as much as II know & have researched in past thoughts.

[Jim Snow]

You can also hedge the low cost / high deductible policies with a HSA (Health Savings Account). HSA's also have some tax benefits. Money put into a HSA isn't subject to income tax withholding. Obviously a key restriction is that HSA's are intended only for medical expense payments.

[Lukas Siewior]

In my situation I'm waiting for my wife to graduate from college and once she gets well paid job with decent benefits, I'll be able to switch to full-time with my business.

[Chris Davis]

Why make health insurance the arbiter of when you go into business? Sure, it's expensive, but it's not so expensive that I'd put my plans on hold for it. Go price some insurance. Like I said in an earlier post - if it's $xx dollars, then you need to determine if $xx falls into the budget. It's no different than office rent, utilities, equipment or a hundred other expenses involved with running a business.

This is why our country is in such a tizzy about health care - we've all been conditioned to think that health insurance is something that must be provided for us - by an employer, our spouse, or the government.

[Denny Kyser]

I have been using Cobra. The person that replaced me when I quit my day job, left after 17 months leaving them in a bind. I went back part time it was early spring for a couple months but the stip was I got back on health insurance. This restarted the Cobra when I left after 3 months of part time.

I was told recently though that Cobra does not have an expiration now, can not say that is right or wrong, but would not surprise me.

[William Smyth]

Originally Posted by Chris Davis

Why make health insurance the arbiter of when you go into business? Sure, it's expensive, but it's not so expensive that I'd put my plans on hold for it. Go price some insurance. Like I said in an earlier post - if it's $xx dollars, then you need to determine if $xx falls into the budget. It's no different than office rent, utilities, equipment or a hundred other expenses involved with running a business.

This is why our country is in such a tizzy about health care - we've all been conditioned to think that health insurance is something that must be provided for us - by an employer, our spouse, or the government.

No really the point. But my initial question was what were others in this business doing to get affordable health care. Sure, I can go price it on my own, which I've done. But there are other methods than just buying it yourself. I know of people in other businesses that have formed associations or join a Chamber of Commerce, that enable them to buy it as a group. That's why I wanted to find out what others are doing in this business.

Not to get into off track, but if you take the cost of healthcare lightly, you're not a good business manager. The latest government projection say that in 9 years, healthcare expenses will cost the average family $34,000/year. That's over 50% of the average projected family income for the same time period. Think about that for a second. That's 9 years, not some gloomy prediction of what's going to happen in 100 years if we don't change things.

[Chris Davis]

Originally Posted by William Smyth

No really the point.

My editorial comment was not directed at your original post, but rather at the general attitude of helplessness I saw in the thread.

Those "latest government projections" you quote are pure alarmist propaganda. Health care is a *product*. When the price of that product exceeds what the market will bear, it ceases to sell. I can guarantee you we will not see the average cost of health care reach $34k per year by 2018.

As I mentioned in my first post, we belong to a health insurance coop. We have 9 children, my wife and I covered under that policy for $285 per month. The coop requires us to be actively involved in the cost of our health care decisions and to negotiate for lower pricing. For example, my wife recently had surgery on her leg. We asked the doctors why each and every procedure or test was necessary. One of the providers gave us a 54% discount simply because we asked. We negotiated the price down from nearly $14k to under $8k. Any savings we can document come straight off our deductible, so we were reimbursed 100% for that surgery.

Anyway, there are several alternatives to high priced insurance - a few have suggested an HSA, which would be a very good place to start.

[Robert M Wright]

At risk of sounding somewhat repetitive, it would be just way easier to predict where the Dow Jones Industrial Average will be in 9 years, than predict what health insurance will cost, or even be like by then (whether or not anyone's particular projection is propaganda or otherwise). The only thing that is even remotely certain at all, is that things will almost assuredly change a whale of a lot (especially for folks who are self employed), with whatever Congress actually winds up doing (and predicting the weather next month is far easier than predicting what those buffoons ...er, uh, I mean our honorable and esteemed representatives in Washington will actually wind up doing, after all the back door wheeling and dealing is said and done!).

[William Smyth]

Originally Posted by Chris Davis

My editorial comment was not directed at your original post, but rather at the general attitude of helplessness I saw in the thread.

Those "latest government projections" you quote are pure alarmist propaganda. Health care is a *product*. When the price of that product exceeds what the market will bear, it ceases to sell. I can guarantee you we will not see the average cost of health care reach $34k per year by 2018.

As I mentioned in my first post, we belong to a health insurance coop. We have 9 children, my wife and I covered under that policy for $285 per month. The coop requires us to be actively involved in the cost of our health care decisions and to negotiate for lower pricing. For example, my wife recently had surgery on her leg. We asked the doctors why each and every procedure or test was necessary. One of the providers gave us a 54% discount simply because we asked. We negotiated the price down from nearly $14k to under $8k. Any savings we can document come straight off our deductible, so we were reimbursed 100% for that surgery.

Anyway, there are several alternatives to high priced insurance - a few have suggested an HSA, which would be a very good place to start.

Chris, I appreciate your input, so I hope I wasn't sounding snarky in my response. I don't want to turn this into a political discussion, but I believe the government numbers that I saw, because all they did, was project, for the next 9 years, what had occurred in the past nine years. Anyway, I think the coop is a great idea and that seems to be the most appealing option to me.

On a side, note. 9 kids and you work in the video business? You have earned my unqualified admiration. I have one child and this business keeps me up nights.