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Mandated State Insurance Pools: Health Insurance for the Self-Employed

Employee Benefits

For decades, entrepreneurs and self-employed workers struggled with the idea of how to get affordable health insurance. Because group plans are often more affordable than individual plans, self-employed policy holders have had to pay higher rates just to get the kind of coverage that is routinely enjoyed by salaried workers or full-time hourly employees. With recent changes in health care, some of this will shift in favor of those individuals seeking affordable health coverage.

State Coverage Pools and Exchanges

Part of the Affordable Care Act (ACA) includes the emergence of state insurance exchanges where individuals can shop for individual coverage. In some ways, this law is tailor-made for situations where consumers and families are not covered by group plans from an employer. In theory, this change is supposed to relieve some of the pressure on small businesses and other employers who can’t afford to pay for health care for all of their workers. Instead, it looks like one result of the plan may be companies pushing even more of their workers toward part-time or contracted status to avoid paying group benefits.

Some experts are calling these exchanges ‘pools’ because there are also provisions of the Affordable Care Act that require health insurers to take on individuals with previously existing conditions. In the past, these kinds of insurance seekers were discriminated against because the insurance companies consider them a higher risk. Another idea behind the ACA is that higher risk individuals must not be denied health insurance.

How to Get ACA-Mandated Insurance Options

Those who are self-employed and want to take advantage of state exchanges can look for these insurance marketplaces to go into effect in 2014. These systems are in different stages of progress in different states, but the federal government has required states to implement one of these exchanges by next year or allow the federal government to set one up for them. Within a number of months, Americans in all 50 states will be able to purchase coverage through new models for insurance that will have a really positive impact on alternatives for the self-employed.

This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.