[US] I'm hesitating launching my own business because I'd lose health insurance for my family. What are my options?
[US] I'm hesitating launching my own business because I'd lose health insurance for my family. What are my options?
I have everything pretty much ready to launch full time. Time, skills, customers, support from family. But I'd leave my current job behind and with it my family's health insurance for the foreseeable future. I can't afford any of the options I've seen. It's the one thing holding me back. Any ideas for affordable health insurance for startups? If you've been in the same situation, what did you end up doing?
System working as intended in the US.
Tieing healthcare to work wasn't an accident.
iT sTifLeS iNnoVaTiON
Yeah you know what really stifles innovation? Our healthcare system being such a quintessential, categorical piece of shit that people don’t want to start a company because then they’d have to deal with the Wild West of unsubsidized insurance in a political environment where health insurance has successfully executed regulatory capture of all relevant laws and agencies.
in a political environment where health insurance has successfully executed regulatory capture of all relevant laws and agencies.
Well said. It blew my mind when Obamacare, and my Massachusetts Romneycare before it, turned "giving people healthcare" into "giving people health insurance".
People wanted health care, they pretended to give it to us, and they ensured it meant more profit for the industry.
I don't like that.
I was actually part of a startup in Europe some years ago. Healthcare was not part of the equation.
yup. granted post obamacare its not as bad as before. Just like half a loaf is better than no loaf.
If you can't afford health insurance then you don't have everything ready to go. Myself, I'm holding my job to keep my health insurance until my business can support my family and our needs. It's a bastard and a half but worst case, I've still got my job.
But if all you need is money, do you have a way to get some to pay for health insurance in the interim? Do a tiny "family and friends" seed round for six months runway, or however long you think you'd need?
Yeah, that's also what I'm thinking. It's just so sad that the US healthcare system is the thing that's holding back business. Seems counterintuitive. I was just hoping someone knew of a good workaround.
I guess one option is to save more and risk losing the business opportunity.
Is it possible for your partner to get a job with health insurance while you get your business up and running? If not, the ACA website, healthcare.gov, is your best option. When filing, you won't declare your income from when you had a job. Try to make your best guess. If needed, claim it to be $0 and then plan on paying it back when you file your taxes using the 1095-A.
If you don't have an accountant, get one. Talk to them before leaving your job. They know the ins and outs of these things. They should be one of your first trusted advisors. If you don't know how to pick an accountant, read Small Business Cash Flow by Dennis O ' Berry.
Thanks for the suggestions. We have been thinking about having my partner switch jobs to something that provides better healthcare coverage. But that could take a while and put the business opportunity at risk.
Can you get Obamacare with a subsidy if you're self-enjoyed?
This is what I do as a business owner. Buy insurance from the marketplace.
I do enjoy myself every night but not sure how that’s related.
I can, but it's still outrageously expensive compared to my current situation. It would put a lot of financial stress on us in a situation that's already stressful in every way possible.
There's a few options.
- Get healthcare through your spouse.
- Start your business as a "side hustle" while maintaining your job for a while.
- Try to find help through a small business alliance or chamber of commerce. (You probably need employees to get any real benefits)
- Welcome to running a small business, everything is far more expensive than you thought.
I'm not exactly an expert so please research all of this further, but my understanding is that you have a few options. In no particular order:
- COBRA. I know it's expensive ($800 / mo or more) but you're still getting the "group" discount your employer gets. Cheaper than buying insurance on the "open market" without getting your employer's group discount.
- Major medical. This is health insurance but only covers major incidents. No preventative care. Shitty but better than worst case medical problems bankrupting you.
- Open market insurance. Just buying straight from a health insurance company. Very expensive. Try Obamacare first.
- Obamacare. This has different names in different states. Tiered costs based on income. You'll want to research how it looks at income because this might inform the timing of leaving your job/current health insurance.
- No insurance. Terrible option, but you can go to the emergency room and they have to treat you.
- Other insurance. I believe some places like Costco (Sam's club?) offer health insurance for businesses.
The whole thing is a confusing mess and no options are perfect.
Have you talked with other small business owners? Do you have connections to the business community that could explain what they do? If you don't have anyone to network with about this, FIND some people. Even just by walking into their business and telling your story. Many communities have business incubators or other networking for startups. At least one mentor could make a HUGE difference for you.
Is starting the business and ramping it up for some time THEN quitting possible? This could make sense for a lot of reasons, not just health insurance.
If nothing else, you could work long enough to save up 6 months or a year of COBRA and then quit to do your business full time.
Best wishes!
A couple of notes on COBRA, the cost is because you’re (usually) losing the amount your employer pays toward health insurance, plus the administrator charges a percent on top to administer the program. So the cost will definitely depend on which plan you already have and how much the employer pays.
With COBRA you’ll be locked into your current plan, but should have the opportunity to change plans when the employer goes through annual/open enrollment.
Another thing to note is that you’ll keep access to any HSA accounts you have (this is money you and/or your employer has put in an account.). You will lose access to any FSA balance you have, unless you elect it while electing COBRA.
If you are a disregarded entity, are not currently and do not in the next 6 or 12 months expect to make enough profit for an AGI above a certain percentage of the FPL, and your state has Medicaid, you can apply for Medicaid with dependents using recent profit and loss reports to substantiate your effective self-employment income.
I started doing medical tourism. If I have anything big like a root canal or the like, I hop over to another country, take care of it and come back.
Even with flights factored in, it's way cheaper than paying premiums every month until you actually need it added to the eventual obscene hospital or clinic bill.
Circumstances obviously apply, but it's a very straightforward solution to high medical costs and worth looking into.
Does your idea only work in the US? Can you move to a country that's, y'know, more sane with healthcare (and I say this as a former US healthcare IT worker now living in another country).
It would work anywhere, but the opportunity I have is in the US and moving overseas right now is not really an option.
I do feel discouraged that it's the healthcare system that's holding back my business opportunity. Shouldn't be like that.
I do feel discouraged that it's the healthcare system that's holding back my business opportunity. Shouldn't be like that.
Your business opportunity isn't an opportunity for competitors' shareholders; you're more valuable to them being exploited for labor, and decades of "socialism is communism" governments and corporate lobbying have made it as difficult as possible to enter the market without being funded by and beholden to investment firms.
While the situation is utter shite, don't let it discourage you. Just make sure to be safe and have an emergency fund that isn't tied up in your business.
Write a letter to the editors of major media outlets, including Forbes and wish. Complain bitterly about politics stifling business, innovation and your freedoms, courtesy copy your Republican and Dem representatives at state and national levels.
Depending on the state, you may be able to get access via the health insurance marketplace.
Is medical tourism an option?
I think if you can't afford health insurance then you probably can't afford to run a business in the first place.
That is the unfortunate truth about doing business as a startup in the US, isn't it?
I wonder now many businesses never get off the ground because people have to make these decisions.