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?
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.
