Health Insurance for Contractors

This guide can help you know what questions to ask and how to compare plans when looking for a health insurance policy.

Definitions

First, let’s define the components of health insurance so you know what you’re comparing when you shop for a plan.

Plan premium
- The plan premium is the amount you pay each month for your health insurance.
Deductible
- Your deductible is what you pay out-of-pocket before the insurance company begins paying for care. For example, if you have a $3,000 deductible, your insurance does not pay for anything until you’ve paid $3,000 first. Note that there are some exceptions, like primary care services, which are usually covered by a copay.
Coinsurance
- Once your deductible is met, the coinsurance is the percentage you will pay for services. Let’s say you have a plan with a $3,000 deductible and 30% coinsurance. You have surgery that costs $10,000. You will pay the first $3,000 (your deductible), leaving $7,000 due. Your coinsurance cost is $2,100 (30%), leaving your insurance paying $4,900.
Copay
- The copay cost is a fixed amount you pay for a health care service that is generally due when service is rendered, and these copay amounts are not applied to your deductible. There are usually different copay amounts for different procedures and drugs. For example, if you have a $45 copay for a primary care physician visit, you’d pay $45 to the doctor’s office before your check-up; that amount would not apply to your deductible.
Out-of-pocket maximum
- The out-of-pocket maximum is the most you will have to pay in one year before your insurance begins to cover 100% of costs.

Plan types

Now that you have some basic definitions, this chart outlines the types of plans that you will most likely compare when shopping for coverage.

At first glance, having an HMO plan may seem restrictive. However, if you live in a big city and do not travel, health providers like Kaiser Permanente offer a full range of services and a wide variety of doctors and locations.

If you travel frequently and want a bigger network, or if you wish to have the flexibility of seeing who you want, when you want, you should consider a PPO, such as BlueCross/BlueShield. You’ll pay more, but you’ll have more choices.

Shopping for a health plan

Now that you understand definitions and plan types, you’re ready to shop! You have several options—outlined below—to get health insurance for yourself. Each state differs in what carriers, plans, and coverages are available, but the process for shopping for and signing up is generally the same.

Health Insurance Agent The great thing about health insurance agents is that they will (hopefully) be able to present all the best options for your situation. They can walk you through available individual or family plans and, if applicable, find a business plan that may fit your needs. You’ll have someone to explain the pros and cons for plans in detail. Even so, you’ll need to be prepared to ask the right questions, so be sure you are familiar with all the terminology so you can compare apples-to-apples. You can do an online search for an agent in your area.

<aside> 📌 If you need help finding an agent, we recommend:

The Jordan Insurance Agency

Billy Jordan, Jr., President & CEO

[email protected]

704.926.7565

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Health Exchanges Private exchanges like eHealth and HealthInsurance.com consolidate and present choices based on answers to some basic questions. They are like online agents; some even have agents you can talk to. Be sure you understand the basic concepts and really understand what each plan covers, and even more importantly, what is not covered in each plan. For example, there are now plans that require a 12-month waiting period for pre-existing conditions, so if you have a pre-existing condition, you may want an ACA plan that does not allow a pre-existing condition clause.