Health insurance isn't an option -- it's a necessity. Historically, employer-sponsored coverage was the way to go as coverage could not be denied and you received maternity benefits. The Affordable Care Act leveled the playing field, requiring private insurance to offer the same coverage. Most couples get health insurance through an employer, but it may not be in your best interest to do so. You may get a better deal by purchasing private insurance on your own.
Employer-sponsored health insurance plans come with set coverage levels. You have no say in the coverage levels, deductibles and coinsurance percentages unless the employer offers multiple policies. You enroll and get the same coverage as the person in the next cubicle. By buying your own health insurance, you may choose the coverage that fits your needs and medical profile. By increasing your deductible and coinsurance premium, you decrease your out-of-pocket premium.
With employer-sponsored health plans, you are only covered while employed with the company. You have the option of paying for temporary COBRA coverage after employment terminates. COBRA coverage requires paying out-of-pocket for the full premium, which is often prohibitively expensive. By paying for your own health insurance, you are guaranteed coverage regardless of employment status or geographic location. Your plan stays in force as long as you continue to pay your premium.
Starting January 2014, health insurance coverage is mandatory for all taxpayers. With the new law in force, health insurance policies are expected to be more competitively priced. By privately purchasing your health insurance, you could save money each month. You are eligible for private health insurance even if employer-sponsored insurance is on the table. Compare your employer’s premium to private health insurance to determine which is the better deal.
Self-employed taxpayers are eligible for an above-the-line income adjustment. You deduct the cost of your health insurance from your income for the year. In order to qualify, you must be considered self-employed by the IRS receiving a 1099 form to document income. The health insurance policy must be established under your name or your business’s name to qualify for the deduction. In comparison, you cannot deduct health insurance premiums from an employer-sponsored plan. You may only include the premiums as a medical deduction if the premium was paid on a post-tax basis.
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