If you are a gig worker, a freelancer, an independent contractor or simply self-employed, then you know the freedom and challenges that come with being self-employed. You’re a master at juggling tasks, but when it comes to taking care of your health, figuring out the right health insurance can feel like a tricky puzzle.
In this blog post, we’ll break down the intricacies of health insurance for self-employed in simple terms so you can make smart choices. We will discuss other types of self-employed insurance and the best health insurance for self-employed in Canada.
What is Self-Employed Insurance?
Self-employed insurance is a specialized insurance policy designed for individuals who work for themselves. Whether you run your own business, operate as an independent contractor, or work as a freelancer, this type of insurance is tailored to your unique needs.
This self-employed insurance can cover various aspects, including health, critical illness, disability, and more, just like other types of insurance. To secure this coverage, you’ll need to apply for it and pay a monthly premium, along with other associated fees.
It’s important to note that not all insurance policies are the same, as various insurance providers offer different terms and conditions. Therefore, before purchasing an insurance policy, there are some key factors you should be aware of to ensure you make the right decision.
Types of Insurance for Self-Employed in Canada
In Canada, self-employed individuals have various insurance options to consider. Here’s a breakdown of the major types:
1. Life Insurance
Life insurance provides financial security for your loved ones in the event of your passing. It guarantees a benefit for your beneficiaries. There are two primary types of life insurance:
- Term Life Insurance: This type covers you for a specific period and offers protection to your dependents in times of financial need. It’s cost-effective and straightforward.
- Permanent Life Insurance: This coverage lasts for a predetermined number of years, providing a death benefit as long as premiums are paid. It’s a long-term solution that can build cash value.
2. Critical Illness Insurance
Critical illness insurance pays out a lump sum if you’re diagnosed with specific serious illnesses, including cancer, heart attack, stroke, and more. This coverage ensures you’re financially secure when facing a critical health condition, covering medical expenses and other costs. Here are a range of illnesses that are covered:
- Cancer
- Heart attack
- Kidney failure
- Liver Failure
- Stroke
- Lung Disease
- Coma
- Coronary artery bypass
- Muscular dystrophy
- Hepatitis
- Many sclerosis
- Motor Neurone Disease
- Parkinson’s Disease
- Terminal illness
- Meningitis
- Alzheimer’s Disease
- Paralysis
- Hypertension
So, with this type of insurance, you don’t have to worry about the cost of treating any of the above critical illnesses for yourself or your family members.
3. Disability Insurance
Life is unpredictable, and a sudden illness or injury can affect your ability to work. Disability insurance steps in to replace your income if you become sick or injured and can’t work. It’s especially important for safeguarding your family’s financial stability in case you cannot work due to disability.
4. Liability Insurance
Liability insurance is a type of insurance that provides protection against financial losses resulting from legal claims or lawsuits filed against an individual or organization. It covers the costs associated with legal defence, court judgments, and settlements if the insured party is found liable for causing injury, property damage, or other harm to a third party.
Liability insurance typically comes in various forms, including general liability for businesses, professional liability for professionals, and auto liability for vehicle owners, among others. It serves to safeguard the insured from the financial consequences of legal liabilities.
5. Health Insurance
Illness can strike at any time, and it may take a toll on your finances. Health insurance offers protection against medical expenses, including doctor visits, medications, and hospitalization costs. It ensures that you and your family are financially prepared to handle unexpected health issues, regardless of your savings.
Benefits of Health Insurance for Self-Employed
The importance of self-employed insurance cannot be overstated. Let’s break down the major benefits:
- Emergency Expense Coverage: When you’re your own boss, your success is yours. However, unexpected emergencies can strike at any time. It’s reassuring to know that you have a safety net to cover these expenses when they happen. Whether you’re just starting out or have an established business, many things can go awry and lead to financial setbacks. Therefore, investing in insurance is a critical safeguard for your business and overall success.
- Steady Cash Flow: Every business, regardless of the industry, requires a consistent cash flow to thrive. The last thing you want is for your business to crumble due to a financial crisis. With insurance, you can rest assured that your business will remain operational even during emergencies, providing you with peace of mind.
- Boost Your Savings: Saving for the future is crucial. But what if you could save more of your income without cutting back on your spending? This becomes possible with the right insurance policy. As a self-employed Canadian, insurance can help you minimize expenses and increase your savings, allowing you to stay in control of your finances even during unexpected situations.
- Secure Retirement: Imagine a scenario where you retire and face unforeseen circumstances like a critical illness or accident. While it’s easy to envision, it can be incredibly challenging to navigate in reality. However, your insurance has you covered from your working days to your retirement days. It ensures that you can retire with confidence, knowing you have financial protection in place to handle unexpected events.
The Best Health Insurance for Self-Employed in Canada
1. Blue Cross Blue Shield
If you have extensive health requirements, Blue Cross Blue Shield (BCBS) could be your best choice. BCBS offers some of the lowest-cost Gold plans among all the insurers we evaluated. While their premiums may not be the absolute lowest, their deductibles are competitive. BCBS consistently receives high ratings for its plans.
BCBS goes beyond traditional health insurance plans, providing short-term coverage and global health insurance for contractors and individuals travelling abroad.
2. Aetna
Aetna’s plans cover the essential health benefits mandated by the Affordable Care Act (ACA), making all their plans eligible for the maximum premium reduction available through the premium tax credit. For instance, if your income falls below 150% of the Federal Poverty Level (FPL) and you choose an Aetna Silver plan in 2023, your required contribution could be as low as $0.
Aetna offers busy contractors the convenience of no- or low-cost virtual care and MinuteClinic services, ensuring accessible healthcare. You can book appointments online for various services, including the possibility of receiving and picking up prescriptions on-site.
3. Molina Healthcare
For independent contractors seeking cost-effective plans, Molina Healthcare’s Bronze and Silver plans typically feature the lowest premiums and deductibles, on average, among major and regional insurers. Molina provides ACA plans in 14 states, with most plans offering 24/7 telehealth visits through Teladoc at no additional cost.
Molina also offers a handy mobile app that enables you to access your medical records, communicate with a nurse, and more, making it easier for you to manage your healthcare needs.
Insurance Benefits for Self-Employed Canadians
In Canada, the Canadian Revenue Agency (CRA) oversees insurance benefits tailored for self-employed individuals, providing valuable support when needed.
The Employment Insurance (EI) encompasses a self-employed insurance program accessible to eligible Canadians. This program offers benefits as soon as 12 months after your registration, provided you own a business or possess over 40% of your corporation’s votes. The benefits extend to a maximum of 55% of your earnings, subject to a defined maximum amount, in case you require time off to care for yourself, your children, or other family members. In 2022, the maximum weekly benefit stands at $638.
Quebec residents also enjoy access to this program, which includes compassionate care, family caregivers, and sickness benefits. Furthermore, residents of Quebec can take advantage of paternity, maternity, adoption, and parental benefits.
To access these benefits, you must meet specific eligibility criteria for each benefit you are applying for. Additionally, you must:
- Be a Canadian citizen or permanent resident.
- Have earned a minimum self-employment income within the year prior to your program application.
- Complete a minimum of 12 months in the program.
- Reduce your business involvement to less than 40% for at least one week.
Range of Quebec Benefits
Name | Beneficiary | Weekly Maximum | Maximum Weeks |
Parental | Parents who are away from work to care for their newborn or newly adopted child | $595 or $357 | 40 or 69 |
Maternity | People who are away from work because they're pregnant or have recently given birth | $595 | 15 |
Family caregiver | Benefit for adults people who provide care or support to a critically ill or injured person 18 or over | $595 | 15 |
Family caregiver | Benefit for children people who provide care or support to a critically ill or injured person under 18 | $595 | 35 |
Sickness | People who cannot work for medical reasons | $595 | 15 |
Compassionate care | People who provide care or support to a person who requires end‑of‑life care | $595 | 26 |
Source: canada.ca
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Final Thoughts on Health Insurance for Self-Employed
As a self-employed individual, your health and financial well-being are inextricably linked, and taking the right steps to protect them is a powerful move towards a more secure future.
Remember, your health and financial well-being go hand in hand, and having the right insurance can be a game-changer in your self-employed journey.
So, if you’re ready to navigate this path with confidence and make informed choices, I encourage you to explore your options further. Take the first step towards a more secure and successful self-employed life. Start exploring your health insurance options today. Your future self will thank you.
