| Self-Employed
More than one-fourth of all self-employed persons are uninsured (compared with 13% of workers in firms with 1000 or more). Not only are these individuals taking a risk to start and manage their own companies, often they are taking chances with their financial security by going without health insurance
What Barriers Keep THE SELF-EMPLOYED from OBTAINING Health Insurance?
Cost
The National Association for the Self-Employed reports that an employee in a firm with less than 10 employees pays 18% more for his or her portion of the health insurance premium than a worker in a firm with 200 or more employees. Health care costs are continuing to rise in double digits for micro-businesses, as well as for all companies
Convenience
The self-employed do not have a full-time human resources person to research and negotiate rates, file claims, answer employee questions, and address problems as they arise.
Inequitable Tax Treatment
When people receive health insurance through their employer, they pay no income tax on the portion of their income used to pay for the insurance. However, when people are not offered insurance through their employer and/or purchase coverage in the individual market, they must pay taxes on the part of their income they have used to pay their premium.
In dollars, this tax inequity can be significant. Families with a household income of $20,000 to $30,000, who purchase their health insurance outside of the employer framework, pay an average of $725 more in taxes. As income rises, so does the tax inequity.
In addition, the self-employed are not able to deduct the cost of their health insurance premiums for the purposes of self-employment tax. The self-employed are the only business entity that does not receive a full deduction of health care costs. This inequity causes the self-employed to pay 15.3% in additional taxes.
CAHC believes that health care tax credits, tax deductions, Health Savings Accounts, and other legislative solutions like high-risk pools targeted at reducing the tax inequities can make coverage more affordable for small businesses, their employees, and the self-employed.
More than one-fourth
of all self-employed persons are uninsured (compared with
12.6% of workers in firms with 1000 or more). Not only are
these individuals taking a risk to start and manage their
own companies, often they are taking chances with their financial
security by going without health insurance.
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