eHealth Insurance Review: How to Lower Health Insurance Costs

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Here's how to lower your health insurance costs, and even avoid a tax penalty, when you're self-employed by using eHealthInsurance. Self-employed health insurance | lower health insurance | health insurance tips | ehealthinsurance

Finding ways to lower health insurance costs when self-employed is tough. There are many different options available, but finding an affordable one can seem impossible.

The good news is that eHealth Insurance is one of the best ways to compare prices and different insurance plans. So you can find the best rate for the coverage you need!

If you’re like me, you are probably procrastinating on applying for health insurance. Maybe it’s because you just don’t think you can afford the $400+ premiums per month.

(Depending on your state and whether or not you’re single or married, your premium may be more or less.)

Either way, it’s not usually an expense that you’re excited about paying. However, I’ve done personal research lately and found a silver insurance plan that only costs $250 per month. This is for my husband and I to be on a family plan, versus the $450 it was going to cost.

Here’s how to use eHealth Insurance to lower your costs when self-employed!

How to avoid a tax penalty

I admit that since the hubs and I both became full-time self-employed in 2014, I waited way too long to apply for health insurance. This lead to having to pay $195 tax penalty when we filed our 2014 taxes.

If you don’t take action to apply for health insurance by April 30, 2017 this year, you’ll have to pay a tax penalty which will be on par with inflation, or a flat 2.5% of your income, whichever is greater.

As much as I may not like being forced into doing something just because the government tells me to, getting health insurance is a smart investment when you’re self-employed.

Why? Because if you’re out of commission due to health reasons, it’s likely that your self-employed business will fail. There’s no need to compound that further with medical bills and outstanding debts.

“You will be financially exposed if you have a medical need and don’t have health insurance — a dangerous gamble that could wreak havoc on your finances if you or a dependent falls ill,” warns Michael Stahl, Senior Vice President of HealthMarkets.

In the end it’s only me and my family who are losing out because we won’t have health insurance.

Review qualifying life events

Open enrollment for health insurance takes place from November 15th to December 30th for the current year’s healthcare coverage. If you miss this window you’ll have to pay a tax penalty during the next tax season.

If you missed the deadline and are applying for health insurance late (like I did last year), there are some life events that could qualify you for an extension and that will exclude you from paying a tax penalty.

“Ordinarily, the only options for obtaining health insurance outside of open enrollment are by experiencing a qualifying life event, such as marriage, divorce, birth of a child, or by purchasing short-term health insurance,” explains Stahl.

“However, the government is holding a special enrollment period until April 30th, geared toward folks who were uninsured and paid the 2017 tax penalty but want insurance in 2018. You only have a few more days to get full coverage for this year, so act quickly,” he says.

Qualifying life events that will exclude you from a penalty and extend the time you can get insurance coverage, include:

  • Moving to a new state
  • Big changes in your income
  • Getting married
  • Having a baby
  • Getting divorced
  • Death of a family member
  • Change in subsidy eligibility
  • Paying a previous year’s tax penalty

Get short-term health insurance

If you missed the open enrollment deadline, don’t worry, you can still get insurance coverage. The only problem is that your options are much more limited.

“You can apply for short-term health insurance, which will cover you for 6 or 12 months, but you won’t have access to the government-run exchange, so you’ll need to either call individual insurance carriers to compare plans or work with an insurance agent,” says Stahl.

I suggest working with a licensed agent who provide you with all the available options, from all available carriers as well as offer counsel and explain the tax consequences.

“Short-term health insurance does have its limitations, however,” warns Stahl. “You will not be eligible for cost-lowering subsidies since you are not purchasing a plan on the government exchange; you may be subject to coverage barriers if you have a pre-existing condition; and you will still be hit with a tax penalty for 2018.”

In any case, purchasing short-term insurance is better than having no insurance. Why? Because it’s a much smaller price tag than a potentially bankrupting injury or illness.

Apply for a health insurance subsidy

In addition to short-term health insurance when self-employed, you can receive health insurance coverage through the smaller companies and individual brokers, while keeping your costs affordable.

Doing so allows you to apply for a government subsidiary to aid in paying your monthly premiums.

What is a health insurance subsidy?

A subsidy is basically like a small tax credit that you get from the government to help pay your health insurance premiums depending on how much money you make each year.

Beware though, that you will have to balance your account at the end of the tax year, and if you make more money than you projected, you’ll have to pay some of this credit back.

I recommend a site like eHealth Insurance, which is what I used when I applied for my premium subsidiary. Insurance subsidies, on average, cover around 70% of the premium cost, and typically offer greater choices in health plans versus other avenues.

Step 1: Start an online application to see what you qualify for

Head over to the website and start the application process. You first must choose the insurance coverage plan that best fits your situation and your budget. The process is secure and only takes a few minutes.

You’ll need to have important info handy like your Social Security number, date of birth, household income (for both you and your spouse), and zip code.

ehealthinsurance options


Step 2: Fill in the details about your income and business

How much income did you make this year and last year? What was your employment status for both years? If you had to pay a tax penalty on your tax return for 2016, you could qualify for a subsidiary benefit from the government.

ehealthinsurance application online

Step 3: Review and finalize the application

Once you’ve filled in all the information, you will be take to the last page where you can review all of your details. The process takes about 3-4 minutes, but make sure you double check your figures. You don’t want any info to be wrong and mess up your application.

ehealthinsurance summary

Step 4: Wait for confirmation and processing

The final step is simple, just check your email inbox for a confirmation number and more info from You will be contacted (either by automated phone message or by email) when an insurance representative has approved your application.

Step 5: Receive a subsidy and insurance coverage

I applied for insurance on November 16th and received a final approval email and phone on November 25th. So you can expect to wait about 7-10 for the finalized details. In order for your insurance to take affect you will likely have to make payment prior to the enrollment date (which in my case was January 1, 2017).

ehealthinsurance confirmed

Get insurance from eHealth Insurance

“Rather than utilizing the Small Business Health Options Program (SHOP) — the government’s program for small business owners looking to offer group insurance through the ACA — many small business owners are offering employees a one-time “raise” to buy their own health insurance on the individual market,” says Stahl.

If you work at a traditional job and they offer this, you can combine this bonus with the government subsidy (if you qualify), and pay way less for insurance. This is a great option if you have a side hustle and aren’t working for yourself full-time.

The open enrollment period for 2018 coverage starts on November 1st and runs through December 31st, so mark your calendars so you don’t miss this deadline!

Use these steps to lower health insurance costs while self-employed with



  1. Hey, Carrie! I’m also self-employed, although I’m not full-time. Should I also look into applying for health insurance? I’m hoping that it won’t be mandatory, given my part-time status. Although, I suppose, it would be good to be covered in case something were to happen.

    Alex Jennings

    • Carrie says:

      Great question, Alex! If you don’t have health insurance through your job (or can’t get it) then you will likely have to go the self-employed insurance route. With Obamacare now fully in place, you will be charged a large penalty fee for every month you go without insurance coverage. Last year I paid the $200 fee, but next year it’s projected that I’ll have to pay $2,000 fee. So I suggest you look into getting coverage from either your day job or from being self-employed. You don’t want to pay the IRS more fees than you have to, right?! 🙂

  2. Helen says:

    Thank you so much for sharing this advice! There are more self-employed people these days, especially among young adults, who need this kind of help with insurance. Heck, many young people have started businesses without finishing college. I don’t think that is a bad thing, but it can be hard for a new business owner who is inexperienced with insurance or finance. I would definitely advise starting the steps that you explained here.

  3. Maryann says:

    I also recommend checking out Costco. Look on their website and see if they offer insurance in your state. Like e- site above, there are multiple choices.

  4. My husband has been self employed for years, but he is turning 26 soon and will have to find his own insurance. Thanks for the advice, it is sure to help us choose personal insurance that will work for him. I didn’t know that there are short-term plans. I will look in to the option before the next enrollment period.

  5. Thanks for the information. Thinking about health insurance is kind of overwhelming for me. It has become especially stressful in the last year since I went off my parents insurance. I learned about the penalty last year because I didn’t sign up for insurance soon enough, but I didn’t know there were life events that could exclude you from the penalty. I will be sure to look into these to see if they help me at all.

  6. James Bay says:

    I am self employed and have always found it difficult to find affordable health insurance. I had no idea you could avoid a tax penalty for all those reasons! That’s good to know in case any of that happens. Thank you so much!

  7. I didn’t realize that moving constitutes a qualifying life event. I’m planning on moving next year. I’m going to have to report it to my insurance company. On the whole, I think it would help me out with insurance breaks. What sort of insurance policy do you have?

  8. Having insurance can be very complicated but a must now days. Especially how you mention that we now have to pay a penalty if we don’t have it. I’m self employed and don’t make a lot really, but make a little too much to qualify for medicaid. I’m stuck in that weird spot where even though I make too much I still can’t afford insurance. What is the best thing to do in my situation?

  9. This is wonderful information Carrie! I’m going to share this post with my audience, as I know many self-employed entrepreneurs will appreciate the insights and find this article very helpful.

    • Carrie says:

      Glad I could help, Susan! I know how frustrating getting health insurance can be when you’re self-employed so I wanted to explain my entire process and how it works. Thanks for sharing it! Let me know if you (or your friends) have questions. I’m happy to help!

  10. Sarah says:

    Hi Carrie,
    I’m self-employed and became aware of the need to get health insurance (or pay the tax penalty) recently. My husband and I don’t want to get on an ACA plan. We are checking out another option, a Christian sharing plan called Samaritan Ministries. They are affordable ($180 for one person; $360 for two, etc.) and allow us to meet the requirement without joining an ACA plan. Just wanted to share – maybe someone else out there would benefit from this option too.

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