More and more people are ditching their 9-5 jobs in favor of freelancing. Today, the Freelancers Union reports that freelancers make up 35% of the total U.S. workforce. With numbers like that, it’s easy to think that freelancers have it made, and that signing high-end contract templates is a breeze.
They get to set their own hours, work for themselves, and focus on their passions. However, there is one final challenge that holds many back from finding their own employment path: health insurance.
Health insurance for freelancers is tricky. When you’re employed through a traditional full-time job, insurance is offered through them and this covers a portion of the cost. When you’re not under any traditional benefits package, you have to figure these things out for yourself, just as you do with your freelance invoices, for example.
Luckily, it’s not impossible to find excellent health insurance options. Let’s look into the many options you, as a freelancer, have today for protecting your health.
One of the most common ways freelancers stay covered is to jump on a family member’s plan. If your spouse has a healthcare policy, you can usually add yourself to their coverage either at no cost or with an additional premium.
Another option available for younger freelancers is being added as a dependent on their parent’s insurance plan. Under new healthcare laws, most insurance companies need to offer coverage for children under 26.
Talk to your family members today about possible coverage options. However, don’t be afraid to keep shopping around. Sometimes the cost of adding you to an existing plan is more expensive than purchasing your own insurance plan. In that case, keep reading.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a rule passed by Congress in 1986 that might apply to your situation as a freelancer. This act includes a rule that when you leave a company where you had a healthcare policy, this coverage must be extended up to 18 months after you leave.
If you’re planning to make the switch from full-time to freelance work, you might consider COBRA coverage as a way to transition. It buys you more time to find a plan outside of your employer. This coverage is a great option because, generally, employer plans offer more coverage than individual plans, so you can receive excellent care.
The ACA isn’t just for the unemployed and with existing conditions. Under the ACA, insurance is possible for those who are self-employed as freelancers as well. While the options likely won’t be as flexible or as extensive as a traditional plan through an employer, this will cover your healthcare basics and any emergencies.
You can view the plan options in your area through HealthMarkets today. Just like how you browse this list of Bonsai recommended project management tools for freelancers, you need to browse your options for health insurance via the marketplace. Just make sure you visit the marketplace early to avoid the last-minute rush of enrollment season.
Aside from the ACA, there are now options available specifically for freelancers. Some insurance plans on a national scale are designed with freelancers in mind.
While these were only available in a few states before, they’re now an option across the country. Keep in mind that options are still limited, but it’s still a great resource for seeing what’s available in your area. Finally, the Freelancer’s Union offers an insurance option built around freelancers and their needs.
Many cities offer health insurance for freelancers. These are group plans through business organizations or local chambers, and they can be substantial depending on your location. If you’re a member of a local professional organization, it’s worth asking if they offer any type of health insurance coverage.
Even if your local professional group doesn’t currently offer coverage, you might be able to find a group of members willing to start the process of getting group coverage together. Through this method, you’ll work independently or through a broker to choose a plan that’s right for your group.
Another choice is to choose a health savings account or HSA. This is a tax-protected account that’s specifically designed to be used for healthcare costs. When you use an HSA, you save each year on taxes while also preparing for any out-of-pocket health costs.
Most people pair an HSA with a high-deductible insurance plan. These high-deductible plans are commonly called “emergency” plans since they don’t cover much regular treatment, but they do help if you face a medical emergency. With an HSA and a high-deductible plan, you can save for your health without risking your financial future.
Finally, if you decide insurance isn’t right for you as a freelancer, you still have options to receive less expensive care. This is a good option if you already have an established health savings account, or if you have considerable assets.
Paying cash in full at the time of service usually opens you up to a large discount on care. Never be afraid to ask your provider if there’s a discount available if you pay upfront. Like you look for the best freelance tips to run your business, you need to keep in mind the best money-saving tips when visiting a healthcare professional.
Another option for paying cash is to look for a flat-fee doctor in your area. Many doctors and specialists provide a monthly rate you pay each month in exchange for unlimited visits. While this won’t help if you need emergency hospital care or if you need prescription drugs, but it can help with doctor costs.
Depending on your state, you might be able to get insurance as a business rather than an individual. Of course, this means you need your business to be registered with your state government. You’ll also likely need at least two people working under the same business in order to qualify for health insurance plans.
Forbes recommends self-employed individuals and small businesses establish insurance via a professional employer organization (PEO). This does involve extra steps, but it might be worth the added coverage options. A PEO might also open your business to some new tax credits, and that’s always a benefit.
As we’ve shown, it’s likely more inexpensive to choose coverage as an employer yourself than to search for an individual, private insurance plan. Your state might offer great health insurance options that are more affordable. However, it’s always a good idea to shop around before committing to a plan since rates change every year.
It’s true that healthcare is complicated for freelancers, but that’s no excuse to skip coverage altogether. If you do the right research, you can find a healthcare option that works for your income and situation. Don’t wait until you have an emergency to choose coverage. You should also consider disability insurance, which protects your income in case health issues prevent you from working. Also, learn more about your tax and accounting software options to keep track of your expenses. Today, every penny counts, especially when insurance is so expensive.
Use this guide and start your search today. While it’s not as simple as employer-based coverage, you do have options for health insurance as a freelancer. Your health is the most important thing you have. Protect it with the proper insurance plan to make sure you can focus on the parts of your business that are important to you.
Once you’ve mastered your health insurance options, it’s time to make life as a freelancer even simpler with Bonsai. With Bonsai, you can get paid faster and manage your freelance business with ease - sign up for a free Bonsai trial today.
A verbal contract (formally called an oral contract) refers to an agreement between two parties that's made —you guessed it— verbally.
Formal contracts, like those between an employee and an employer, are typically written down. However, some professional transactions take place based on verbally agreed terms.
Freelancers are a good example of this. Often, freelancers will take on projects having agreed on the terms and payment via the phone, or an email. Unfortunately, sometimes clients don't pull through on their agreements, and hardworking freelancers can find themselves out of pocket and wondering whether a legal battle is worth all the hassle.
The main differences between written and oral contracts are that the former is signed and documented, whereas the latter is solely attributed to verbal communication.
Verbal contracts are a bit of a gray area for most people unfamiliar with contract law —which is most of us, right?— due to the fact that there's no physical evidence to support the claims made by the implemented parties.
For any contract (written or verbal) to be binding, there are four major elements which need to be in place. The crucial elements of a contract are as follows:
Therefore, an oral agreement has legal validity if all of these elements are present. However, verbal contracts can be difficult to enforce in a court of law. In the next section, we take a look at how oral agreements hold up in court.
Most business professionals are wary of entering into contracts orally because they can difficult to enforce in the face of the law.
If an oral contract is brought in front of a court of law, there is increased risk of one party (or both!) lying about the initial terms of the agreement. This is problematic for the court, as there's no unbiased way to conclude the case; often, this will result in the case being disregarded. Moreover, it can be difficult to outline contract defects if it's not in writing.
That being said, there are plenty of situations where enforceable contracts do not need to be written or spoken, they're simply implied. For instance, when you buy milk from a store, you give something in exchange for something else and enter into an implied contract, in this case - money is exchanged for goods.
There are some types of contracts which must be in writing.
The Statute of Frauds is a legal statute which states that certain kinds of contracts must be executed in writing and signed by the parties involved. The Statute of Frauds has been adopted in almost all U.S states, and requires a written contract for the following purposes:
Typically, a court of law won't enforce an oral agreement in any of these circumstances under the statute. Instead, a written document is required to make the contract enforceable.
Contract law is generally doesn't favor contracts agreed upon verbally. A verbal agreement is difficult to prove, and can be used by those intent on committing fraud. For that reason, it's always best to put any agreements in writing and ensure all parties have fully understood and consented to signing.
Verbal agreements can be proven with actions in the absence of physical documentation. Any oral promise to provide the sale of goods or perform a service that you agreed to counts as a valid contract. So, when facing a court of law, what evidence can you provide to enforce a verbal agreement?
Unfortunately, without solid proof, it may be difficult to convince a court of the legality of an oral contract. Without witnesses to testify to the oral agreement taking place or other forms of evidence, oral contracts won't stand up in court. Instead, it becomes a matter of "he-said-she-said" - which legal professionals definitely don't have time for!
If you were to enter into a verbal contract, it's recommended to follow up with an email or a letter confirming the offer, the terms of the agreement , and payment conditions. The more you can document the elements of a contract, the better your chances of legally enforcing a oral contract.
Another option is to make a recording of the conversation where the agreement is verbalized. This can be used to support your claims in the absence of a written agreement. However, it's always best to gain the permission of the other involved parties before hitting record.
Fundamentally, most verbal agreements are legally valid as long as they meet all the requirements for a contract. However, if you were to go to court over one party not fulfilling the terms of the contract, proving that the interaction took place can be extremely taxing.
So, ultimately, the question is: written or verbal agreements?
Any good lawyer, contract law firm, or legal professional would advise you to make sure you formalize any professional agreement with a written agreement. Written contracts provide a secure testament to the conditions that were agreed and signed by the two parties involved. If it comes to it, a physical contract is much easier to eviden in legal circumstances.
Freelancers, in particular, should be aware of the extra security that digital contracts may provide. Many people choose to stick to executing contracts verbally because they're not sure how to write a contract, or they think writing out the contract terms is too complicated or requires expensive legal advice. However, this is no longer the case.
Today, we have a world of resources available at our fingertips. The internet is a treasure trove of invaluable information, platforms, and software that simplifies our lives. Creating, signing, and sending contracts has never been easier. What's more, you don't have to rely on a hiring a lawyer to explain all that legal jargon anymore.
There are plenty of tools available online for freelancers to use for guidance when drafting digital contracts. Tools like Bonsai provide a range of customizable, vetted contract templates for all kinds of freelance professionals. No matter what industry you're operating in, Bonsai has a professional template to offer.
A written contract makes the agreement much easier to prove the terms of the agreement in case something were to go awry. The two parties involved can rest assured that they're legal rights are protected, and the terms of the contract are sufficiently documented. Plus, it provides both parties with peace of mind to focus on the tasks at hand.
Bonsai's product suite for freelancers allows users to make contracts from scratch, or using professional templates, and sign them using an online signature maker.
With Bonsai, you can streamline and automate all of the boring back-office tasks that come with being a freelancer. From creating proposals that clients can't say no to, to sealing the deal with a professional contract - Bonsai will revolutionize the way you do business as a freelancer.
Why not secure your business today and sign up for a free trial?