The failure rate of small businesses increased by a whopping 40 percent on average across the United States from 2007 to 2010, according to CNNMoney.

At a time when it’s more difficult than ever to start and grow your own business, health insurance for yourself and your employees can feel like one more thing trying to bring you down and take away from your bottom line.

Although most of you aren’t jumping for joy over the excitement of choosing the right health insurance plan for your small business, we all know that picking one is an unfortunate necessity. The risk of not having a plan, and having to pay for an accident or health emergency out of pocket is not worth taking.

The good news is that with more and more people continually becoming self-employed, a growing number of insurance agencies are beginning to offer this type of insurance at a lower rate, making it easier for you to find the plan that fits your needs and your budget.

Below is a list of some of the different types of health insurance that are available to self-employed individuals.


4 Types of Health Insurance for the Self-Employed

  • Health Management Organization (HMO): HMO health plans are one of the most inexpensive and widely used options for self-employed individuals. This type of plan offers a wide range of coverage options, as well as emergency and long term care. Individuals under HMO plans are required to see one primary care physician who then refers patients to specialists to aid in amending their specific healthcare needs.
  • Preferred Provider Organization (PPO):PPO plans are similar to HMO plans, but offer greater options as to where patients are able to go to receive care. Individuals under a PPO plan are most often able to see the physician or specialist of their choosing, no referral necessary. Unfortunately, with this freedom also comes a higher cost in deductibles, co-pays, and monthly premiums.
  • Point of Service Plans (POS): The POS plan is thought of by many as a combination of the HMO and PPO plans. With a POS plan, individuals are required to choose a primary care physician from within their network who becomes their “point of service.” This physician can then refer the patient to other physicians or specialists who are both in and out of the plan’s network. POS plans provide partial coverage for physicians outside of the patient’s network
  • Fee-For-Service: Fee-For-Service plans allow for patients to have the ultimate freedom in choosing their physicians as well as the types of services that they would like to receive. This type of plan usually requires that a high annual deductible be met before insurance steps in to cover any additional charges.

With these options in mind, talk with your insurance agency about figuring the plan that is right for you and your employees. There are many good options to choose from, many of which are better than having no policy in place at all.