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How Health Care Reform Helps the Self-Employed

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Being self-employed is like being a one-person band. And not your average pop rock trio -- we're talking big-band jazz style.

When you're self-employed, you're in charge of vocals, guitar, piano, drums, violin, clarinet, double bass, flute, saxophone, trumpet... the list goes on and on. Keeping all these moving parts coordinated is crucial, and acquiring or maintaining health insurance is a huge part of that job.

With all the recent news about health care reform, that part of your job just got even more confusing.

By now you've probably heard that the Supreme Court upheld the Affordable Care Act (ACA) declaring health care reform constitutional. Chances are you haven't read the whole thing (since it's more than 900 pages long). But there are some provisions designed to benefit the self-employed. So how can this reform work for you?

Since we at eHealthInsurance speak to the self-employed on a daily basis and have addressed some of these new changes on our blog, we've become well-versed in explaining how benefits have changed (and will continue to change) as a result of the ACA.

If you're self-employed, here are five ways health care reform can help you:

1. Insurance for Those with Pre-Existing Conditions

If you've gone without health insurance for the last six months or so because you have a pre-existing condition, Pre-existing Condition Insurance Plans have been established to help bridge the gap between now and 2014.

These are subsidized health insurance plans for people with complicated medical histories that prevent them from qualifying for individually-purchased health insurance. Funding for these plans is scheduled to end in 2014, when the law will require all health insurance plans to accept applicants regardless of pre-existing medical conditions. You can learn more about these plans at www.pcip.gov.

2. "Free" Preventive Care

The law requires plans to provide some basic preventive health screenings at no out-of-pocket cost to you. So if your rationale for not getting a routine exam was the price of your copay, your excuse is now gone. Go see your doctor!

3. No More Caps on Lifetime Coverage

The ACA did away with lifetime coverage limits for most medical services on most health insurance plans. This means you no longer have to worry about going over your lifetime coverage cap.

4. Small Business Health Care Tax Credit

If you anticipate growing your business and eventually providing health insurance to your employees, you'll be happy to hear that the Small Business Health Care Tax Credit helps small businesses that are incorporated or registered as an LLC.

The credit applies to businesses with 25 or fewer employees by providing a tax credit of up to 35 percent of the cost of employee premiums. These tax incentives are in place now, and they're scheduled to be expanded in 2014.

5. Health Insurance Rebates

This provision of the ACA went into effect in 2011 and requires insurance companies to spend 80-85 percent of member premiums directly on member medical expenses. The insurance company's costs and profits are limited to the remaining 15-20 percent of premium income.

Insurance plans that do not meet these "medical loss ratio" (MLR) criteria are required to issue rebates to policyholders. Rebates are already being issued, and all rebates from 2011 should have been paid by August 1, 2012. Learn more about these provisions and more on the eHealthInsurance blog.

Keith Mendonsa is one of eHealthInsurance's top agents licensed in all 50 states and the District of Columbia. Keith has helped thousands of people find health coverage that fits their needs. Brazen Life is a lifestyle and career blog for ambitious young professionals. Hosted by Brazen Careerist, we offer edgy and fun ideas for navigating the changing world of work -- this isn't your parents' career-advice blog. Be Brazen.