As a self-employed Canadian, you have the freedom to determine your own schedule and decide your own work priorities. There are many advantages to being self-employed, but these advantages also carry responsibilities, especially where your health is concerned. While you know you can rely on Medicare for basic services no matter in which province or territory you reside, there are also many important health services which provincial and territorial plans don't cover.
Why should self-employed people, including entrepreneurs, consider private health insurance?
Canada's territorial and provincial healthcare systems provide essential medical services. However, each province's health system is different, and Medicare doesn't cover prescription drugs, dental care, and vision care. Other important services, like physiotherapy, chiropractors, and massage, are only partially covered by some provincial health plans. In many cases, these services are not covered at all.
Canadians who work for larger employers have group health plans that can supplement provincial health system coverage. Self-employed Canadians typically don't have group plans offering essential supplemental coverage. Fortunately, self-employed people and small business owners can obtain the health coverage they need by purchasing their own private insurance.
Without private health insurance, business owners and self-employed proprietors run the risk of losing their business and incurring substantial expenses for supplemental health care without reimbursement.
What are some services that provincial health plans don't usually cover?
Provincial and territorial health plans are designed to cover essential health services, focusing on primary care. There are many necessary health services that don't fit under this definition, especially vision care, dental care, prescription drugs, ambulances, and home health services.
If you're self-employed and need vision care, you will likely be asked to pay for your exams, glasses, and treatment out-of-pocket. The same is true of dental care, as well as most prescriptions you may receive.
What is a realistic scenario for additional health services that aren't covered?
Here's an example of why a self-employed individual should consider private health insurance: a self-employed auto repair technician injured his back while working. He received emergency medical care but required chiropractic therapy and massage to continue to recover and get back to work. His chiropractic therapist offered a $500 package to assist his recovery, with another follow-up plan for $500 for six massage therapy visits.
The auto repair technician lived in B.C. He learned that B.C.'s supplementary benefits program would provide partial payments for up to ten visits for either chiropractic care or massage therapy per year. Even though B.C. is one of the provinces that provides some assistance with chiropractic care or massage, the auto repair technician would be responsible for paying for the majority of services he needs to recover and restart his business.
What advantages do private health insurance plans offer to self-employed people?
You're responsible for keeping your business going, and private health plans can offer peace of mind and coverage that can ensure you're able to continue to work and run your business. In addition, private health plans also offer:
- Customization: Tailor the coverage you need and make your health plan work for you.
- Independence: You will have your own individual plan protecting you and will not have to rely on someone else.
- Flexibility: You can choose your own plan and not need to have a group plan that might offer benefits you don't need.
- Portability: Employer-provided plans won't cover people after they move to another job or retire. A private plan will move with you wherever you go, including after retirement.
- Tax benefits: Premiums paid for private health plans can be tax deductible.
In addition, a private health plan will provide peace of mind, knowing that you have coverage for an ambulance if needed, medical equipment, and prescription drugs that you need. You can also get supplemental plans that offer vision and dental care.
What are some options for private health insurance for self-employed people and small business owners?
The most common type of health insurance self-employed people can get is personal health insurance. These plans are designed to provide personalized coverage for individuals. Personal health insurance plans can be matched to individual needs and budgets.
In addition, you may obtain an Association Health Insurance Plan (AHP). Association health plans are provided as a type of group plan for self-employed individuals and small business owners through either trade or business associations. For example, chambers of commerce can offer AHPs to members.
You may also apply to buy group health insurance through a family member, including your spouse or parents. When looking to buy group health insurance, it's always a good idea to check if you can receive a better premium and services that are tailored to your needs through a personal health insurance plan.
What about transitioning from a group plan to self-employed health insurance?
According to Stats Canada, in 2023 about 13.2% of Canadians were self-employed. Self-employment offers people the chance to be their own boss, but transitioning from a group employer plan to your own personal health insurance plan can be challenging and confusing.
Here are some tips on making the change:
- Know your group insurance coverage: Review your group insurance policies and the types of deductibles and co-pays you have. Be aware of any pre-existing conditions that may affect the new coverage you will apply for.
- Compare coverage options: Use comparison tools to analyze whether a new policy has the coverage you need at the price that you want to pay.
- Allot sufficient time: Start planning and comparing coverage as soon as possible if you're transitioning from a group employer plan.
- Account for waiting periods: Particularly for dental care, you may find that policies have waiting periods. Check the dates and waiting periods for care for any new policy that you select.
How to select the right health insurance plan if you're self-employed
You should consider the types of health and wellness services you need and want, as well as your budget. Here are some considerations to keep in mind when shopping for the right personal health plan:
- What kinds of services do you want and use?
- What is your monthly budget for premiums and deductibles?
- Do you have any pre-existing conditions?
Ensure that you are familiar with the specific types of coverage, exclusions, and limitations that the plan offers prior to buying the plan.
Tips for getting the best health insurance when you're self-employed
First, don't buy the first plan that you see, even if it has a very appealing price. Shop around and compare quotes based not only on price, but on the benefits that the plan provides to you. Ensure that the plan provides the benefits you need, and also has providers that accept the plan which meet your needs.
Some self-employed people may choose to save money on their personal health insurance plan by matching a high-deductible plan with a health spending account (HSA). This option is available to both incorporated and unincorporated businesses, and the HSA funds can be tax-deductible.
Finally, you will not only save money by taking advantage of plans that offer preventive care services at very low or no cost. You can use preventive services to not only save money, but also help to stay healthy and avoid future medical expenses.
For the health insurance plans for self-employed people offered by GMS, you can use our “Help Me Choose” tool to compare plans and quotes to understand the best value and coverage for you.