Many people dream of replacing their full time job with their own business on eBay. The first thing they plan on is replacing their salary with profit from eBay but sometimes fail to take into account the other fringe benefits that their job provides. This guide takes a look at replacing health insurance benefits from your full time job.

One of the major benefits of most jobs is participation in a group healthcare program. Most employers pay a portion of the cost as a benefit to retain employees. Becoming a self-employed eBay seller removes this benefit and puts the cost of health insurance on the individual. Living without coverage until your business takes off may seem like an option but what happens when you get sick and rack up major bills? Following are some options for coverage:

Get on your Spouse's Plan

If you are married and your spouse's company offers health insurance program, one option is to participate in that plan. Be aware that most plans have fixed entry dates and qualifying events that may limit when you can enter the plan. Consult with the company's HR department to get all the facts.

COBRA

The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows for the portability of health care coverage if you lose or quit your job. You can continue your current healthcare coverage plan for up to 18 months after you leave your job. This requirement is for companies of 20 or more employees. You will have 60 days from leaving your job to decide if you want to continue on the plan. Under COBRA, you will pay the full cost of the insurance. For example, if the cost of insurance to you was $200 per month while employed and your employer paid 50% of the total cost, then your cost under COBRA would be $400 per month. This can be daunting expense going into any business much less being self employed. Consult your company's HR department for the costs and requirements for continuing health coverage under COBRA.

More information can be found at the US Department of Labor website.

HSA's and HRA's

Another option for the small business owner and the self employed are Heath Savings Accounts (HSA) and Health Reimbursement Arrangements (HRA). Health savings accounts allow you to use pretax dollars to pay for out of pocket medical expenses. Health Reimbursement Accounts allow you to use pretax dollars for out of pocket medical expenses and health insurance premium costs. In other words, these plans allow you to deduct the costs of health insurance from your taxable income. Continuing your coverage under COBRA does not allow for this. Both HSA's and HRA's have their own benefits, limitations, qualifications and paperwork requirements. Do your research and consult a professional before making any decisions.

More information can be found at the National Organization of the Self Employed website and the National Federation of Independent Businesses website.

In General

Health Insurance can be a costly expense but doing without can be more costly. Doing your research can help you make the best decision for your situation.

Sincerely,
Brad Heck