Health coverage is a huge issue for beginning farmers, as it is for many people involved in farming. NYFC is a strong advocate for improving the ways that beginning farmers can access insurance, including pushing for improvements in state and federal programs. However, we know that the perfect solution is a long way off, so we asked Bisi Ibrahim, an expert from NerdWallet Health, to offer some insight into the issue.
Consider this a starting point as we push for better programs to support beginning farmers. Here’s what she had to offer:
Working long hours with dangerous equipment in all types of weather, farmers know they need health insurance to protect their physical and financial well-being. However, since approximately three in four farmers are self-employed, most do not have access to employer-sponsored health insurance. For new farmers, like most small-business owners, this problem is further compounded by how it often takes years to turn a profit, making it tempting to skip buying expensive health insurance on the individual market.
There are several options for new farmers looking for affordable health insurance. Below are a few to consider.
Your spouse’s employer plan
This is the easiest and most obvious way to go. Employers typically get discounted rates on health insurance and pay some of the costs for employees and their families. If you’re married and your spouse has an employer-sponsored plan, you may be able to sign up immediately if you’ve experienced a qualifying life event such as a change in your work status (you left a corporate job) or marriage. The benefits representative at your spouse’s employer should be able to provide details on whether you’re eligible and how to sign up.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows workers to extend their employer-based health insurance for up to 18 months after leaving a job. Thus, if you’ve recently left a traditional job, you may be able to get back on your previous plan. You’ll have to pay the entire premium, plus a 2% administrative fee, but that will likely be cheaper than the rate you’d pay on the individual market.
Affordable Care Act
The Affordable Care Act, better known as Obamacare, offers reduced premiums for some Americans. If your family income is between $11,490 and $126,360, and depending on the size of your family, you may qualify for a subsidized premium. Also, if your income falls below a certain amount ($28,725 for individuals, for example), insurers must by law reduce your out-of-pocket expenses. Visit healthcare.gov for details on coverage and rates.
Small-business group plan
All health insurance plans sold to small groups—typically, employers with between 2 and 50 employees—must now be offered on a “guaranteed issue” basis. This means that, if you have at least one employee (thus two people working on your farm), insurers cannot refuse to offer coverage based on health status. Several states require guaranteed issue plans for solo business owners as well. Since business plans typically carry more favorable rates than individual plans, you may be able to secure cheaper health insurance for farmers via this route.
Through a membership organization
Membership organizations, including AAA, AARP, unions and university alumni associations, often offer health insurance to their members. Discounts can run as much as 30%. Look into joining a group that offers discounted health insurance to its members—but be sure to crunch the numbers to see that the membership fee doesn’t offset any discounts.
A majority of states have a high-risk health insurance pool that covers individuals who are otherwise unable to obtain adequate insurance. For instance, California offers the Major Risk Medical Insurance Program, which is open to residents who are ineligible for Medicare Parts A and B, cannot purchase health care under Cal-COBRA or COBRA and are unable to secure adequate coverage.
Off-farm part-time job
A part-time job could provide adequate coverage until your farm becomes profitable enough for you to afford insurance on your own. Several employers offer health insurance to part-time workers, including DHL, FedEx, Lowe’s, Starbucks, and UPS.