You're responsible for every job, but there's no employer handling your benefits. Here's how builders, contractors and remodelers can manage health insurance costs when their income arrives through project draws.
Hi, I'm Sam Jaber, a Tampa-based licensed health insurance broker. I help clients by phone across 36 states. Working with contractors makes sense to me because you're used to weighing costs, scheduling work, and preparing for things that don't go according to plan. That's also how I approach finding the right health coverage.
Many builders and remodelers I speak with started out managing crews for another company. Once they began pulling permits under their own business and putting their name on the truck, they lost access to that employer's health coverage. Suddenly, insurance for the family became another business expense to budget for, right alongside equipment payments, bonding costs and general liability coverage.
I'll explain how I work through these decisions with contractors. We start with the main question, then look at several situations I see regularly. Chances are, you'll recognize your own circumstances pretty quickly.
Before looking at plans, we need to answer this: is your household income low enough to receive a marketplace premium subsidy?
Here's where contractors often use the wrong figure. The marketplace isn't looking at the total value of your contracts. When you're self-employed, it considers your net income after business expenses, including subcontractors, materials, vehicles, insurance and other operating costs. Even a company bringing in substantial contract revenue might have a net profit low enough to qualify for subsidies.
The income threshold is four times the federal poverty level. For a household of one, that's slightly above $60,000 annually, with higher limits as household size increases. Whether your income falls above or below that threshold shapes the options worth considering, so look for the situation that best describes your business this year.
I hear this situation frequently from builders who've been in business for a while. Their net income is comfortably above the subsidy threshold, leaving them to pay the marketplace's full premium. For family coverage, that monthly expense can feel almost like carrying another mortgage without having another house to show for it.
There's a different route worth exploring. Private health plans outside the marketplace can use medical underwriting, meaning you'll answer questions about your health during the application. Since insurers can decide which applicants to accept, people in good health may qualify for premiums substantially below the marketplace's unsubsidized rates. Many of these plans use nationwide PPO networks, useful when your projects take you across state lines or your family travels regularly.
The important compromise with this option is medical underwriting. Depending on your health history and application answers, the insurer might accept you, decline coverage, or approve you while excluding a particular condition. Coverage details also differ between plans, so we'll examine the actual benefits and limitations carefully before you agree to anything.
Next step: Give me a call and I'll compare the marketplace premium for your household with a medically underwritten PPO quote, so you can judge the actual difference in cost.
Between retainage, project deposits and scheduled draws, predicting annual income in January isn't straightforward for contractors. One delayed project might move its profit into the following year, while several completed jobs could bring substantial income during a single quarter.
When business slows enough to bring your household income below the threshold, marketplace coverage is generally the better value because that's where premium subsidies are available. But the application relies on your projected income for the coverage year. You're expected to revise that projection as circumstances change. If your actual earnings exceed your estimate and you don't report the increase, tax filing could leave you repaying some or all of the excess subsidy.
We'll use your previous tax return as our starting point, then account for projects already under contract. Whenever a major job finishes or gets delayed, we'll review whether the income projection needs adjusting.
Next step: Share your previous year's tax return along with the jobs currently on your schedule, and I'll work with you to develop a reasonable income estimate.
Maybe you're still managing projects for another builder but preparing to launch your own company. When you leave that employer, the health insurance provided through the job generally ends. Losing employer coverage usually creates a special enrollment period lasting 60 days, allowing you to select a marketplace plan outside the regular fall enrollment season. COBRA works differently: choosing to cancel it early doesn't create another enrollment opportunity, but exhausting COBRA coverage does.
Private plans that require underwriting don't necessarily approve applications immediately. Give yourself several weeks to complete that process rather than waiting until your final paycheck arrives to start looking.
There's another distinction worth making when you open your own firm. General liability and workers' compensation address business risks and workplace injuries. They're not substitutes for personal health insurance, so they won't cover your child's routine appointment or treatment when you develop pneumonia.
Next step: Reach out before you finish your final day as an employee, and we'll arrange for your next coverage to begin when the employer plan ends.
Depending on where you live, the marketplace may offer primarily HMO and EPO coverage, which generally limits nonemergency care outside the network. Sometimes a PPO is available, but the premium is difficult to justify. That doesn't mean you have to give up on PPO coverage. In the 36 states where I'm licensed, I can help builders explore nationwide PPO plans. If you're healthy, we can discuss actual pricing in about fifteen minutes by phone.
We can get started without much paperwork, although having these details ready will help:
You don't pay anything extra for working with me. After you enroll, the insurance company compensates me directly, and my involvement doesn't increase your monthly premium by even a cent.
Straight answers, no sales pitch.
Yes, that's possible. If your business employs at least one person who isn't an owner or related to an owner, you may qualify for the marketplace's small business coverage option. People working for you as 1099 subcontractors don't meet that employee requirement.
Use the net profit from your previous tax return as a starting point, then factor in projects you already have under contract. Submit your best projection for the coverage year and revise it through the marketplace whenever a major project finishes ahead of schedule or gets postponed. That helps keep your subsidy aligned with your income.
When you file your taxes, the subsidy you received is compared with what your actual income entitled you to receive. If too much assistance was paid, you could have to repay part or all of that difference. Keeping your marketplace income projection current throughout the year helps prevent an unexpected repayment.
No. Workers' compensation covers work-related injuries, not ordinary illnesses, preventive appointments or medical treatment for your family. You'll still need separate health insurance to cover those healthcare needs.
Give me an idea of last year's business net income, the projects you've got coming up this year, and everyone who needs coverage. I'll compare the routes available, explain the costs, and let you know if keeping your current plan makes more sense than changing anything.
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