When you work for a plumbing company, health benefits may come with your paycheck. Starting your own operation changes that. Here's how plumbers and pipefitters running their own businesses are finding less expensive coverage for their families.
Hi, I'm Sam Jaber, a licensed health insurance broker based in Tampa. I help clients by phone in the 36 states where I hold licenses. That arrangement tends to work well for plumbers, since you're often answering calls from your work truck while traveling between service appointments.
Most people in the plumbing trade earn their living working for an employer rather than running a business themselves. According to government employment figures, plumbing and heating contractors employ the majority of plumbers and pipefitters, while relatively few work for themselves. If you're one of those business owners, chances are you previously worked at a company that provided health benefits. Once you went out on your own, those employer benefits disappeared along with your old paycheck.
I'll explain how other plumbers who have made that transition are finding health plans that reduce expenses while keeping them covered. The best place to begin is with a single question about income.
The answer to this question will guide our comparison: does your household earn less than the income limit for marketplace premium assistance?
Marketplace premium assistance ends at approximately four times the federal poverty level. For one person, the threshold is a little above sixty thousand dollars annually, and it increases with additional household members. Since the usual earnings for a plumber employed by a company are close to that single-person amount, this income test can put people in the trade on either side of the line.
Running your own plumbing business means your total customer invoices aren't the number the marketplace uses. Instead, it considers net self-employment earnings after expenses such as materials, your truck, licenses, liability insurance, and other operating costs. Both busy emergency-service periods and slower stretches affect that final number. With that in mind, let's find which situation describes your business.
When your household earnings fall below the subsidy threshold, marketplace insurance is generally the most economical choice, often by a substantial amount. That's because marketplace coverage is the only kind eligible for premium assistance.
Of course, plumbing work can make income fluctuate throughout the year. One stretch of freezing weather might keep you booked solid, while a slow summer could leave you waiting for calls. The marketplace bases your enrollment on projected annual earnings and expects updates when those earnings change. If you underestimate your income and ultimately make more, your subsidy is adjusted at tax time, potentially requiring you to return part or all of the excess assistance.
My approach is to review the net income your business actually produced last year, account for anything that's different now, and come up with an estimate you can reasonably explain and support.
Next step: Send over your most recent tax return. I'll help you work out a realistic income projection and use it to choose an appropriate health plan.
This is a common situation for plumbing business owners who have grown enough to keep several trucks working. Once household income passes the subsidy limit, marketplace premiums are charged at full price. For a family that's generally healthy, those unsubsidized rates can be difficult to accept.
There's another category of coverage we can examine. Private, medically underwritten policies require you to complete a health questionnaire when applying. Because the insurance company evaluates applicants before accepting them, people in good health can often qualify for premiums significantly below the marketplace's full rates. These policies also use PPO networks extending nationwide, giving you access to physicians beyond a limited local network.
Before you apply, I want you to understand the conditions. Medical underwriting means the insurer might reject an application or accept it while excluding a health issue from your history. Different policies also provide different benefits. I'll explain the actual coverage details for each plan we're considering so you understand what you're purchasing.
Next step: Give me a call and we'll put the price of a nationwide PPO next to the marketplace premium for your family, making it easy to see how they compare.
Losing employer-sponsored medical benefits when you quit a job normally gives you a special marketplace enrollment opportunity. You generally have 60 days to enroll, even outside the usual enrollment period. If you decide to continue your old coverage through COBRA, be careful about canceling it voluntarily. Ending COBRA early by choice doesn't qualify you for another special enrollment period, so it's better to account for its scheduled expiration.
Because medical underwriting takes time to review an application, I'd prefer we talk a few weeks before your final day instead of waiting until afterward.
Getting a plumbing company off the ground also involves dealing with business liability insurance and, potentially, workers' compensation. Those policies serve different purposes from medical coverage. Workers' comp applies to workplace injuries, not everyday healthcare. It won't cover a sinus infection, a preventive doctor's appointment, or treatment your spouse or children need.
Next step: Contact me before you resign from your current plumbing job. We'll work on arranging a new plan to begin the very next day after your employer-provided insurance ends.
Many marketplace choices are HMOs or EPOs, which generally don't pay for nonemergency treatment outside their provider networks. Even when a marketplace PPO is available, its premium may be extremely high. You aren't necessarily stuck with those choices. I can help plumbers living in any of my 36 licensed states access PPO coverage through a nationwide network. If you're healthy, we can check the price with one brief phone call.
If possible, keep the following information within reach when we speak:
You don't pay me anything for the work I do. The insurance company provides my compensation when your coverage begins, and that payment doesn't increase the premium you're charged each month.
Straight answers, no sales pitch.
Health benefits from an employer generally stop when your employment ends. Losing that coverage usually gives you around 60 days to join a marketplace plan. If you're in good health and your earnings put you above the subsidy limit, I'd recommend comparing the cost of private medically underwritten coverage as well.
The marketplace looks at your net earnings from self-employment, meaning your business income after subtracting operating expenses. It doesn't simply count the total amount you've billed customers. Your actual business profit matters, along with income from other members of your household.
Often, you can take that deduction. However, the self-employed health insurance deduction can't be greater than your business's net profit. It also isn't available for months when you were eligible to participate in an employer-subsidized health plan. I'd have your tax preparer review the specific rules with you.
No, workers' compensation and health insurance have different jobs. Workers' comp deals with injuries related to your work, but it doesn't pay for sickness, preventive medical visits, or healthcare for your family. You'll still need a separate health insurance policy.
Tell me approximately how much profit your plumbing business made, how many family members need insurance, and your home location. That's enough for us to begin comparing prices and coverage. I'll recommend what makes sense for your situation, and if the plan you already have is a good fit, I'll tell you so you can get back to your jobs.
Plumbers and pipefitters in your state
Other lines of work I help