Discussion: Independent Illustrator Blockers

[adc]

I'm sure this has been addressed before, but as someone who really would like to gradually transition to an independent illustrator - a major blocking concern for me is something like insurance.

I have a family, and a good paying day job that provides decent benefits. (Of course, I pay for that in my wage etc. but regardless) I intend to keep my day job and build my illustration stuff on the side.

The good news is that our family already lives and dies by a budget. I assume you just end up budgeting for carrying insurance costs yourself, but I am curious if many folks have experience with this, or what options there might be, etc?

For the record, @Lee-White's biz vid series is great about this stuff generally. I'm just interested in what specific solutions folks have discovered for something like this.

Thanks in advance!

[Lee White]

great question andrew. Plans are changing so quickly right now in insurance that it's hard to know what is going to happen next, but there are some tips and tricks I can give you. Being self employed has the benefit of you being able to move a lot of money around pre-tax. The reason that makes a difference is that having insurance as a freelancer isn't too bad if you don't make too much money. The subsidy that Healthcare.gov covers can be huge. It varies from state to state, but generally things are pretty consistent. Sometimes the subsidy will cover the entire insurance plan! But the details REALLY matter so you need to check into it and be careful.

In Tennessee, a married couple can make up to $81,500 and get a FULL subsidy on a bronze level plan. That means I literally pay $0 for health insurance right now. If I make only $500 dolllars more, I end up not getting ANY subsidy and my health insurance skyrockets to $1100 per month. So knowing those numbers, I make sure I make under $81k in net income. I can do that by contributing to a 401k, or a solo IRA and any number of other pretax income shelters.

One other part of this is being able to control how much income you need monthly so you can hit the numbers you need. You may need to have little to no debt to truly be able to make the numbers work.

Like I said, each state is different so check your individual state at healthcare.gov. You can run through hypothetical scenarios on their site to see what things might make a difference to your subsidy or plan.

Open enrollment is coming up in November, so be ready by then. Otherwise you will have to wait another year.

[davidhohn]

@adc Oh wow! You found @Lee-White 's sweet spot! And as expected, he nails it. I'll just add my own experience to Lee's answer. For years my wife's corporate insurance covered our family. Since she left that job we've been working with the ACA and healthcare.gov. While we do get a subsidy, Lee is right -- if you make too much income then you lose the subsidy so tracking your taxable income becomes important. So this year, for example, we are on track to be ineligible for the subsidy, and our health plan is going to want a bunch of money. But we've just been saving for that projected cost in a dedicated savings account with our bank. Much like we handle our property tax payment.

While I love my job, that's probably the thing I like least about being self-employed, all the additional paperwork!

[adc]

Very helpful information guys. Thanks a bunch!