Contractors agree to take on duties for clients according to the rules of a contract. They may have to complete work for the employer, but they often have some leeway in how they complete their projects. Therefore, contractors often do not classify as full-time employees of a business.
Contractors often face different qualifications for employee benefits. For example, contractors may have to get health insurance through different avenues than as full-time employees. Contractors should understand their employment status to get the correct health benefits.
Health Insurance Requirements for Contractors
By law, most businesses need to offer health insurance to most full-time employees. Otherwise, they may face tax penalties. Nonetheless, the business may not have to offer health insurance packages to contractors. This means that the contractor may not be able to get coverage through their payer (the company for whom they contract).
However, the law also mandates that most Americans have to carry health insurance. If they don’t carry insurance, they may face tax penalties as well. Some Americans are able to get health benefits through their place of work. However, contractors may not have that option. If a contractor cannot get health insurance through their payer, they may need to look elsewhere for benefits.
Getting Health Insurance as a Contractor
Even though contractors may not be able to get coverage through their payer, they usually have other avenues to get coverage. These might include coverage:
- From a Spouse or Relative: Many Americans can join a spouse’s health plan if they can’t get coverage on their own. This often provides a way for contractors to still get health insurance.
- Through Private Insurance: Private usually offer plans through both the federal healthcare exchange and through non-exchange coverage. Both options may allow contractors to find coverage that is right for them.
- From a Contracting Company: Some contractors work for contracting firms. Often, these specialized firms are businesses unto themselves. They may provide employees with benefits, even though those employees complete work on behalf of other clients.
Nonetheless, some companies choose to offer benefits to their contractors. This decision often hinges on a number of factors. Contractors should never assume that a payer will provide health benefits. They should always verify if they can receive benefits, or otherwise take steps to get them.
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