Traditionally, individuals considering leaving their job to strike out on their own have worried that they may be denied health insurance coverage because they have preexisting conditions, fear losing access to a trusted physician, or are unable to afford the premiums without an employer sharing the costs. The result is that some U.S. workers feel “job lock,” being tethered to their jobs and unable to leave, even if their skills and talents no longer match their position.
New research estimates that the number of self-employed Americans will be 1.5 million higher in 2014 because of the Affordable Care Act (ACA). Beginning next year, access to high-quality, subsidized health insurance coverage will no longer be exclusively tied to employment, which could lead people to pursue their own businesses as self-employed entrepreneurs.
ACA provisions that may encourage more people to start their own business include:
- No applicant can be turned down because of a preexisting condition.
- Individuals cannot be charged higher premiums because of their health status.
- Insurers must offer plans with a comprehensive set of essential health benefits.
- Tax credits to help low- or moderate-income individuals and families will reduce premium costs.
- Medicaid expansion, in some states, will provide coverage for those with the lowest incomes.
Researchers say that evidence of pre-reform job lock—along with empirical research demonstrating a significant increase in self-employment in states that have already initiated some health reforms—strongly suggest that the number of self-employed individuals in the United States will increase with full-implementation of the ACA.
The link to download the full report is here.