Some estimates say 45 percent of the Canadian workforce will be self-employed by 2020. At the time this article was updated in April of 2022, just over 2.6 million Canadians are self-employed. The number of freelancers and contractors has been growing in recent years. The gig economy is behind the growth of self-employment.
For many people, self-employment is an excellent career opportunity. Self-employment has plenty of benefits. It allows more flexibility in scheduling and gives you the chance to be your own boss.
It also comes with many challenges. This is something more Ontarians and Canadians alike are discovering as they switch to self-employment. One of the major differences with self-employment is the benefits situation.
Traditionally, employers provide sponsored benefits programs, providing things like health insurance and pensions. If you're self-employed, the situation changes.
What does health insurance in Ontario for self-employed people look like? We'll take a look at what you can expect. We'll also show you how to get the coverage you need and want.
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The State of Health Insurance in Ontario
If you're self-employed, you're likely familiar with the advantages. You have scheduling flexibility, and you can decide when to take a vacation, or even a much needed Workation.
You also know you have to fund that vacation out of your own pocket. For most freelancers and contractors, a day off is a day unpaid. Even public holidays are rarely paid, even though you would be paid if you worked for a big company.
This is also true when it comes to health insurance. Many large Canadian companies provide employer-sponsored benefits for their employees. This package often includes health insurance, such as dental and vision care.
The Need for Supplemental Health Insurance
Most employer-sponsored health benefits are supplemental insurance. That's because all Canadians have coverage under the public healthcare system.
The public healthcare system has some gaps in it. These include things like dental coverage, vision care, chiropractors and of course mental health care practitioners. Prescription medications are another common expense Canadians have to fund out-of-pocket.
Self-employed Ontarians still have coverage under the Ontario Health Insurance Plan, or OHIP. You can still visit the ER or see your doctor, so long as you have a valid health card.
As discussed, OHIP doesn't cover every medical expense you're likely to encounter. That's why so many Canadian employers offer health insurance as part of their benefits plans.
Not all Canadian employers offer supplemental health insurance. Self-employed Ontarians most definitely don't have access to company-sponsored benefits plans.
Nonetheless, supplemental health insurance is a good idea for the self-employed. A private health insurance plan can help you get access to the coverage you need.
Out-of-pocket costs have been increasing in recent years. Canadians like yourself are paying more for healthcare. The self-employed often pay more since they don't have coverage.
Challenges of Getting Supplemental Health Insurance in Ontario for Self-Employed People
The biggest challenge to securing a private health insurance plan is the cost. This is true for almost all Canadians, whether they're self-employed or not.
You might wonder if there are government grants designed to help self-employed workers. The Ontario government shut down the Ontario self-employment benefit in 2016, however there still exists various ways to secure government funding for things like improving your digital presence and assistance with training costs. There haven't been any programs targeted specifically at the self-employed since then.
That program wasn't designed to help people access increased health insurance. Its aim was to help unemployed people move into self-employment.
You may be able to take advantage of provincial or federal small business programs. The target of these programs isn't usually health insurance.
Though currently in 2022, self-employed individuals can get access to Employment Insurance (EI) Benefits. These benefits are designed to give financial support to self-employed people, though you must meet the eligibility requirements to apply.
There Are Tax Credits for Health Insurance
The Ontario self-employment benefit is no more, yet you can still be on EI. There are also still tax credits you can claim.
The Canada Revenue Agency publishes a long list of eligible medical expenses. If you pay out of pocket for certain health expenses, you might be eligible to claim them on your taxes. You can claim health insurance premiums.
This can help you reduce the amount of tax you pay to the CRA.
Another option for small business owners is a health spending account. Keep in mind that you need to establish HSAs for arm's-length employees. Your business must be incorporated. Learn more about HSA's in this article.
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The CPP and Employment Insurance
Self-employed workers in Ontario also qualify for some other benefits. You'll need to pay both the employer and employee part of the Canada Pension Plan and Employment Insurance.
This is good news for the self-employed since these programs can help cover a variety of leaves. In the context of health, the CPP can provide disability insurance. The EI program may be able to help you through more short-term illnesses.
Neither program offers much in the way of traditional health insurance coverage. Your best bet is still supplemental health insurance.
Finding the Right Supplemental Health Insurance
If you're self-employed in Ontario, your next task is to find great health insurance.
As mentioned, the cost is usually the biggest challenge for the self-employed. You may not think health insurance premiums are in your budget.
Affordable plans do exist. The first step to finding the right one for you is assessing your needs. Since you don't have employer-sponsored benefits, you'll need more coverage than other workers.
You'll also want to consider your age and family status. Parents with small children have different needs than people who are retiring soon.
You'll likely want to consider coverage for at least some of the following areas:
Critical illness insurance is also a smart idea for the self-employed. For most self-employed people, your business is you. If you get sick, your income and your business could suffer.
You don't need to buy the most expensive plan. Keep in mind that what you'll pay for health insurance will be minimal compared to what you'll pay out of pocket.
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Secure Your Health Today
Self-employed workers in Ontario need to take steps to secure their healthcare future. Supplemental health insurance in Ontario for self-employed workers is a smart move.
What are you waiting for? Health insurance can be more affordable than you think. Contact us to start the search for the right healthcare plan for your needs and secure your future.