Health insurance, having enough and being able
to afford it, is one of the most nagging
concerns for those who leave corporate America
to run their own business.

Many small businesses have dropped health
coverage or reduced it in the past three years
because of rising rates. About 24 million of
American small-business employees and their
families are uninsured, according to a study by
the Kaiser Family Foundation.

The Consolidated Omnibus Budget Reconciliation
Act (COBRA) is a federal law that requires
employers to allow departing workers to buy
health insurance through the employer's group
plan. For the first 18 months after you leave
your employer you may elect to continue to
receive coverage in your employer's group plan
at your expense.

However, the cost of the monthly premiums for
COBRA can come as quite a surprise if you're
accustomed to you employer picking up most of
your health insurance tab via pretax paycheck
deductions. COBRA coverage for a family can run
$500 a month, and upwards of $200 a month for an
individual.

Depending on which State you live in COBRA may
not necessarily be the best deal for you. Shop
around, you may find joining a short term
insurance plan to be less expensive than
continuing your current insurance under COBRA.

One piece of good news for the self-employed -
Starting in 2003, the self-employed health
insurance deduction is increased to 100% from
the 70% that was deductible in 2002. As a
result, if you work as a consultant, freelance
worker, and other self-employed individual you
will be allowed to deduct all of your health
insurance premiums. The self-employed health
insurance deduction is especially valuable
because it is an above the line deduction for
Adjusted Gross Income (AGI). This means that you
can take advantage of this deduction even if you
do not you itemize your deductions on your tax
return.

Even with health insurance the portion of
medical expenses that has to come out of your
pocket can be more than you imagine. If you have
to dip into your retirement savings for certain
medical expenses, distributions from your IRA
used for that purpose may be exempt from the IRS
10 percent early withdrawal penalty. However,
you still will have to pay taxes on the IRA
distribution. Another alternative is to transfer
your IRA to a Self-Employed 401(K) plan and take
a loan from that plan. Loans from a 401(k) plan
are tax-free and penalty free as long as the
loans are paid back.

Daniel Lamaute is a retirement plans specialist
with Lamaute Capital. It's website
http://www.investsafe.com - covers retirement
plans and other benefits for the self-employed.

Daniel Lamaute of Lamaute Capital, Inc., invites
you to reprint this article in your print
publication, ezine, or on your website. This is
a Free-Reprint article. The only requirements
for publishing this article are:

You must leave the article and resource box
unedited. You must forward a copy of the ezine
or newsletter that contains the article inside
to the author at: InvestNews@aol.com . If you post this article on a website, you must set the links up as hyperlinks, and you must send us a copy of the URL where the article is posted. Health Insurance for the Self Employed Copyright 2003, Daniel Lamaute.

For more articles on this subject, please see
http://lonestarmerchandisingservices.com/articles.html

jerry durham has been in business as Opportunity
To Succeed, since the fall of 2003, offering
newsletters, ebooks, ebourses and ideas you need
to start, manage, & grow your online business,
with strategies, downloads, & artilces written
by professionals.

Lone Star Merchandising Services,
http://www.lonestarmerchandisingservices.com ,
email us -
info@lonestarmerchandisingservices.com