Let’s take a look at a few important ones:

Liability insurance - If any one of your employees gets injured or dies while working in your organization, then you are legally liable to provide financial assistance to him and to his dependents. This insurance plan protects you against this kind of liability.

Disability insurance - This insurance plan provides regular income to an employee who injures himself and becomes disabled, either temporarily or permanently, while working in your company.

Key employee insurance - Small enterprises have a limited number of employees and almost all of them play a significant role in the organization. Their absence cripples the entire system. Key employee insurance plan protect your business against the loss of an employee who is critical for your enterprise.

Employment practices liability insurance - At times, the employees stand up against the business owner, with a claim that the latter has violated their legal rights. This self employment insurance plan will protect against all the unlawful claims put forth by the employees like breach of contract, sexual harassment, discrimination, mismanagement, wrongful disciplinary action, and so forth.

Business interruption insurance - Due to natural and man-made disasters like theft, fire, flood, earthquake, tornado, hurricane and so on, you may be compelled to shut your enterprise for a few days or months. Under such circumstances, you would have to bear the brunt of huge financial losses. Business interruption insurance is unique plan that have the ability to protect you from these kinds of losses.

In addition to these, property insurance, social security program, unemployment insurance, workers’ compensation insurance and health insurance are other important self employment insurance plans that should not be overlooked.

Here are a few tips that will help you to find the best health insurance plan within your budget:

Take advantage of COBRA - While you were in job, your employer was sponsoring your medical insurance plan. After you leave the job, yon can continue to keep the same insurance policy for about 18 months, as per the health provisions associated with COBRA (Consolidated Omnibus Budget Reconciliation Act, 1986).

In order to hold on to the health insurance plan, you would have to ensure that 3 conditions are fulfilled viz:

1. The company that you left had more than 20 employees
2. You weren’t expelled from the company because of negligence or incompetence
3. You are ready to bear the full coverage cost

According to the Act, you would have to find the new self employed medical insurance plan within 63 days. If you fail to do so, then either your medical insurance application will be rejected or your new policy would leave out the pre-existing health condition for a year.

Join your spouse’s plan - If your wife is working, then you can easily join her health insurance plan and thereby save lots of money that is spent on maintaining separate insurance plans and policies.

Complete your homework - If you wish to buy a new self employed medical insurance policy, then conduct a comparative study to ascertain the kinds of plans available, the different benefits that they can provide and how much premium you would have to shell out to get the best coverage. This comparative analysis will help you to find the best insurance policy.

Take the help of insurance agent - A proficient insurance broker can also help you to track down the best self employed medical insurance plan. Interview a few agents, compare their profiles and check the state insurance commissioner’s office to determine whether any complaints have been filed against the broker or not. National Association of Health Underwriters is a trustworthy place to find a reputed insurance agent.

Professional employers’ association - With time your business is bound to grow and you will certainly hire new employees to manage your organization properly. At this stage, it would be more feasible to buy self employed medical insurance from a professional employers association. Here you can get good policies at a reasonable price.

You are eligible for self employed health insurance deduction only if any one of the following applies to you:

• You own and manage an enterprise that is able to generate net profit as described in Schedule C, F or C-EZ.
• You are a general partner in an organization with net earnings as reported on Schedule K-1 of Form 1065.
• You are a partial partner and receive guaranteed payments.
• You receive salary from a corporation in which you hold at least 2% of the shares.
• You can also claim tax deductions if you are being paid premiums by a corporation and these premiums are included in your gross income.

Do you have the right health insurance plan?

You cannot claim tax benefits on any kind of health insurance plan. The plan should be established under the name of your business. It can cover you as well as your family. If you work in an organization and also look after your own business, then you would be having a medical insurance policy that is provided by your employer. You cannot claim deduction on such an insurance plan. Likewise, if the insurance coverage is provided by your spouse’s employer, then too you cannot claim tax benefit.

Some methods to claim self employed health insurance deduction:

Form 1040 consists of a worksheet; you can use this worksheet to figure out how much tax deduction you can claim. The table will basically help you to separate regular medical insurance premium from long-term health insurance premiums.

If you have more than one source of income that is subject to self-employment tax or you file form 2555or 2555EZ, then instead of using the spreadsheet, you should refer to IRS Publication 535- Business Expense.

If for any reason you cannot claim 100% self employed health insurance deduction, then you should calculate itemized deduction. In this deduction you can include remaining insurance premiums as well as other medical expenses. The amount you can claim as itemized deduction should not be more that 7.5% of your gross income.