*I am not an insurance expert or agent. I am simply sharing my own experience. If you need guidance, listen to someone smarter than I.
When Kirstie and I were debating about whether or not to go full-time on eBay our discussions really highlighted our youth and inexperience (our stupidity actually…)
We talked for hours about me quitting my job, where we’d source inventory, how I could convert the third bedroom into an office/eBay space etc. but the topic of insurance never came up a single time. Look back, this is absolutely unbelievable. Not having health insurance as an eBay seller is a great way to jeopardize your personal health, your business, and even your family.
Now, most people would be okay if they went a year without health insurance. In theory, we were making enough money that we should have been fine paying for normal health issues. Too bad we didn’ have normal health issues. A whirlwind year and nearly $100k in medical debt later we fully appreciated how short-sighted we had been.
While we’ve finally dug ourself out of the debt hole, I cannot recommend the experience. Making six figures a year and eating ramen because you didn’t think about health insurance was a heavy price to pay for our youthful ignorance.
So our purpose here is to help you avoid the same mistake and, hopefully, the same experience. I’m still not at expert in insurance for self-employed people but we have done a ton of research and successfully navigated the field of health and insurance for the past three years (which included two surgeries, two nights in critical care for my daughter, and healthy pregnancy).
So let’s get right into it, what insurance options for eBay sellers have and which is the best one?
Health Insurance for eBay Sellers
In short, eBay sellers have the same health insurance options as anyone else who is self-employed. eBay no longer provides a health insurance option for its sellers and, as of now, there are no group insurance options available.
- Piggyback of someone else’s plan. The most common place that eBay sellers get insurance is through their spouses. Because most employees pay a significant portion of your monthly premium, you’ll be hard-pressed to find a better option outside or workplace insurance.
- Find group rate insurance through an organization. One of the main reasons that insurance through a job is cheaper is that it is “group insurance.” Group insurance dilutes the risk among all employees and allows your employer to negotiate a better rate. You can often find a group rate if you are college alumni, a member of a trade association, etc.
- Buy a marketplace plan. if you’re single/your spouse doesn’t have health insurance and you don’t work yourself, you might be left to get a plan through the marketplace. This is typically the most expensive option but is much cheaper than not having insurance when you need it!
- Medicaid (for those who qualify). If you keep great financial records (like you should) then you probably know exactly how much you make on eBay. If you don’t keep great records, you would probably be surprised at how little you actually make. The majority of eBay sellers would be able to qualify for Medicaid if they don’t have other options available.
- Join a HealthShare or other alternative to traditional insurance. HealthShare plans (such as Altrua) offer something similar to insurance for eBay sellers than could help you out if you had it before a catastrophe. In a HealthShare, a group of people pay a monthly premium which is used to “share” the health costs of those in the group who incurred them during the month. The main drawback here is the significant waiting time before becoming eligible for benefits and the amount of coverage your receive.
- Establish an HSA. A health savings account isn’t a replacement for insurance (since you need a health insurance plan to qualify for one) but it does allow you to get a cheaper plan that still meets your needs. An HSA allows you to save pre-tax money (similar to a traditional IRA) which can then be used for medical costs. You typically have to have a high deductible plan to qualify.
If you are an eBay seller in need of insurance, that is really the extent of your options. The only other option available is to do what I ended up doing and….get a job.
Does eBay offer health insurance to sellers?
No. eBay used to offer health insurance to its sellers but the program has long since died. Do not mourn though, by all accounts it was not cost-effective and you’re better off looking for insurance from other sources.
What do we currently do for health insurance?
We still consider ourselves to be full-time sellers because our eBay store generates a full-time level of income and we spend significant time on it. However, that’s not to say that we don’t do other things. Depending on how much effort we are putting into it eBay is either our 3rd or 4th largest stream of income every month.
When I finished with college two years ago and no longer qualified for the student health plan (my university’s insurance) we had to sit down, take a look at our finances, and check out some options. After breaking everything down we decided that the best thing for me to do was to *gulp* get a job.
Here’s how it broke down:
- eBay Sales at the time: $10,000/month
- Profit Margin: 40-50%
- Job offer: $2400/month
- Value of benefits through job: $1,000/month (insurance, HSA, and 401k matching)
So, stick with me here, to replace the income I would be getting from taking the job, we would have to find a marketplace insurance plan (around $1100/month for our family of 4) and increase our eBay sales by over $7,000! Get it? Because of our profit margins, me taking a job that paid $2,400 a month and had decent benefits took the place of an extra $7,000 in sales.
In general, this is the safest route for people to go. I currently work a job that provides structure to our days, extra income (that can be spent on eBay inventory), and peace of mind (through diversified income and benefits). I don’t plan on working forever but will probably continue to do so until we hit the $150,000/year mark from other income sources.
Now, working a job doesn’t mean that eBay has died. We have enough time to maintain $10k/month on eBay, manage 3 websites (our #1 income source), and spend lots of time with our kiddos. I don’t think any of that would be possible without me working!
So, in the end, perhaps the best health insurance option for eBay sellers is to simply get a job (or have your spouse get a job). Remember, there’s no shame in traditional work!
Whatever health insurance option you choose, just be sure to put in your due diligence. May your health always be in your favor!