My Husband and I Are Both Self-Employed. This Is the Single Biggest Challenge

My husband and I both run our own businesses and we have done so for many years. We love many aspects of operating our own companies. We have direct control over our income, so we can make more or less money by choosing when and how much we work.

Our businesses have been profitable, and we've been lucky enough to be able to support ourselves without going into credit card debt. And we even get to live a pretty good life with a nice home and an affordable mortgage loan.

Unfortunately, there is one big downside to being self-employed -- especially when two people in a marriage both have non-traditional jobs. 

Buying quality health insurance is almost impossible

The biggest problem that comes from my husband and I both being self-employed is that neither one of us has an employer who can provide health insurance. This means we have to buy coverage on the individual market.

Buying coverage on the individual market is expensive -- particularly when you don't qualify for any premiums under the Affordable Care Act, which we do not.  

In 2022, the national average monthly health insurance premium for one person on an ACA-compliant plan was $438 without subsidies. Since our family consists of us and our two children, when I began shopping for plans, I was looking at prices of around $1,400 per month or more just to get pretty basic coverage. That's a big amount of money.

Even worse, most of these plans were not very good. They had little or no out-of-network coverage, and most had networks in just one state, which is a problem for me because I travel back and forth between two locations. When I was pregnant, I was willing to pay literally any monthly premium price to have coverage that would allow me to see doctors in two different states, but I could not find one. 

This is not just a problem for me. Individual plans simply are not as good as those you can get from an employer. It's a fact of life, since individual people don't have the bargaining power that companies do. That means if you don't have company-provided insurance coverage, you're almost assuredly going to have to pay more for both premiums and care -- just like we do. 

Be sure to take all of your self-employment costs into account 

It's easy to forget about the fringe benefits that come from a traditional employment relationship. These might include:

• Health insurance 
• Workplace retirement plans 
• Paid time off
• Commuter benefits
• Subsidized child care
• Tuition assistance 

Not everyone gets all of these benefits. But many people get some of them. In fact, the Bureau of Labor Statistics reported that employer costs for civilian workers in March 2023 were $29.70 per hour for wages and salaries and $13.36 per hour for fringe benefits. That means fringe benefits account for about 31% of the $43.07 paid for each hour of work on average in the U.S. 

If you no longer have an employer providing all of these benefits for you, you are going to have to provide them yourself. You'll need to make a business plan, set prices for your company, and look at what it takes to be profitable. So don't forget about the added costs you'll incur by paying for insurance, putting money into a retirement account, and any income you'll lose if you take vacations. 

Going without health insurance or foregoing retirement savings are not options you should consider. I'm still happy to be running my own business, despite the challenges. But this is something you can't forget to think about.  

If your company can turn enough profits to allow you to pay for these essentials out of your checking account while still bringing in enough income to cover your other expenses and reinvest in business growth, then you just may have a viable career. If it can't, don't give up -- but just be aware that you may need your business to grow a little more before you can give up all your other sources of income.