Some boons go bust when you work for yourself | May 08th 2006
by Jacqueline Dooley
There are many benefits to being self-employed and, as I’ve espoused in past columns, the top one for me is flexibility, both in location (being able to work from home) and my work schedule. But there are also things I’ve had to give up that, while not deal breakers, are fairly huge hurdles that are not likely to disappear anytime soon.
Health Insurance
Or lack thereof, I should say.
I took health insurance for granted during my 12 years of full-time employment at various companies. In fact, during my last full-time year of employment, I complained bitterly to my husband about the $300 per month that was removed from my paycheck to cover the cost of family health insurance. When I started working for myself, we switched to my husband’s benefits package which bumped us up to $500 per month because his employer didn’t cover as much.
Then, when my husband left his job to stay home with the kids, we switched to COBRA and our monthly health insurance cost jumped to $600, which left us shaking our heads and cursing the system, particularly since that $600 didn’t include prescription drug coverage. When I worked full time from August through March, my employer covered 75 percent of my health insurance and the cost once again dropped to about $300. I did not complain this time.
I now pay nearly $900 a month, which is a discounted amount I receive because I am a member of the New Paltz Chamber of Commerce. Joining a chamber of commerce is one of the few ways a self-employed person can actually find affordable health insurance in New York state. If I were to go directly to the insurance company, it would cost twice that (at least). The true irony is how much I miss those $600 COBRA payments.
Paid time off
I never thought of paid time off as a benefit until it no longer existed. Again, I complained about the limited amount of time off most positions offered me (mainly two weeks at first, then three as my career advanced). All companies provided five or six additional days off which could be used as sick or personal days.
I was never one to use my sick time in excess, but it was definitely nice to have it available to me if I needed it (like the time I was in a car accident and was out for more than a week with whiplash). So now, while I enjoy the flexibility to come and go as I please, I feel the pinch at the beginning of the month if my hours from the previous month are short due to missed work days.
And, again, I marvel at the concept of a company paying you when you’re not actually working (the flip side of this is the expectation that you’ll work 60-hour weeks and only get paid for 40 hours).
Taxes and expenses
There are other more subtle benefits missing from my life as a self-employed individual.
I’m responsible for covering the full 15.3 percent of Social Security and Medicare taxes — an employer normally covers half (7.65 percent) of this expense. I am no longer entitled to unemployment, something I had to use when I was laid off in 2002. I have to pay for my own liability insurance and I pay for industry conferences and continuing education out of my own pocket (the upside is that business-related education is a tax write-off).
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This article was published in the Poughkeepsie Journal on Saturday, May6th, 2006.