The two words that best describe what this week was like would be: Researching, and Waiting. We’ve been researching Health Insurance options over the past week. This is helpful and necessary, as well as eye-opening. I’ll talk about that more in a minute. We’ve also been waiting…and waiting. Tammy and I applied for zoning permits so we can legally do business from our homes. Since our neighborhood is zoned “residential, we need to obtain zoning permits to do business in a residential area. Could we have started Internet businesses without going through this process? Yes, but there are benefits to taking this route. I’ll talk more about those benefits below.

Health Insurance for the Self-Employed

So far, there are two specific websites we’ve used the most to conduct some of our research: eHealthInsurance and the Blue Cross/Blue Shield website. However, on the BCBS website there is a box where you enter your zip code which then takes you to another site with appropriate health insurance information according to where you live.

We’ve run into two complications while exploring our options. 1) coverage for pre-existing conditions, and 2) coverage for workers comp-related issues. Both issues are in the pre-existing conditions category. If you are looking for health insurance coverage and have a pre-existing condition, most insurers have a 12 to 24 month “waiting period” where they will not cover your pre-existing condition. The only way around this is if you do not have a lapse in health insurance coverage, such as, if you change jobs and you switch from one group health plan (that the old employer carried) to another group health plan (that the new employer carries). Since there was no lapse in coverage, your new health insurance will cover any pre-existing conditions.

I understand why this practice is in place. This is to prevent people from buying health insurance only when some big health issue appears in their lives. You pay nothing for health insurance, which means health insurers aren’t making any money off you. Then, when an expensive health issue is discovered, you buy health insurance, which means a health insurer is now paying out big money to cover your expenses…which mean the health insurer is now losing money because of your expensive treatments. At this rate, all health insurance companies would go out of business and we would go broke when health issues crop up.

If you’re a self-employed person and your health insurance is covered by your spouse’s employer-provided group health insurance plan, everything is just dandy. But if your spouse winds up losing his or her job (which is happening to many people during our troubled economic times), then you might be stuck paying for COBRA (Consolidated Omnibus Budget Reconciliation Act – passed in 1986), which is very expensive for a married couple (even more so for a family). This is a very complex issue. I’m sure we’ll be writing about this again as we sort it all out. Until then…more research (fun, fun, fun!).

Getting In the Zone

Tammy and I have both received our LLC (Limited Liability Company) documents which makes each of our companies official. But we still have more items on our checklist that need to be crossed off. Getting our zoning permits is next on our list. We’ve mailed in our applications and fees, now we’re just eagerly watching our mailbox every day. Nothing we can do, now, but wait.

So what are the benefits of getting in the zone? The simple answer is it’s just one more layer of protection, that, when added to the fact that we each have an LLC, we’re solidly establishing our places in the world of business. Tammy and I want to ditch our day jobs and be self-employed. We want to be free to pursue businesses that we’re excited and passionate about. But what would happen if we were sued for any reason? Without properly establishing your business by setting up an LLC, obtaining the proper permits, setting up a business checking account, and filing the proper tax forms, you are greatly at risk if you are ever sued.

If the boundary between personal and business finances are not clearly established, and if it’s not clear whether you’re actually running a business or just a hobby making a little extra cash, you open yourself up to liability. You can reduce personal financial liability by protecting your passion…your work-from-home business. Tammy and I are serious about what we are creating. We want it to be solid and we want it to last a long time. There’s an entirely different mindset you have when you’re taking yourself and your business seriously enough to go through these formalities. I admit, it’s hard having to wait for mail to come; it’s hard taking all these extra steps when I see other people develop an ebook and begin selling it within a couple of weeks. We could have done that too…and there’s nothing wrong with taking that path. I guess it’s a matter of priorities, and long-term goals.

What’s up for Next Week

Even though we’re waiting for our zoning permits, we still have plenty to keep us busy. Next week, I’m going to be researching web hosts to find the best one for our business websites. I started doing a little of this yesterday but the real work is just beginning. We’ll continue researching health insurance options. I’m going to be talking with a representative from NFIB (National Federation of Independent business) about member health insurance plans. If we get our zoning permits, we’ll each register a DBA (Doing Business As) if we need them. Next, we’ll get our business licenses and set up our bank accounts. A lot of this depends on when we get our zoning permits which are required before we can get our business licenses. So we have another busy week ahead. And even though it seems like a lot of work, I think it’s pretty exciting too.

Are you trying to get an online business started? How are you progressing and what’s on your checklist for this week?