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Getting Group Benefits When You’re Self-Employed or Unemployed

One of the disadvantages inherent in being self-employed is the absence of employer paid benefits. Unfortunately, there’s no perfect world when it comes to getting group benefits when you are self-employed – you mostly have to put together the best combination of benefits possible. But there is a combination of sources that can help you in getting group benefits. It’s not perfect, but it will help.

Triple A (AAA)

Getting Group Benefits When You’re Self-Employed or Unemployed
Getting Group Benefits When You’re Self-Employed or Unemployed

AAA is a veritable treasure trove of benefits, not rising quite to the level of a good employee benefits package, but a welcome alternative if an employer paid option isn’t available. My wife and I have been AAA members for many years, and have found the price we pay for annual membership ($197 per year for Premier Membership services) is more than recovered through discounts and free car towing.

I recently applied for the group term life insurance policy through AAA Life Insurance, and was approved in about a week, with virtually no substantial questions asked. Being self-employed and having no employer provided plan, that was a welcome benefit.

Here is a partial list of benefits available to AAA members:

  • Group life insurance – As mentioned above.
  • Auto loans with preferred rates – Currently advertised to be as low as 1.75%.
  • Preferred rates on CDs and money market accounts – The current published APYs on both are well above current rates paid by banks and brokers.
  • Health Insurance – I couldn’t get additional information on this without subjecting myself to sales calls by insurance agents (which I won’t accept) so we’ll have to take this one with a very large grain of salt. But AAA advertises that they have major medical, individual and family health insurance and a Medicare supplement. I’m sure these are provided by independent brokers, and how these will work now that Obamacare is the law of land is an open question.
  • Pet insurance – Since so many people have pets they consider to be part of the family, this can be an excellent benefit to have. Most likely, the policy is through a regular provider, but at a discount as a result of your AAA membership.
  • Auto insurance – Likely similar to pet insurance in that the policy will be carried by a major insurance carrier, but with an applicable AAA discount.
  • Home insurance – Ditto.
  • Free towing – Under the Premier Membership, you can have one tow up to 200 miles, or three of up to 100 miles – all at no additional charge. We tend to use this service once or twice a year, and it about covers most of our annual membership fee.
  • Car rental discounts – You can get discounts at Hertz for up to 20%, though I have to confess we normally save only 10%. More significantly, with your AAA membership, the second driver on a rental car is available at no additional cost. And once again, on this benefit alone, we recover our annual membership fee. Or we move ahead when combined with free towing.
  • Eye exam discounts – As participating members, LensCrafters and Pearl Vision centers offer 30% discounts on eye exams, 15% off eyeglasses, and 10% off contact lenses. Since most employer vision plans typically save you 50% (at best), the AAA package isn’t terrible.
  • AAA prescription drug card – Offers discounts of up to 50% on prescriptions, but you can bet it will be a lot lower at most popular pharmacy chains. But it could still come in handy if you’re on an ongoing drug therapy and don’t have health insurance. After all – you’re not paying anything extra for the discount card.
  • Merchant discounts – This varies based on your location, but where I live there are currently 20% discounts available at New York & Company, FTD.com and 1-800Flowers, and 10% discounts at Denny’s, Hard Rock Café and Payless Shoe Source.

Credit Unions

We joined a local credit union less than two years ago, mainly because we are dissatisfied with our banks. We have been pleasantly surprised that not only do credit unions offer something reasonably close to good old-fashioned personal banking, but they also have certain benefits as a result of being a member of the group.

And that’s the key – membership. Credit unions treat customers like members, because that’s what they are. On the other hand, banks treat us like customers, which is something very different. In fact, given their close association with- and reliance upon- the Federal Reserve it often seems that banks don’t even really need customers. And sometimes it shows.

In addition to being treated as a member in a credit union, here are some of the benefits that you can expect as a result of joining one.

  • GAP insurance – Or Guaranteed Asset Protection, helps to protect your car in the event that the value drops below the loan balance that you owe on it. Should your car be totaled, and your regular auto insurance pay an amount that is insufficient to payoff the loan, GAP coverage will pay the deficiency. Our credit union offers this benefit at discounted rates.
  • Auto insurance – The credit union works with an auto insurance company to provide discounted coverage for its members.
  • Home insurance – This coverage is similar to the arrangement with auto insurance.
  • Accidental Death & Dismemberment Insurance – At our credit union you get $1,000 for free just for being a member, but you can purchase up to $300,000 of coverage at discounted rates.
  • Credit Life and Disability Insurance – This is insurance that provides additional income in the event you are disabled. It’s not health insurance, but supplemental income to help you pay your bills while you’re out of commission.
  • Life insurance – Once again, group term life insurance offered to members at a discounted rate through a third party provider.

AARP

Yes, I’m over 50, but I have not joined AARP, and probably won’t. It’s not that I think that it’s a bad organization, it’s just that they have certain political leanings, and I’m not at all political. However it’s got a decent package of benefits. If you’re over 50, you can join AARP for an annual fee of just $16.

Here are some of the benefits you can expect to see if you do:

  • Health insurance – AARP no longer offers major medical coverage (a casualty of Obamacare), but they do offer Medicare and hospital supplemental policies to cover what your primary plan doesn’t.
  • Dental insurance – One of the preferred providers is Delta Dental, whom I can vouch for as being an excellent dental insurance company. In the many years we’ve had the coverage (through my wife’s employer) I think we got a bill only once.
  • Vision and prescription discounts – On vision, they offer discounts up to 60% on eye exams, 30% on glasses, and 20% on contact lenses. They also offer a 15% discount on Lasik eye surgery. The prescription drug discount enables you to save up to 38% on the cost of drugs not covered by your health insurance plan, and is available at 64,000 participating pharmacies.
  • Auto and home insurance – Both provided through The Hartford Insurance Company.
  • Life insurance – Up to $100,000 in coverage through New York Life.
  • Discounts – Available at different levels for Angie’s List (45% off the membership fee), Denny’s, Dunkin Donuts, ADT Security, Consumer Cellular, Michael’s, McCormick & Schmick, Outback Steakhouse, Geek Squad and other popular merchants.
  • Travel discounts – Save up to 10% on stays at Choice Hotels, Hyatt, Hilton, Best Western, LaQuinta and other hotel chains.
  • Car rental discounts – Save up to 25% when you rent a car through Avis, Budget or Payless.

Trade Associations

Depending upon what industry you work in, there may be a trade association established at least in part for the purpose of providing benefits to its members. Which trades those are, and what benefits will be available, will depend entirely upon the industry group as well as the geographic location.

I have never been a part of a trade association in the past – and I’m not aware that one exists for bloggers – so I don’t have many details to offer. Earlier in my life however I was able to obtain discounted term life insurance through the American Institute of Certified Public Accountants (AICPA). It was the first non-employer life insurance plan I ever had, and I got it as a result of my employer’s membership in the AICPA (and kept the policy long after I left the firm).

Now it’s without a doubt that professional associations such as the AICPA and the American Bar Association – that serve established professions – probably offer more benefits than most trade associations do. Check out the possibility of the existence of trade organizations in your own field. You may find that the membership makes certain benefits available to you that would otherwise be prohibitively expensive to purchase on your own.

If you’re self-employed – or unemployed – what are you doing to get some form of benefits?

( Photo by David Hilowitz )


4 Responses to Getting Group Benefits When You’re Self-Employed or Unemployed

  1. Hi Kevin, I don’t know much about it, or how competitive the benefits are, but I’ve come across folks who are members of the National Association for the Self Employed (nase.org). Have you ever looked into it?

  2. Hi Chaz – I actually did investigate it a couple of years ago but never acted on it. Maybe it’s time to revisit that organization to see what’s available. At the time I was looking into health insurance but the options they had were unsatisfactory. Unfortunately when you’re self-employed health insurance is always a problem, even with Obamacare. Over the years at least one of us has managed to stay in an organization where we could get group coverage, but that’s no longer certain. I’m always exploring other options. Thanks for the suggestion!

  3. Hi Roger – My wife works in a bank and that’s where our benefits come from. But I’m always investigating other possibilities. You can never know when a pink slip will arrive and you’ll have to make changes – fast!

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