Health insurance is a must for everyone. Most individuals, being employed by others, are covered automatically by their employer's health insurance plan. As a business owner, you do not have this luxury.

Basically, medical coverage is offered in the following ways:

1. spouse's employer
2. association and group insurance
3. individual policies

Coverage by Your Spouse's Employer

Fortunately, many business owners are covered by their spouse's health plan. Your spouse's employer subsidizes the actual cost of insurance to you. It is important to realize two things: 1) Obtaining coverage through your spouse's employer has many features and benefits you most likely will not be able to obtain individually, and 2) it reduces your premium payments dramatically. So, if your spouse is working and has medical coverage through an employer, make certain you and all your children are included in the plan. If you can't get coverage through your spouse, you have several choices, none of them cheap, but you absolutely must have medical insurance.

Association and Group Insurance

If you cannot get health insurance benefits through regular employment or if you are not able to convert a group policy to an individual one when you leave a job, you may be able to purchase group insurance through an association. The most common groups offering insurance to members are trade and professional associations, labor unions, business groups, civic organizations, and college alumni associations. Association and group insurance is usually cheaper than buying coverage on your own, because the group can often negotiate a better discount from an insurer than an individual.

Individual Policies

If you have to buy an individual medical insurance policy, get quotes from either a commercial insurer or from your local Blue Cross Blue Shield. Be prepared for larger monthly premiums, which are dependent on your family status. (Blue Cross covers hospital costs, while bills for medical and surgical needs are taken care of by Blue Shield.) Although the "Blues" exist throughout the country, local plans are autonomous and offer different coverage.

Blue Cross Blue Shield is different from commercial insurers in that they maintain a nonprofit status. Thus, their rates may be lower. They charge premiums as do other insurance companies but they generally pay bills directly to the provider. (With commercial insurance, often you must pay the bill and wait to be reimbursed and your reimbursement may or may not cover the full bill.) Generally, policies are guaranteed to be renewable, which is not always the case with commercial insurance. A number of the Blues let you sign up for coverage regardless of your health, during a period called open enrollment. So, if you have a chronic or preexisting medical condition, the Blues may be your only choice, although some state laws require all insurance companies to provide coverage regardless of your health.