Three Years In

Insights on the Logistics of Self-Employment

This week marks my third anniversary as a freelance writer focused on astrology and related topics. I accepted my first ghostwriting assignment (no byline) to write an article for an astrology website at the end of July 2020.

A few months later, I was recruited via Upwork to join Tarot.com’s rotation of Daily Horoscope Writers. I’m still there, and I wrote their Daily Horoscopes for this month, August 2023. You can receive the Daily Horoscope for your Sun sign by email every day at no charge by registering for a free account on Tarot.com.

It was great to have a work-from-home job during the pandemic — and even better to get the grinding part of breaking into freelancing over with while restrictions related to the pandemic made other activities unappealing anyway. I love the freedom of freelancing, but it does mean I must put more effort into taxes and insurance than I would if I were an employee. Disability insurance came up in conversation today, so I want to share with others what I have learned about that.

Disability insurance is available through Freelancers Union

If you need to take a sick day while you’re self-employed, typically no one is going to pay you for that. Of course, the loss of income would become a big problem if you had an illness or injury that made you unable to work for several weeks. This is why disability insurance policies are crucial for self-employed workers.

Even if you are ill enough to ultimately qualify for Social Security Disability Income, the Social Security Administration states, “It generally takes three to six months for an initial decision.” A disability insurance policy that you pay for yourself can provide you with income while you wait for that to get sorted out.

Freelancers Union sells disability insurance policies to freelance workers. The amount of income replacement you are eligible to insure varies based on your income. Your premium then depends on both your age and your desired amount of income replacement. I’m almost 37, and my current policy through Freelancers Union costs $9.69 per month. If I made a claim that was accepted for an illness or injury, I would receive $750 of income replacement per month after a 30-day waiting period.

As described in the instructions for Line 15 of Schedule C, you are not allowed to deduct disability insurance premiums as a business expense on your U.S. federal taxes. However, I have found the peace of mind to be worth it anyway.

Paid Leave Oregon looks promising

My state, Oregon, is starting a new paid leave program this year. Employees are automatically enrolled in Paid Leave Oregon, while self-employed workers can choose whether to opt in. I am seriously considering it as a replacement for my current disability insurance policy. While disability insurance only covers illnesses and injuries, Paid Leave Oregon covers family leave, medical leave, and safe leave.

The cost of opting into the program is 0.6% of one’s Oregon net income from self-employment up to $132,900. For a monthly income of $2,200, this would be $13.20 according to Paid Leave Oregon’s calculator.

After you make a claim that is accepted, you will be paid weekly benefits effective the start date of your leave — retroactively, if necessary. For a minimum-wage employee, the benefit payout is equivalent to your usual weekly pay. For higher incomes, the benefit payout is likely to be less than your usual weekly pay.

OnPay provides a state-by-state guide to paid leave laws. Look up your state there to see if there is a paid leave program that self-employed workers can opt into.

Disability insurance may help with parental leave

Back in fall 2021, not long after I first got my disability insurance policy through Freelancers Union, there was a lot of talk in the news about things going awry during U.S. Transportation Secretary Pete Buttigieg’s parental leave. Tucker Carlson made nasty comments about Buttigieg breastfeeding, and then the story became all about the ensuing fight.

The bigger story that the media largely missed is that parental leave is often not handled as well as it should be for anyone regardless of their gender or sexual orientation. People commonly have their children closer to age 30 and get high-profile jobs closer to age 50, and that mitigates the problem to some extent. For Buttigieg, however, both of these huge responsibilities collided around age 40 — ouch!

When you’re self-employed, at least you don’t have an incompetent boss to mess up the financial and logistical coverage of your parental leave for you. Instead, you will have the parental leave that you plan and insure for yourself.

In December 2021, I wrote to Freelancers Union to ask how their long-term disability policies cover pregnancy. I received the following reply from Member Services: “With respect to pregnancy, please keep in mind that you must pay a premium for 12 months before you give birth; otherwise your claim would likely be denied. Long-Term Disability coverage with a 30 day waiting period would provide 2 weeks of coverage for a natural birth and 4 weeks for a c-section.”

My reading of this email is that disability coverage through Freelancers Union is only provided to a parent who gives birth. However, it sounds like Paid Leave Oregon covers parental leave for anyone who becomes a parent — whether that is through giving birth, one’s partner giving birth, or a child being adopted.  

I am not a licensed financial professional, and I have never had to make a claim on my Freelancers Union disability insurance policy. I’m just sharing what I have learned as a customer so far!