Self-Employed Health Insurance

man in a suit sitting at a work desk There are a lot of benefits to being self-employed. But one of the drawbacks is that you don’t have the option to enroll in employer-based health insurance. So, whether you own your own business, or are a freelancer, an independent contractor, or a gig worker, you’ll have to figure out how to enroll in health insurance coverage on your own. 

Health insurance might seem like an expense you can do without. But taking a gamble on not having it could end up costing you more in the long run. You should know that there are a variety of insurance options available to you if you’re self-employed. So, you don’t have to go without coverage. 

Jump To:

What Is Self-Employed Health Insurance

Self-employed health insurance is simply individual (or private) health insurance that you can purchase on the government’s insurance exchange for yourself (and your family). Self-employed people are considered those who run their own businesses and generate their own income, or who work as freelancers or independent contractors.


Compare Health Plans Online

  • Let us help you find the right Health Insurance Plans for you


Do The Self-Employed Need Health Insurance?

If you’re self-employed, you most likely need to get an individual or family plan if you don’t have an employer or workers but earn taxable income. Independent contractors, freelancers, consultants, gig workers, private practitioners like doctors or attorneys, and independent contractors are a few examples of people who might sign up for self-employed health insurance.

If any of these descriptions apply to you, you’ll need to look into getting health insurance to protect your health and your finances. And regardless of your employment position, getting insurance for yourself could spare you from having to pay a fine for not having it. Since some states still have a tax penalty for not having health insurance

To see health insurance costs and information specific to your state click here!


Getting Self-Employed Health Insurance

As an independent contractor, freelancer, or consultant, there are a number of ways you can get health insurance. Each of these options has advantages and disadvantages, as well as several criteria for eligibility.

  1. A family member’s group insurance – If your working parent, spouse, or domestic partner has employer-based health insurance, you could be able to sign up as a dependent. Group health insurance is frequently less expensive than individual health insurance. Because employers and unions frequently cover a percentage of the cost. Additionally, group health insurance may come with other benefits, including coverage for prescription drugs, dental work, and vision care. You are not eligible for group coverage through a spouse, domestic partner, or parent, respectively, if you are single and living alone or if you are 26 years old or older. Additionally, an employer might not pay for dependent coverage under the group health insurance plan. Which could make the insurance plan too expensive. Furthermore, you must accept the insurance options provided by your company rather than choosing the coverage that’s best for you.
  2. Affordable Care Act Individual and Family Health Insurance Plan – If you can’t get on an employer-based plan, you can purchase an ACA plan on the health insurance Marketplace. Purchasing an ACA plans guarantees the coverage and consumer protections of the ACA. You’ll be able to evaluate the four “metal” tiers, including Bronze, Silver, Gold, and Platinum plans. To see which suits your specific requirements for cost-effective coverage. You might be able to get low out-of-pocket costs with one of these plans. Particularly if you’re eligible for a tax break.
  3. Short-term health insurance – If you are uninsured and don’t want to wait for the annual Open Enrollment Period, you might be able to get temporary coverage by purchasing a short-term health insurance policy. You can get a short-term health insurance policy whenever you choose. Additionally, short-term insurance is typically less expensive than the comprehensive health plans available from commercial insurers and through the government exchange. But short-term insurance policies often only offer protection for less than a year, and renewal is not always an option. Short-term insurance doesn’t have the same minimum coverage requirements as ACA plans. So, it might not cover the benefits you require. Some states have limitations or outright bans on the sale of short-term insurance.
  4. COBRA – If you recently left a position as a full-time employee with a health insurance plan, you might be eligible to keep your employer’s group health insurance for 18 to 36 months through the COBRA program. This means that as you establish yourself as an independent contractor or freelancer, your ongoing health insurance coverage will protect you. In essence, you are maintaining the same level of coverage that you had with your previous employment. The drawback is that the cost of COBRA coverage is probably more than the cost of individual health insurance. And typically, your insurance would expire after 18 to 36 months.
  5. Direct enrollment – Directly purchasing a plan from an insurance provider or via a personal internet exchange is possible but not always advised. These “direct enrollment sites” were previously illegal.  Now, Insurance firms and brokers are able to sign up customers through personal websites in numerous jurisdictions. Private exchanges also don’t show every choice that might be available on the Marketplace, and the plans don’t have to comply with the Affordable Care Act. The commission fees paid to people who sell these plans may also have an impact on their suggestions.


The Cost of Self-Employed Health Insurance

When it comes to the cost of any health insurance plan, insurers consider various factors when setting your premium rates. But in general, you should budget between $300 and $500 per month for individual health insurance. 

The real cost of health insurance might vary depending on a number of variables, such as:

  • Your age
  • Your location
  • The number of dependents you want to add to your plan
  • The type of work you do
  • Plan type

Again, if you can get on a family member’s group plan, or purchase group insurance through a professional organization, you could end up paying less than you would for individual insurance.


Find Health Insurance Plans In 3 Easy Steps

  • Let us help you find the right Health Insurance Plans for you


Deducting Self-Employed Health Insurance Premiums

If you work for yourself, you may be able to deduct the premiums you pay for medical, dental, and qualifying long-term care insurance. You can benefit from this health insurance write-off whether or not you itemize your deductions. Because you record it on Part II of Schedule 1 as an adjustment to income and move to page 1 of Form 1040. This deduction type is preferable to an itemized deduction because it lowers your adjusted gross income (AGI).

You can only take the write-off for health insurance premiums for the months in which neither you nor your spouse qualified to join an employer-sponsored health plan. For instance, if you were single and ineligible for any employer-provided health plan during the final six months of the year as a result of quitting your job and opening your own business, you could still deduct the cost of your insurance premiums during that time.



  • Am I self-employed or a small business?

If you have no employees and your business generates an income you are self-employed.  To count as a small business you need to have workers that you record as “employees” on a w-2 form annually.  This does not include independent contractors. Hiring independent contractors to complete tasks does not qualify you as an employer.

  • What if I go from self-employed to working for a business that offers insurance?

Once an employer offers you health insurance, you no longer qualify for the premium tax credits or savings on Marketplace plans. Whether you enroll in the group plan or not. You can cancel your personal Marketplace plan at any time and enroll in your employer’s group plan. It’s rare, but if for some reason you can’t afford the group plan through your employer you may qualify for different tax credits. You may also qualify for savings on the Marketplace that are based on your new income.

  • What if my spouse has health insurance through work?

It depends on whether or not your spouse’s plan offers coverage to spouses and dependents. In most cases group plans do offer coverage options for the employee, their spouse, and any dependents. In this case you as the self-employed individual would no longer qualify for any premium tax credits or discounts.

If your spouse’s plan does NOT offer coverage for anyone beyond the employee, then you can get a Marketplace plan. And depending on your income, qualify for tax credits and discounts. Keep in mind, most of the time, in order to qualify for premium tax credits and other discounts on Marketplace plans, a married couple must file a joint federal tax return.


The Bottom Line

Flexibility and work-life balance are two benefits of working independently or as a freelancer. But one of the drawbacks is that you’ll have to sort out your own health insurance. Doing this is incredibly important. Since without health insurance, you and your family could face financial disaster due to a medical emergency. There are plenty of options available to you. So, you can find affordable coverage. You might even be able to deduct your health insurance premiums from your taxes. So, there is no reason not to get insurance if you are self-employed. To get started, simply put your zip code into the box below or give one our licensed agents a call at 877-670-3557.

Compare Health Plans Online

  • Let us help you find the right Health Insurance Plans for you

About The Author:
Cassandra Love

With over a decade of helpful content experience Cassandra has dedicated her career to making sure people have access to relevant, easy to understand, and valuable information. After realizing a huge knowledge gap Cassandra spent years researching and working with health insurance companies to create accessible guides and articles to walk anyone through every aspect of the insurance process.

2 thoughts on “Self-Employed Health Insurance

    1. We’d be happy to help! For a free, no obligation quote you can put your zip code into the bar to the right of our page or give one of our agents a call at 877-670-3557.

Leave a Reply

Your email address will not be published. Required fields are marked *