Health Insurance for the Self-Employed: Your Options
Freelancers, gig workers and small business owners have to find their own health coverage. Here are the main options, from Marketplace plans and a spouse's job to COBRA and Medicaid, how premium tax credits work, the tax breaks available, and the plans to be careful with.
By Pond.com editors Updated 3 min read
Quick answer
- The ACA Marketplace (HealthCare.gov or your state's site) is the main option for most self-employed people.
- Premium tax credits can lower the cost, based on your expected income for the year.
- Open enrollment usually runs from November 1 to January 15; losing other coverage gives you a special enrollment period.
- You can usually deduct health insurance premiums as a self-employed person, which lowers your income tax.
- Be careful with short-term plans and health care sharing ministries, which aren't full insurance.
Working for yourself means no employer health plan. Finding your own coverage can feel daunting, but you have more options than you might think, and some real tax breaks to help with the cost.
This article is general information, not tax or insurance advice.
Your main options
| Option | Good for | Things to know |
|---|---|---|
| ACA Marketplace plan | Most self-employed people | Premium tax credits based on income; can't be turned down for health conditions |
| Spouse's or partner's employer plan | Those with a working spouse | Often good coverage; adding a spouse can be costly |
| COBRA | Recently left a job | Keeps your old plan, but you pay the full cost |
| Medicaid | Lower incomes | Free or very low cost; rules vary by state |
| Parent's plan | Under 26 | Usually the cheapest option if it's available |
Marketplace plans and premium tax credits
You can buy a plan on HealthCare.gov or your state's own marketplace. Premium tax credits lower your monthly cost if your household income is generally between 100% and 400% of the federal poverty level. The extra help that lifted that upper limit ended after 2025, so people earning above it usually pay full price.
- Estimate your income for the year as profit after business expenses, not your total sales.
- Update your estimate if your income changes; any difference is settled when you file your taxes.
- Enroll during open enrollment, usually November 1 to January 15, or within 60 days of losing other coverage.
See how to choose a health insurance plan.
Tax breaks
- Self-employed health insurance deduction: you can usually deduct premiums for yourself, your spouse and dependents, as long as you weren't eligible for an employer plan through a job or your spouse's job that month. It lowers your income tax, though not your self-employment tax.
- Health savings account: with an HSA-eligible plan, you can save pre-tax money for medical costs. See how health savings accounts work.
See side hustle taxes for how self-employment income is taxed.
Plans to be careful with
- Short-term health plans: cheaper, but they can refuse cover for existing conditions and leave out major care. They're meant as stopgaps.
- Health care sharing ministries: members share costs, but payment isn't guaranteed.
- Discount plans: they offer discounts at certain providers, but they aren't insurance.
Common questions
Use your best estimate for the whole year, based on your recent profit after business expenses. Update it on the Marketplace if your income changes a lot, because your premium tax credit is checked against your actual income when you file your taxes.
Often, yes. If your spouse's employer offers family coverage, you can usually join during their open enrollment or within 30 days of losing other coverage. Compare the extra cost with a Marketplace plan, since adding a spouse can be expensive.
No. Members share each other's medical bills, but there's no guarantee your claims will be paid, and they don't have to cover pre-existing conditions or follow ACA rules. They can work for some people, but understand the risks before relying on one.