Health Insurance for the Self-Employed

On this page

• Your main options
• How marketplace subsidies work when you’re self-employed
• Deduct your premiums at tax time
• Pair a bronze plan with an HSA
• If you have employees
• Coverage to be careful with
• Frequently asked questions

Your main options

When you work for yourself, nobody picks a plan for you. These are the routes most freelancers, contractors and small-business owners use:

• A marketplace plan. Buy an individual or family plan through HealthCare.gov or your state’s exchange. Every plan covers the ACA’s essential health benefits, and you may qualify for a premium tax credit.
• A spouse’s job-based plan. If your spouse gets coverage through work, joining it is often the cheapest choice. You’ll usually need a qualifying event or the employer’s open enrollment to be added. See covering every family member on one policy.
• COBRA from your last job. If you just left a job to go out on your own, COBRA lets you keep your old plan for up to 18 months, but you pay the full premium plus up to 2%.
• A small-group plan or HRA, once you have employees. More on this below.
• Medicaid, if your income is low. In the 41 states (including DC) that expanded Medicaid, adults with income up to 138% of the federal poverty level usually qualify. See health insurance for low-income families.

How marketplace subsidies work when you’re self-employed

The premium tax credit is based on your household’s modified adjusted gross income for the year you’re covered. For self-employed people, that starts with net profit (revenue minus business expenses), not gross receipts. You estimate it when you apply, and the credit is settled on your tax return.

Estimating is the hard part when income swings. If you underestimate and get too much credit in advance, you pay the difference back at tax time, and starting with 2026 coverage there’s no cap on how much you might owe. Update your marketplace account when your income changes. What happens if you under-report your income walks through it. If you drive or deliver for an app, see Uber, Lyft and DoorDash for the stipends some states require.

The larger subsidies that ran from 2021 through 2025 expired, so credits now follow the original rules: households between 100% and 400% of the federal poverty level qualify, and above that you pay full price. For 2026 coverage, the cutoff for one person is $62,600. The table shows the cutoffs for 2027 coverage, which use the 2026 poverty guidelines. Congress has debated restoring the bigger credits, so check the estimate HealthCare.gov gives you at enrollment.

Household size	100% of poverty level	400% (subsidy cutoff)
1	$15,960	$63,840
2	$21,640	$86,560
3	$27,320	$109,280
4	$33,000	$132,000

For more detail, see how health insurance subsidies work.

Deduct your premiums at tax time

If you have a net profit from self-employment, you can generally deduct what you pay for medical, dental and qualified long-term care insurance for yourself, your spouse, your dependents and your children under 27. It’s an above-the-line deduction, so you get it even if you don’t itemize.

• You can’t take it for any month you were eligible for a subsidized employer plan, through your own job or your spouse’s.
• The deduction can’t be larger than the net profit from the business.
• You claim it on Schedule 1 of Form 1040. Some people also have to file Form 7206.
• If you also got a premium tax credit, the credit and the deduction affect each other, so let tax software or a preparer do the math.

The rules for everyone else are in Is health insurance tax deductible?

Pair a bronze plan with an HSA

If you’re healthy and want lower premiums, a higher deductible can make sense, as long as you keep enough savings to cover it. Before you choose one, read how you meet your deductible so you know what you’d pay first.

Since January 2026, bronze and catastrophic plans count as HSA-eligible under the 2025 tax law. With a health savings account, you can put in up to $4,400 for self-only coverage or $8,750 for family coverage in 2026 ($4,500 and $9,000 in 2027), deduct it, and spend it tax-free on medical costs. Unused money carries over year to year.

If you have employees

Once you hire, you have more choices. Small businesses can buy group plans, and in most states that takes at least one employee who isn’t the owner or the owner’s spouse. Listing a spouse who doesn’t really work in the business as an employee to get group coverage is misrepresentation, and an insurer can cancel the policy over it.

Instead of a group plan, you can offer an individual coverage HRA (ICHRA) or, with fewer than 50 full-time employees, a qualified small employer HRA (QSEHRA). Both reimburse employees tax-free for individual insurance they buy themselves. Owners of sole proprietorships, partnerships and S corporations usually can’t join these arrangements, so talk with an accountant before you set one up. Small business health insurance has more.

Coverage to be careful with

• Short-term plans can be cheap, but they don’t have to cover pre-existing conditions or all essential benefits. See short-term health insurance.
• Health care sharing ministries aren’t insurance, and there’s no guarantee your bills get paid.
• Discount cards can lower some prices but won’t protect you from a large bill.
• Association or trade-group plans can be solid, but read the coverage details and confirm the plan is regulated insurance.

Related guides: 2027 Obamacare income limits and what a doctor visit costs without insurance.

Want to see what plans cost where you live? Compare quotes by ZIP code.

Frequently asked questions

Can I get health insurance through my LLC?

A one-person LLC usually can’t buy a group plan because it has no employees besides the owner. Most single-member LLC owners buy an individual marketplace plan and take the self-employed health insurance deduction. Once the LLC has employees, group coverage or an HRA becomes possible.

When can I sign up?

During open enrollment, which for 2027 coverage runs November 1, 2026, to January 15, 2027, on HealthCare.gov. Enroll by December 15 for coverage that starts January 1. Leaving a job with health benefits also gives you 60 days to enroll. See qualifying life events.

Is COBRA or a marketplace plan cheaper?

Usually the marketplace plan, especially if you qualify for a premium tax credit, because COBRA charges the full premium your employer used to share. COBRA can still make sense mid-year if you’ve already met a big deductible or need to keep the same doctors.

Can my spouse’s employer plan cover me?

Usually, yes. Most employers let workers add a spouse, though the cost varies a lot. If family coverage through your spouse’s job costs less than about 10% of household income, you generally won’t qualify for marketplace subsidies. Can a spouse be dropped from health insurance? covers related rules.

This article is general information, not tax, legal or insurance advice. Rules and prices change and vary by state, so check HealthCare.gov, your state’s marketplace, a licensed agent or a tax professional for your situation. Last reviewed September 2026.