July 22, 2021

Health Insurance for Self-Employed Professionals: Everything You Need to Know

When you’re self-employed, you have some more responsibilities than those in more traditional roles that work for an employer. In these traditional roles, the employer takes tax out of each check, and for many positions, health insurance is covered by the employer. If you are an independent contractor or self-employed worker, it’s typically up to you to make sure you have the health insurance coverage you need.

Finding the right health insurance plan depends on your situation. If you’re married, have children or other dependents that you take care of, you’ll need to make sure you have the right health insurance plan to provide them the coverage that they need. You never know when something is going to happen where you’ll need some kind of medical service, so it is usually better to have more coverage.

From private health insurance providers to the ACA health insurance marketplace, there are plenty of options available for self-employed individuals looking to make sure they have the coverage they need. Suppose you are temporarily self-employed and don’t plan on staying self-employed for an extended period. In that case, you can consider short-term self-employed health insurance – but these plans typically only include three months of coverage.

By reaching out to an insurance agent, you will be able to narrow in on the right health insurance plan to meet your needs, but here are some things to keep in mind when you are seeking health insurance for self-employed workers:

How to Find the Right Coverage

Depending on where you live and the kind of coverage you need, the monthly cost of health insurance will vary. Generally, if you live in a more populated or urban area, your monthly premiums will most likely cost more than similar plans in less populated or more rural areas.

In addition to geographic location, other factors, like your age and activity level might also influence your coverage and costs. If you are under 30, you most likely qualify for “catastrophic” coverage, which offers the lowest monthly premiums, but costs the most for health services as you need them.

Obamacare, or the Affordable Care Act, established a health insurance marketplace exchange where different health insurance providers compete to offer you the best insurance plan. Many self-employed individuals and independent contractors buy their self-employed health insurance plans through this exchange because the plans all meet government-mandated minimum requirements.

The ACA marketplace also provides several different health insurance plans, all in one place. This makes it easy to browse the different options and compare coverage plans.

Factors to Consider When Searching for the Right Plan

If you are looking for health insurance and you are self-employed, there are several factors to consider to find the right plan for you:


Based on your income, self-employed individuals can either qualify for the ACA Marketplace or Medicaid. If your self-employed income is low enough, you may be eligible for Medicaid.

There are also several expanded eligibility exemptions, such as having children versus being single and living alone. Qualifications for Medicaid vary state-by-state.

Compare Options

When you search for health insurance, the worst thing you can do is just go with the first option you see. If you want the best plan for you, where you get the coverage you need and pay what you want, you need to compare options to see what’s available.

Whether you browse online or reach out to a licensed insurance agent, be sure to compare rates and benefits between the leading insurance carriers in your region. Different plans offer different benefits, premiums, and deductibles, so shop around and find the best coverage for you.


If you are recently self-employed, you may be eligible for COBRA health insurance coverage. Self-employed individuals who recently were covered via an employer health insurance plan are often qualified to extend their coverage through the COBRA system.

However, many have noticed that COBRA coverage plans tend to be relatively expensive, so if you plan on being self-employed for an extended period, it might be more sustainable to find other plans. Suppose you register for COBRA health insurance extensions. In that case, you’ll notice an increase in the cost you paid from when you were employed because the employer contribution is much smaller than when you still worked for the employer.

The COBRA plans typically allow 18 months of coverage extension to your previous employers’ health insurance plan, so this is not an option if you plan on being self-employed for an extended period.


Another benefit available for self-employed individuals is a health savings account or HSA. HSAs are tax-advantaged bank accounts that work hand-in-hand with HSA-eligible health insurance plans. These plans offer major medical health insurance, often offering lower monthly premiums than traditional health insurance plans.

With an HSA, pre-tax income can be deposited into the savings account, allowing self-employed individuals to earn interest tax-free. These funds can then be used for qualified medical expenses, including copayments and deductibles for any medical services. Any funds that are not used are accumulated tax-free.

There are some limits on contributions to HSAs, which vary from year to year and change if you are file taxes as a family or file as an individual.

Rate Guarantees

One of the more frustrating parts of paying for your own health insurance is fluctuating prices from month to month. When you manage your own finances and expenses, allocating funds to make ends meet when the monthly prices change can make things difficult.

When shopping around for different rates, some insurance agents can offer a rate guarantee – which locks in the premium price for a certain period of time. Locking in a guaranteed rate can help give you some stability when it comes to paying your bills.

When you are shopping for different health insurance plans, be sure to mention to the insurance agent or representative that you are interested in locking in your rate for a rate guarantee.

Enroll As a Dependent

If you are self-employed, the most affordable way to pay for health insurance might be to enroll as a dependent under somebody else’s health insurance plan. If you are under the age of 26, especially if you live at home, you might qualify for your parents’ health insurance plan. If you have a spouse or domestic partner, you might also be eligible under their health insurance plan.

Enrolling as a dependent is usually the most affordable health insurance option, as employers of group insurance plans typically pay a portion of the premium. When you shop around for health insurance for self-employed options, you’ll notice that the rates are typically more expensive than employer health insurance because you have to pay as employees and employers.

Different Levels of Coverage You Should Know About

The types of coverage available vary between insurance plans and providers. The level of coverage that your plan includes depends on the level of risk you pose – the lower the risk level, the more the insurance company pays, which means you have lower premiums, but higher deductibles. On the other hand, the higher the risk level, the less the insurance company will pay, which means you pay higher premiums, but will have lower deductibles.

The different levels of coverage are signified by a metal tier system – from catastrophic to bronze, then silver, then gold, and finally, platinum. According to the Affordable Care Act (ACA), all of the metal tiers must cover each of the ten following categories of benefits:

  • Ambulance service
  • Emergency service
  • Hospitalization
  • Pregnancy
  • Mental health service
  • Prescription drugs
  • Rehabilitative services
  • Preventive and wellness
  • Pediatric service

People in the lower risk levels might not need ongoing coverage and don’t expect to use their insurance coverage as regularly. This explains the lower monthly premiums for these lower risk plans but higher deductibles when care is needed.

Catastrophic Plans

The catastrophic plans generally have the lowest premiums but the highest deductibles. If you are under 30, you most likely qualify for a catastrophic plan. At a minimum, these plans include the ten services listed above that all tiers must cover. In addition, you usually get up to three primary care visits per year, and most preventive services are covered.

While not as many services are covered, catastrophic plans usually cover most check-ups, day-to-day care, screenings, and immunizations. A self-employed catastrophic health insurance plan might be best for you if you are young and relatively healthy. Suppose you are over 30 and interested in a catastrophic health insurance plan. In that case, you may be eligible if you qualify due to exemption – such causes might include being the victim of misfortune such as bankruptcy, death of a loved one, natural disaster, eviction, homelessness, etc.

Bronze Plans

The bronze level of self-employed health insurance plans offers low monthly premiums but higher costs and deductibles. This health insurance plan is a good fit for individuals who do not anticipate using medical services very frequently. While the monthly cost is low, you will be more likely to pay out-of-pocket when service is needed.

Silver Plans

The silver level of self-employed health insurance plans offer moderately priced monthly premiums and moderately priced deductibles and cost of service. With a silver plan, the health insurance typically pays about 70% of the cost, leaving you with about 30% to cover. This gives you more coverage for more services if you need it.

Gold Plans

The gold self-employed health insurance plan level costs the most for monthly premiums but offers lower deductibles and lower cost of service. If you anticipate using a lot of health services, a gold plan is probably worth paying more on your premiums.

Platinum Plans

The platinum level of self-employed health insurance plans costs the most for monthly premiums but offers the lowest cost of care and cheapest deductibles. With a platinum plan, most costs of service are covered. A platinum health insurance plan is best for individuals who want the safety net of knowing that almost all health services will be covered.

Tax Write-Offs for Self-Employed

With the increased responsibility of being self-employed, there are also some benefits to writing off deductibles on your taxes. In addition to a number of write-offs related to your independent contracting work, the most significant tax write-off might be the self-employed health insurance tax deduction.

If you qualify for the self-employed health insurance tax deduction, you can prove you have no other forms of health insurance coverage, and you can prove your self-employed income, you can write off 100% of health insurance premiums.

For self-employed individuals and independent contractors, taking advantage of tax write-offs is essential for the annual bottom line. As a self-employed worker, you can write off many deductible expenses, in addition to health insurance premiums, which saves you money in the long run.

Depending on your line of work, independent contractors and self-employed individuals can typically write off all of these things:

  • Health insurance premiums
  • Mileage and car expenses
  • Home office deductions
  • Internet and phone bills
  • Travel expenses
  • Meals
  • Interest on loans/credit
  • Subscriptions/publications
  • Education
  • Office space/supplies
  • Advertising
  • Startup costs
  • Childcare
  • Retirement savings

When preparing your tax report for your self-employment, make sure you keep detailed records and logs to track deductible expenses.

What’s Next?

Now that you know the basics of health insurance for self-employed professionals, the next step is to find the best insurance plan that works for you. Comparing different options can be overwhelming, so be sure to consult with a professional before committing.