What are the health insurance options for self-employed people?

When you're self-employed, you lose access to employer-sponsored group health insurance — which means you're shopping the individual market. The good news: the ACA created a marketplace with income-based subsidies that can dramatically reduce your cost. The HealthCare.gov marketplace is the federally facilitated exchange; many states run their own exchange at a different URL.

Option 1: ACA Marketplace

The ACA marketplace is typically the best starting point for self-employed individuals. Plans are organized into metal tiers (Bronze, Silver, Gold, Platinum). If your household income is between 100% and 400% of the federal poverty level — and for 2023–2025, even above 400% under enhanced subsidies — you may qualify for premium tax credits that lower your monthly premium. Net self-employment income (after business deductions) is what counts toward income for subsidy eligibility. HealthCare.gov's subsidy estimator gives a quick estimate.

Option 2: COBRA continuation

If you recently left a job with employer-sponsored health insurance, COBRA lets you continue that exact plan for up to 18 months. The catch: you pay 100% of the premium — both your share and your former employer's share — plus a 2% administrative fee. COBRA is often expensive, but it preserves continuity of care and existing deductible progress mid-year.

Option 3: Spouse's or domestic partner's employer plan

If your spouse has access to employer-sponsored coverage, joining their plan is often the most cost-effective option — employers typically subsidize 50–80% of the premium for dependents. Losing your own coverage counts as a qualifying life event that allows a special enrollment period outside of open enrollment.

Option 4: Small-business HRAs

If you have a C-corp or S-corp and employ yourself, a Qualified Small Employer HRA (QSEHRA) or Individual Coverage HRA (ICHRA) allows the business to reimburse you tax-free for individual marketplace premiums up to IRS-set annual limits. The IRS publishes QSEHRA limits annually — in 2024 it was $6,150 for self-only coverage and $12,450 for family coverage. See IRS guidance on HRAs for current rules.

Tax deduction for self-employed health insurance

Self-employed individuals can deduct 100% of health, dental, and long-term care insurance premiums paid for themselves, a spouse, and dependents as an adjustment to gross income on their federal tax return — you do not need to itemize. The deduction cannot exceed net self-employment income. IRS Publication 334 covers the business expense deduction rules; the self-employed health insurance deduction is on Schedule 1 of Form 1040.