For those who are self-employed, you can use the individual Health Insurance Marketplace to shop for and enroll in flexible and quality health coverage that works well for people who operate their own businesses. You would be considered Self-Employed if you have a business that takes in income but doesn’t have any employees, so this includes freelancers, consultants, independent contractors.
Coverage Options if you’re Self-Employed
When you complete a marketplace application, you will find out if you qualify for premium tax credits or other potential savings on a health plan. This is based off of your household size as well as your income.
You will also find out if you qualify for low-cost or even free coverage through Medicaid and CHIP programs within your state. This will also depend on your household size, your income and other factors.
In the marketplace, you can choose from several different categories of options, offering plans with low premiums that mainly protect you in worst-case scenarios, to health plans where you’ll have to pay more each month but less out-of-pocket when you get healthcare services.
Self-Employed Income and Marketplace Savings
When you fill out an application with the Health Insurance Marketplace, you will have to estimate your net self-employment income. Marketplace savings are based on your estimated net income for the year you’re getting coverage, not last year’s income.
You can see more about projected income estimation and what counts as income here:
https://www.healthcare.gov/income-and-household-information/income/
Self-Employed FAQ’s
How do I know if I’m self-employed or a small employer?
If you run a business that produces income and has no employees, you are considered self-employed. You can buy health coverage through the individual Marketplace. You’re not considered an employer only because you hire independent contractors to do some work. Employees are generally workers whose income you report on a W-2 form at the end of the year.
What if I leave my job, lose my job-based health coverage and become self-employed?
If you happen to lose your job-based health insurance for any reason, you then qualify for a Special Enrollment Period. This means you can enroll in a health plan even if it’s outside the annual Open Enrollment period. During the Open Enrollment Period, if you Qualify for a Special Enrollment Period you may be able to have your coverage start sooner than it otherwise would.
What if I’m self-employed and then get a job that offers Health Coverage?
You can cancel your marketplace plan any time and enroll in your employer’s insurance. Once you have an offer of job-based coverage, in most cases you will no longer qualify for a premium tax credit and other savings with a marketplace plan. This is true whether you enroll in the job-based coverage or not. In rare cases, your employer’s insurance won’t be considered affordable to you or won’t meet minimum standards. If this is true, you may qualify for premium tax credits and other savings on a Marketplace plan based on your income.
What if I am self-employed but my spouse has coverage through a job?
If your spouse’s plan offers coverage to spouse and independents, in most cases you won’t qualify for premium tax credits and other savings on a Marketplace plan. If your spouse’s job-based insurance doesn’t cover spouses and dependents, then you can buy a marketplace plan for you and your dependents. Depending on your household income, you may qualify for premium tax credits and other savings.
What if I have COBRA coverage?
If you currently have COBRA coverage, then your options are different during the annual health insurance Open Enrollment period and outside Open Enrollment. If you decide not to take the COBRA coverage, then you can opt for a Marketplace plan. If you already have COBRA, you may still have options in the Marketplace.