Freelancers, consultants, independent contractors, and business owners often need health coverage that can adapt to variable income and changing business needs. The first step is determining whether you are applying as a self-employed individual or evaluating coverage as a small employer.
Self-employed with no employees
HealthCare.gov generally treats a business owner with no employees as self-employed. Independent contractors do not usually count as employees for this purpose. A self-employed person can apply for individual or family coverage through the Marketplace and may qualify for premium tax credits or other savings based on household information and expected income.
Estimating variable income
Marketplace applicants report expected net self-employment income for the year coverage applies—not simply gross business revenue. HealthCare.gov recommends making a realistic estimate based on experience and expectations, then updating the application when business circumstances change.
Keeping organized records can make this easier. Useful documents include a recent tax return, current profit-and-loss statement, self-employment ledger, and realistic projections of income and deductible business expenses. Consult a qualified tax professional for advice about your individual situation.
Private coverage outside the Marketplace
Private individual coverage may also be offered outside the Marketplace. Benefits, underwriting, exclusions, enrollment rules, and availability vary. Premium tax credits are available only through the Marketplace, so compare the complete coverage—not only the monthly premium.
Important questions include:
- Are your doctors and hospitals in the network?
- How are prescriptions covered?
- What services apply to the deductible?
- What is the out-of-pocket maximum?
- Is out-of-area care covered?
- Are there benefit limits or exclusions?
When does a business become a small employer?
A business with at least one qualifying employee other than an owner, spouse, family member, or certain other owners may be able to explore small-group coverage. HealthCare.gov says SHOP generally serves eligible employers with 1–50 employees. Group rules, participation requirements, contribution requirements, products, and availability vary by state and carrier.
Can you enroll during the year?
Marketplace coverage generally requires Open Enrollment unless you qualify for a Special Enrollment Period. Losing job-based coverage when becoming self-employed may create such an opportunity. Eligible small employers may be able to begin SHOP coverage during the year.
Prepare for a self-employed coverage review
- Household members needing coverage
- Expected annual household income
- Current policy and renewal date
- Doctors, hospitals, prescriptions, and pharmacies
- Premium and deductible preferences
- Business structure and qualifying employee count
- Expected hiring or growth during the year
Jaron Harrison Insurance helps self-employed people and business owners compare available individual, family, private, and eligible small-group options. Request a coverage review to discuss your situation.
Sources: https://www.healthcare.gov/self-employed/ and https://www.healthcare.gov/small-businesses/choose-and-enroll/shop-marketplace-overview/
Important: This article provides general educational information and is not tax, legal, or medical advice. Eligibility, savings, prices, benefits, provider networks, underwriting, and plan availability vary. This website is not the Health Insurance Marketplace website. For official Marketplace information, visit HealthCare.gov.
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