Is there Health Insurance for the Self-employed?
If an individual is self-employed, he/she can use the individual Health Insurance Marketplace to enroll in flexible, high-quality health coverage that works well for people who run their own businesses.
The individual can enroll through the Marketplace if he/she is a freelancer, consultant, independent contractor, or another self-employed worker who doesn’t have any employees.
He/she is considered self-employed if he/she has a business that takes in income but doesn’t have any employees. If his/her business has even one employee (other than himself/herself, a spouse, family member, or owner), he/she may be able to use the SHOP Marketplace for small businesses to offer coverage to himself/herself and his/her employees.
Coverage options for the self-employed
When an individual fills out a Marketplace application, he/she will find out if he/she qualifies for premium tax credits and other savings on a health plan. This will be based on his/her income and household size.
He/she will also find out if he/she qualifies for free or low-cost coverage through the Medicaid and CHIP programs in his/her state. This will depend on his/her income, household size, and other factors.
Do a quick check to see if expected income is in the range to save.
In the Marketplace, he/she can choose from several categories of coverage, from plans with low premiums that mainly protect him/her in worst-case scenarios to plans where he/she will pay more each month but less out-of-pocket when he/she get health care services.
Self-employment income and Marketplace savings
When an individual fills out a Health Insurance Marketplace application, he/she will have to estimate his/her net self-employment income. Marketplace savings are based on his/her estimated net income for the year he/she is getting coverage, not last year’s income.
When he/she is self-employed, it can be hard to estimate his/her income for the coming months or yearIf you don’t have coverage, you’ll pay a penalty.
What if one leaves his/her job, lose his/her job-based coverage, and become self-employed?
If an individual loses job-based coverage for any reason, he/she qualifies for a Special Enrollment Period. This means he/she can enroll in a health plan even if it’s outside the annual Open Enrollment period. During the Open Enrollment Period, if he/she qualifies for a Special Enrollment Period, he/she may be able to have his/her coverage start sooner than it otherwise would.
An individual can cancel his/her Marketplace plan any time and enroll in his/her employer’s insurance.
Once he/she has an offer of job-based coverage, in most cases he/she will no longer qualify for a premium tax credit and other savings on a Marketplace plan. This is true whether he/she enrolls in the job-based coverage or not.
In rare cases, his/her employer’s coverage won’t be considered affordable to him/her or won’t meet minimum standards. If this is true, the individual may qualify for premium tax credits and other savings on a Marketplace plan based on his/her income.
Here’s How You Can Get health insurance coverage as a self-employed Individual
One of the biggest challenges facing freelancers today (aside from landing paying clients) is finding affordable healthcare coverage.
In fact, according to a 2016 study by Upwork, 20% of the 55 million freelancers in the U.S. workforce are without health insurance.
It can be tempting to go without it, but that’s a disaster waiting to happen. Here are some health insurance for self-employed individuals:
- Health Insurance Marketplace
Depending on one’s income and household size, he/she may qualify for Medicaid, the Children’s Health Insurance Program (CHIP) , premium tax credits or other savings options through the Affordable Care Act.
- Health Insurance Companies
Health insurance companies like Cigna and UnitedHealthcare offer private health insurance plans for self-employed people.
The companies offer a wide range of price points and coverage options to choose from. It can be difficult to figure out the right one to choose, but it’s worth it to spend time researching one’s choices.
- Health Insurance Brokers
Health insurance brokers like Stride and Gravie assemble a variety of plans from several health insurance companies based on the type of coverage an individual is looking for so he/she can quickly compare them and find what he/she needs.
Reputable health insurance brokers make money from the insurance companies they represent and will never charge an individual a fee for their services.
- Health Care Sharing Ministries
These faith-based organizations distribute health care costs among their members to help ease the burden of medical bills on individual members.
“These organizations generally require members to make a promise to adhere to certain biblical values and to participate regularly in worship or prayers,” explains HealthInsurance.org.
- Gig Service Companies
It’s rare, but a few gig service companies offer health benefits to freelancers who use their platforms.
Care.com offers health insurance to its professional caregivers, and Instacart recently reclassified some of its contract workers as part-time employees to make them eligible for health benefits.
- Freelancer and Industry-Specific Advocacy Groups
Freelancers Union connects freelancers with affordable health insurance plans.
Industry-specific organizations like the National Writer’s Union or the Professional Photographers of America are also great places to find leads to discounted health insurance.
If an individual runs a business that produces income and has no employees, he/she considered self-employed. He/she can buy health coverage through the individual Health Insurance Marketplace.
The individual is not considered an employer only because he/she hires independent contractors to do some work.