Health insurance options when you’re self-employed

If you work for yourself, you have four main ways to get health insurance: a Marketplace plan with a premium tax credit based on your expected income, a spouse’s job-based plan, COBRA from a job you recently left, and a small group plan once you have at least one employee who isn’t an owner or an owner’s spouse. Which one fits depends on your income, your family and how recently you went out on your own.

How does a Marketplace plan work when you’re self-employed?

You apply like anyone else, but your income estimate starts with net profit, not gross receipts, and it has to cover the whole year you want coverage. The credit depends on that estimate, your household size and the benchmark plan where you live. It’s settled on your tax return. That makes getting the estimate right matter more for you than for someone on a salary.

Rules changed for 2026. The larger credits Congress added in 2021 expired at the end of 2025, and 2026 plans went back to the original rules. Congress has debated bringing them back, so check HealthCare.gov for the rules that apply to 2027 plans; it posts 2027 amounts starting November 1.

All bronze and catastrophic Marketplace plans now work with health savings accounts. That gives you another tax-advantaged way to set money aside for care, and your tax professional can tell you how contributions work in your situation.

You can enroll during Open Enrollment, which usually runs November 1 through January 15 on the federal Marketplace, and some states run their own dates; enroll by December 15 for coverage that starts January 1. Outside that window, you need a qualifying event, like losing other coverage when you leave a job.

Can you join a spouse’s job-based plan?

Often, yes. When it’s offered, it’s usually the simplest route. You can generally join at the plan’s yearly open enrollment, or within 30 days of an event like losing other coverage, getting married or having a baby. Compare it the way you’d compare any plan: the network, the deductible, and whether your doctors and prescriptions are covered, not just what comes out of your spouse’s paycheck.

If the family coverage your spouse is offered counts as affordable, you generally can’t get a Marketplace tax credit instead. Since 2023, that test for family members looks at what family coverage costs, not just the employee’s share, so an expensive family plan doesn’t always rule the credit out.

Should you keep COBRA from your last job?

If you left a job to go out on your own, COBRA lets you keep that plan for up to 18 months, at up to 102 percent of its full cost and with no tax credit. It can make sense for a few months if you’ve already met most of this year’s deductible, or if you’re in the middle of care with doctors a new plan might not include. Leaving the job also opens a 60-day Marketplace window, and electing COBRA doesn’t close it as long as you switch within 60 days of losing the job-based coverage. Compare both before the window closes.

How do you compare the options?

Say you leave a salaried job at the end of April to freelance. You earned $30,000 in salary through April and expect about $40,000 in net profit from the business for the rest of the year. Your job-based coverage ends April 30, which opens three doors at once: COBRA, your spouse’s plan within 30 days of losing yours, or a Marketplace plan within 60 days, using $70,000 plus your spouse’s income as the year’s estimate. The deadlines differ.

For each option you’re weighing, write down:

1. What it costs you each month after any tax credit or employer contribution.
2. How much of this year’s deductible and out-of-pocket maximum you’ve already met, and whether that progress carries over.
3. Whether your doctors and prescriptions are covered.
4. The enrollment deadline, which is 60 days for the Marketplace and for electing COBRA, and often only 30 days for a spouse’s plan.
5. How the choice affects your tax credit, since an affordable offer through your spouse’s job can rule it out.

When does a group plan make sense?

Once you hire at least one employee who isn’t an owner or an owner’s spouse, a small group plan becomes possible, and an individual coverage HRA is another option. Both change how your own coverage and taxes work, so talk to your tax professional before you switch. Group quotes start here.

Can you deduct health insurance when you’re self-employed?

Often, yes. The IRS allows a self-employed health insurance deduction for premiums you pay for medical, dental and qualifying long-term care coverage for yourself, your spouse and your dependents, and Form 7206 is where it’s figured. It’s an adjustment to income, not an itemized deduction. It can’t be more than your earned income from the business, and you can’t take it for any month you were eligible for an employer-subsidized plan through your own job or your spouse’s.

If you also get the premium tax credit, the deduction and the credit depend on each other, and IRS Publication 974 explains how to work them out together. This is general information, not tax advice. Have a tax professional run your numbers.

When you’re ready, see Marketplace plans with your credit applied and set them next to the spouse’s plan or COBRA numbers you wrote down.

Quick answers

Can I buy a group plan for just myself?

Usually not. Carriers and federal rules generally don’t treat a business with only an owner, or an owner and spouse, as having employees, so the individual market is the route until you hire.

What if my income changes a lot during the year?

Update your Marketplace application when it does, so the advance credit adjusts for the rest of the year instead of landing all at once on your tax return.