Navigating Health Insurance Options for Self-Employed
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Navigating Health Insurance Options for Self-Employed

January 27, 2025

By Claudette Zolkowski

A freelancer researches health insurance options at her desk.
Take care of your health and wallet as you learn about possible health insurance options for self-employed individuals.

Being your own boss comes with a lot of benefits. Corporate-sponsored health insurance is not one of them.  

As you’re hustling with your own venture, it’s important to make sure you’re taking care of your health. 

Self-employed individuals can consider these health insurance options to help make medical insurance less of a headache.  

Who is Considered Self-Employed

If you run your own business, work as a freelancer, or earn income as an independent contractor, you fall under the category of self-employed. This includes individuals who own S corporations as well as sole proprietors.  

Understanding this classification can affect your eligibility for certain insurance plans and tax benefits.  

Common Health Insurance Options for Self-Employed

Here’s an overview of some common health insurance plans for self-employed individuals.  

Federal or State Health Insurance Marketplace

The federal health insurance marketplace, also known as the exchange, is a platform where individuals can shop for health insurance plans. Established under the Affordable Care Act (ACA), the marketplace offers a central location to shop for and enroll in private health insurance plans.  

Medicaid

Medicaid is a state and federally funded program that provides health coverage to low-income individuals and families. Eligibility varies by state and is primarily based on income. For those who qualify, Medicaid can cover a wide variety of services, including doctor appointments and preventive care.  

Medicare

If you’re 65 or older or have certain disabilities, you might qualify for Medicare. This federal health insurance program offers a range of plans for older self-employed individuals.  

Private Insurance

You can also choose to purchase private health insurance directly from insurance companies. This can be an avenue to explore if you want specific coverage not available through the federal or state insurance marketplace. While you have more control over your plan details, it can be expensive.  

Membership Organizations

Depending on your area of business, you may be eligible for a group health plan through a professional, trade, or membership organization. In this situation, group members share the cost of health insurance like employees of a small business might.  

Independent Insurance Agents or Brokers

You can opt to work with an independent insurance agent or broker to help you find and enroll in a health insurance plan. Agents may work for a single insurance company, while brokers may represent several companies.  

Together with the Paychex Insurance Agency, SurePayroll® By Paychex can help you find top-rated healthcare solutions and plans.1  

COBRA

COBRA, also known as the Consolidated Budget Reconciliation Act, gives workers and their families who lose their health benefits under certain circumstances the right to choose to continue their group health benefits. This is a temporary option available to individuals who have lost their employer-sponsored health plan due to voluntary or involuntary job loss, reduction in hours worked, transition between jobs, death, divorce or other life events.  

Qualified individuals may have to pay the entire premium coverage, up to 102% of the plan, which can make this option quite costly.  

 

How Much Does Self-Employed Health Insurance Cost?  

How much you will spend on health insurance when you’re self-employed will depend on your income, the level of coverage you select, your location, your age, and how many people you need to cover. You’ll want to take care to balance your health needs with your budget.  

Do I Need Health Insurance?  

While health insurance isn’t required in most states, you should weigh the pros and cons carefully before deciding to go without. Choosing to buy an insurance plan can offer a safety net against high medical costs in the event of an unexpected illness or accident.  

Plus, knowing you have health insurance can help give you peace of mind and help reduce stress, allowing you to focus on your business and personal life.  

Some states require their residents to have health insurance. If you live in one of those states, you should enroll in a qualified health plan to avoid fines and penalties.  

Tax Deductions

You may be able to deduct the premiums you pay for certain types of insurance including medical, vision and dental if you are self-employed.  

Conclusion

Navigating health insurance coverage as a self-employed individual is an essential part of managing your personal and financial well-being. By exploring available choices and taking advantage of potential tax deductions, you can find a plan that meets your needs and budget.  


1 Health insurance sold and serviced by Paychex Insurance Agency, Inc., 225 Kenneth Drive, Rochester, NY 14623. CA License #0C28207.

* This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up to date.

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This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up to date

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