Health coverage for the self-employed

If you're self-employed, you 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.

You can enroll through the Marketplace if you’re a freelancer, consultant, independent contractor, or other self-employed worker who doesn’t have any employees.

  • When you fill out a Marketplace application, you’ll find out if you qualify for premium tax credits and other savings on a health plan. This will be based on your income and household size.
  • You’ll also find out if you qualify for free or low-cost coverage through the Medicaid and CHIP programs in your state. This will depend on your income, household size, and other factors.

You can choose from several categories of coverage, from plans with low premiums that mainly protect you in worst-case scenarios to plans where you’ll pay more each month but less out-of-pocket when you get health care services.

Marketplace coverage for the self-employed

You’re considered self-employed if you have a business that takes in income but doesn’t have any employees. If your business has even one employee (other than yourself, a spouse, family member, or owner), you may be able to use the SHOP Marketplace for small businesses to offer coverage to your employees. See “How do I know if I’m self-employed or a small employer?” to learn more.

Self-employment income and Marketplace savings

Marketplace savings are based on your estimated income for the year you’re getting coverage.

Projecting your income

When you fill out a Marketplace application, you’ll have to estimate your net income for the year you want coverage. (See “Reporting net income” below to understand what income to report.)

When you’re self-employed, it may be hard to estimate your income.

  • Do your best to estimate your self-employment income and expenses for the year accurately, based on your past experience, realistic expectations, industry standards, and other information.
  • During the year, if it looks like your yearly income will be higher or lower than you estimated, update your Marketplace application as soon as possible.

Important: Update your estimated annual income when your business circumstances change. If you wind up making more than you reported on your Marketplace application, you could have to pay back some or all of the premium tax credits you took during the year. If you wind up making less, you could qualify for more savings than you claimed during the year.

Reporting net income

On your Marketplace application, you’ll be asked to report your net income from your self-employment. (Net income is sometimes called “profit.”)

Your net income is the difference between your self-employment income and your business expenses.

  • If your self-employment income is higher than your business expenses, you report this net income.
  • If your business expenses are higher than your income, you report a net loss.

Your net income from self-employment is what you report on Schedule C of your federal tax return. Learn about income from self-employment from the IRS (PDF).

Other kinds of income

When you apply for Marketplace coverage, you must report income from everyone in your household. Learn who to count in your household and how to report other kinds of income.

If you don’t have coverage, you’ll pay a penalty

Most Americans must have minimum essential coverage or pay a penalty. This is true no matter what your job status is.

More answers

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’re considered self-employed. You can buy health coverage through the individual Health Insurance Marketplace.

You’re not considered an employer even if you hire independent contractors to do some work.
“Employees” are generally defined as workers whose income you report on a W-2 form at the end of the year.
Get details about how to know if people who work for you are considered employees.
What if I leave my job, lose my job-based coverage, and become self-employed?

If you lose job-based coverage for any reason, you 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. Learn more about how to apply with a Special Enrollment Period.

What if I’m self-employed and then get a job that offers health coverage?

You can cancel your Marketplace plan and enroll in your employer’s insurance.

Once you have an offer of job-based coverage, in most cases you’ll no longer qualify for premium tax credits and other savings on a Marketplace plan. This is true whether you enroll in the job-based coverage or not.
In some cases, your employer’s coverage 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. Learn about your options if you have an offer of job-based coverage.
What if I’m self-employed and my spouse has coverage through a job?

If your spouse’s plan offers coverage to spouses and dependents, 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. Remember, if you want Marketplace savings, you and your spouse must file a joint tax return and report all household income, not just yours, even if your spouse doesn’t need coverage. Learn more about reporting household income.
What if I have COBRA coverage?

If you currently have COBRA continuation coverage, your options are different during the annual health insurance Open Enrollment period and outside Open Enrollment. Learn about COBRA and the Marketplace.