Self-employed

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.

It’s very important to 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.

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