What is Self-Employed Health Insurance?

Individual and Family

What is Self-Employed Health Insurance?

Published on December 18, 2017

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If you are self-employed, you are not alone—the Bureau of Labor Statistics claims that in 2015, 15 million people in the U.S. were self-employed. Or in other words, 15 million people may need to buy individual or family insurance themselves. Your occupation as a self-employed person can be anything from an artist to an accountant, so it’s important to understand the actual classification of a self-employed individual.

How do I know if I need self-employed health insurance?

If you have neither an employer or employees, but you bring home taxable income, then you will most likely need to seek out self-employed health insurance, in the form of an individual plan or a family plan. Some examples of individuals who might enroll for self-employed health insurance:

  • Consultant
  • Independent contractor
  • Freelancer

If this description seems to apply to you, it’s important to explore your options for self-employed health insurance. Getting coverage for yourself, no matter you job status, will help you avoid paying a penalty for being uncovered.
If you have even one employee other than yourself, you may be eligible for small business group health insurance instead, which works well for people who are responsible for insuring their employees in addition to themselves.

What does self-employed health insurance cost?

In 2017, the average individual premium for people buying individual health insurance was $397 per month, but depending on your income you may be eligible for government subsidies to reduce your monthly premiums.
If you qualify for subsidies, what you pay for your coverage will vary depending on your household income. With a household income of no more than 400% of the federal poverty level (about $49,000 for a single person in the contiguous United States, or about $98,000 for a family of four), you may qualify for subsidies that can significantly reduce what you need to pay each month for coverage.
When you apply for subsidies you will be asked to estimate your income for the year. You can give an estimate of your income and adjust it later if it changes. Your initial eligibility for subsidies will be based on this estimate. Any changes in your income and your subsidy eligibility will be reconciled when you file your federal tax return, so if your income estimate is lower than your actual income, you may have to pay back some of your subsidies when paying your taxes.

Find a self-employed health insurance plan that works for you

If you have no employees that might qualify you for a small business group insurance policy, then you should begin exploring the options for individual and family plans.
Comparing the various costs of different plans can be confusing, especially as a self-employed individual with a business that might have unsteady income. Start with figuring out what you want from your health insurance, and talk to a licensed agent to get quotes and understand costs. To learn more about your options as a self-employed person, visit eHealth.com.
This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.

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