Updated August 2026 · Reviewed by the CoverageCo team
If you're self-employed with no employees, you generally buy individual coverage through the Marketplace, and you may qualify for premium tax credits based on your projected net self-employment income. You may also be able to deduct premiums through the self-employed health insurance deduction, which is separate from and in addition to any subsidy.
Key takeaways
- Marketplace coverage is the default route for freelancers and solo business owners.
- Subsidy eligibility uses projected NET self-employment income, not gross revenue.
- The self-employed health insurance deduction is separate from premium tax credits.
- Variable income makes mid-year income updates important — it prevents a tax-time surprise.
Your realistic options
Self-employment removes the default path most people take, so it's worth knowing what's actually available:
| Option | Who it fits |
|---|---|
| Marketplace individual plan | Most freelancers and solo owners — the main route, and the only one with premium tax credits |
| A spouse's employer plan | Often the cheapest option if it's available to you |
| Small-group coverage | Businesses with eligible employees, not solo owners |
| Professional or trade association plans | Varies widely; check whether it's ACA-compliant |
| Short-term plans | Narrow gap-filling only — not comprehensive, and pre-existing conditions generally aren't covered |
Income is the part self-employed people get wrong
Subsidy eligibility is based on projected modified adjusted gross income for the coverage year. For self-employment, that means net income after business expenses — not gross revenue.
This trips people up in both directions. Some assume they earn too much to qualify because they're thinking of revenue, and never apply. Others estimate optimistically, receive larger advance credits than they were entitled to, and owe money back at filing.
If your income varies month to month, revisit your estimate during the year rather than setting it in January and forgetting it. Updating an estimate is a few minutes; reconciling a large overpayment is not.
The deduction most people underuse
The self-employed health insurance deduction lets many self-employed people deduct premiums for themselves, a spouse, and dependents.
It's an above-the-line deduction, meaning you don't need to itemize to take it. It's also distinct from premium tax credits — these are two different mechanisms, and the interaction between them can be genuinely tricky when you receive both.
This is the point where a tax professional earns their fee. The rules around coordinating a subsidy with the deduction are more involved than they first appear, and it's worth getting right.
Choosing a plan when your income is lumpy
Two practical considerations matter more for self-employed people than for salaried workers.
First, cash flow. A lower premium with a higher deductible can be attractive when income is uneven, but only if you could genuinely absorb the deductible in a bad month. Be honest about that rather than optimistic.
Second, HSA eligibility. If you pair a qualifying high-deductible plan with a health savings account, contributions are generally tax-advantaged — which is a meaningful benefit for someone already managing their own tax picture.
Where an agent helps most here
Self-employed shoppers are the group most likely to overpay, because they're comparing plans alone while running a business and it's rarely the most urgent thing on the list.
A licensed agent can check subsidy eligibility against a realistic income projection, confirm your doctors and prescriptions are covered, and flag the HSA question. It costs nothing — agents are paid by the carriers, and the plan price is identical whether you enroll on your own or with help.
Common questions
Can I deduct health insurance premiums if I'm self-employed?
Many self-employed people can deduct premiums for themselves, a spouse, and dependents through the self-employed health insurance deduction, which doesn't require itemizing. It's separate from premium tax credits, and coordinating both is worth reviewing with a tax professional.
What income do I report for ACA subsidies if I'm self-employed?
Projected net self-employment income after business expenses, not gross revenue, as part of your modified adjusted gross income for the coverage year.
Can an LLC get group health insurance?
Small-group coverage generally requires eligible employees. A single-member LLC with no employees usually buys individual Marketplace coverage instead. Rules vary by state and carrier.
What if my income changes during the year?
Report the change to the Marketplace rather than waiting until you file. Advance premium tax credits are reconciled on your tax return, so an outdated estimate can mean repaying part of what you received.