Guide to self-employed health insurance

Three ways to get self-employed health insurance

Whether you’re a freelance writer, Uber driver, DoorDasher, independent contractor, consultant or otherwise self-employed, you will likely need to purchase your own health insurance – unless you’re covered by a spouse or a parent (if you’re under 26). Your options for comprehensive coverage include enrolling in an ACA Marketplace plan, COBRA, or Medicaid (if you’re eligible).

Click below for a snapshot of each:

How do I know which health insurance is the best fit for my freelance lifestyle and budget?

There are several factors to consider when comparing plans, including whether you’re temporarily self-employed, between jobs, or freelancing for the foreseeable future.

Take a closer look at your options:

The ACA Marketplace

If you’re self-employed, you should know that the Affordable Care Act (ACA) opened up new self-employed health insurance opportunities. Here are the key points to know:

• Essential health benefits: All ACA-compliant individual/family plans cover the ACA’s 10 essential health benefits (EHBs), ensuring comprehensive coverage.
• Subsidies available: You can get income-based premium tax credits (subsidies) to lower your monthly premiums if you’re eligible and enroll through the ACA Marketplace in your state.
• No medical underwriting: Your medical history won’t affect your eligibility, coverage, or premiums.
• Enrollment periods: You can sign up during the annual open enrollment (Nov. 1 through Jan. 15 in most states) or during a special enrollment period triggered by qualifying life events, such as losing employer-based coverage when you quit your job to become self-employed.

Read our guide to special enrollment periods.

Coverage under your spouse’s plan

If your spouse’s employer offers health insurance, you are likely eligible to be covered under that plan since almost all employer-sponsored plans offer spousal coverage.¹ This option may provide a way to get coverage. Here’s what else you should know:

• Enrollment periods: You can enroll during your spouse’s employer’s open enrollment period (set by the employer) or a special enrollment period triggered by a qualifying life event. (Rules for these are specific to employer-sponsored coverage.)²
• Special enrollment timing: If you lose coverage from your own employer, you have 30 days to join your spouse’s plan through a special enrollment period – half the time allowed for individual-market plans.³

COBRA

If you’re leaving a job where you’ve had group health insurance and the plan is subject to COBRA, you can extend your group coverage for up to 18 or 36 months, depending on the circumstances. COBRA coverage cannot continue indefinitely. But it can be a good temporary solution if you’re just testing the self-employment waters, or if you plan to transition to another type of coverage later on.

Financial factors to consider:

• Continuation of benefits: If you’ve already paid some out-of-pocket medical costs (deductibles, copays, etc.) for the year, electing COBRA will continue your existing coverage (including any amounts paid toward your deductible and out of pocket maximum) and prevent those costs being reset to $0 under a new plan.
• Higher costs: You’ll pay the full premium, which includes both your share and the portion your employer used to cover, plus a 2% administrative fee.⁴ This can result in a significant cost increase. (Some employers may offer COBRA subsidies as part of a severance package.)

Read: Deciding between COBRA and a Marketplace policy

Medicaid

Low-income freelancers might qualify for Medicaid, a joint federal and state program that provides access to free or low-cost health coverage for children and adults.

Most states have expanded Medicaid under the ACA, ⁵ making coverage available to adults under age 65 with household income up to 138% of the federal poverty level (coverage under Medicaid/CHIP for children extends to higher income levels in every state).⁶

Here’s what to know:

• Eligibility: In most states, adults under 65 with household income up to 138% of the federal poverty level can qualify for Medicaid. In 2024, that’s $20,782 for a single adult and $43,056 for a household of four (higher in Alaska and Hawaii).⁷ Coverage for children extends to higher income levels in every state, either under Medicaid or CHIP.⁶
• Enrollment: If you’re eligible for Medicaid, you can apply anytime.
• Flexibility: Medicaid can serve as a temporary or long-term solution, depending on changes in your income. If your income increases in the future to a level that makes you ineligible for Medicaid, the loss of Medicaid will trigger a special enrollment period that will allow you to enroll in a private individual/family plan.

Estate recovery: If you’re 55 or older, be aware of your state’s Medicaid estate recovery rules, as this could impact how your estate is handled after you die. Some states recoup all costs that were incurred by Medicaid, while others limit it to only long-term care costs.

Health insurance through trade organizations

Depending on the type of work you do and where you live, you may find professional associations or membership organizations that will offer you access to health benefits or help to arrange your enrollment in a health insurance plan. But it’s important to pay close attention to the details of the coverage.

Keep in mind:

• Types of coverage: Some associations help members enroll in ACA Marketplace plans, while others may offer non-ACA-compliant options like short-term insurance or fixed indemnity plans. Associations may also provide access to discount medical programs, which are not health insurance.
• ACA protections: Ensure you understand the coverage details and whether the plan offers ACA consumer protections like essential health benefits or if premium subsidies are available.

Short-term health insurance

Short-term health insurance is not a substitute for ACA-compliant major medical health coverage and is not an adequate self-employed health insurance solution. But if you need to bridge a short gap between other policies, here’s what to know:

• Limited duration: Starting in September 2024, short-term health insurance is limited to initial duration of three months, and total duration of four months, including any renewals.
• Coverage limitations: These plans often have caps on benefits, do not cover essential health benefits (EHBs), and usually exclude coverage for pre-existing conditions.
• Use case: They can be used for bridging gaps if you missed ACA open enrollment, and don’t qualify for a special enrollment period, or need temporary coverage before your next enrollment period.