Best Health Insurance Plans for Self-Employed Individuals

Understanding Health Insurance for Self-Employed Individuals

Self-employment can offer you freedom and flexibility in your career, but it also comes with its challenges, particularly when it comes to healthcare. Unlike traditional employees who usually receive healthcare benefits from their employers, self-employed individuals are responsible for securing their own health coverage, which can be expensive and complex to navigate.


Health insurance is a significant concern and expense for individuals looking to venture into self-employment. When working for a company, employees often enjoy the benefit of the employer covering a portion of the healthcare costs, leading to lower monthly premiums. Unfortunately, that’s not the case when you work for yourself.

Self-employed individuals must shoulder the full cost of their healthcare premiums. To make matters worse, individual health insurance plans tend to cost more than group plans provided by employers, which can put a strain on a freelancer’s budget.

Options for Healthcare Coverage When You’re Your Own Boss

Even though the situation might seem daunting, self-employed individuals have several avenues to explore for healthcare coverage.

Individual Marketplace Insurance

The Affordable Care Act (ACA) marketplace is the go-to resource for many self-employed people. During open enrollment, you can compare different health plans and find one that matches your budget needs. Remember, as a self-employed individual, your insurance premiums will not be subsidized by an employer, meaning the costs can run high. In the U.S., the average monthly cost for health insurance premiums hovered around $465 in 2019, and it could be even higher now.

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COBRA Insurance

If you’ve recently left a job to pursue self-employment, COBRA (Continuation of Health Coverage) allows you to extend your previous employer’s group health coverage temporarily. You’ll be responsible for the entire premium, but it can be a bridge to maintaining your healthcare until you transition fully into your new self-employed lifestyle. COBRA benefits can last up to 36 months, depending on the circumstances of your job departure.


Medicaid: An Option for Low-Income Freelancers

For self-employed individuals with lower earnings, Medicaid could be a viable solution. Certain states expanded their Medicaid programs to cover more people. Income limits vary from state to state, so it’s crucial to check the eligibility criteria where you live to see if Medicaid can be an affordable healthcare option for you.

Think Before You Leap Into Freelancing Full Time

Choosing to become self-employed is a significant decision, and healthcare plays an essential role in it. Healthcare costs should factor into your decision to go freelance or start your own business. Some individuals may find freelancing more feasible if they can access health insurance through another avenue. This could be through a spouse’s plan, or perhaps your freelance work remains a side project until you’re financially ready to take on health insurance costs independently.

When considering self-employment, look at your healthcare options closely. It’s a considerable part of the self-employment puzzle and shouldn’t be overlooked. While it might not be easy to navigate, being informed about your options can help you find the best path to maintaining both your health and your professional independence.

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Remember, healthcare, much like rent and other living expenses, varies by location and individual circumstances. Proper research and planning are your best tools when finding the health insurance that suits your self-employed life.


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