Health Coverage Options for Self-Employed and 1099 Workers
When you work for yourself, there is no employer plan to fall back on. Freelancers, gig workers, 1099 contractors and small business owners usually choose from a handful of paths: a Marketplace plan, a spouse's employer plan, health sharing, Direct Primary Care paired with a second layer, or COBRA right after leaving a job. Here is how they compare on cost, taxes and fit.
| Option | What you pay | Tax treatment (general rule) | Network | Often fits |
|---|---|---|---|---|
| ACA Marketplace plan | Monthly premium; savings are based on your estimated net income for the year | Premiums may qualify for the self-employed health insurance deduction | Insurance company network | People with pre-existing conditions, people whose income qualifies for savings, anyone who wants ACA protections |
| Spouse's employer plan | Your share of the premium through your spouse's payroll | The self-employed deduction isn't allowed for months you could join a spouse's subsidized employer plan | Insurance company network | Households where a spouse has affordable employer coverage |
| Health sharing (not insurance) | Monthly contribution, plus your Initial Unshared Amount (IUA) for each medical need | Not insurance, so don't assume insurance tax rules apply; ask a tax professional | Often no network; you pay as a self-pay patient | Generally healthy people paying full price who are comfortable reading program guidelines |
| DPC plus a large-event layer | DPC membership (about $99 per member per month on average) plus the cost of the second layer | A qualifying DPC membership no longer blocks HSA contributions when paired with an HSA-qualified plan | The DPC practice you choose, plus the network of your second layer | People who want direct, easy access to a primary care doctor |
| COBRA (right after a job) | Up to 102% of the full group premium | Ask a tax professional how it applies to your return | Your former employer's network | Short bridges while you set up your own plan, or mid-treatment patients |
ACA Marketplace plans
For many self-employed people, the individual Marketplace is the starting point. Marketplace savings are based on your estimated net income for the year you’re getting coverage, not last year’s income [1], which matters if your income moves around. Marketplace plans can’t deny you coverage or raise your rates based only on your health [2].
For 2027 coverage, open enrollment runs November 1, 2026 to January 15, 2027, and December 15 is the deadline for coverage starting January 1 [3]. To see prices for your household, try our Quick Rate Estimator, which takes under 60 seconds.
A spouse’s employer plan
If your spouse has access to an employer plan, compare its cost and network with a Marketplace plan. Keep in mind the tax rule below: being eligible for a spouse’s subsidized employer plan affects the self-employed health insurance deduction, even if you don’t enroll [4].
Health sharing
Health care sharing ministries serve at least 1.7 million people, but they are not insurance, are not regulated by state insurance commissioners, and do not count as minimum essential coverage [5]. Programs differ in their Initial Unshared Amount (IUA), waiting periods for pre-existing conditions, whether members must affirm a statement of faith, and sharing limits. Read Health Share vs Traditional Insurance or visit our health sharing page before deciding.
Direct Primary Care plus a second layer
Direct Primary Care gives you a primary care practice for a flat monthly membership, about $99 per member per month on average nationally and about $98 in the South [6]. DPC is not insurance and handles primary care only, so self-employed people typically pair it with a Marketplace plan or health sharing for hospital stays, surgery and specialists. See our hybrid models comparison and Direct Primary Care.
Taxes and HSAs: the general rules
Self-employed health insurance deduction. You may qualify if, for example, you were self-employed with a net profit reported on Schedule C or Schedule F, or you were a partner with net self-employment earnings. You can’t take the deduction for any month you were eligible to participate in an employer-subsidized health plan, including one through your spouse’s employer, even if you didn’t enroll [4].
DPC and HSAs. For months beginning after December 31, 2025, a qualifying DPC arrangement no longer prevents you from contributing to a Health Savings Account, as long as total fees are no more than $150 a month for one person or $300 a month for more than one person, and an HSA can pay the membership fee [7]. You still need an HSA-qualified high-deductible health plan to contribute.
This is general educational information, not tax or legal advice. Talk with a qualified tax professional about how this applies to your situation.
If you just left a job
If you recently left an employer, you have two clocks running. COBRA can cost up to 102% of the full group rate [8], and you have 60 days from losing job-based coverage to enroll in a Marketplace plan through a Special Enrollment Period [9]. Compare both in COBRA vs Your Alternatives and on our job transitions page.
How to choose
- Estimate your net income for next year, since Marketplace savings depend on it.
- List your doctors, prescriptions and any planned care.
- Price a Marketplace plan and, if available, your spouse’s plan.
- Decide whether you want DPC for everyday care, and what second layer fits your health and budget.
Our guide to health coverage for the self-employed goes deeper, and you can book a consultation with an independent advisor. You can also visit For Individuals & Families.
REFERENCES
[1] HealthCare.gov. “Health Care Insurance Coverage for Self-Employed Individuals.” U.S. Centers for Medicare & Medicaid Services, 2026. https://www.healthcare.gov/self-employed/coverage/
[2] HealthCare.gov. “Marketplace Health Plans Cover Pre-existing Conditions.” U.S. Centers for Medicare & Medicaid Services, 2026. https://www.healthcare.gov/coverage/pre-existing-conditions/
[3] HealthCare.gov. “Dates and Deadlines for 2027 Health Insurance.” U.S. Centers for Medicare & Medicaid Services, 2026. https://www.healthcare.gov/quick-guide/dates-and-deadlines/
[4] Internal Revenue Service. “Instructions for Form 7206 (2025).” IRS, 2025. https://www.irs.gov/instructions/i7206
[5] healthinsurance.org. “What is a health care sharing ministry?” healthinsurance.org, April 2026. https://www.healthinsurance.org/glossary/health-care-sharing-ministry/
[6] Direct Primary Care Alliance. “State of Direct Primary Care 2026.” DPC Alliance, July 2026. https://dpcnews.com/wp-content/uploads/2026/07/State_of_DPC_FINAL2026.pdf
[7] Internal Revenue Service. “Notice 2026-5: Expanded Availability of Health Savings Accounts under the One, Big, Beautiful Bill Act (OBBBA).” IRS, December 2025. https://www.irs.gov/pub/irs-drop/n-26-05.pdf
[8] U.S. Department of Labor. “An Employee’s Guide to Health Benefits Under COBRA.” Employee Benefits Security Administration, September 2022. https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/an-employees-guide-health-benefits-under-cobra-2022.pdf
[9] HealthCare.gov. “COBRA Coverage When You’re Unemployed.” U.S. Centers for Medicare & Medicaid Services, 2026. https://www.healthcare.gov/unemployed/cobra-coverage/
Frequently asked questions
Can I deduct health insurance if I'm self-employed?
As a general rule, if you have a net profit from self-employment, you may be able to deduct health insurance premiums as the self-employed health insurance deduction. You can't take it for any month you were eligible for an employer-subsidized plan, including through your spouse's employer, even if you didn't enroll. This is general educational information, not tax or legal advice. Talk with a qualified tax professional about how this applies to your situation.
Do freelancers qualify for Marketplace savings?
Many do. Marketplace savings are based on your estimated net income for the year you're getting coverage, not last year's income, so estimate carefully if your income changes from year to year.
Is health sharing an option for 1099 workers?
It can be. Health sharing is not insurance and does not count as minimum essential coverage, and sharing is not guaranteed. Some generally healthy self-employed people use it, often paired with Direct Primary Care. It is not available in every state, so ask an advisor about options where you live.
Can I use an HSA with Direct Primary Care?
Starting in 2026, a qualifying DPC membership of up to $150 a month for one person, or $300 for more than one person, no longer blocks HSA contributions, as long as you have an HSA-qualified high-deductible health plan. This is general educational information, not tax or legal advice. Talk with a qualified tax professional about how this applies to your situation.
When can I sign up for a Marketplace plan?
Open enrollment for 2027 coverage runs November 1, 2026 to January 15, 2027, and December 15 is the deadline for coverage starting January 1. If you lose job-based coverage, you can enroll within 60 days through a Special Enrollment Period.
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