Best Health Insurance for Self-Employed Freelancers
At $546 per month on average, UnitedHealthcare has the best health insurance if you’re self-employed.
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You can also find plans from other companies such as Aetna, which has cheaper options, and Blue Cross Blue Shield, which is available in more locations.
The cost of the plan will be based on how much you make. A Bronze plan costs about $12 per month if you earn $25,000 per year, and it costs about $110 per month if you earn $35,000 per year.
Best health insurance companies when you're self-employed
How much does self-employed health insurance cost?
The cost of health insurance for freelancers depends on several factors, such as where you live, your income level and the size of your deductible.
Self-employed health insurance costs an average of $129 per month after income-based discounts are applied. This is the average rate that all shoppers pay after buying a marketplace health insurance plan.
If you don't qualify for income-based discounts, the average cost of a health insurance plan is $560 per month for a Silver plan.
Self-employed health insurance costs
Plan type | $25K income | $35K income | Full price |
|---|---|---|---|
| Bronze | $12 | $110 | $440 |
| Silver | $132 | $230 | $560 |
| Gold | $176 | $274 | $604 |
| Platinum | $309 | $407 | $737 |
Monthly rates based on income are the average costs after subsidies are applied.
Health insurance subsidies lower the monthly cost of a health insurance plan based on how much you earn. Subsidies can be applied to all coverage levels except Catastrophic plans.
You need to sign up for a plan through HealthCare.gov or the health insurance marketplace to get a discounted rate for health insurance.
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Best self-employed health insurance
The best health insurance when you're self-employed is through the health insurance marketplace.
Enrolling in a plan on the marketplace is the only way you can get discounted rates based on your income. Plus, all marketplace plans follow the coverage standards of the Affordable Care Act (ACA). This helps you avoid getting a policy that doesn't cover prescriptions or cap your medical costs.
With a marketplace plan, you'll have coverage for essential health services including hospitalizations, doctor appointments and mental health. You can't be denied a plan because of a preexisting condition. Plus, you won't pay anything for preventive care.
When enrolling in a plan, the two most important decisions are choosing the right level of coverage and choosing the best company for your needs. The company you choose will determine the doctors and hospitals you can use, the customer service you get and what special benefits are included.
If you qualify for discounted rates based on your income, you can apply the subsidies to any company you choose.
UnitedHealthcare: Best overall if you're self-employed
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Editor rating
- Monthly cost: $546
Why it's great
UnitedHealthcare (UHC) is a high-quality health insurance company that has good customer service, many plan options and useful perks when you're self-employed.
Pros of UHC
Cons of UHC
Aetna: Best if you want cheap coverage
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Editor rating
- Monthly cost: $450
Why it's great
Aetna is the best health insurance company if you're self-employed and have a tight budget. Plans are cheap and are a good value for coverage.
Pros of Aetna
Cons of Aetna
Blue Cross Blue Shield: Popular health insurance company
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Editor rating
- Monthly cost: $607
Why it's great
Blue Cross Blue Shield (BCBS) is the most popular company in the U.S. for individual health insurance because of its well-rated plans that have a large network of doctors and hospitals.
Pros of BCBS
Cons of BCBS
Where you live determines which companies and plans you can choose from. That's why looking at the best and cheapest companies in your state can help you get a good deal.
Learn about the best insurance companies in your state
Choosing a metal tier
The metal tier of your plan determines how much of your medical costs will be covered:
Bronze plans have cheap monthly costs. However, the high deductibles will mean that your medical care could be expensive. Bronze plans are typically a good choice if you're young, healthy and don't expect to need much medical care.
Silver plans are a good middle ground. These plans balance monthly costs with medical benefits, making them a good choice for people who need moderate amounts of health care. They're also a good choice for people who earn less than $33,975 per year because the cost-sharing reductions program will improve their benefits.
Gold and Platinum plans are expensive but have great benefits. These plans are worth it for those who expect to need expensive medical care. For example, those who have chronic health conditions, those who expect to need surgery or those who are pregnant may save money by choosing a higher-tier plan that has better benefits.
When can you enroll in a marketplace plan?
- You can sign up for health insurance each fall during open enrollment, which typically runs from Nov. 1 through Jan. 15. This will give you coverage for the upcoming plan year.
- You can also sign up any time of year if you qualify for a special enrollment period. For example, you can enroll in a marketplace plan midyear if you lose other health insurance coverage or have a qualifying life event like moving, getting married or having a child.
You can cancel at any time if your needs change. For example, you may not need self-employed health insurance if you get a full-time job that provides health insurance.
Other options for self-employed health insurance
In addition to ACA plans sold through the health insurance marketplace, those who are self-employed can also get health insurance by joining a family member's plan, getting coverage through Medicaid or joining a group health insurance plan through a professional organization.
1. Join a family member's plan
If you're married, living with a partner or eligible for insurance through a parent, it can be a good deal to join a health insurance plan they're getting through their job.
The employer will typically pay part of the health insurance premiums, so it may only cost about $200 per month to be added to a family member's health insurance.
Costs and coverage vary by employer. And you won't have as much flexibility about choosing your plan because you'll be added to an existing plan.
2. Look into professional groups, unions and associations
You may be eligible for health insurance or medical benefits through an organization associated with your line of work. For example, Freelancers Union offers group health insurance plans to its members. Also, Drivers Union in Washington gives those who work for Uber or Lyft access to telemedicine, prescriptions and support when choosing health insurance.
You may have to pay a fee to join a professional group. So remember to factor in any membership costs. Coverage and rates vary, so double-check how this group health insurance option compares to buying an individual plan on the marketplace.
3. Find out if you qualify for Medicaid
Medicaid is free or low-cost health insurance for those who have a low income.
You'll usually be eligible for Medicaid if you earn less than $20,120 per year. However, the income limit changes based on where you live and the size of your household.
If you have children or dependents under age 18, they may qualify for other low income health insurance programs like the Children's Health Insurance Program (CHIP), which is similar to Medicaid but for children.
Avoid using COBRA when you're self-employed
COBRA will let you continue your employer health insurance for up to 18 months after you leave the job. The problem is that it's very expensive.
If you're leaving a job, it's usually a better deal to shop on the marketplace for a new plan rather than continue your employer plan using COBRA.
The only exception to this is if it's at the end of the policy year and you've already met your employer plan's deductible. In this case, it may be worth it to pay the high COBRA rates for a few months, rather than needing to meet a deductible for a new plan.
Should you consider short-term health insurance?
Short-term health insurance is useful only if you're trying to fill a gap in coverage, for instance, or if you miss your open enrollment period.
Short-term health insurance plans are usually cheap, costing $124 per month, on average, but they're not regulated in the same way as a standard health insurance plan. This means they can choose to exclude coverage for prescriptions, pregnancy, cancer treatment and more. Also, you may not be able to get a plan if you have a preexisting condition.
Short-term plans can be good if you need coverage for a month or two before a standard health insurance plan begins. But unless absolutely necessary, steer clear of short-term health insurance.
Do you need health insurance if you're self-employed?
Health insurance is important because it helps pay for your medical costs.
- Plans have benefits for preventive care and wellness to help you stay healthy.
- Having insurance gives you the peace of mind of knowing you can go to the doctor when you need to.
- Plans include prescription coverage, which gives you access to affordable medications.
- Health insurance protects you from very large medical bills. For example, if you needed surgery that costs $50,000, most of the bill would be paid for by the health insurance company because the plan has an out-of-pocket maximum.
Where are there the most gig workers?
According to the Census Bureau, there were more than 9 million gig workers in the United States in 2018. Gig workers, a subset of those who are self-employed, represented nearly 5.9% of the total labor force.
When broken down by state, Puerto Rico, Vermont and Montana had the largest percentages of their labor force working in the gig economy — 9.6%, 9.5% and 8.4%, respectively. On the other hand, West Virginia, Indiana and Rhode Island had the lowest rates, all representing less than 5% of their labor force.
Affording health insurance is one of the biggest barriers to a gig worker's well-being. This is especially true in places like Vermont. In 2018, people in the state had the third-highest average rate for private health insurance, at $530 per month. Similarly, Maine, with a gig-worker rate of 8%, had a higher-than-average health insurance cost of $421.
State | Gig workers | Labor force % |
|---|---|---|
| Alabama | 117,974 | 6% |
| Alaska | 22,084 | 6% |
| Arizona | 193,825 | 6% |
| Arkansas | 88,092 | 7% |
| California | 1,550,418 | 8% |
Demographic breakdown of the gig economy
When broken down by age group, people over age 60 are the most likely to be a part of the self-employed workforce, at over 18%, while people 16-19 are the least likely. Generally, the percentage of people who work within the gig economy rises steadily with age.
Age | Total employment | Gig worker % |
|---|---|---|
| 16-19 | 5,351,000 | 2% |
| 20-29 | 31,900,000 | 3% |
| 30-39 | 32,960,000 | 8% |
| 40-49 | 31,950,000 | 11% |
| 50-59 | 31,380,000 | 13% |
| 60+ | 19,030,000 | 18% |
Frequently asked questions
How much does health insurance cost when you're self-employed?
The average cost of self-employed health insurance is $560 per month. But most people qualify for discounts based on their income. Shoppers pay an average of $129 per month for health insurance.
Can you write off health insurance costs when you're self-employed?
Yes, the self-employed health insurance deduction lets you deduct the annual amount you spend on medical and dental insurance. It's a valuable tax break because you can write off the insurance costs even if you don't itemize your deductions.
How do you get cheap self-employed health insurance?
ACA health insurance plans, also called "Obamacare," give you the cheapest rates on health insurance when you're self-employed. How much you pay is based on your income. So even if the plan costs more than $400 per month, you might only get a bill for $100 per month because the rest is paid for by a subsidy.
Methodology
The average cost of health insurance is based on an aggregate of data from public use files (PUFs) on the Centers for Medicare & Medicaid Services (CMS) website as well as data from state-run marketplaces that don’t utilize the federal marketplace.
Costs for different incomes are calculated using the average cost of health insurance for a 40-year-old by metal tier, the average cost of a benchmark plan, federal poverty levels (FPLs) for an individual and income percentages that people pay for a benchmark plan.
Costs by company are the average monthly rates for a 40-year-old purchasing a Silver plan on the federal marketplace. The average amount people pay for a plan after subsidies is based on research from the Kaiser Family Foundation.
ValuePenguin also used data from the U.S. Census Bureau. Values were pulled from the American Community Survey for the 2018 survey year.
Editorial note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.