If you’re self-employed, you’ve probably felt that mix of excitement and terror when you realize… you’re your own boss. But also, you are your own HR department, too. Which means figuring out health coverage all by yourself.

As a solopreneur for the past five years, I’ve navigated this challenge for my family of four. In this article, we’ll break down your best options for health coverage if you’re self-employed so you can protect your health and your wallet while running your business.

Why Health Coverage Matters for the Self-Employed

Self-employment is on the rise. According to the Center for American Progress, about 16 million people in the U.S. were self-employed in 2022, and that number is projected to keep growing.

With more people working for themselves, more of us need to figure out health coverage outside of an employer plan.

And here’s why it’s urgent: the average employer-sponsored family health insurance premium is now over $23,000 per year. That’s a big number! One you don’t want to be caught paying entirely out of pocket if a medical emergency strikes.

Medical debt is one of the leading causes of bankruptcy in the U.S., with over 100 million Americans struggling with some form of it. One accident or illness could wipe out years of hard work in your business.

1. Coverage Through a Spouse or Partner

If your spouse or partner has an employer-sponsored plan, this is often the easiest and most affordable option. Even if it costs more to add you, it’s worth comparing against the other options on this list.

2. The Marketplace (Healthcare.gov)

This has been my personal choice for the past five years. The Health Insurance Marketplace lets you compare plans side-by-side, and depending on your household income, you may qualify for premium tax credits that significantly reduce your monthly cost.

For example, using the KFF Subsidy Calculator, a family of four in Michigan with a $100,000 household income might receive around $400 per month in premium tax credits — that’s nearly $5,000 a year in savings.

Pro Tip: Credits vary by county, ages, tobacco status, and the local benchmark plan, so check the calculator with your own details.

With the recent passage of the H.R.1 “One Big Beautiful Bill Act”, subsidies may be reduced for some families starting next year. KFF estimates that changes to the ACA Marketplaces could result in 8.2 million more people becoming uninsured, relative to a scenario where the enhanced tax credits are extended and without the new program-integrity rule.

For my family of four, our Marketplace plan costs around $600 per month with a subsidy as of this writing. It’s provided us with solid coverage and allowed me to keep running my business full-time while my wife works part-time elsewhere without benefits.

💡 Related Tool for Solopreneurs:
When you’re self-employed, you don’t have an HR or benefits department. You are the HR department. I use Gusto for my payroll and HR solutions. Their system makes it simple to incorporate health care benefits into payroll, and it’s automated, so I know it’s done right.

Right now, Gusto is offering $100 after you run your first payroll — but it’s a limited-time offer. Here’s a full Gusto review if you want to learn more.

3. Private Health Insurance (Off-Exchange)

You can also shop directly through private insurers or a broker. This might make sense if you want specific network options (like a broad PPO), certain carriers not on the Marketplace, or unique plan features.

Key points:

• No subsidies off-exchange. Premium tax credits are only available through the Marketplace.
• ACA-compliant vs. non-ACA plans:
  • ACA-compliant off-exchange plans have the same protections as Marketplace plans. They cover pre-existing conditions, essential health benefits, and have no annual/lifetime limits.
  • Non-ACA products (short-term limited-duration insurance, fixed indemnity plans) can exclude pre-existing conditions, cap benefits, and deny claims for care that ACA plans must cover.
• Renewability risk: Short-term policies often expire and may require re-application, with higher rates or exclusions if your health changes.

4. Health Share Plans (Not Insurance)

Health care sharing ministries and similar arrangements are not insurance. Members pool funds to help with each other’s medical costs, and monthly amounts are often lower than traditional premiums.

Major caveats:

• No legal guarantee of payment. (National Association of Insurance Commissioners)
• Pre-existing condition exclusions for 12–24 months.
• Lifestyle or religious requirements (no tobacco, alcohol limits).
• Limited scope — preventive care, maternity, mental health, and prescriptions may be excluded or capped.

These can work for some budgets, but you’re trading lower costs for higher uncertainty. Read every guideline before joining.

5. Medicaid

If your business is in the early stages and your income is lower, you might qualify for Medicaid — a joint federal/state program offering free or low-cost coverage.

In Michigan, a family of four can qualify with an income of about $37,000 per year (Healthy Michigan Plan). Benefits include preventive care, prescriptions, hospital stays, and mental health services.

With the H.R.1 “One Big Beautiful Bill Act”, some states could see reduced federal funding, potentially tightening eligibility or benefits. KFF projects millions more uninsured over the next few years due to these changes.

If your income fluctuates, Medicaid can be a safety net — just monitor earnings closely. If you cross the threshold mid-year, switch promptly to a Marketplace plan to avoid coverage gaps.

6. COBRA

If you recently left a job to become self-employed, you could extend your previous employer’s coverage temporarily via COBRA. It’s expensive, but it can be a short-term bridge while you explore other options.

Final Thoughts on Health Coverage if you’re Self-Employed

As a self-employed professional, health coverage is one of the biggest line items in my budget. It’s also one of the most important.

The Marketplace has been the right fit for me, but your situation might lead you toward a spouse’s plan, Medicaid, or private insurance. The key is to explore every option, get quotes, and run the numbers so you can make a confident decision.

You don’t have to juggle health benefits, payroll, and taxes all by yourself. Gusto has been a huge help for me in streamlining everything for my business. They’re offering $100 after you run your first payroll for a limited time.

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