Quick answer
Most freelancers get coverage in one of these ways:
- ACA marketplace plan (HealthCare.gov or your state’s exchange). Premium tax credits are available up to 400% of the federal poverty level, which is $62,600 for a single person for 2026 coverage.
- A spouse’s or partner’s employer plan, often the cheapest route.
- COBRA from a job you just left, usually for up to 18 months.
- Medicaid, if your income is low enough in your state.
- Medicare, at 65.
Premiums you pay for yourself and your family are usually deductible through the self-employed health insurance deduction, if you have a profit and weren’t eligible for an employer plan.
What changed for 2026
Three changes matter most for freelancers:
- Enhanced subsidies expired. The larger premium tax credits from 2021 to 2025 ended on January 1, 2026. Households above 400% FPL again get no credit, and people below it pay a larger share of income.
- Full repayment of excess credits. If your income ends up higher than you estimated, you now repay the entire excess advance credit at tax time. The old repayment caps are gone.
- More HSA-eligible plans. All bronze and catastrophic marketplace plans now count as HSA-compatible. That opens a $4,400 (self-only) or $8,750 (family) HSA contribution for many freelancers.
Your options compared
| Option | Who it fits | Key points |
|---|---|---|
| ACA marketplace | Most freelancers | Covers pre-existing conditions. Subsidies up to 400% FPL. Enroll in open enrollment or after a qualifying life event. |
| Spouse’s employer plan | Married or partnered freelancers | Often cheaper. If you’re eligible, you can’t take the SE health deduction for those months. |
| COBRA | Recent W-2 employees | Same plan you had, but you pay the full premium plus up to 2%. Usually 18 months. |
| Medicaid | Low-income freelancers | Free or low-cost. Eligibility depends on your state. |
| Medicare | Age 65+ | Medicare premiums can count toward the SE health deduction. |
| Short-term plan | Gaps between coverage | Not ACA-compliant. Can exclude pre-existing conditions. State rules vary. |
| Health care sharing ministry | Some faith-based members | Not insurance. No guarantee claims will be paid. |
ACA marketplace
Marketplace plans come in bronze, silver, gold and platinum tiers. Bronze has the lowest premiums and highest deductibles. Silver is the benchmark for subsidies and the only tier with cost-sharing reductions for lower incomes.
Open enrollment for 2027 coverage starts November 1, 2026. Check your marketplace for the end date, since some state exchanges run longer. Losing job-based coverage, moving or having a baby can open a special enrollment period.
For how subsidies are calculated, see ACA Marketplace for Freelancers: How Subsidies Work.
Short-term plans
Federal rules adopted in 2024 limit short-term plans to 3 months, and 4 months with renewals. In August 2025, the federal agencies said they would not prioritize enforcing that definition while they write new rules. Many states set their own limits or ban these plans.
Short-term plans can deny coverage for pre-existing conditions and cap benefits. They are a stopgap, not a full substitute.
Other options worth knowing
- Direct primary care: a monthly fee to a doctor’s practice for routine care. From 2026, qualifying arrangements no longer disqualify you from an HSA.
- Professional associations: some offer group dental, vision or disability plans. Check the fine print on any “association health plan” before relying on it.
- S corp owners: premiums paid by the S corp for a more-than-2% shareholder are added to W-2 wages, then deducted through the SE health deduction.
How the tax deduction works
If you have a net profit, you can generally deduct 100% of premiums for medical, dental, vision and qualifying long-term care coverage for yourself, your spouse and dependents. It’s an adjustment on Schedule 1, so you don’t need to itemize.
Limits:
- The deduction can’t exceed your net profit from the business (minus certain retirement contributions).
- You can’t take it for any month you were eligible for a subsidized employer plan, including through a spouse.
- It reduces income tax, not self-employment tax.
- You can’t deduct the part of premiums paid by the premium tax credit.
Full details are in our guide to the Self-Employed Health Insurance Deduction.
Worked example
Sam is a single freelance writer with $110,000 of net profit. Sam’s income is well above 400% FPL, so there’s no premium tax credit. Sam buys an unsubsidized marketplace bronze plan costing $500 a month.
| Item | Amount |
|---|---|
| Annual premiums | $6,000 |
| SE health insurance deduction | $6,000 |
| Income tax saved in the 22% bracket | $1,320 |
| Net cost of coverage after tax savings | $4,680 |
Because the plan is bronze, Sam can also open an HSA and contribute up to $4,400. At 22%, that saves another $968 in federal income tax, while building a fund for medical bills.
Tips for choosing a plan
- Estimate income carefully if you want a subsidy. Over-estimating is safer than under-estimating now that repayment caps are gone.
- Compare total cost, not just premiums: add the deductible and out-of-pocket maximum.
- Check the network for doctors you already use.
- Consider bronze plus HSA if you’re healthy and can cover the deductible from savings.
- Keep records of premiums paid for your tax return.
Common mistakes
- Underestimating income on a subsidized plan, then owing the full excess credit back.
- Choosing on premium alone without checking the deductible and network.
- Missing the enrollment window after losing job-based coverage.
- Claiming the SE health deduction for months you were eligible for a spouse’s employer plan.
Frequently asked questions
Can my LLC buy my health insurance?
A single-member LLC taxed as a sole proprietorship can pay premiums, but you still claim them through the SE health deduction, not as a Schedule C expense.
Can I deduct premiums if I have a loss?
No. The SE health deduction is limited to net profit. If you itemize, premiums may count as medical expenses above 7.5% of AGI.
Is there a penalty for being uninsured?
There’s no federal penalty. A few states, including California, Massachusetts, New Jersey and Rhode Island, plus Washington, D.C., have their own mandates.
When can I sign up outside open enrollment?
After a qualifying life event, such as losing other coverage, moving, marriage or a birth. You usually have 60 days.
This article is general information, not tax or insurance advice. Consult a CPA, Enrolled Agent or licensed insurance agent for your situation. Prices and rates change often.
Related guides
- Disability Insurance for Freelancers: Is It Worth It?
- Best Life Insurance for Self-Employed Workers
- Retirement Plans for Self-Employed: SEP IRA vs Solo 401(k) vs SIMPLE IRA
- Solo 401(k) Contribution Limits 2026 and How to Maximize Them
About this guide
Written by the Freelancer Tax HQ editorial team, based on our professional experience, official US government sources (IRS, SSA and other agencies) and reputable informational articles listed in the sources below. Last reviewed on . Tax rules change often, and we update this guide when they do. Read our editorial policy or report an error.
Sources
IRS Rev. Proc. 2025-25; IRS Rev. Proc. 2025-19; IRS: Guidance on new HSA benefits; DOL statement on short-term, limited-duration insurance; Healthinsurance.org: Federal poverty level; Health Affairs: Senate fails to extend enhanced ACA subsidies; IRS: About Form 7206. Example figures are FreelancerTaxHQ illustrations.
Official resources linked in this guide: IRS: Tax preparer credentials; HealthCare.gov.