Best Self-Employed Health Insurance

When employers offer health insurance as a benefit, the employer may pay over 80% of the cost. If you’re self-employed, a freelancer, or an independent contractor, the entire cost of health insurance coverage is yours. Fortunately, there are some effective ways to make health insurance more affordable, but there are some important considerations as well. The best self-employed health insurance is out there, and these are just a few tips and insights you can use to your advantage.

The Best Self-Employed Health Insurance

• Best for Access to Specialists: Kaiser Permanente
• Best for Nationwide Coverage: Blue Cross Blue Shield
• Best for Pharmacy Programs: Cigna
• Best for PPO Plans: Humana
• Best for Member Support: Aetna

Best Health Insurance for the Self-Employed

Take a look at our list and compare quotes to find the best health insurance premium for you.

1. Best for Access to Specialists: Kaiser Permanente

Health insurance is often offered regionally, and Kaiser Permanente is no exception. While limited to just 8 states and Washington, D.C., this health insurer is known for affordable rates and a wide selection of coverage options (if you live where it offers plans).

If you’re a little older but not quite ready for Medicare, you may also find a price advantage with Kaiser Permanente.

2. Best for Nationwide Coverage: Blue Cross Blue Shield (BCBS)

An American icon, Blue Cross Blue Shield is a time-tested health insurer made up of dozens of regional companies that span the U.S. Health plan availability varies based on location, which is common in the health insurance industry but may be more pronounced with BCBS and its federation of health insurance companies.

Customers can expect a wide network of healthcare providers and a strong assortment of plans in most areas.

3. Best for Pharmacy Programs: Cigna

Cigna, a popular choice with employers for group health insurance plans, also offers individual plans in 12 states throughout the U.S. Dental plans are also available over a wider geographic territory.

Cigna customers can expect an expansive provider network of doctors and a practical assortment of health insurance plans, including high-deductible plans that qualify for health savings accounts. Cigna does not offer short term health insurance plans.

4. Best for PPO Plans: Humana

Available in 22 states, Humana is not only widely accessible but also a more affordable option. In some states, Humana can bundle dental and vision coverage with your health insurance coverage, providing an all-in-one solution that’s increasingly rare in the health insurance industry.

Like Cigna, Humana does not offer short-term plans but if your needs are longer-term, this health insurer deserves a closer look.

5. Best for Member Support: Aetna

Offering plans both privately and through the health marketplace exchanges, Aetna offers a broad range of healthcare plans, including dental and vision plans and even travel insurance. Aetna’s indemnity plans provide an affordable way to reduce costs for many common health services.

Health insurance costs vary by age and location, but consumers who are price conscious can expect Aetna’s health insurance plans to be more affordable than some other options.

What Should I Know About Self-Employed Health Insurance?

The Affordable Care Act changed the health insurance landscape, introduced additional requirements for health insurers and mandated coverage for consumers. The federal coverage mandate is no longer in place for consumers but some states, like New Jersey, have enacted state-level mandates for residents.

Even where not mandatory, health insurance can provide a safety net for you and your family. Often, it’s best to view insurance as coverage for the big expenses — the type of expenses that can change your lifestyle or leave you burdened with medical bills for years.

Like other types of insurance, health insurance has its own lingo and industry terms that affect how your coverage applies and which expenses you pay out-of-pocket. Become familiar with the most common terms because they can have a dramatic effect on your overall health insurance costs.

What Affects Health Insurance Costs?

Unlike other types of insurance, like home or auto insurance, where literally hundreds of factors can affect your rates, health insurance uses a limited number of individual rating factors that can affect your premiums.

• Age: Expect to pay more for your health insurance as you get older.
• Location: State rules and localized cost of services can affect your premiums.
• Tobacco use: Health insurers can charge up to 50% more for tobacco users. However, some states prohibit the practice or limit the additional premium based on tobacco use.
• Individual vs. family: Plans that extend coverage to family members cost more than plans limited to individuals.
• Deductible: When you have a higher deductible, you will pay lower premiums. At times, it might be worth the money to keep a low deductible because you need medical care throughout the year. If you feel you will not meet the deductible, you may want to save money by choosing a high deductible health plan (HDHP).
• Prescription benefits: Some plans cost more because they have better pharmacy benefits. Other plans may cost more specifically because you choose a plan that pays for specialty medicines or equipment.

Plan features, such as the structure of the deductible or out-of-pocket limits, affect the cost of premiums as well.

What to Look for in a Self-Employed Health Insurance Plan

Each household has its own priorities. Some households may place physician choice above monthly cost. Other households might prioritize monthly affordability over occasional expenses, like higher copays or coinsurance.

While your priorities may differ from those of your neighbor, be aware of the potential costs when choosing a health insurance provider. The monthly premium for your health insurance only tells part of the story. In a year in which your healthcare needs are higher, your cost can skyrocket if you choose a plan that has lower premiums but which has higher deductibles, co-pays, coinsurance, or a higher maximum out-of-pocket limit.

You’ll find most of your options are from long-established and well-known health insurance providers. However, some plans or providers may offer coverage options that are more advantageous for your household.

Is Self-employed Health Insurance Tax Deductible?

Self-employed health insurance premiums became 100% tax deductible in 2003 in many cases. Self-employed individuals may be able to deduct the cost of their premiums as an adjustment to their income on their tax return. However, there are certain criteria that need to be met in order to qualify for the tax deduction. Be sure to check current guidelines each year before taking the deduction on your 1040. Also, it is recommended to consult with a tax professional or refer to the IRS guidelines for more specific information.

Get the Right Self-Employed Health Insurance

Finding the best health insurance as a self-employed individual is crucial for both your health and your financial well-being. It's important to explore all your options and make an informed decision that suits your specific needs.

If you’re newly self-employed and still building your income, a subsidized health insurance marketplace plan may be the best solution in the short term. However, if you have significant savings or are able to regularly fund a health savings account, a high-deductible health insurance plan may be a more cost-effective solution that also provides more freedom.

Frequently Asked Questions