Health Insurance for Freelancers: Every Option Beyond an Employer Plan

Leaving a job means leaving the employer plan. Freelancers must find coverage on their own, and the choices vary in cost, quality and protection. This guide lays out each option, with the trade-offs that matter.

1. ACA marketplace plans

Plans sold on HealthCare.gov or your state exchange must cover essential health benefits, cannot deny you for pre-existing conditions and cap your yearly out-of-pocket costs. Many freelancers qualify for subsidies based on income. For most self-employed people without other coverage, this is the default option.

2. A spouse or partner's employer plan

If your spouse's employer offers family coverage, adding you can be cheaper than buying your own plan, although the employer share for dependents is often smaller. Compare the true monthly cost and the deductibles.

3. COBRA

If you leave a job with 20 or more employees, you can generally keep the same plan for up to 18 months, but you pay the full premium plus an administrative fee. COBRA is useful as a bridge, especially if you have met your deductible for the year, but it is rarely the cheapest long-term option.

4. Medicaid and children's coverage

When income is low, you may qualify for Medicaid. Eligibility depends on your state and your projected income, which can change month to month for freelancers. Children may qualify for state children's insurance programs even when adults do not.

5. Short-term health plans

These plans can have low premiums, but they often exclude pre-existing conditions, limit benefits and carry low coverage caps. They are not considered comprehensive coverage and may not satisfy rules in some states. Read the exclusions carefully before buying one.

6. Health care sharing ministries

These are not insurance. Members share costs, but there is no legal guarantee that bills will be paid. They may be an option for some people, but understand the risk.

7. Professional or trade associations

Some associations offer group health plans or discounts for members. The offerings vary and are not available in every state, so compare against marketplace plans.

8. Medicare

At 65 you generally become eligible for Medicare. Sign up during your initial enrollment period to avoid lifelong late penalties.

Option comparison

Tax advantages

If you are self-employed with net profit and not eligible for an employer plan, you can deduct health insurance premiums for yourself, your spouse and dependents. If you choose a qualifying high-deductible plan, you can also contribute to a Health Savings Account, which has deductible contributions, tax-free growth and tax-free withdrawals for medical costs.

How to choose

1. List your expected medical needs, medications and doctors.
2. Estimate your income for the year realistically.
3. Compare total yearly cost, which means premiums plus the deductible and out-of-pocket maximum you might actually pay.
4. Check that your doctors and prescriptions are covered.
5. Look for special enrollment events if you miss open enrollment, such as losing coverage, moving, marriage or having a baby.

Common mistakes

• Choosing the lowest premium without looking at the deductible.
• Going without coverage because of cost. A single hospital stay can cost more than years of premiums.
• Missing the open enrollment window.

Frequently asked questions

Can I buy insurance outside open enrollment?

Only if you have a qualifying life event or qualify for Medicaid.

Is a high-deductible plan a good idea?

It can be, if you are healthy and can fund an HSA. It is a risk if you cannot afford the deductible.