- Leaving a job with health coverage opens a 60-day Special Enrollment Period.
- Marketplace subsidies are based on projected net self-employment income, not gross revenue.
- Self-employed premiums are often tax-deductible.
- Compare total yearly cost, not just the premium.
Going independent means becoming your own HR department, and health insurance is usually the hardest part. Here's how to approach it step by step.
Step 1: Know your enrollment window
If you're leaving a job that provided coverage, losing that coverage is a qualifying life event. You generally have 60 days to enroll in a Marketplace plan, and you can often apply up to 60 days before the coverage ends so there's no gap. If you're already self-employed and uninsured, you'll usually wait for open enrollment for ACA plans, though many private plans accept applications year-round.
Advisor tip: COBRA lets you keep your old employer plan, but you pay the full premium plus up to a 2% admin fee. Compare it with Marketplace and private options before you elect it.
Step 2: Estimate your income carefully
Marketplace subsidies are based on your expected household income for the year. For self-employed people that means net self-employment income (revenue minus business expenses), plus any other household income. Estimate too low and you may repay part of the subsidy at tax time. Estimate too high and you'll overpay each month, although you'll get the difference back when you file.
- Start from last year's Schedule C net profit and adjust for what you expect this year.
- Update the Marketplace promptly if your income changes significantly mid-year.
- Keep good books. Accurate expenses lower your counted income.
Step 3: Compare the right plan types
- ACA Marketplace plans: guaranteed issue and full benefits, with subsidies if you qualify.
- Private plans: can cost less for healthy applicants, often have broader networks, and are available year-round. Some are limited-benefit.
- Spouse's employer plan: if available, compare the true cost of adding yourself.
- Supplemental coverage: accident and critical-illness plans that pay cash, useful when you can't afford time off.
Step 4: Think in total yearly cost
A low premium with a $9,000 deductible isn't a bargain if you see specialists monthly. Add up 12 months of premiums plus a realistic estimate of what you'd pay out of pocket in a normal year, then check the worst case (the out-of-pocket maximum or benefit caps).
Step 5: Use the tax advantages
Many self-employed people can deduct health insurance premiums for themselves, a spouse and dependents. If you choose an HSA-eligible high-deductible plan, you may also contribute to a Health Savings Account with pre-tax dollars. For 2026 the IRS limits are $4,400 for self-only coverage and $8,750 for family coverage, plus $1,000 more if you're 55 or older.
Common mistakes
- Letting coverage lapse after leaving a job and missing the 60-day window.
- Using gross revenue instead of net income when estimating for subsidies.
- Buying a limited-benefit plan without realizing it isn't major medical.
- Skipping a network check, then finding out your doctor isn't covered.
Luis Ruiz is a licensed health insurance advisor (NPN 22256582) based in Orlando, Florida, and licensed in all 50 states. He helps self-employed people, business owners and families compare private and ACA coverage. More about Luis.
This guide is general information, not legal, tax or individualized insurance advice. Rules change, so always confirm details for your situation. Last reviewed October 1, 2026.