- Eligible self-employed people can deduct health, dental and qualifying long-term care premiums.
- The deduction can't exceed your net profit from the business.
- You can't take it for months you were eligible for a subsidized employer plan, including through a spouse.
- It reduces income tax, not self-employment tax. Talk with a tax pro about how it interacts with subsidies.
One of the few perks of buying your own health insurance is that, if you're self-employed, the premiums may be deductible. Here's how the deduction generally works. I'm a licensed insurance advisor, not a tax professional, so confirm your specifics with a CPA or enrolled agent.
Who can generally take it
- Sole proprietors and single-member LLC owners reporting on Schedule C.
- Partners receiving guaranteed payments, and certain farmers.
- More-than-2% S corporation shareholders, when premiums are handled through the S corp and included in W-2 wages.
What premiums count
Premiums for medical, dental and qualifying long-term care insurance for yourself, your spouse, your dependents and children under 27. Medicare premiums can count too. Supplemental policies may qualify, depending on the type.
The key limits
- Profit limit: the deduction can't exceed the net earned income from the business the plan is established under.
- Employer-plan rule: you can't deduct premiums for any month in which you were eligible to join a subsidized employer plan, whether through your own job or your spouse's.
- Income tax only: it's an above-the-line deduction that lowers adjusted gross income, but it doesn't reduce self-employment tax.
If you also get a Marketplace subsidy
You can only deduct the portion of premiums you actually paid, not the part covered by the premium tax credit. Because the deduction and the credit affect each other, the calculation can get circular. Tax software and the IRS instructions for Form 7206 handle it, and this is a good place to involve a professional.
Don't forget HSAs
If you're on an HSA-eligible high-deductible plan, Health Savings Account contributions are a separate deduction. For 2026 the limits are $4,400 for self-only coverage and $8,750 for family coverage, plus a $1,000 catch-up at age 55 and over.
Advisor tip: When we compare plans, I'll flag which ones are HSA-eligible so you and your tax pro can plan around it.
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.