Health Insurance for the Self-Employed and Small Business Owners

Carrying the whole premium yourself? Here's how to pay less.

Whether you're 1099, freelance, gig, or running a small business, you carry the whole premium yourself, with no employer to split the cost and no HR department handing you a benefits packet. You're the one shopping, comparing, and paying. Health Trust Financial is the only company the Ramsey Team recommends to help you find health insurance, and a licensed advisor will do the comparing for you, at no cost, so you can get back to running your business.

Finding the right coverage when you work for yourself requires a different approach. You have to balance a premium you can afford against a deductible that won't bankrupt you if you get sick. You also have to navigate income estimation, subsidies, and tax advantages that W-2 employees never have to think about.

We understand the unique challenges of self-employment. Our advisors are experts at finding plans that fit variable incomes and maximizing the financial assistance available to you. We take the burden of shopping off your plate so you can focus on your work.

Comparing your options

This is a general comparison. Your advisor will walk you through the specifics for your situation.

Why coverage is harder when you work for yourself

Employees feel premium increases as a line on a pay stub. You feel the whole thing. There's no employer match, no group plan to fall back on, and the choices can pile up fast. That's the exact problem we solve every day. When you are the business, every dollar spent on a premium is a dollar that isn't reinvested in your growth or your family. The stakes are higher, and the margin for error is smaller.

Your options

The self-employed health insurance deduction

One of the few advantages of buying your own health insurance as a self-employed person is the potential for tax deductions. Many self-employed individuals can deduct 100% of their health insurance premiums from their adjusted gross income.

This deduction can apply to medical, dental, and qualifying long-term care insurance premiums for yourself, your spouse, and your dependents. It is an "above-the-line" deduction, meaning you don't have to itemize your deductions to claim it.

However, the details depend entirely on your specific tax situation and how your business is structured. We are insurance advisors, not accountants. We can help you find the right plan, but your tax professional must confirm exactly what deductions apply to you.

Why an HSA is often the strongest play

A Health Savings Account (HSA) paired with a high-deductible health plan is often a powerful strategy for the self-employed. These plans typically offer a lower monthly premium, which frees up cash flow for your business.

More importantly, an HSA offers tax-advantaged savings. The money you contribute is tax-deductible, it grows tax-free, and you can withdraw it tax-free to pay for qualified medical expenses. Unlike a Flexible Spending Account (FSA), the balance in an HSA is yours forever and rolls over year to year.

But there is an honest tradeoff: a higher deductible means you carry more risk up front. If you have an unexpected medical event early in the year, you will have to pay more out of pocket before the insurance kicks in. An HSA suits people who have some savings to absorb that initial deductible.

Income that moves

Freelance and self-employed income is often lumpy. You might have a great quarter followed by a slow one. This creates a unique challenge when buying health insurance because ACA subsidies are based on your estimated annual income.

If you estimate your income too high, you might miss out on a subsidy you actually deserve, paying more than necessary every month. If you estimate your income too low, you might receive a large subsidy during the year, only to find out you have to pay a significant portion of it back when you file your taxes.

An advisor helps you navigate this. We work with you to make a realistic, conservative estimate of your income, and we can help you adjust that estimate during the year if your business performs differently than expected.

Common mistakes

The self-employed face unique pitfalls when shopping for coverage. Here is what to avoid:

• Going without coverage: Assuming insurance is too expensive and risking bankruptcy if a major medical event occurs. Subsidies often make coverage much more affordable than people realize.
• Picking on premium alone: Choosing a plan just because it's cheap, without understanding the deductible or checking if your doctors are in-network.
• Missing open enrollment: Being too busy running your business and missing the deadline. If you are on an individual marketplace plan, missing open enrollment can lock you out until the next year, unless a life event opens a special enrollment window. Small-group plans, if you have employees, have more flexible enrollment timing.
• Not deducting the premium: Failing to claim the self-employed health insurance deduction at tax time, leaving money on the table.

Who this fits, and who it doesn't

What to ask before you decide

When you speak with a licensed advisor, bring these questions to the table:

• "Based on my estimated freelance income, what subsidy do I qualify for?"
• "Does an HSA-eligible plan make sense for my cash flow and savings?"
• "Are my current doctors in-network for this specific plan?"
• "What happens if my income changes significantly mid-year?"
• "Are my regular prescription medications covered on this plan's formulary?"
• "If I hire an employee next year, how does that change my options?"
• "What is the true out-of-pocket maximum if I have a major medical event?"

What it costs to work with us

Nothing. We're paid by the carriers, so comparing your options is free and doesn't raise your premium. Self-employed premiums may also be tax-deductible, so it's worth a quick word with your tax professional.

What our clients say.

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"He provided everything I needed to know, and made it super easy to get insurance, and it only took a few minutes. Also, I didn't have to worry about getting a ton of phone calls from different agents. My phone number and other contact info was kept confidential."

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