May 2, 2018
2 minute read

How to take advantage of self-employed health insurance deduction

Across America, a wide variety of unique employment situations have materialized. Some people work multiple jobs. Some have ceased their commutes to work from home indefinitely. And others still have left the corporate setting completely to become entrepreneurs, or even self-employed “solopreneurs.”

Going from having employer coverage to purchasing your own individual health insurance policy can come with a certain amount of confusion about the process and variation in costs. Indeed, health insurance premiums have been increasing over the last 10 years.

Premium tax credits, or subsidies, can be helpful for the self-employed, who have traditionally had to foot the entire bill. If you’re self-employed, you may be eligible for the self-employed health insurance deduction.

How do I get insurance if I am self-employed?

You can get insurance if you’re self-employed by purchasing a self-employed health insurance plan on the individual health insurance market. Another option may be buying group health insurance for self-employed people, which you can do in some states even if your company only has one employee.

Like any other Affordable Care Act-approved plan on the individual Health Insurance Marketplace, self-employed health insurance plans can only be purchased during an Open Enrollment Period unless you have a qualifying life event.

No matter what, learning about the self-employed health insurance deduction can be helpful for those who will need to cover the cost of health insurance on their own.

What is the self-employed health insurance deduction?

The self-employed health insurance deduction is a tax benefit allows 100% of health insurance premiums for you and your dependents to be deducted on your tax return. Self-employed health insurance deductions are applicable to insurance premiums for medical, dental, or long-term care insurance.

Deduction eligibility

According to the IRS, you may qualify for the self-employed health insurance deduction if one of the following applies to you:

  • You had a net profit from self-employment.
  • You had self-employment earnings as a partner.
  • You used an optional method to figure your net earnings from self-employment.
  • You were paid wages reported on Form W-2 as a shareholder who owns more than 2% of the stock of an S-corporation.

Long-term care premium deductions

There is a set limit on how much you can deduct for your long-term care insurance premiums. As of 2020, the total deduction was as follows:

  • Age 40 and younger: $420
  • Age 41-50: $790
  • Age 51-60: $1,580
  • Age 61-70: $4,220
  • Age 71 and older: $5,270

How can a self-employed person get health insurance?

A self-employed person can get health insurance by applying during the Open Enrollment Period, which occurs November 1 – December 15. If you do not enroll during this window, you may only apply for coverage if you qualify for a Special Enrollment Period. When you do apply, be sure to check your eligibility for a self-employed health insurance deduction.

HealthMarkets can help you compare your health insurance options. With our FitScore® technology, we can search thousands of plans from hundreds of insurance companies to help you find the plan that fits your needs. Start comparing your options and find a self-employed health insurance plan today.

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© 2023 HealthMarkets Insurance Agency. All rights reserved.

* Medicare Advantage, Medicare Supplemental Insurance, and Part D options can be explored.

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program to get information on all of your options.

To send a complaint to Medicare, call 1-800-MEDICARE (TTY users should call 1- 877-486-2048), 24 hours a day/7 days a week). If your complaint involves a broker or agent, be sure to include the name of the person when filing your grievance.

Attention: This website is operated by HealthMarkets Insurance Agency, Inc. and is not the Health Insurance Marketplace® website. HealthMarkets Insurance Agency, Inc. is licensed as an insurance agency nationwide except in MA. Not all agents are licensed to sell all products. Service and product availability varies by state. Sales agents may be compensated based on a consumer’s enrollment in an insurance plan. No obligation to enroll. Agent cannot provide tax or legal advice. Contact your tax or legal professional to discuss details regarding your individual business circumstances. Our quoting tool is provided for your information only. All quotes are estimates and are not final until consumer is enrolled. Medicare has neither reviewed nor endorsed this information.

HealthMarkets Insurance Agency offers the opportunity to enroll in either QHPs or off-Marketplace coverage. Please visit HealthCare.gov for information on the benefits of enrolling in a QHP. Off-Marketplace coverage is not eligible for the cost savings offered for coverage through the Marketplaces.

This information is not a complete description of benefits. Call the Plan’s customer service phone number for more information.

46975-HM-0121

© 2023 HealthMarkets Insurance Agency. All rights reserved.

* Medicare Advantage, Medicare Supplemental Insurance, and Part D options can be explored.

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program to get information on all of your options.

To send a complaint to Medicare, call 1-800-MEDICARE (TTY users should call 1- 877-486-2048), 24 hours a day/7 days a week). If your complaint involves a broker or agent, be sure to include the name of the person when filing your grievance.

Attention: This website is operated by HealthMarkets Insurance Agency, Inc. and is not the Health Insurance Marketplace® website. HealthMarkets Insurance Agency, Inc. is licensed as an insurance agency nationwide except in MA. Not all agents are licensed to sell all products. Service and product availability varies by state. Sales agents may be compensated based on a consumer’s enrollment in an insurance plan. No obligation to enroll. Agent cannot provide tax or legal advice. Contact your tax or legal professional to discuss details regarding your individual business circumstances. Our quoting tool is provided for your information only. All quotes are estimates and are not final until consumer is enrolled. Medicare has neither reviewed nor endorsed this information.

HealthMarkets Insurance Agency offers the opportunity to enroll in either QHPs or off-Marketplace coverage. Please visit HealthCare.gov for information on the benefits of enrolling in a QHP. Off-Marketplace coverage is not eligible for the cost savings offered for coverage through the Marketplaces.

This information is not a complete description of benefits. Call the Plan’s customer service phone number for more information.

46975-HM-0121

© 2023 HealthMarkets Insurance Agency. All rights reserved.

* Medicare Advantage, Medicare Supplemental Insurance, and Part D options can be explored.

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program to get information on all of your options.

To send a complaint to Medicare, call 1-800-MEDICARE (TTY users should call 1- 877-486-2048), 24 hours a day/7 days a week). If your complaint involves a broker or agent, be sure to include the name of the person when filing your grievance.

Attention: This website is operated by HealthMarkets Insurance Agency, Inc. and is not the Health Insurance Marketplace® website. HealthMarkets Insurance Agency, Inc. is licensed as an insurance agency nationwide except in MA. Not all agents are licensed to sell all products. Service and product availability varies by state. Sales agents may be compensated based on a consumer’s enrollment in an insurance plan. No obligation to enroll. Agent cannot provide tax or legal advice. Contact your tax or legal professional to discuss details regarding your individual business circumstances. Our quoting tool is provided for your information only. All quotes are estimates and are not final until consumer is enrolled. Medicare has neither reviewed nor endorsed this information.

HealthMarkets Insurance Agency offers the opportunity to enroll in either QHPs or off-Marketplace coverage. Please visit HealthCare.gov for information on the benefits of enrolling in a QHP. Off-Marketplace coverage is not eligible for the cost savings offered for coverage through the Marketplaces.

This information is not a complete description of benefits. Call the Plan’s customer service phone number for more information.

46975-HM-0121