Do I qualify for an ACA plan if I’m self-employed?
Can I purchase an ACA plan if I work as a freelancer or am self-employed?
Yes, if you’re a freelancer or self-employed, you can purchase a health insurance plan through the ACA Marketplace. The Affordable Care Act (ACA) provides access to comprehensive health coverage for individuals who don’t receive health insurance through an employer, including those who are self-employed or freelance workers. Here’s what you need to know about your coverage options and how to get started:
1. Eligibility for ACA Marketplace Plans as a Freelancer or Self-Employed
As a freelancer, contractor, or self-employed individual, you are eligible to purchase health insurance through the ACA Marketplace.
You can purchase an ACA plan whether you are:
Solely self-employed (with no employees).
A freelancer working on individual contracts or gigs.
A small business owner without employer-sponsored health insurance.
You do not need to have an employer to qualify for ACA coverage, and you can access the same benefits as anyone else in the Marketplace.
2. Income and Eligibility for Financial Assistance
One of the advantages of purchasing an ACA plan as a self-employed individual is that you may qualify for financial assistance based on your income:
A. Premium Tax Credits:
If your household income is between 100% and 400% of the federal poverty level (FPL), you may qualify for premium tax credits to help lower the cost of your monthly health insurance premiums.
For 2024, this income range is approximately $14,580 to $58,320 for an individual and $30,000 to $120,000 for a family of four. If your income is within this range, you may be eligible for these subsidies.
B. Cost-Sharing Reductions (CSRs):
If your income is between 100% and 250% of the FPL, you may also qualify for cost-sharing reductions (CSRs) that lower your out-of-pocket costs, such as deductibles, copayments, and coinsurance, when you use healthcare services.
To receive cost-sharing reductions, you must choose a Silver-level plan in the ACA Marketplace.
Estimating Your Income:
As a freelancer or self-employed individual, your income may fluctuate. When applying for ACA coverage, you will need to estimate your annual income. This includes your total income from freelance work, any other income sources, and allowable business deductions.
3. When You Can Enroll in an ACA Plan
You can enroll in an ACA Marketplace plan during the Open Enrollment Period or during a Special Enrollment Period (SEP) if you qualify. The typical enrollment periods are as follows:
A. Open Enrollment Period:
The Open Enrollment Period generally runs from November 1 to January 15 for coverage starting the following year. If you enroll during this period, your coverage will begin on January 1 (or later, depending on when you enroll).
B. Special Enrollment Period (SEP):
If you experience a qualifying life event, such as losing other health coverage, moving, or experiencing a significant change in income, you may qualify for a Special Enrollment Period to apply for coverage outside of the regular Open Enrollment window.
4. Choosing the Right ACA Plan for Self-Employed Individuals
The ACA Marketplace offers a variety of plan levels (Bronze, Silver, Gold, and Platinum) to meet different healthcare needs and budgets. Here’s what to consider when choosing a plan:
A. Bronze Plans:
Lower monthly premiums but higher out-of-pocket costs when you need care.
Best for those who are generally healthy and expect to need minimal healthcare services.
B. Silver Plans:
Moderate premiums and out-of-pocket costs.
If you qualify for cost-sharing reductions (CSRs), you must choose a Silver plan to take advantage of lower out-of-pocket costs.
C. Gold and Platinum Plans:
Higher monthly premiums but lower out-of-pocket costs for care.
Best for those who expect to need frequent healthcare services or prescription drugs.
D. Consider Your Healthcare Needs:
As a freelancer, you might prioritize certain services, such as telehealth or coverage for prescriptions and specialist visits. Be sure to compare provider networks, covered services, and deductibles across plans to find the best fit.
5. Self-Employed Health Insurance Deduction
If you are self-employed, you may be eligible for the self-employed health insurance deduction, which allows you to deduct the cost of your health insurance premiums from your taxable income. This deduction can help reduce the overall cost of your health insurance plan.
Important Note: The self-employed health insurance deduction is only available if you are not eligible for employer-sponsored health insurance through another source, such as a spouse’s employer.
6. How to Apply for ACA Coverage
You can apply for an ACA health plan through tsunamihealth.com, over the phone, or by mail. When applying, you’ll need to provide the following information:
Household income: Include your total income from freelance work, self-employment, and any other sources of income.
Household size: Include your spouse and dependents, if applicable.
Current health coverage: If you already have health coverage, you’ll need to indicate that as part of the application process.
Once you submit your application, you’ll be able to see the available plans in your area, compare coverage options, and determine if you qualify for premium tax credits or other financial assistance.
7. Other Coverage Options for Self-Employed Individuals
In addition to ACA Marketplace plans, you may have access to other health coverage options depending on your circumstances:
COBRA: If you recently left a traditional job, you may be eligible for COBRA continuation coverage, allowing you to keep your former employer’s health plan for a limited time.
Medicaid: If your income is low, you may qualify for Medicaid instead of an ACA plan. You can apply for Medicaid through the ACA Marketplace, and if you’re eligible, you’ll be directed to your state’s Medicaid program.
Spouse’s Health Plan: If your spouse has access to employer-sponsored coverage, you may also be able to join their health plan.
Key Takeaways:
Freelancers and self-employed individuals are eligible to purchase ACA Marketplace plans, and may qualify for premium tax credits and cost-sharing reductions based on their income.
You can apply during the Open Enrollment Period or if you experience a qualifying life event that triggers a Special Enrollment Period.
Be sure to estimate your income carefully and choose a plan that fits your healthcare needs and budget.
For personalized assistance in selecting the right health plan for your self-employment needs, schedule an appointment with a Tsunami Advisor here: Schedule an Appointment.
