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What does health insurance cost when you're self-employed?

5 min read

Self-employed health insurance costs the whole premium, and the whole premium is about five times what the average employee sees on a payslip. In 2025 the average total premium for single coverage at a private-sector employer was $9,025 a year, and employees paid 20.1% of it.

Why can self-employed health insurance be such a shock?

Self-employed health insurance can be a shock because your payslip only ever showed your share. The employer paid the rest, and in 2025 the rest averaged about four-fifths of a single premium and nearly three-quarters of a family one.

Average employer plan premiums in 2025 (a year)
CoverageTotal premiumEmployee paidEmployer paid
Single$9,025$1,817 (20.1%)$7,208
Family$26,281$7,314 (27.8%)$18,967

Source: AHRQ Medical Expenditure Panel Survey, Insurance Component 2025, Tables I.C.1-3 and I.D.1-3, private-sector averages; employer paid = total minus employee contribution. Read 2 October 2026.

The number on your payslip isn't your insurance cost. It's your share of it.

How do you find your real premium before you quit?

Ask HR for your plan's total premium, price Marketplace plans at your expected income, check for savings and a spouse's plan, then put the real monthly figure into your quit number. Do it now, not after your last day.

  1. Ask HR for the total premiumNot your deduction: the full monthly cost of your plan, employer share included. COBRA can charge up to 102% of it (Department of Labor).
  2. Price Marketplace plans at your expected incomeUse HealthCare.gov or your state's Marketplace. Self-employed applicants estimate their net self-employment income for the year they want coverage (HealthCare.gov).
  3. Check whether you'd get savingsFor 2026 the premium tax credit is limited to household incomes from 100% to 400% of the federal poverty line: $62,600 for one person in the 48 contiguous states and DC (IRS, HealthCare.gov).
  4. Check a spouse's planIf a spouse's job-based plan covers spouses and dependents, in most cases you won't qualify for Marketplace savings (HealthCare.gov). It may still be the cheapest route.
  5. Put the real monthly figure into your quit numberThen rerun the quit number calculator. In the example, the premium alone adds about $1,030 a month to the quit number ($752 ÷ 0.73).

Can you deduct health insurance when you're self-employed?

Self-employed people may be able to deduct health insurance premiums, but not for every month. The IRS lets you deduct premiums for medical, dental and vision insurance for yourself, a spouse and dependents if you had a net profit on Schedule C. You can't take it for any month you could join an employer's subsidized plan, including a spouse's, even if you didn't enroll (IRS Form 7206 instructions).

The deduction lowers your income tax. It doesn't lower your self-employment tax, and it can't be larger than the business's net profit.

What does self-employed health insurance cost besides the premium?

Besides the premium, budget for the deductible and out-of-pocket maximum, dental and vision, prescriptions and family members, and check your doctors' network and disability cover.

  • The deductible and out-of-pocket maximum. A cheap premium with a high deductible is a different product. Budget for the deductible as a real possibility.
  • Dental and vision. These can be separate policies once you leave an employer plan.
  • Prescriptions. Check your medications against the plan's drug list before choosing.
  • Your doctors. Check the network before you switch, not after.
  • Family members. Costs scale with the household.
  • Disability cover. Check whether your job provides it, and what happens to it when you leave. Self-employed, there's no sick pay behind you.

When should you buy self-employed health insurance?

Buy self-employed health insurance inside the window your quit opens. Losing job-based coverage, even if you quit, starts a Special Enrollment Period: 60 days before or after the loss (HealthCare.gov, SEP page). Outside that, Open Enrollment for 2027 coverage starts November 1, 2026, and you enroll by December 15 for coverage that starts January 1 (HealthCare.gov). COBRA or a Marketplace plan lays out every date from your last day.

What if the premium makes your quit number fail?

If the premium breaks your quit number, that's a real answer, and better found now. Your options: stay employed longer while sales grow, get cover through a household member, or raise the target until the premium is affordable rather than barely covered. Health costs sending you back to a job early is a legitimate outcome, just an expensive one to reach by surprise.

Sources

Every rule and figure on this page was checked against these pages, read 2 October 2026.

How much does health insurance cost when you're self-employed?
The whole premium, which varies by age, place, household and plan. For scale: in 2025 the average total premium for single coverage at a private-sector employer was $9,025 a year, about $752 a month, of which employees paid 20.1%. Price your own cover on HealthCare.gov at your expected income.
Can I deduct health insurance premiums if I'm self-employed?
Possibly. The IRS allows the deduction if you had a net profit on Schedule C, but not for any month you could join an employer's subsidized plan, including a spouse's. It lowers income tax, not self-employment tax.
Do self-employed people get Marketplace savings in 2026?
They can. Savings are based on estimated net self-employment income plus other household income for the year. For 2026 the premium tax credit is limited to households from 100% to 400% of the federal poverty line, and there's no cap on paying back excess credit.
When should I price health insurance before quitting?
Before you resign. Ask HR for your plan's total premium, then price Marketplace plans at your expected income. Put the real figure into your quit number, because the premium goes straight into it.

Disclosure The Quit Number is published by the team behind FlowLister. FlowLister writes eBay listings from your photos, which matters here because listing is the part of a full-time week you can't skip. It's AI, so it misses things. We make it, so read this as a disclosure, not a recommendation. Nothing on this site is financial, tax or legal advice.

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