When you're self-employed, finding affordable health coverage feels like navigating a maze blindfolded. You don't have an HR department to guide you, and the phrase "group health insurance" sounds like it's only for traditional businesses with employees. But here's what most self-employed people don't realize: you actually have several paths to group-style coverage and lower premiums, from Association Health Plans to spouse coverage to alternative sharing arrangements. The trick is understanding which option makes sense for your situation and your wallet.
Association Health Plans: Currently Off the Table, But Maybe Not for Long
Let's start with what could have been a game-changer. Association Health Plans (AHPs) are designed to let small businesses and self-employed individuals band together through professional or trade associations to buy health insurance as a group. Think of it like Costco for health insurance—pooling your buying power with thousands of other freelancers, consultants, and sole proprietors to negotiate better rates and broader provider networks.
Here's the frustrating part: in 2018, the Department of Labor expanded AHP rules to allow self-employed individuals to participate for the first time. But in July 2024, those rules were rescinded. Right now, if you're a sole proprietor or independent contractor, you can't join an AHP. The door is closed.
But it might not stay closed. The Association Health Plans Act of 2025 is currently working its way through Congress—both the Senate (S. 1847) and House (H.R. 2528) have versions of the bill. If passed, it would once again allow self-employed people to access AHPs. Organizations like the U.S. Chamber of Commerce are pushing hard for this legislation, arguing that self-employed workers deserve the same purchasing power as larger businesses. Keep an eye on this if you're looking for future options beyond what's available today.
Your Spouse's Employer Plan: Often Your Best Bet
If you're married and your spouse works for an employer that offers health benefits, this is usually your simplest and most cost-effective option. Most employer-sponsored health plans include coverage for spouses, and you'll typically benefit from the employer's group rates and contribution toward premiums. Even if you have to pay the full premium for your portion of the coverage, it's often cheaper than buying an individual plan on your own.
There's one major catch: if your spouse's employer offers you coverage, you almost certainly won't qualify for premium tax credits on the ACA Marketplace. The government considers you to have access to affordable coverage, even if you choose not to take it. This matters because 92% of Marketplace enrollees in 2024 qualified for subsidies that dropped their average premium from $605 per month down to $111. That's a huge difference. So before you automatically dismiss your spouse's plan because of the monthly cost, run the numbers both ways to see which option actually saves you more money.
ACA Marketplace Plans: Better Than You Think
If you don't have access to a spouse's plan, the ACA Marketplace is your next stop. And contrary to what you might have heard, it's actually become a strong option for self-employed people. In 2021, about 2.6 million Marketplace enrollees were small business owners or self-employed workers—roughly a quarter of all enrollees.
The key is understanding how premium tax credits work. These subsidies are based on your income, and since self-employed income can fluctuate, you'll estimate your annual earnings when you apply. If your income is lower, you'll qualify for bigger subsidies. The credits are applied directly to your monthly premium, so you see the savings immediately rather than waiting until tax time. You can cover your spouse and dependents on the same plan, and all Marketplace plans are required to cover essential health benefits, including preventive care at no cost to you.
One bonus feature: you can pair a high-deductible health plan from the Marketplace with a Health Savings Account (HSA). For 2025, you can contribute up to $4,300 for individual coverage or $8,550 for family coverage, and that money is tax-deductible. You can use HSA funds for qualified medical expenses tax-free, and unlike flexible spending accounts, the money rolls over year after year. If you're generally healthy and don't need frequent medical care, this combination can save you serious money.
Health Sharing Ministries: Lower Cost, Higher Risk
Health sharing ministries have exploded in popularity since the ACA launched, with an estimated 1 to 1.5 million Americans now participating. These aren't insurance plans—they're membership organizations where people with shared religious or ethical beliefs pool monthly contributions to help pay each other's medical bills. The monthly "share" amount is often significantly lower than traditional insurance premiums, which makes them attractive if you're healthy and don't qualify for Marketplace subsidies.
But here's what you need to understand before you sign up: health sharing ministries are not legally required to pay your medical bills. Unlike insurance, which is a binding contract, these ministries operate on goodwill and shared responsibility. If the organization decides your medical expense doesn't align with their guidelines, or if they simply don't have enough money in the pool, your claim might not get paid. You're on your own.
Most health sharing ministries also exclude pre-existing conditions, at least initially. Some programs will gradually increase coverage for pre-existing conditions over three to four years of continuous membership, but you'll be paying out of pocket for those conditions in the meantime. Preventive care and birth control typically aren't covered either, whereas ACA-compliant plans must cover both. Maternity coverage is another gray area—many ministries have restrictions or waiting periods that could leave you with massive out-of-pocket bills.
Health sharing can work if you're young, healthy, comfortable with the faith-based requirements, and fully understand the financial risk you're taking on. But if you have any ongoing health conditions, take regular medications, or want the peace of mind that comes with actual insurance guarantees, stick with a traditional plan.
Don't Forget the Self-Employed Health Insurance Deduction
No matter which coverage option you choose, if you're paying premiums yourself, you can likely deduct 100% of what you pay for health insurance on your tax return. This includes premiums for yourself, your spouse, and your dependents—even your adult children up to age 27, whether or not you claim them as dependents. This is an above-the-line deduction, meaning you don't have to itemize to claim it, and it directly reduces your adjusted gross income.
The catch: you can only take this deduction for months when you weren't eligible to participate in an employer-sponsored plan, including your spouse's plan. So if your spouse's employer offers coverage and you're eligible to join, you can't claim the self-employed health insurance deduction for those months, even if you didn't actually enroll. You also need to show a net profit from self-employment to claim the deduction—no profit, no deduction.
How to Choose the Right Coverage
Start by checking if you have access to a spouse's employer plan. If you do, compare the total cost of joining that plan against buying a Marketplace plan without subsidies. Then visit HealthCare.gov and enter your estimated income to see what premium tax credits you'd qualify for if you're not eligible for spousal coverage. For most self-employed people, those subsidies make Marketplace plans the most affordable option.
If you're considering a health sharing ministry because the low monthly cost is appealing, read the fine print carefully. Understand exactly what is and isn't covered, what happens with pre-existing conditions, and how claims are actually processed. Talk to current members if you can. And have a backup plan in case a major expense isn't covered—because unlike insurance, there's no guarantee.
Being self-employed means you don't get the easy button of employer-sponsored health insurance, but you have more options than you might think. Whether you're waiting for Association Health Plans to become available again, tapping into your spouse's coverage, taking advantage of Marketplace subsidies, or exploring alternative arrangements, the key is to run the actual numbers for your situation. And don't leave money on the table—claim that self-employed health insurance deduction at tax time. Your coverage is out there; it just takes a little more work to find it.
