Insurance Guide for the Self-Employed

If you are self-employed, you must purchase your own insurance from your state marketplace. Learn about insurance terminology and top providers.

Many Americans receive their health insurance through an employer, but this is not an option if you are self-employed. Instead, you must purchase your own health insurance plan. Buying an insurance plan can be a lengthy process, since you want to carefully research all your options. Because of the Affordable Care Act, it is easier to search for insurance plans. Each state has a health insurance marketplace, which includes a list of insurance providers in your state, as well as federal insurance plans, such as Medicaid.

Through the marketplace, you complete an application to determine your eligibility for various plans. The application also searches for premium tax credits and other savings. These savings are often significant, sometimes reducing your payments by several hundred dollars. The application covers multiple areas, but the biggest considerations are your total income, household size and whether you have preexisting medical conditions.

Understanding Insurance Terminology

Before searching through insurance plans, make sure you understand all of the terminology. There are multiple types of payments included in insurance plans. The first is your premium. Your insurance premium refers to your monthly cost. You must pay this premium whether or not you use your insurance. Next is the deductible. Your insurance deductible is the amount you must pay out of pocket every year. Once you hit the deductible limit, you must pay coinsurance. Coinsurance is not a set fee, instead, it is a percentage you must pay for medical services, with the rest of the cost covered by your insurance.

Your copayment is a set amount you must pay for basic services. Copayments are typically inexpensive, such as a $20 copay whenever you see your physician. Some select lower income insurance plans allow you to waive your copay. The final type of payment is the out-of-pocket maximum. This refers to the largest amount you can be charged during the year. When you hit your maximum, your insurance covers the rest of your medical costs. Insurance plans commonly have two separate maximums. One limit is for yourself, while the second covers any family members under your plan.

Looking at Insurance Plans

Once you understand the different insurance costs, the next step is figuring out what coverage is available from each plan. An important part of your insurance coverage is your network. Each insurance plan has a different network, which refers to what medical providers accept coverage. With some insurance plans, you can see a doctor outside of your network, but your insurance may not cover all of the costs, or you are required to pay extra fees. Some insurance plans do not provide any coverage if you are outside of the network.

If you have preexisting medical conditions, make sure your insurance coverage will pay for whatever services you need, such as medication costs or physical therapy. Another consideration is what other services are covered by the plan, such as vision and dental. If you want to include family members on your plan, make sure the coverage applies to each family member.

Choosing an Insurance Tier

Many insurance companies provide different tiers of insurance. If you purchase insurance from your state marketplace, the plans are divided into four tiers, bronze, silver, gold and platinum. The higher tiered plans are more expensive, but provide greater coverage. However, based on your eligibility for tax credits and other savings, you may actually save money by purchasing a gold or platinum plan over bronze or silver.

If you have preexisting medical conditions, gold and platinum plans are strongly recommended. If you only see your doctor once or twice a year for a physical, or you are on a strict budget, consider bronze or silver plans. Most bronze and silver plans have minimal options for adding family members.

If you are purchasing your insurance through a private company, they may use policies instead of tiers. The two options are similar, but policies typically offer more customization. This allows you to craft insurance based on your medical needs, such as decreasing your premium by increasing your out-of-pocket maximum, or swapping out vision coverage for dental.

United Healthcare

United Healthcare is a popular insurance provider for self-employed workers because it has an extensive number of online options. Every United Healthcare plan includes online care, which lets you speak with medical experts through a chat program, as well as participate in wellness programs. You can also order your prescriptions over the internet. United Healthcare has an extensive network, with an easy-to-use search tool to find specialists in your network. You can also schedule all your appointments online. United Healthcare also has a mobile app, which has the same features as the website.


Cigna is another good choice for self-employed workers because it offers advanced online options. While it is not as extensive as United Healthcare, all Cigna plans include free access to a virtual consultation, to determine whether you need to see a doctor in person. They also provide options for mental healthcare through video chat. Cigna provides extensive coverage for medication through Express Scripts, which is the largest network of pharmacists. One of the downsides of Cigna is the level of coverage greatly varies depending on the state you live in, so make sure you carefully look over each plan.

Molina Healthcare

Molina is one of the smaller insurance providers, but it has robust options for self-employed workers, especially if you have preexisting medical conditions. Molina is also compatible with federal insurance plans, including Medicaid and Medicare. This allows you to get additional coverage from Molina without sacrificing your federal healthcare. The company prides itself on offering affordable coverage and catering towards lower-income individuals.

Kaiser Permanente

Kaiser is another small insurance provider, but it is growing in popularity due to their extensive coverage. Kaiser has four separate insurance plans, but each plan has multiple tiers and policies options. Kaiser’s insurance network is growing, but it is not as large as some of the other providers. If you plan on switching, make sure your current physicians are covered under the network.

Blue Cross Blue Shield (BCBS)

If you are concerned with network size, BCBS is the best insurance provider. It has one of the largest insurance networks, even in rural areas. There are also multiple plans for lower-income individuals. As one of the largest insurance providers, BCBS has excellent customer support. You can login to your account to view claim summaries and track payments. In some states, members also receive access to the Blue365 program, which offers discounts on select gym memberships or fitness products.