When you work for yourself, no HR department picks a health plan for you. You have real options in both states, plus a tax break most employees never get. Here is the 2026 landscape for freelancers, contractors, and solo business owners.
Option 1: The ACA Marketplace
For most self-employed people, the Marketplace (HealthCare.gov) is the starting point. Plans there are full, ACA-compliant coverage: they take you regardless of health history and cover the essential benefits, including preventive care and prescriptions. If your household income qualifies, premium tax credits lower your monthly bill. Self-employment income counts as your net profit, not your gross revenue, which trips up a lot of first-time applicants and can mean you qualify for more help than you think.
Option 2: Buying directly from a carrier
You can also buy an individual plan off the exchange, straight from an insurance company. You give up any subsidy, so this mainly makes sense for higher earners who would not qualify for credits anyway and want a specific network. In Alabama, that can mean access to Blue Cross Blue Shield of Alabama's broad statewide network. In Arizona, Marketplace plans are HMOs, so off-exchange shopping is sometimes about finding a network that fits.
Option 3: A spouse's employer plan
Often overlooked and often the best deal. If your spouse has affordable coverage available through work, compare it before buying your own. One caution: for any month you are eligible for an employer plan, you cannot take the self-employed premium deduction described below.
The tax break: the self-employed health insurance deduction
If you show a profit from self-employment, you can generally deduct premiums you pay for medical, dental, and qualifying long-term care coverage for yourself, your spouse, and your dependents. It is an adjustment to income on Schedule 1 (calculated on IRS Form 7206), which means you get it even if you do not itemize.
Two limits to know: the deduction cannot exceed your net self-employment profit, and it is off the table for any month you were eligible for an employer-sponsored plan. You can combine this deduction with a premium tax credit, but the math just gets circular, so it is worth having your tax professional run it. We help with the insurance side; your CPA owns the tax advice.
What about short-term plans?
Short-term medical plans are sometimes pitched to the self-employed because premiums look low. Be careful: short-term plans are not ACA-compliant comprehensive coverage. They can decline you for health history, exclude pre-existing conditions, and cap what they pay. They can serve as a stopgap between jobs or before an enrollment window, but they are not a substitute for real coverage. The duration rules also differ between our two states, and we cover that in a separate post.
Do not forget dental and vision
Standalone dental and vision plans are inexpensive, and premiums for them can also count toward the self-employed deduction. If you are building your own benefits package anyway, it usually makes sense to price them at the same time.