Health Insurance for Part-Time Workers, the Self-Employed, and More

If you’re a part-time worker, self-employed, or you run your own small business, navigating health insurance can feel overwhelming — but it doesn't have to be. This article will guide you through your options for getting covered. From financial assistance through Covered California to maximizing tax deductions and more, you'll learn how to find a plan that fits your needs and budget. Read on to simplify your path to coverage.

Part-Time and Self-Employed Workers

Your health insurance options will differ depending on whether you’re a part-time worker, self-employed individual, or a small business owner. Here’s what those terms mean.

• Part-time workers are employees who work less than full time. As a part-time worker, you have an employer (or more than one), but you work fewer than 30 hours per week on average or 130 hours per month for any single employer, according to the Internal Revenue Service (IRS).

• Self-employment means you work for yourself as an independent contractor, sole proprietor, freelancer, gig worker, etc.

• Small business owners work for themselves and may have employees or established a business entity like a limited liability corporation (LLC) or S corporation that allows them to hire employees.

Your Coverage Options

The way you work will have an impact on where and how you get health insurance. This may look a little different depending on whether you are a part-time worker, self-employed individual, or small business owner. Whether you have a dog-walking gig or a small start-up, Covered California can help you find brand-name health insurance and the financial help to pay for it. Scroll down to the section that pertains to you to learn more about your options.

Part-Time Worker Health Insurance

Some part-time roles come with health insurance benefits, so obtaining coverage through your employer may be possible. Talk with your human resources representative or manager to find out what benefits are provided to part-time employees.

If your employer provides a health plan, you can still choose to find coverage through Covered California. However, you’ll only qualify for financial help if the plan your employer offers isn’t considered affordable or doesn’t meet the minimum value standards set by the federal government. You can use the Covered California Affordability Tool to find out if that applies to you.

When employer-sponsored plans aren't available or affordable, Covered California is the place to get health insurance and financial help. There are benefits covered by all plans, but they differ in a few ways:

• Coverage level: Covered California offers plans across four metal tiers: Bronze, Silver, Gold, and Platinum. These tiers represent the cost-sharing arrangement between you and the insurance company. Bronze plans feature the lowest monthly premiums but the highest potential out-of-pocket expenses, while Platinum plans have the highest monthly premiums and the lowest out-of-pocket costs.

• Plan types: Within these coverage tiers, you can choose a plan type: HMO, PPO, or EPO. These plans differ in the flexibility they offer when it comes to seeing in-network and out-of-network providers.

Learn more about what to consider when shopping for health insurance here.

Self-Employed Health Insurance

Depending on your needs, you can find a variety of brand-name health insurance plans through Covered California. The benefits covered by all plans include emergency care, preventive services, and more. However, key differences in these health plans include:

• Coverage levels: All plans available through Covered California fall into one of four metal tiers of coverage: Bronze, Silver, Gold, and Platinum. The different tiers indicate how you and the insurance company will split the cost of care. Bronze plans typically have the lowest monthly premium and the potential highest out-of-pocket costs, while the opposite is true for Platinum plans.

• Plan type: Within the tiers of coverage, you can also choose different types of plans, like HMOs, PPOs, and EPOs. These plans differ in your flexibility to see out-of-network providers.

Learn more about navigating plan options here.

Small Business Health Insurance

If you own one of California’s 4.1 million small businesses, Covered California for Small Business (CCSB) has health insurance options for you. As a small-business owner, it may be easier and more affordable than you think to offer your employees a choice of high-quality health plans. Plus, billing is simple and you could qualify for federal tax credits.

Financial Help for Health Insurance

Covered California is the place to get both quality health insurance and the financial help to pay for it. Regardless of how you work, there’s a good chance you qualify for financial help — 90 percent of people who enroll do. This help comes in the form of premium tax credits and cost-sharing reductions (CSRs) — and the amount of financial help you qualify for depends on your zipcode, household’s size, and income. Read on to learn more about the different kinds of financial help and for guidance on how to estimate your income.

Premium Tax Credits

Premium tax credits are a form of financial help for health insurance that lowers your monthly premium or the amount you pay to keep covered each month. Many people who sign up for health insurance through Covered California pay as little as $10 or even $0 per month for their plan. You can choose to get the premium tax credit each month to reduce your monthly payment, or you can claim it when you file your taxes and receive it all in a lump sum.

Cost-Sharing Reductions

Cost-sharing reductions (CSRs) are extra savings that lower the amount you pay when you receive care. CSRs lower the cost of out-of-pocket expenses, including your deductible, copays, coinsurance, and out-of-pocket maximum. Beginning in 2024, there’s even more help through CSRs through a state program, including $0 deductibles for people who have Enhanced Silver Plans.

How to Estimate Your Income

If you don’t receive a regular paycheck, knowing what you’ll make in a year can be a challenge. If you’ve been working on your own for a while, look at your income from the previous year and adjust as needed. If you’re just starting out, you might consider creating a business plan to predict revenue and expenses. Find more information about how to estimate your income here.

Remember, an estimate is an educated guess. As the year goes on if it looks like you’ll be making more — or less — than what you projected, it’s important to report your revised estimate to Covered California. If you end up making more than you thought, you could owe money back come tax time.

Health Insurance Tax Breaks

Nontraditional employment has its perks and its challenges. More freedom and flexibility sometimes come alongside increased responsibility for costs like health care. Fortunately, when tax time rolls around, there may be ways to offset that expense, whether you’re a part-timer, self-employed, or a small business owner.

• Part-time workers: All taxpayers — whether they work for themselves or an employer — can deduct medical expenses that exceed 7.5 percent of their adjusted gross income. This includes the money you pay for your health insurance premium as well as any out-of-pocket costs for medical, vision, or dental services. This tax break will come in the form of an itemized deduction.

• Self-employed workers: If you work for yourself, you can deduct 100 percent of your health insurance premiums. This is a tax write-off (not an itemized deduction), and it lowers your adjusted gross income. On top of this, you can also deduct medical expenses that go beyond 7.5 percent of your adjusted gross income as an itemized deduction. Learn more here.

• Small-business owners: You may qualify for tax breaks to offset annual health insurance costs. Read more about the ways small businesses may qualify for tax savings.

Avoid a Health Insurance Tax Penalty

From protecting your finances to safeguarding your health, health insurance has a lot of benefits. Plus, when you live in California, having a health plan is the law. Whether or not you receive health insurance through an employer, it’s your responsibility to maintain coverage. Going without can result in a tax penalty unless you qualify for an exemption.

The penalty for not having health coverage for an entire year is hundreds of dollars per adult and child — this can add up to thousands for a family. The penalty will be applied by the California Franchise Tax Board. Find out the amount you or your family could owe for not having coverage here.

Get Covered Now

Knowing you have health insurance for the times you need it can free you up to focus on working on your own terms. Whether you’re a part-timer, self-employed worker, or small-business owner, Covered California is there for you when you need affordable health insurance. Start shopping now for the plan that best fits your needs or find out how much financial help you qualify for by getting a quick quote.

Please consult the Internal Revenue Service, a tax advisor, or a tax professional for any questions about your tax return. The information in this article is not intended as tax advice, and your situation may vary.