Health Insurance Options For Freelancers and Contractors

Health Insurance Options For Freelancers and Contractors

March 13, 2024 0 By Ellice Whyte

As a self-employed, freelance or contractor it is essential that you understand your options when it comes to health insurance coverage. Options available to you may include purchasing coverage directly from an insurer or via the Affordable Care Act marketplace (also known as Obamacare).

Some professional and trade associations provide access to group health plans that operate similarly to the plans available through employers.


COBRA (the Consolidated Omnibus Budget Reconciliation Act) allows you to keep the group health insurance from your former employer for a limited time after changing or losing employment, but at a cost. Where your former employer contributed a substantial portion toward your monthly premium payment, with COBRA you are solely responsible for paying it fully as well as an administrative fee of up to 2%.

Individuals eligible for COBRA coverage can elect to continue coverage under a group plan for 18 or 36 months following a qualifying event (such as job loss). Although the Affordable Care Act changed how COBRA operates, it still exists as an option for many.

If you decide to enroll in COBRA, your employer or group health plan administrator will send an election notice and require that your first premium payment be made within 45 days after enrolling for continuation coverage; otherwise your coverage could end. If this payment fails, coverage could terminate and coverage would cease altogether.

Small Business Health Options Program (SHOP)

If you own a small business, SHOP may allow you to provide health insurance for your employees through the Patient Protection and Affordable Care Act (commonly referred to as Obamacare). Participation in SHOP exchange is completely voluntary and allows you to select any Qualified Health Plans to offer workers. With the easy-to-use platform of eHealth’s platform you can compare price, coverage and quality side-by-side to quickly find the ideal plan for your needs.

Under the Employer Mandate, all full-time employees who average 30 or more hours per week must receive SHOP coverage. You also must meet a minimum participation rate based on employee count; the rate can differ by state and be calculated via employee enrollment count. You can register directly through SHOP marketplace or join Professional Employer Organization (PEO) that offers exchange benefits without an individual marketplace registration; here you can see your state’s SHOP rules!

Association Health Plans

Association health plans resemble employer groups or chambers of commerce in that they allow small employers or self-employed workers to combine forces to purchase insurance together, mitigating some of the complex regulatory obligations placed upon small businesses or working owners who offer individual coverage.

Some commenters were critical of expanding the “commonality of interest” test to include geography, asserting that doing so could allow employer groups and associations to use geographic restrictions to dissuade employees from enrolling in higher cost areas or high risk professions, leading to adverse selection that increases costs associated with AHPs for employers and their employees alike.

Commenters also requested the Department clarify that an insurer, agent or broker providing services to an association health plan that meets its eligibility criteria or having members on its governing body is not considered controlling it – in order to stop such plans engaging in activities that violate federal consumer protection laws.


Medicaid is a health insurance program for low-income people that is jointly funded by states and the federal government, with each state setting their own benefit policies that conform to broad federal guidelines regarding type, amount, duration and scope. Each program is overseen by its own separate agency with policies differing depending on your location but all share similar traits: basic coverage must be provided to eligible individuals; federal law mandates comparable benefits across each state in terms of amount, duration and scope; beneficiaries have freedom of choice among participating providers or managed care plans.