If you get a 1099, you work for yourself. No boss signs you up for a health plan. That can feel like a gap, but you do have options.
This guide explains how the IRS tells contractors from employees, and why clients generally don't owe you coverage. Then it walks through where your coverage can come from.
Contractor or employee? What the IRS looks at
A 1099 is a tax form, not a job title. A business uses Form 1099-NEC to report what it paid a contractor. What matters is how the work really happens.
The IRS's general rule is simple. You're an independent contractor if the business can control only the result of your work. It can't control what you do and how you do it.
- Behavioral control. Does the business control what you do and how you do your job?
- Financial control. Who controls how you're paid, your expenses, and your tools?
- Type of relationship. Is there a written contract, or job perks like insurance? Will the work go on? Is it a key part of the business?
If it's unclear, the business or the worker can file IRS Form SS-8. The IRS will then decide. This guide can't decide your status. A tax pro can help.
Why clients generally don't owe contractors coverage
The ACA's employer rule applies to large employers. In general, that's an employer with 50 or more full-time workers, counting part-time hours too. Most employers are below that size.
The rule counts only employees under the common-law standard (26 CFR 54.4980H-1). A full-time employee works an average of at least 30 hours a week (26 U.S.C. 4980H). The IRS says sole proprietors, partners, and people who own 2% or more of an S corporation are not employees for this rule.
So a business generally doesn't owe a true contractor health insurance. If you think you're really an employee, that's a question for the IRS or a tax pro.
You're far from alone. The Bureau of Labor Statistics found 11.9 million independent contractors on their main job in July 2023. That's 7.4% of all workers. Of those contractors, 74.2% had health insurance from some source. For workers in regular jobs, it was 84.9%.
Where your coverage can come from
Most contractors get coverage in one of these ways. Each has its own rules.
Option 1: A Marketplace plan and the tax credit
You can buy an individual plan on the Marketplace for yourself and your family. As of October 19, 2026, under current law, the tax credit for 2027 coverage is generally only for household incomes from 100% to 400% of the poverty line (IRS Premium Tax Credit Q&A). It's based on your income for the year you are covered.
For 2027 coverage, 400% is $63,840 for one person (48 states and D.C.). Above that, there's no credit. See our guide to the 2027 ACA subsidy cliff.
For contractors, income means net self-employment income, after business expenses. Give an honest, reasonable estimate of the income you expect, based on your records. Don't report a higher number than you expect just to get a credit.
Under current law, for tax years after 2025, there is no cap on paying back extra credit. If you get more credit than you qualify for, you pay back all of the difference when you file. A tax pro can help.
Our guide on how to estimate your income for Marketplace insurance can help with the number. To see what moves the price, read what self-employed health insurance costs.
As of October 19, 2026, under current law, Open Enrollment for 2027 coverage runs November 1, 2026, to January 15, 2027. A court case about these dates is still on appeal, so check HealthCare.gov. See every date in our Florida open enrollment guide.
Option 2: A spouse's job plan
If your spouse's job offers family coverage, you may be able to join it. A job plan must give at least 30 days after a marriage to ask to join (45 CFR 146.117). Other times, you join during the plan's own open enrollment.
A spouse's offer can affect the Marketplace credit. Under a 2022 IRS rule, a family member's offer is judged by the cost of family coverage. If that cost counts as affordable and the plan meets minimum value, you can't get the credit. See Marketplace insurance if your employer offers coverage.
Option 3: A private plan
Some contractors look at private plans sold outside the Marketplace. This can make sense if your income is over 400% of the poverty line, so you get no credit. It can also make sense if you work in more than one state. Some private plans ask health questions, and approval is not guaranteed. Some may not cover care for health problems you had before you enrolled. Some plans use PPO networks in many states.
Private plans that ask health questions are not ACA plans. Read each plan's papers before you choose. See our page on nationwide PPO plans for self-employed people. If you work in the building trades, see our page on health insurance for contractors.
The tax side: Form 7206
As a contractor, you pay self-employment tax on your net earnings. But the tax code may give some of your premium back. If you had a net profit from self-employment, you may be able to deduct what you paid for medical, dental, and vision insurance. IRS Form 7206 explains how.
- The deduction can't be more than your net profit from the business, after some adjustments.
- You can't take it for any month you could join a job-based plan that an employer helps pay for. That includes your spouse's employer.
- If you also got a premium tax credit, IRS Publication 974 has worksheets for how the two work together.
This is general tax information, not tax advice. Our guide to the self-employed health insurance deduction has more detail. For tax questions, talk with a tax professional.
How we can help
Daniels Health Advisors is licensed in 30+ U.S. states. We can help you compare Marketplace plans and private plans side by side. Try our Policy Pricing Calculator for a rough first look.