Self-Employed? Learn What the Affordable Care Act Means for You

Many of the provisions of the Affordable Care Act affect small businesses differently depending on their size.  For self-employed individuals in particular, there are new options for health coverage and other changes under the health care law that will directly affect you in the coming months.

New Options for Health Coverage through the Affordable Insurance Marketplaces

Under the Affordable Care Act, self-employed business owners now have more options than ever to find affordable health coverage.  Beginning in January 2014, self-employed individuals and other consumers will be able to purchase their insurance through new Health Insurance Marketplaces (also referred to as Exchanges).

Health insurance plans offered in these new insurance Marketplaces will offer a core package of benefits, known as “essential health benefits.”  The plans may vary according to the percentage of costs the health plan covers, or “metal levels”: 60 percent for a bronze plan, 70 percent for a silver plan, 80 percent for a gold plan, and 90 percent coverage for a platinum plan. Issuers may offer catastrophic-only coverage, which includes free prevention and several primary care visits, to young adults among others.

Self-employed individuals may qualify for premium tax credits and cost-sharing reductions on a sliding scale, based on income, to purchase coverage in the Marketplace. Increased access to quality, affordable health care will make it easier for potential entrepreneurs to go out on their own instead of staying at larger firms simply because of "job lock” or the lack of access to affordable insurance outside of work.

For more information on individual tax credits offered through the Marketplaces and to stay connected with the latest information visit healthcare.gov.

Find Insurance Options Today

To find an insurance plan that meets your needs today, check out the U.S. Department of Health and Human Services (HHS) insurance finder tool.  By answering just a few simple questions, you’ll be able to locate health insurance plans in your state and explore whether there are local facilities in your area that provide free or reduced-cost health care. 

To learn more about health insurance available to self-employed individuals, visit healthcare.gov.  

New Insurance Coverage Requirements: Individual Shared Responsibility

The Individual Shared Responsibility provisions of the Affordable Care Act call for each individual, beginning in 2014, to have:

• Basic health insurance coverage (known as minimum essential coverage) for each month,
• Qualify for an exemption, or
• Make an Individual Shared Responsibility payment when filing a federal income tax return starting in 2015.  

Minimum essential coverage includes employer-sponsored coverage, coverage purchased in the individual market, Medicare, Medicaid coverage, Children's Health Insurance Program (CHIP) coverage, veteran’s health coverage, TRICARE, and others as identified by the U.S. Department of Health and Human Services.

Individuals will not have to make a payment under the Individual Shared Responsibility provisions if:

• Coverage is unaffordable
• They spend less than three consecutive months without coverage
• They qualify for an exemption for several other reasons, including hardship and religious beliefs.

To learn what  Individual Shared Responsibility requirements and exemptions may apply to you, refer to this Fact Sheet from the U.S. Department of Treasury, as well as these helpful Q&As from the Internal Revenue Service, or consult with your tax professional.

For more information about other provisions affecting self-employed business owners under the Affordable Care Act, go to sba.gov/healthcare.