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Health Insurance for Single-Member LLCs: A Complete Guide

Why Health Insurance Matters for Single-Member LLC Owners


As the owner of a single-member LLC, you wear all the hats—entrepreneur, manager, and often, sole employee. Securing the right health insurance for single-member LLCs means safeguarding both your personal well-being and your business’s resilience. Under the Affordable Care Act (ACA), self-employed individuals have access to tailored marketplace options and tax breaks designed to lower your overall healthcare costs.


Signing a health insurance plan

Available Health Insurance Options


  1. ACA Marketplace Plans: Compare Bronze, Silver, and Gold plans on HealthCare.gov. You may qualify for premium tax credits based on your household income to lower monthly payments.

  2. Qualified Small Employer Health Reimbursement Arrangement (QSEHRA): If your LLC has no full-time employees, reimburse yourself tax-free for individual health insurance premiums up to IRS-set limits. See IRS Notice 2020-32 for annual caps and rules.

  3. Professional Association or Group Plans: Organizations like the National Association for the Self-Employed (NASE) offer group buying power that can reduce premiums and extend network access.

  4. Spouse or Family Plans: Evaluate whether joining a spouse’s employer-sponsored plan is more cost-effective than an individual marketplace policy.

  5. Short-Term or Supplemental Plans: While these can bridge coverage gaps, they aren’t ACA-compliant and may exclude pre-existing conditions. Consult the Department of Health and Human Services before choosing.


Tax Benefits and Deductions


  • Self-Employed Health Insurance Deduction: As a sole proprietor, you can deduct 100% of your health insurance premiums on Form 1040, Schedule 1(PDF), reducing your adjusted gross income. See IRS for guidelines.

  • Health Savings Account (HSA): Enroll in a high-deductible health plan (HDHP) and contribute to an HSA. For 2024, you can deduct up to $3,850 for individual coverage—pre-tax dollars you can use for qualified medical expenses. Details in IRS Publication 969.


How to Choose the Right Plan


  1. Assess Your Healthcare Needs

  2. Review medical history, prescriptions, and expected doctor visits.

  3. Estimate total annual costs:

    Total Cost = (Monthly Premium × 12) + Expected Out-of-Pocket Expenses

  4. Compare Plan Types:

    • HMO: Lower premiums, in-network only, referrals required.

    • PPO: Higher flexibility and larger network.

    • HDHP: Lower premiums, HSA-eligible.

  5. Check Provider Networks: Confirm your preferred doctors and hospitals are in-network to avoid surprise fees.

  6. Factor in Total Costs: Look beyond premiums—consider deductibles, copays, and coinsurance.

  7. Understand Enrollment Periods:

    • Open Enrollment: Usually November 1–January 15 via HealthCare.gov.

    • Special Enrollment: Triggered by life events (marriage, move). Details are on the marketplace website.


Step-by-Step Enrollment Guide


  1. Gather Your Documents: Social Security or Tax ID, proof of income (e.g., Schedule C), and household details.

  2. Create a Marketplace Account: Visit HealthCare.gov (or your state’s exchange).

  3. Complete the Application: Report accurate income to determine premium credits.

  4. Compare Plans Side-by-Side: Review premium, deductible, network, and provider directories.

  5. Enroll & Confirm: Choose your plan, submit payment, and save your confirmation number.


Tips to Maximize Savings


  • Estimate Income Carefully: Over- or under-estimating affects tax credits; reconcile with Form 8962.

  • Use QSEHRA If Eligible: Reimburse health premiums tax-free if you have no employees.

  • Leverage HSAs and FSAs: Pre-tax accounts reduce taxable income and cover out-of-pocket costs.


With the right plan and strategic use of tax deductions, single-member LLC owners can secure comprehensive health coverage affordably. Reach out to our team for personalized advice—because your health matters as much as your business.


Picture of Evin Wick

Evin Wick JD, LLM is a Georgetown-trained tax lawyer and co-founder of S Works, where he channels two decades of small-business tax expertise into streamlined S-Corp, bookkeeping, and payroll solutions for solo consultants.




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