Working for yourself means buying your own coverage - and paying for it out of a profit you also pay 15.3% self-employment tax on. Enter your net profit, premium and expected use to see your premium tax credit, your true monthly premium, and what the deductible actually costs you across a year.
Situation: Situation: You net $120,000 from consulting, file jointly, and need coverage for a family of four. The full silver premium is $2,150/month.
Rate / rule: Rate: FPL for a household of four is $32,150, so your MAGI of $120,000 is 3.73x FPL. Under the post-2025 schedule your expected contribution is capped at 9.96% of income.
Calculation: Calculation: Expected contribution = $120,000 x 9.96% = $11,952. Benchmark silver = $23,736. Credit = $23,736 - $11,952 = $11,784.
Situation: Situation: You net $42,000 and file as Single. The benchmark silver plan costs $8,400/year ($700/month).
Rate / rule: Rate: FPL for one person is $15,650, so $42,000 is 2.68x FPL - inside the 8.44-9.96% band, where the credit does the most work.
Calculation: Calculation: Expected contribution = $42,000 x 9.00% = $3,780. Benchmark silver = $7,728 (92% of the $8,400 plan). Credit = $7,728 - $3,780 = $3,948.64. Net premium = $8,400 - $3,948.64 = $4,451.36.
Situation: Situation: A single consultant nets $260,000 and pays $9,600/year for a silver plan.
Rate / rule: Rate: $260,000 is 16.6x FPL, well beyond the 400% FPL cutoff for federal premium tax credits.
Calculation: Calculation: No federal premium tax credit. The full $800/month premium is yours.
Benchmark Silver Premium = second-lowest-cost silver plan available to your household in your rating area, annualized.
MAGI = adjusted gross income + tax-exempt interest + excluded foreign income + non-taxable Social Security. For the self-employed, that is net profit − half of self-employment tax − the SE health insurance deduction − retirement plan contributions.
Applicable Percentage = the share of income the government says you can afford to contribute toward the benchmark plan. It slides from 0% at 133% FPL to 9.96% at 300–400% FPL.
Eligibility cliff = 400% of the federal poverty line. Past that line the federal subsidy drops to $0 — no phase-out.
| Household Income (% FPL) | Income, 1 Person | Income, Family of 4 | You Pay This % of Income |
|---|---|---|---|
| Under 133% | under $20,815 | under $42,760 | 0.00% |
| 150% | $23,475 | $48,225 | 2.34% |
| 200% | $31,300 | $64,300 | 6.00% |
| 250% | $39,125 | $80,375 | 8.44% |
| 300% | $46,950 | $96,450 | 9.96% |
| 400% | $62,600 | $128,600 | 9.96% |
| Above 400% | above $62,600 | above $128,600 | no federal credit |
The enhanced subsidy structure that allowed credits above 400% FPL expired after 2025. Households above the cliff pay full price unless they qualify through a state-run program or a special enrollment calculation.
Premiums you pay for yourself, your spouse and your dependents are deductible on Schedule 1 of Form 1040 — an above-the-line deduction, so you get the benefit whether or not you itemize. The deduction cannot exceed your net self-employment profit, and it is not available for any month in which you were eligible to participate in a subsidized employer plan (yours or your spouse's).
The planning wrinkle: the deduction lowers AGI, and a lower AGI raises your premium tax credit. But if you use the Advanced Premium Tax Credit during the year, Form 8962 reconciles the two. In practice the deduction and the credit interact — which is why this calculator reports both.
For a self-employed worker, health insurance is not a line item — it is a second payroll tax. The cost has three layers, and most people only budget for the first one.
| Cost Layer | Typical Range, Family of Four | When It Bites |
|---|---|---|
| Gross premium | $9,000 - $26,000 / yr | Monthly, automatically |
| Premium tax credit offset | $0 - $24,000 / yr | Only if MAGI is under 400% FPL |
| Deductible exposure | $1,500 - $16,000 | The year something goes wrong |
| Coinsurance and copays | $500 - $4,000 | After the deductible is met |
| Out-of-network surprise | Unbounded | Any emergency, anywhere |
The practical consequence is that a self-employed household's true health budget is the net premium plus the deductible, held in cash, not the premium alone. A household paying $996/month net with a $6,000 deductible needs $17,952 of the next year's cash earmarked for health before a single elective expense. That is the number a cash-flow plan has to absorb — and this calculator reports it directly as “months of savings the deductible eats.”
Outside the ACA marketplace the standard advice is “buy silver if you expect to use care, bronze if you are healthy.” A premium tax credit inverts part of that logic, because the credit is a fixed dollar amount tied to the benchmark silver plan, not a percentage of whatever plan you choose.
Cheapest gross premium. Because the credit is pegged to silver, a cheap bronze plan can become nearly free — sometimes literally $0/month. The trade-off is a deductible that can reach the annual out-of-pocket maximum.
The benchmark itself. If your MAGI is under 250% FPL, silver also unlocks cost-sharing reductions that cut the deductible and coinsurance — a benefit no other metal tier gets, and one this calculator cannot model from a premium alone.
The credit is the same dollar amount, so the expensive tiers stay expensive. Rarely the right answer for a household that is subsidy-eligible — but often correct for a high-user household that is over the cliff and itemizing large medical costs.
Two rules of thumb fall straight out of the structure: (1) if you are subsidy-eligible, price the bronze plan first — the credit does more work against a small premium; (2) if your MAGI is under 250% FPL, price silver even when bronze looks cheaper, because cost-sharing reductions live only there.
If you take the Advanced Premium Tax Credit — the version paid directly to your insurer each month — you are estimating next year's income before you know it. When you file, Form 8962 reconciles the credit you received against the credit you were actually entitled to.
Self-employed income is lumpy, which makes the reconciliation brutal in exactly the direction that hurts. One good quarter can push you past 400% FPL and trigger full repayment of every month's subsidy. The repayment caps are real but generous: $375 per person for a household under 200% FPL, rising to $1,500 per person for households at 300–400% FPL — and no cap at all above 400% FPL, where the entire credit must be returned.
Three defences work in practice:
⚠ Important Disclaimer: This calculator produces planning estimates from published federal poverty guidelines and the post-2025 applicable-percentage schedule. It is not a marketplace quote and it does not account for state-run subsidy programs, cost-sharing reduction eligibility, rating-area variation in the silver benchmark, or mid-year income changes. Verify your actual eligibility at HealthCare.gov or your state exchange before making coverage decisions.