Self-Employed Health Insurance in Illinois
Working for yourself in Illinois means you pick your own health plan, and the right one depends on your income, your health and a few rules that only apply in Illinois. Individual premiums in Illinois are set to rise 14% to 14.1% on average for 2027, and with the enhanced tax credits gone, anyone above the subsidy line pays the full increase.
Private health insurance in Illinois
Most people I help in Illinois end up on a private plan, not a Marketplace plan. Private, medically underwritten health insurance is priced on your age, zip code and health instead of your income, so a strong year never raises your premium and there is no tax credit to pay back in April.
Why people leave the Marketplace
- Premiums keep climbing. Illinois Marketplace premiums are rising 14% to 14.1% on average for 2027.
- The subsidy cliff. Above 400 percent of the poverty level ($63,840 for one person, $132,000 for a family of four) you pay full price.
- Surprise tax bills. Underestimate your income and you repay the tax credit in April.
- Narrow networks. Many plans are local HMOs or EPOs that need referrals and cover little outside the area.
- High out-of-pocket costs. 2027 out-of-pocket maximums reach $12,000 per person and $24,000 per family.
- One window a year. Outside open enrollment you need a qualifying life event to enroll or switch.
What a private plan does differently
- Start any month. If approved, coverage can begin the first of next month, with no wait for open enrollment.
- Networks that travel. Many private plans use national PPO networks, which can give you in-network doctors outside Illinois too. Networks vary by plan.
- Can cost less than full-price Marketplace plans for some healthy applicants above the subsidy line.
- Accident coverage the Marketplace does not offer. A private plan can be paired with accident coverage, a separate policy. What it includes varies by plan.
- Approval is based on health. You answer health questions, and acceptance is not guaranteed.
With a significant health condition, or income low enough for a large tax credit, a Marketplace plan can be the better fit, and I will tell you if it is. Either way you see both side by side.
Private plans are not ACA Marketplace plans. Benefits, exclusions and pre-existing condition rules differ by plan and by state, so review the plan details before you enroll.
Get a private plan quoteLearn more: coverage not based on income · how underwriting works · private vs Obamacare · PPO plans for individuals · switching from the Marketplace
Who works for themselves in Illinois
The SBA Office of Advocacy's 2025 profile counts about 1.35 million small businesses in Illinois, and about 1.1 million of them have no employees at all. The largest group of those one-person firms is transportation and warehousing, about 192,000, a category that includes rideshare and delivery drivers and owner-operator truckers. Professional and technical services follow with about 138,000, and personal services, real estate, administrative support and construction each have between about 94,000 and 117,000. Small businesses employ about 44 percent of Illinois workers.
How Illinois taxes self-employed health premiums
Illinois taxes income at a flat 4.95 percent, and Form IL-1040 starts with your federal adjusted gross income. The self-employed health insurance deduction and the HSA deduction both lower federal AGI, so they carry straight into the Illinois return. Schedule M, where Illinois lists its additions and subtractions, has no add-back for HSA contributions and no separate subtraction or credit for health premiums. General information, not tax advice — confirm with your CPA based on your specific entity structure.
Illinois options beyond the Marketplace basics
Self-employed Illinoisans shop on Get Covered Illinois, the state-run exchange, which offers certified brokers, navigators and a customer help line at 1-866-311-1119. The Department of Insurance posts every 2027 rate decision by insurer, and the final individual averages range from about 2 percent to about 15 percent, so the size of your increase depends heavily on which insurer you have. The Department also publishes an annual Exchange Plan Analysis and a separate Off-Exchange Plan Analysis, in English and Spanish, which let buyers who earn too much for a tax credit compare plans sold outside the exchange.
Illinois at a glance for people who work for themselves
Illinois buyers use Get Covered Illinois, the state's own exchange since the 2026 plan year. Final 2027 individual rates rise about 14 percent on average across five insurers, and two insurers are leaving the exchange, so some enrollees must pick new plans. Illinois now requires prior approval of individual and small-group rates. The state banned short-term plans in 2025, so the alternatives to Marketplace coverage are private, medically underwritten plans and employer or union coverage. Continuation rights are relatively strong: 12 months for employees, and up to two years, or until Medicare for those 55 and older, for divorced or widowed spouses.
Other Illinois rules to know
- Leaving a small employer: Illinois requires insured group plans to offer up to 12 months of continuation after three months of coverage, and gives divorced or widowed spouses up to two years, or until Medicare if they are 55 or older.
- Short-term plans: Illinois banned new short-term health plans starting January 1, 2025.
- Where to enroll: Illinois uses its own exchange, Get Covered Illinois, which replaced HealthCare.gov for 2026. Get Covered Illinois sets its own open enrollment dates; check its site for 2027 deadlines. Private, medically underwritten plans can start the first of any month if approved.
- 2027 rates: individual plans 14% to 14.1% on average, small-group plans about 17.6%. See the Illinois 2027 rate page.
Private plan or Marketplace
Above 400 percent of the poverty level, a Marketplace plan costs full price. A healthy self-employed buyer in that range may pay less with a private, medically underwritten PPO priced on health rather than income, and if approved, it can start the first of any month. With a health condition, or with income low enough to qualify for a credit, the Marketplace is usually the better choice because approval is guaranteed.
Estimating income when it changes every month
The Marketplace credit is based on this year's projected net income from Schedule C or your K-1, not gross revenue. Estimate conservatively, update it when a big contract lands, and remember that above the line you repay the entire advance credit.
An HSA as a second retirement account
For 2027 every bronze and catastrophic plan is HSA-eligible, and the contribution limits are $4,500 for self-only coverage and $9,000 for family coverage, plus $1,000 at 55 or older.
For 2027 the Marketplace credit stops at 400 percent of the poverty level: $63,840 for one person, $86,560 for two and $132,000 for a family of four. The out-of-pocket maximum for 2027 Marketplace plans is $12,000 for one person and $24,000 for a family. The full guide covers the rest.
Compare Illinois plans
Licensed in Illinois. Private plans priced first, Marketplace alongside when it fits. No fee.
Illinois questions
Where do Illinois residents enroll in 2027 coverage?
Illinois uses its own exchange, Get Covered Illinois, which replaced HealthCare.gov for 2026. Get Covered Illinois sets its own open enrollment dates; check its site for 2027 deadlines.
What continuation rights does Illinois give after leaving a small employer?
Illinois requires insured group plans to offer up to 12 months of continuation after three months of coverage, and gives divorced or widowed spouses up to two years, or until Medicare if they are 55 or older.
How much are Illinois premiums rising for 2027?
Individual-market premiums are set to rise 14% to 14.1% on average, and small-group plans about 17.6%.
Can self-employed people deduct health insurance premiums?
Usually, if you are not eligible for an employer plan through a spouse, the federal self-employed health insurance deduction lets you deduct premiums for yourself and your family. General information, not tax advice — confirm with your CPA based on your specific entity structure.
When can a self-employed person buy health insurance?
Marketplace plans need open enrollment, November 1 to January 15 for 2027, or a qualifying event. Private plans can start the first of any month if you are approved.
Sources: advocacy.sba.gov, tax.illinois.gov, idoi.illinois.gov, idoi.illinois.gov. Facts checked October 2026. See all Illinois health insurance rules.
Self-employed in other states
Written by Frank Caballero, licensed health insurance agent in Illinois and 30 other states, NPN 21032307.