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Self-Employed Health Insurance in Michigan

Working for yourself in Michigan 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 Michigan. Individual premiums in Michigan are set to rise 14.5% on average for 2027, and with the enhanced tax credits gone, anyone above the subsidy line pays the full increase.

Private health insurance in Michigan

Most people I help in Michigan 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. Michigan Marketplace premiums are rising 14.5% 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 Michigan 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.

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Learn 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 Michigan

The SBA Office of Advocacy counts about 983,000 small businesses in Michigan, and about 809,000 of them have no employees besides the owner. Small firms employ roughly 1.9 million people. Repair and personal services, professional and technical services, and construction have the most small firms, with retail, health care, food service and manufacturing close behind. That covers consultants around Detroit and Ann Arbor, builders and remodelers in west Michigan, and shop owners in small towns up north, nearly all of whom choose and pay for their own health coverage.

How Michigan taxes self-employed health premiums

Michigan's flat income tax, 4.25 percent for both 2025 and 2026, starts with federal adjusted gross income. That means the federal self-employed health insurance deduction and the HSA deduction lower Michigan taxable income too, with no state add-back. Michigan does not offer a separate state deduction or credit for health premiums. Detroit and a number of other Michigan cities levy their own local income tax as well. General information, not tax advice — confirm with your CPA based on your specific entity structure.

Michigan options beyond the Marketplace basics

Michigan has no state premium subsidy or reinsurance program, so self-employed buyers on HealthCare.gov rely on the federal tax credit alone. The individual market is deep, though: ten insurers filed 2027 individual-market plans with the state, many built around regional hospital networks, so a plan's network deserves as much attention as its price. Michigan also licenses multiple employer welfare arrangements, but only for employers in the same trade or industry whose association has existed for at least two years, with at least two employers and 200 participating employees.

Michigan at a glance for people who work for themselves

Michigan residents buy individual coverage on HealthCare.gov, and open enrollment for 2027 runs November 1, 2026 to January 15, 2027, with special enrollment available after losing other coverage, moving, marrying or having a baby. Michigan has no state premium subsidy or reinsurance program, so financial help comes from the federal premium tax credit based on your projected income. The biggest gap for Michigan tradespeople is continuation: the state has no mini-COBRA law, so anyone leaving a shop with fewer than 20 employees should plan on a Marketplace plan or another option within the 60-day special enrollment window. Michigan also keeps a tight rein on short-term plans, which are capped at 185 days in any 365-day period and cannot be stretched with renewals. Federal changes for 2027 expand access to catastrophic plans for people who do not qualify for tax credits and end the requirement that insurers offer standardized plans on HealthCare.gov.

Other Michigan rules to know

Leaving a small employer: Michigan has no state continuation law for small employer plans, so people leaving an employer with fewer than 20 workers generally lose group coverage when the job ends, while federal COBRA still applies at larger employers.
Short-term plans: Michigan limits short-term plans to 185 days in any 365-day period, with no renewals or extensions past that, regardless of the federal enforcement pause.
Where to enroll: Michigan uses HealthCare.gov. Open enrollment for 2027 coverage runs November 1, 2026 to January 15, 2027. Private, medically underwritten plans can start the first of any month if approved.
2027 rates: individual plans 14.5% on average, small-group plans about 10%. See the Michigan 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.

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Michigan questions

Where do Michigan residents enroll in 2027 coverage?

Michigan uses HealthCare.gov. Open enrollment for 2027 coverage runs November 1, 2026 to January 15, 2027.

What continuation rights does Michigan give after leaving a small employer?

Michigan has no state continuation law for small employer plans, so people leaving an employer with fewer than 20 workers generally lose group coverage when the job ends, while federal COBRA still applies at larger employers.

How much are Michigan premiums rising for 2027?

Individual-market premiums are set to rise 14.5% on average, and small-group plans about 10%.

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, www.michigan.gov, www.michigan.gov, www.legislature.mi.gov. Facts checked October 2026. See all Michigan health insurance rules.

Written by Frank Caballero, licensed health insurance agent in Michigan and 30 other states, NPN 21032307.