Self-Employed Health Insurance in Texas
Working for yourself in Texas 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 Texas. Individual premiums in Texas are set to rise 13.1% 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 Texas
Most people I help in Texas 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. Texas Marketplace premiums are rising 13.1% 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 Texas 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 Texas
Texas has about 3.5 million small businesses, and roughly 3.0 million of them have no employees, according to the SBA Office of Advocacy's 2025 profile built on 2022 Census data. The biggest group of these one-person firms is in transportation and warehousing, with about 396,000, followed by construction at about 376,000 and professional, scientific and technical services at about 357,000. Real estate adds about 257,000 more. Small businesses employ 5.1 million Texans, about 44 percent of the state's workers, yet most solo owners have no employer plan behind them.
How Texas taxes self-employed health premiums
Texas has no personal income tax, so there is no state return where a self-employed health insurance deduction or an HSA deduction would apply; those savings come only from your federal return. The state franchise tax reaches many LLCs and corporations, but entities with revenue at or below $2.65 million owe no franchise tax on reports due in 2026 and 2027. Texas has no state credit for health premiums. General information, not tax advice — confirm with your CPA based on your specific entity structure.
Texas options beyond the Marketplace basics
Texas has no state premium subsidy and no reinsurance waiver, so the federal premium tax credit on HealthCare.gov is the main help with cost. One state-law option stands out. Since September 2021, Insurance Code Chapter 1682 has let nonprofit agricultural organizations offer member health plans that are not insurance. Applicants must sign a notice saying the plan is not state-regulated insurance, and waiting periods for preexisting conditions are capped at six months. If you hire, note that Texas small-group rules require at least two employees, so a solo owner shops individual plans.
Texas at a glance for people who work for themselves
Texas buyers use HealthCare.gov, and the state has the second-largest Marketplace in the country with about 15 insurers filing for 2027. Texas requires insured group plans to offer state continuation, nine months for people without COBRA rights and six more months after COBRA ends, at the group rate plus 2 percent, though self-funded employer plans are exempt. Texas defines short-term plans by the federal rule rather than its own limit. Final 2027 individual increases average about 13 to 14 percent, with small-group plans up about 17 percent, which makes individual coverage reimbursement worth a look for small Texas employers.
Other Texas rules to know
- Leaving a small employer: Texas requires insured group plans to offer state continuation for up to nine months to people not eligible for COBRA, or six more months after COBRA ends, at the group rate plus 2 percent. It does not apply to self-funded employer plans.
- Short-term plans: Texas defines short-term plans by reference to the federal rules, which set a three-month initial term and four months in total; federal agencies are not prioritizing enforcement of that limit while new rules are written.
- Where to enroll: Texas 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 13.1% to 14.1% on average, small-group plans about 16.9%. See the Texas 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 Texas plans
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Texas questions
Where do Texas residents enroll in 2027 coverage?
Texas uses HealthCare.gov. Open enrollment for 2027 coverage runs November 1, 2026 to January 15, 2027.
What continuation rights does Texas give after leaving a small employer?
Texas requires insured group plans to offer state continuation for up to nine months to people not eligible for COBRA, or six more months after COBRA ends, at the group rate plus 2 percent. It does not apply to self-funded employer plans.
How much are Texas premiums rising for 2027?
Individual-market premiums are set to rise 13.1% to 14.1% on average, and small-group plans about 16.9%.
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, comptroller.texas.gov, capitol.texas.gov, www.cms.gov. Facts checked October 2026. See all Texas health insurance rules.
Self-employed in other states
Written by Frank Caballero, licensed health insurance agent in Texas and 30 other states, NPN 21032307.