The 'but what about health insurance?' question stops a lot of people from going independent. Let's actually compare the two worlds so you can decide with facts instead of fear.
W-2: Convenient, But You're Paying More Than You Think
On a W-2, your employer picks the plans and pays most of the premium, so your payroll deduction looks small. But that 'cheap' coverage is baked into a lower salary, and you have zero choice in carrier, network, or plan design. When you leave, it ends — and COBRA charges you the full unsubsidized price.
1099: You Choose, and Subsidies Often Make It Cheaper
As a 1099 worker you buy your own Marketplace plan. You pick the carrier and network. Your subsidy is based on net self-employment income — frequently lower than your old W-2 gross — so the credit is often substantial. And you can deduct premiums if you turn a profit.
Losing W-2 → COBRA
- No subsidy
- Same plan, full price
- Up to 18 months
1099 + Marketplace
- Premium Tax Credit on net income
- You choose carrier & network
- Deductible premiums if profitable
The Transition: Use Your Special Enrollment Period
Leaving a W-2 job means losing employer coverage — a qualifying event that opens a 60-day Special Enrollment Period. You can enroll in a Marketplace plan right away instead of waiting for Open Enrollment, and even line it up to start the day your old coverage ends.
See the 1099 Side of the Math
Enter your ZIP and expected net income — we'll show what coverage actually costs as a 1099 worker.
Run My Numbers →Frequently Asked Questions
Is health insurance more expensive on 1099 than W-2?
Not necessarily. W-2 coverage looks cheap because the employer hides most of the premium in a lower salary. As a 1099 worker, subsidies based on your net income often make a Marketplace plan comparable or cheaper — and you can deduct premiums.
What happens to my health insurance when I leave a W-2 job for 1099?
You lose the group plan, which opens a 60-day Special Enrollment Period to buy a Marketplace plan. You can schedule it to start the day your old coverage ends, with no gap.
Should I take COBRA when going 1099?
Usually not — COBRA charges the full unsubsidized premium. A subsidized Marketplace plan based on your 1099 income is typically cheaper. Compare both before electing COBRA.
How do subsidies work with 1099 income?
They're based on expected net self-employment income (after expenses), which is often lower than W-2 gross — frequently producing a larger Premium Tax Credit.
Should I factor coverage into my 1099 rate?
Yes. Price in a realistic subsidized premium when negotiating your rate. A quick quote gives you an accurate number instead of a worst-case guess.
📚 Sources & Authoritative References
Facts in this article are verifiable against the public sources below.
Decide With Real Numbers
See exactly what coverage costs as a 1099 worker before you make the move.
Compare 1099 vs W-2 Coverage →