Side by side: who pays the premium, the deduction a 1099 worker gains and the pre-tax payroll deduction they lose, the credit, the enrollment windows, COBRA, and self-employment tax.
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The same person, the same plan, two very different bills depending on which form reports the income. The short list of what changes, so the first 1099 year does not come with surprises.
Premiums are set county by county and the credit is set by income, so no table can give a 1099 worker a final number. Enter your ZIP and a licensed agent prices every plan filed where you live against what you actually expect to earn.
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“I run my own business and my time is valuable. Daniel handled everything — compared the private options, explained what I was actually getting, and had me covered fast. Way better experience than trying to navigate it myself.”
| W-2 employee | 1099 worker | |
|---|---|---|
| Who pays the premium | Employer pays a share (often 70-80%% of employee-only) | You pay all of it, or all of it after the credit |
| Tax treatment of the premium | Pre-tax through payroll (income and payroll tax) | Above-the-line deduction (income tax only), Form 7206 |
| Premium tax credit | Rarely (the work plan blocks it if affordable) | Yes under $63,840 single / $132,000 family of four, on net income |
| When you can enroll | Employer’s open enrollment, usually autumn | Nov 1 - Jan 15, or 60 days after a qualifying event |
| Plan choice | The employer’s menu | Every plan filed in the county, plus the private market |
| Leaving | COBRA up to 18 months at full price + 2%% | Nothing to leave; the plan is yours |
| Payroll taxes | 7.65%% withheld, employer pays the other half | 15.3%% self-employment tax on net profit, paid quarterly |
| Out-of-pocket maximum 2027 | Plan’s own, up to $12,000 / $24,000 | Same ceiling on any marketplace plan |
The lost employer share is the big one: an employer paying $500 a month toward a $700 plan was $6,000 a year of untaxed compensation. The credit replaces some of that for a 1099 worker under the line and none of it above. The gained deduction is worth the premium times the marginal income-tax rate, typically 12%% to 24%%: real, but smaller than the employer share it replaces. A contractor pricing a 1099 offer against a W-2 one should add the full premium, less the credit and the deduction’s tax value, to the W-2 side before comparing.
Guaranteed issue, no health questions and the $12,000 out-of-pocket ceiling on any marketplace plan; networks that are contracted plan by plan, not insurer by insurer; and a premium that is identical whether bought alone or through a licensed agent.