The key idea: the marketplace wants your net self employment income for the coverage year, meaning what is left after business expenses like mileage. HealthCare.gov says to base it on past experience and realistic expectations, then update it if things change.
- 11.9MAmericans were independent contractors in their main job in July 2023, 7.4 percent of all workers, per BLS
- 74.2%of independent contractors had health insurance from any source, lower than workers in traditional jobs at 84.9 percent
- 76¢IRS standard business mileage rate per mile from July 1, 2026, up from 72.5 cents in the first half of the year
Why net income is the number that matters
HealthCare.gov tells self employed people to report net income, the same profit figure that goes on Schedule C. For a driver, the biggest expense is usually the car. The IRS standard mileage rate for 2026 is 72.5 cents a mile from January through June and 76 cents from July 1 through December.
Here is a simple example for a full time driver in 2026:
| Line | Amount |
|---|---|
| Earnings paid out by the apps | $55,000 |
| 15,000 business miles, January to June, at 72.5 cents | minus $10,875 |
| 15,000 business miles, July to December, at 76 cents | minus $11,400 |
| Phone and other business costs | minus $600 |
| Net profit | $32,125 |
That net profit is about 200 percent of the poverty line for one person, which is solidly in subsidy territory. The deductible half of self employment tax lowers your adjusted gross income a little more. Your own miles and costs will differ, so keep a mileage log. It is the single most valuable record a driver keeps.
How to estimate income that changes every week
Gig income swings, and the marketplace knows it. This is the method I use with clients:
- Start with the last 12 months, from your app earnings summaries, not your best month times twelve.
- Subtract real expenses, mostly mileage, then adjust for anything you know is changing, like a new car, fewer hours, or a second app.
- Add every other household income, including a spouse's wages and any side work.
- Revisit it every quarter. HealthCare.gov says to update your application as soon as your yearly income looks higher or lower than you estimated.
Updating matters more than ever. Starting with 2026 coverage, there is no cap on paying back excess tax credits when you file, so a big underestimate can turn into a big tax bill. Guessing a little high and getting money back at tax time is the safer mistake. You can test different numbers with my subsidy calculator.
Your coverage options
| Option | When it fits |
|---|---|
| Marketplace plan | Most full time gig workers. Credits generally run from 100 to 400 percent of the poverty line, $15,960 to $63,840 for one person on 2027 coverage. |
| Spouse's employer plan | If your spouse has a well subsidized plan, it is often the cheapest route. |
| Your own W-2 job | If you drive on the side of a job with benefits, that plan is usually your answer. |
| Medicaid | Very low income in states that expanded Medicaid. Florida and Texas did not, so adults under the poverty line there often get neither Medicaid nor a credit. |
| Short term plan | A brief gap only. Not ACA coverage, can exclude pre-existing conditions, banned in Colorado and Illinois, and restricted elsewhere. |
For context, CMS reports that the average marketplace premium for 2026 was $619 a month before tax credits and $178 after. Your number depends on your age, county and income.
Deducting your premiums with Form 7206
If you pay for your own coverage and have a net profit, you may be able to deduct your premiums as self employed health insurance on Schedule 1. The IRS rules from the Form 7206 instructions:
- You need a profit. The deduction cannot exceed your net earnings from the business.
- No deduction for months you could get a subsidized employer plan, including through a spouse's employer, even if you did not sign up.
- It does not lower self employment tax. It reduces income tax only.
- Form 7206 is required in some cases, such as when you have more than one self employment income source or include long term care premiums. Otherwise a worksheet in the Form 1040 instructions works.
- Only what you actually paid. If you got an advance tax credit on a marketplace plan, the deduction and the credit interact, and IRS Publication 974 explains how.
A tax preparer who works with gig workers is worth the fee for that interaction alone. For a wider look at buying coverage when you work for yourself, read my self employed health insurance guide.
Quarterly taxes affect your coverage too
The IRS sets the self employment tax rate at 15.3 percent, 12.4 percent for Social Security and 2.9 percent for Medicare, once net earnings reach $400. The IRS says gig workers who are independent contractors may have to pay quarterly estimated taxes, due in April, June, September and January. When you sit down to make an estimated payment, that is a good moment to check your marketplace income estimate as well.
Bottom line
Figure your income after mileage, not before. Pick a plan based on an honest estimate, and update it when your hours change. If a spouse's employer plan is cheap, take that and you may not need me at all. If not, I'm Carson Hornish, an independent broker licensed in 31 states, and comparing your options costs you nothing. Here is why a broker is free.
Common questions
Does Uber or DoorDash offer health insurance to drivers?
Drivers paid on a 1099 as independent contractors do not get an employer health plan, so most buy their own coverage. The most common route is an ACA marketplace plan, where the tax credit is based on your net income after business expenses.
What income do gig workers report to the marketplace?
HealthCare.gov says to report your net self employment income, the profit after business expenses, as estimated for the year you want coverage. For drivers, mileage is usually the largest expense. Update your application if your income changes.
Can gig workers deduct health insurance premiums?
Often yes. The IRS allows a self employed health insurance deduction up to your net profit, figured on Form 7206 in some cases. You cannot take it for any month you were eligible for a subsidized employer plan, including a spouse's, and it does not reduce self employment tax.
What happens if my gig income ends up higher than I estimated?
You may have to pay back some or all of the advance tax credit when you file. Starting with 2026 coverage there is no cap on that repayment, so update your marketplace application as soon as you see your income running higher.
Are short term plans a good idea for rideshare drivers?
Only for a brief gap. Short term plans are not ACA coverage, can exclude pre-existing conditions, and cap benefits. They are banned in Colorado and Illinois and restricted in other states, so the rules depend on where you live.
Driving or delivering full time?
Send me your ZIP and a rough net income, and I'll show you every plan you qualify for and what it costs after credits, free, no pressure.
Get my free comparison →Prefer to pick a time? Book a call here.
Sources
- U.S. Bureau of Labor Statistics, Contingent and Alternative Employment Arrangements, July 2023
- IRS, Standard mileage rates
- IRS, Instructions for Form 7206
- IRS, Self employment tax (Social Security and Medicare taxes)
- IRS, Manage taxes for your gig work
- IRS, Publication 974, Premium Tax Credit
- HealthCare.gov, Estimating self employment income
- HHS ASPE, 2026 poverty guidelines
- CMS, Health Insurance Exchanges 2026 Open Enrollment Report