Tax Deduction for Health Insurance for Contractors in Chesterfield County, Virginia
- Contractors and self-employed individuals in Chesterfield County can deduct 100% of their health insurance premiums from their gross income if they meet IRS criteria.
- The deduction applies to premiums paid for yourself, your spouse, and dependents, provided no one is eligible for an employer-sponsored plan.
- Marketplace Virginia plans, including those with Advance Premium Tax Credits, are eligible for the deduction on the portion of the premium you pay out-of-pocket.
- For 2026, 6 carriers offer marketplace plans in Chesterfield County's Rating Area 3, including CareFirst BlueChoice and Cigna.
Get Your Free Health Insurance Quote
A licensed agent can compare coverage options for you at no cost.
You're all set!
A licensed agent will reach out shortly.
Who Qualifies for the Self-Employed Health Insurance Deduction?
To qualify for the self-employed health insurance deduction, you must meet specific criteria set by the IRS:- You must be self-employed and have net earnings from your business. This includes sole proprietors, partners in a partnership, and S-corporation shareholders who own more than 2% of the company.
- You cannot be eligible to participate in an employer-sponsored health plan. This applies to both your own eligibility and your spouse's eligibility for a plan through their employer, even if you choose not to enroll in it.
- The deduction cannot exceed your net earnings from self-employment. If your business incurs a loss, you generally cannot claim the deduction.
- The premiums must be paid for a qualified health insurance plan, including those purchased through the Affordable Care Act (ACA) Marketplace Virginia or directly from an insurer.
Health Insurance Options for Contractors in Chesterfield County
Contractors in Chesterfield County have several options for securing health insurance coverage, including plans available through the Marketplace Virginia (which uses the HealthCare.gov platform), off-exchange plans, and Virginia Medicaid.Marketplace Virginia Plans
The Marketplace Virginia offers a range of plans under the Affordable Care Act (ACA) and is often the best option for self-employed individuals, as it's the only place to qualify for Advance Premium Tax Credits (APTCs) and Cost-Sharing Reductions (CSRs). These subsidies can significantly lower your monthly premiums and out-of-pocket costs based on your income. In 2026, 6 carriers offer marketplace plans in Rating Area 3, which covers Charles City, Chesterfield, Colonial Heights, Dinwiddie, Goochland, Hanover, Henrico, Hopewell, New Kent, Petersburg, Powhatan, Richmond, Richmond counties. These carriers include:- CareFirst BlueChoice
- Cigna
- HealthKeepers
- Oscar Health
- Sentara Health Plans
- United Healthcare
Virginia Medicaid and FAMIS Plus
Virginia expanded Medicaid in 2019, meaning adults with household incomes up to 138% of the Federal Poverty Level (FPL) may qualify for comprehensive, low-cost health coverage through Virginia Medicaid or FAMIS Plus. For pregnant women, Virginia Medicaid (FAMIS Moms) covers those with incomes up to 200% FPL, and FAMIS (Family Access to Medical Insurance Security) covers uninsured children up to 200% FPL. If your income falls within these thresholds, Medicaid could be a zero-premium option.Off-Exchange Plans
You can also purchase health insurance directly from an insurance carrier outside of the Marketplace Virginia. These plans are ACA-compliant but do not qualify for APTCs or CSRs. While they offer similar benefits, they are generally only cost-effective if your income is too high to qualify for subsidies.Understanding Advance Premium Tax Credits and the Deduction
If you qualify for Advance Premium Tax Credits (APTCs) through the Marketplace Virginia, these credits are paid directly to your insurer to reduce your monthly premium. When taking the self-employed health insurance deduction, you can only deduct the portion of the premium that you actually pay out-of-pocket after the APTC has been applied. For example, if your monthly premium is $600 and you receive a $400 APTC, you pay $200 per month. You can deduct the $200 per month (or $2,400 annually) that you paid yourself. The $400 covered by the APTC is not deductible. It's important to accurately calculate your net premium for deduction purposes.Choosing the Right Plan in Chesterfield County
When selecting a health plan as a contractor, consider these factors:- Budget: Balance monthly premiums with potential out-of-pocket costs (deductibles, copays, coinsurance). Bronze plans have lower premiums but higher out-of-pocket costs, while Gold and Platinum plans have higher premiums but lower out-of-pocket costs.
- Subsidies: If your income is between 100% and 400% FPL, you may qualify for APTCs. If it's between 100% and 250% FPL, you may also qualify for Cost-Sharing Reductions, which are only available with Silver plans.
- Network: Check if your preferred doctors and any local hospitals, such as Bon Secours St Francis Medical Center in Midlothian, are in the plan's network. PPO plans offer more flexibility in choosing out-of-network providers at a higher cost, while HMO and EPO plans typically require you to stay within their network.
- Health Needs: If you anticipate frequent medical care or have chronic conditions, a plan with lower deductibles and out-of-pocket maximums might be more suitable, even with a higher premium.
Frequently Asked Questions
Can contractors deduct health insurance premiums in Chesterfield County, Virginia?
Yes, self-employed individuals and contractors in Chesterfield County, Virginia, can typically deduct 100% of their health insurance premiums from their gross income, provided they meet certain IRS criteria. This includes premiums for plans purchased through the Marketplace Virginia.
What are the income limits for the self-employed health insurance deduction?
There are no specific income limits for taking the self-employed health insurance deduction itself. However, you cannot deduct more in premiums than your net earnings from self-employment. If your business shows a loss, you may not be able to take the deduction.
Can I deduct premiums for my family members?
Yes, you can deduct premiums paid for yourself, your spouse, and your dependents, as long as they are not eligible to participate in an employer-sponsored health plan (including your spouse's employer plan) and you meet the other deduction criteria.
Does the deduction apply to Marketplace plans with subsidies?
You can deduct the portion of your health insurance premiums that you actually pay out-of-pocket, after any Advance Premium Tax Credits (APTCs) have been applied. The APTCs reduce your deductible amount, but the remaining premium paid by you is still eligible.