Health Insurance for Part-Time Workers & Gig Economy in California

Coverage Options for Part-Time Workers

As a part-time or gig worker, you have several options for health insurance in California:

1. Covered California (Best Option for Most)

Covered California is typically the most affordable option because:

• Income-based subsidies reduce premiums to $0-$10/month for many part-time workers
• Comprehensive ACA-compliant coverage (can't deny pre-existing conditions)
• Free preventive care, maternity care, mental health services
• No job requirement—freelancers and 1099 contractors fully eligible

2. Medi-Cal (If Income is Very Low)

If your income is below $20,783/year (138% FPL), you qualify for free Medi-Cal instead of Covered California:

• $0 premiums and minimal copays
• Year-round enrollment (no waiting for open enrollment)
• Comprehensive coverage at no cost

3. Spouse/Parent Coverage

Other options to consider:

• Spouse's employer plan: If married, you may be eligible
• Parent's plan: If under 26, you can stay on parent coverage

How to Report Variable Income

One of the biggest challenges for part-time and gig workers is estimating annual income when it fluctuates. Here's how to handle it:

Use Your Best Estimate

Covered California requires you to estimate your annual income for 2026. Use this approach:

1. Look at last year's tax return as a starting point
2. Adjust for known changes (lost a gig, gained new clients, hourly rate changed)
3. Be conservative—it's better to slightly overestimate than underestimate
4. Update Covered CA if your income changes significantly during the year

What Income Counts?

For part-time and gig workers, report:

• W-2 wages from part-time jobs
• 1099 income from freelance/contractor work
• Self-employment income (gross minus business expenses)
• Gig economy earnings (Uber, Lyft, DoorDash, etc.)
• Side hustle income (Etsy, online sales, etc.)

Report Income Changes

If your income changes significantly during the year (more than 10%):

• Report the change to Covered California within 30 days
• Your subsidy will be adjusted up or down
• Prevents owing money back at tax time
• Can lower your premium if income drops

Maximizing Your Subsidies

Part-time and gig workers often qualify for substantial subsidies. Here's how to maximize your financial help:

1. Report Accurate Income

Your subsidy is based on income:

• Lower income = higher subsidy
• At 150-200% FPL ($22,590-$30,120 for individual), you may pay $0-$1/month
• At 200-250% FPL, you typically pay $10-$50/month

2. Deduct Business Expenses

If you're self-employed or a 1099 contractor, deduct legitimate business expenses:

• Vehicle mileage (if using car for work)
• Equipment and supplies
• Home office expenses
• Professional services and software

Lower net income = higher subsidies and lower premiums.

3. Consider Retirement Contributions

Contributions to traditional IRA or SEP-IRA reduce your Modified Adjusted Gross Income, potentially qualifying you for higher subsidies.

Special Information for Gig Economy Workers

If you drive for Uber, Lyft, DoorDash, or other app-based services, you have unique considerations:

Prop 22 Health Insurance Stipend

California's Proposition 22 requires app-based companies to provide healthcare stipends:

• Work 15-25 hours/week: Get stipend equal to 50% of average Covered CA premium
• Work 25+ hours/week: Get stipend equal to 100% of average premium
• Stipend paid quarterly directly to you
• You still enroll in Covered California yourself—stipend helps pay premium

This stipend does NOT count as income for subsidy calculations, so you keep your Covered California subsidy AND get the Prop 22 stipend.

Reporting Gig Income

For drivers and delivery workers:

• Report your gross earnings minus vehicle expenses
• Deduct mileage at IRS standard rate (67¢/mile in 2026)
• This significantly reduces your taxable income and increases subsidies

What Part-Time Workers Pay

Here are real examples of what part-time workers pay for Covered California coverage after subsidies:

Single Part-Time Worker, Age 30

• Earning $20,000/year (133% FPL): $0-$1/month for Silver plan
• Earning $30,000/year (200% FPL): $10-$15/month for Silver plan
• Earning $40,000/year (267% FPL): $75-$100/month for Silver plan

Part-Time Worker with Family of 3

• Earning $40,000/year (133% FPL): $0-$1/month for family Silver plan
• Earning $60,000/year (200% FPL): $10-$20/month for family Silver plan
• Earning $80,000/year (267% FPL): $200-$300/month for family Silver plan

Most part-time workers fall into the $0-$50/month range after subsidies.