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Developers, engineers and IT consultants work under three very different contract types. Each one changes who offers coverage, whether a tax credit is possible, and how premiums are deducted.
On a W-2 contract through a staffing firm you are an employee, and large staffing firms generally must offer full-time employees coverage. On a 1099 or corp-to-corp contract you are running a business and buy your own. Most experienced IT contractors earn above the 2027 subsidy line, so healthy 1099 and C2C contractors should price a private plan on a nationwide PPO network next to full-price Marketplace coverage.
| W-2 contract | 1099 | Corp-to-corp (C2C) | |
|---|---|---|---|
| Who you work for | The staffing firm, as an employee | The client or firm, as a sole proprietor | Your own LLC or corporation contracts with the firm |
| Health coverage | Offered by the firm, often after a waiting period | You buy it | You buy it, or your company provides it |
| Deduction | Pre-tax payroll | Self-employed health insurance deduction | Depends on entity; S corps have special rules |
| Between contracts | Coverage often ends with the assignment | Yours, continuous | Yours, continuous |
Staffing firms that are applicable large employers face federal penalties if they do not offer affordable coverage to full-time employees, so W-2 contractors working 30 or more hours a week are usually offered a plan. If that offer is affordable, you generally cannot get a Marketplace credit instead. Watch the gaps: coverage often ends with the assignment, and losing it opens a 60-day special enrollment window.
Independent IT contractors are a good fit for private underwritten plans: often healthy, often well over the line, and often working on-site with clients in other states. A plan on a nationwide PPO network keeps one network across every engagement and does not end when a contract does.
If you run C2C through an S corporation, premiums follow special reporting rules. See S corp owner health insurance.
Self-employed and 1099 income is counted after expenses. Our free calculator shows which side of the 400% line you land on in about a minute, with results right away and no sign-up.
Usually, if they work full time for a staffing firm large enough to be subject to the employer mandate. Coverage often has a waiting period and ends with the assignment.
There is no special product. On a C2C contract your own company is the vendor, so you or your company buy coverage. Owner-only companies do not qualify for small group plans.
Yes, if healthy. Private medically underwritten plans built on nationwide PPO networks are sold outside the Marketplace any month.
Checked October 14, 2026. Rules and dates change; confirm before you act.
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