Can contractors deduct health insurance premiums in Colorado?

Yes, eligible self-employed individuals (including contractors) in Colorado can deduct 100% of their health insurance premiums from their gross income, provided they are not eligible to participate in an employer-sponsored health plan.

What types of health plans can I deduct as a contractor?

You can deduct premiums for medical, dental, and long-term care insurance. This includes plans purchased through Connect for Health Colorado, as long as you meet the eligibility criteria for the self-employed health insurance deduction.

How do I claim the self-employed health insurance deduction?

The deduction is claimed as an above-the-line deduction on your federal income tax return, typically on Schedule 1 (Form 1040). This reduces your adjusted gross income (AGI) and can lower your overall tax liability. Keep thorough records of all premium payments.

Does the self-employed health insurance deduction apply to my family members?

Yes, the deduction can cover premiums paid for yourself, your spouse, and your dependents, as long as they are not eligible for an employer-sponsored health plan.

Updated July 2026 · ColoradoPlanFinder.com — Licensed Health Insurance Producer (NPN #21249133)

Health Insurance Tax Deductions for Contractors in Burlington, Colorado

Eligible contractors in Burlington, Colorado, can deduct 100% of their health insurance premiums from their gross income.
This deduction is claimed as an "above-the-line" deduction, reducing your adjusted gross income (AGI).
In 2026, 6 carriers offer marketplace plans in Rating Area 9, which covers Burlington, providing options like HMO, EPO, and PPO plans.
Individuals with incomes up to 138% of the Federal Poverty Level may qualify for Health First Colorado (Medicaid), offering low-cost or no-cost coverage.

For contractors and other self-employed individuals in Burlington, Colorado, understanding how to deduct health insurance premiums can significantly reduce your taxable income. The IRS allows eligible self-employed individuals to deduct 100% of the amounts paid for health insurance premiums for themselves, their spouse, and their dependents. This deduction is available even if you don't itemize, making it a valuable tax benefit for many independent workers in Burlington. To qualify, you must not be eligible to participate in an employer-sponsored health plan, either through your own employment or that of your spouse.

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Who Qualifies for the Self-Employed Health Insurance Deduction?

The self-employed health insurance deduction is available to individuals who pay for their own health insurance premiums and meet specific criteria. You are generally considered self-employed for this deduction if you:

Have net earnings from self-employment (e.g., as a contractor, freelancer, or small business owner).
Are not eligible to participate in an employer-sponsored health plan at any point during the month for which the premiums were paid. This includes plans offered by an employer of your spouse.

This deduction applies to premiums paid for medical, dental, and qualified long-term care insurance. It is an "above-the-line" deduction, meaning it reduces your adjusted gross income (AGI) before other deductions are considered, which can have a beneficial impact on other tax credits or deductions tied to AGI limits. For tax year 2026, it's crucial to maintain accurate records of your self-employment income and all health insurance premium payments to properly claim this deduction.

Finding Health Insurance Plans in Burlington

As a contractor in Burlington, you have several avenues to find health insurance that may qualify for the tax deduction. The primary source for individual and family health plans in Colorado is Connect for Health Colorado, the state-based marketplace. Through Connect for Health Colorado, you can compare a variety of plans and determine your eligibility for financial assistance, such as premium tax credits and cost-sharing reductions, which can lower your monthly premiums and out-of-pocket costs. Burlington, located in Kit Carson County, is part of Colorado Rating Area 9, which covers Alamosa, Baca, Bent, Chaffee, Cheyenne, Clear Creek, Conejos, Costilla, Crowley, Custer, Elbert, Fremont, Gilpin, Huerfano, Kiowa, Kit Carson, Lake, Las Animas, Lincoln, Logan, Morgan, Otero, Park, Phillips, Prowers, Pueblo, Sedgwick, Washington, Yuma counties. In 2026, 6 carriers offer marketplace plans in Rating Area 9, providing a range of choices for contractors seeking coverage. These plans include Health Maintenance Organizations (HMOs), Exclusive Provider Organizations (EPOs), and Preferred Provider Organizations (PPOs), with PPO plans being available on-exchange in Colorado. Burlington has a population of 3,152 residents, with a median income of $74,308 and an uninsured rate of 12.3%, per U.S. Census Bureau ACS 2024 5-year estimates. Kit Carson County, the parent county, has a population of 7,023 and an uninsured rate of 12.0%. These demographics highlight the importance of accessible and affordable health insurance options for the community, including its contractors. Residents of Kit Carson County should note that there are no acute care hospitals within the county boundaries, meaning residents often travel to neighboring counties for hospital services.

Understanding Marketplace Plan Tiers and Subsidies

Connect for Health Colorado organizes health plans into metal tiers: Bronze, Silver, Gold, and Platinum. These tiers indicate how you and your plan share the cost of care:

Bronze plans: Have the lowest monthly premiums but the highest deductibles and out-of-pocket maximums. They cover 60% of costs, leaving you responsible for 40%. Best for those who expect minimal healthcare use.
Silver plans: Offer a balance between monthly premiums and out-of-pocket costs. They cover 70% of costs, leaving you responsible for 30%. Crucially, Silver plans are the only tier eligible for cost-sharing reductions (CSRs), which further lower deductibles, copayments, and out-of-pocket maximums for eligible individuals.
Gold plans: Feature higher monthly premiums but lower deductibles and out-of-pocket maximums. They cover 80% of costs, leaving you responsible for 20%. Good for those who expect regular healthcare use.
Platinum plans: Have the highest monthly premiums but the lowest out-of-pocket costs. They cover 90% of costs, leaving you responsible for 10%. Ideal for those with extensive healthcare needs.

As a contractor, if your household income falls between 100% and 400% of the Federal Poverty Level (FPL), you may qualify for premium tax credits to reduce your monthly premiums. If your income is between 100% and 250% FPL, you may also be eligible for cost-sharing reductions on Silver plans, which can significantly lower your out-of-pocket expenses.

Health First Colorado (Medicaid) and CHP+

For contractors with lower incomes, Colorado offers Health First Colorado (Medicaid), which expanded in 2014. Adults with household incomes up to 138% of the Federal Poverty Level may qualify for low-cost or no-cost comprehensive health coverage through Health First Colorado. This program can be a vital safety net for those who earn too much for traditional Medicaid but still face financial challenges. Additionally, Colorado's Child Health Plan Plus (CHP+) provides coverage for pregnant women with incomes up to 195% FPL and children in households up to 260% FPL. Pregnant women at or below 138% FPL will qualify for full Health First Colorado first. CHP+ offers comprehensive prenatal, delivery, and postpartum care. Applications for both Health First Colorado and CHP+ can be submitted through Colorado PEAK (colorado.gov/PEAK).

Health Insurance Carriers in Burlington

For 2026, contractors in Burlington, Colorado, have access to a variety of health insurance carriers offering plans through Connect for Health Colorado. In 2026, 6 carriers offer marketplace plans in Rating Area 9:

Cigna
Denver Health Medical Plan
HMO Colorado
Kaiser Permanente
Select Health
United Healthcare

These carriers provide a range of plan types, including HMOs, EPOs, and PPOs, allowing you to choose a plan that best fits your healthcare needs and budget. It is important to compare the network of doctors and hospitals for each plan to ensure your preferred providers are included.

Making an Informed Decision About Your Coverage

Choosing the right health insurance as a contractor in Burlington involves balancing premiums, out-of-pocket costs, and the tax deduction benefit. Consider these steps:

Assess your income: Determine if your income qualifies you for premium tax credits or cost-sharing reductions through Connect for Health Colorado, or for Health First Colorado.
Evaluate your healthcare needs: If you anticipate frequent doctor visits or need specific prescriptions, a Gold or Platinum plan might offer better value despite higher premiums. If you're generally healthy, a Bronze plan might suffice, especially when combined with the tax deduction.
Check provider networks: Confirm that your preferred doctors, specialists, and facilities are included in the plan's network, especially since Kit Carson County does not have an acute care hospital and you may need to travel for care.
Understand the tax deduction: Remember that even with subsidies, the remaining premium amount can often be fully deducted from your gross income, reducing your overall tax burden.

Navigating these options can be complex, but you don't have to do it alone. A licensed health insurance producer can help you understand your options, compare plans from different carriers, and ensure you select coverage that meets your needs while maximizing your tax benefits.

Frequently Asked Questions

Can contractors get subsidies for health insurance?

Yes, contractors and other self-employed individuals can qualify for premium tax credits and cost-sharing reductions through Connect for Health Colorado if their household income falls within certain Federal Poverty Level (FPL) guidelines. These subsidies can significantly lower the cost of marketplace plans.

What is the difference between an HMO, EPO, and PPO plan in Colorado?

In Colorado, HMO (Health Maintenance Organization) plans typically require you to choose a primary care provider (PCP) and get referrals for specialists. EPO (Exclusive Provider Organization) plans use a specific network of doctors and hospitals, but usually don't require referrals. PPO (Preferred Provider Organization) plans offer more flexibility, allowing you to see out-of-network providers for a higher cost, and you typically don't need a referral to see a specialist. PPO plans are available on-exchange in Colorado.

When can I enroll in a health insurance plan as a contractor?

The primary time to enroll is during the annual Open Enrollment Period, which typically runs from November 1 to January 15 for coverage starting the following year. However, if you experience a qualifying life event, such as losing other health coverage, getting married, or having a baby, you may be eligible for a Special Enrollment Period (SEP) outside of Open Enrollment.

Is dental insurance also tax deductible for contractors?

Yes, premiums paid for dental insurance can also be included in the self-employed health insurance deduction, provided you meet all other eligibility requirements. This applies to standalone dental plans as well as dental coverage that is part of a comprehensive health plan.