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

Health Insurance Tax Deductions for Contractors in Westmont, Illinois

Self-employed individuals and contractors in Westmont, IL, can deduct 100% of their health insurance premiums if they meet IRS criteria and are not eligible for an employer-sponsored plan.
This deduction is an "above-the-line" adjustment to income, reducing your Adjusted Gross Income (AGI) on Schedule 1 (Form 1040).
Premiums for plans purchased through GetCoveredIllinois, including PPO, HMO, and EPO options, are generally eligible, though only the out-of-pocket portion is deductible if you receive premium tax credits.
In 2026, 5 carriers offer marketplace health insurance plans in Rating Area 2, which includes DuPage and Kane counties.
Westmont, part of DuPage County, has a median household income of $88,090 and an uninsured rate of 6.0%, per U.S. Census Bureau ACS 2024 5-year estimates.

For contractors and self-employed individuals in Westmont, Illinois, understanding how to maximize tax benefits for health insurance can lead to significant savings. The Internal Revenue Service (IRS) allows eligible self-employed individuals to deduct 100% of their health insurance premiums, including those for their spouse and dependents, as an adjustment to income. This "above-the-line" deduction reduces your Adjusted Gross Income (AGI), potentially lowering your overall tax liability. This guide explains the eligibility requirements, how to claim the deduction, and the types of health insurance options available to Westmont contractors through GetCoveredIllinois, the state's official health insurance marketplace.

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Who Qualifies for the Self-Employed Health Insurance Deduction in Westmont?

The self-employed health insurance deduction is a valuable benefit, but it comes with specific IRS eligibility rules. As a contractor in Westmont, you generally qualify if:

You are self-employed: This means you have a net profit from your business activity. You can be a sole proprietor, a partner in a partnership, or an S corporation shareholder who owns more than 2% of the company.
You are not eligible for an employer-sponsored health plan: This is a critical criterion. You cannot claim the deduction for any month you were eligible to participate in an employer-sponsored health plan, whether through your own employment or your spouse's employment. Even if you chose not to enroll in an available employer plan, you cannot take the deduction for that period.
You have sufficient net earnings: The deduction cannot exceed your net earnings from the self-employment activity under which the plan is established. If your business has a net loss, you cannot claim the deduction.

This deduction applies to medical, dental, and long-term care insurance premiums. It's important to note that if you receive a premium tax credit (subsidy) for a plan purchased through GetCoveredIllinois, you can only deduct the portion of the premium you paid out-of-pocket, after the credit has been applied.

How to Claim the Deduction: Form 1040, Schedule 1

Unlike itemized deductions, the self-employed health insurance deduction is an adjustment to income. This means it reduces your gross income to arrive at your AGI, which can impact other tax calculations and credits. You claim this deduction on Schedule 1 (Form 1040), "Additional Income and Adjustments to Income," specifically on line 17. To calculate the deduction, you'll need to sum up all eligible health insurance premiums paid during the tax year. Ensure you have documentation for these payments. If you use a tax professional, they will help you determine the correct amount. If you do your own taxes, tax software will guide you through the process, but understanding the eligibility rules remains your responsibility.

Health Insurance Options for Westmont Contractors Through GetCoveredIllinois

As a contractor in Westmont, you have several avenues to secure health insurance that may be eligible for the tax deduction. The primary source for individual and family plans is GetCoveredIllinois, the state-based marketplace. Here, you can compare plans, check your eligibility for financial assistance, and enroll in coverage. In 2026, 5 carriers offer marketplace plans in Rating Area 2, which covers DuPage and Kane counties. Westmont, located in DuPage County, is served by these plans. The confirmed local carriers for this area include:

Ambetter
Blue Cross and Blue Shield of Illinois
Molina Healthcare
Oscar Health
United Healthcare

These carriers offer a range of plan types, including Health Maintenance Organization (HMO), Exclusive Provider Organization (EPO), and Preferred Provider Organization (PPO) plans. Unlike some states, PPO plans ARE available on-exchange in Illinois, offering more flexibility for network choices to Westmont residents.

Understanding Plan Tiers and Costs for Westmont Contractors

Health insurance plans on GetCoveredIllinois are categorized into metal tiers: Bronze, Silver, Gold, and Platinum. These tiers indicate how you and your plan share costs:

Metal Tier	Approximate Plan Pays	Approximate You Pay	Ideal For
Bronze	60%	40%	Healthy individuals who want low premiums and mainly catastrophic coverage, willing to pay more out-of-pocket for care.
Silver	70%	30%	Individuals and families with moderate health needs. Crucially, if you qualify for cost-sharing reductions (CSRs), Silver plans offer enhanced benefits and lower out-of-pocket costs.
Gold	80%	20%	Those with higher healthcare needs who prefer lower deductibles and out-of-pocket maximums, paying higher monthly premiums for more comprehensive coverage.
Platinum	90%	10%	Individuals with very high anticipated healthcare costs who want the lowest out-of-pocket expenses for services, willing to pay the highest premiums.

As a self-employed individual, you may also qualify for premium tax credits based on your household income, which can significantly reduce your monthly premium costs. These credits are reconciled when you file your taxes, so it's important to accurately estimate your income. Westmont, part of DuPage County, has a population of 23,724 and a median household income of $88,090, per U.S. Census Bureau ACS 2024 5-year estimates. DuPage County itself has a population of 930,024 and a median income of $112,096. While DuPage County has no acute care hospitals within its boundaries, residents travel to a neighboring county for acute care. This makes a strong network and plan type an important consideration.

Illinois Medicaid and CHIP for Lower-Income Contractors

Illinois is a Medicaid expansion state, meaning adults with income up to 138% of the Federal Poverty Level (FPL) may qualify for Illinois Medicaid. This program provides comprehensive health coverage with little to no cost. If your income as a contractor falls within this range, you should explore Illinois Medicaid as a primary option, as its benefits are typically more robust than marketplace plans for those who qualify. Furthermore, Illinois has one of the most expansive child coverage programs in the country. Illinois All Kids (the state's CHIP equivalent) covers children up to 313% FPL, and pregnant women can receive coverage through Illinois Medicaid up to 213% FPL, including prenatal, labor, delivery, and 12 months of postpartum care. Applications for these programs can be submitted through ABE (abe.illinois.gov) or by calling the DHS helpline.

Making the Right Choice: Financial Assistance and Agent Support

Navigating health insurance and tax deductions can be complex. Here's a decision framework for Westmont contractors:

Estimate your income: Your projected Modified Adjusted Gross Income (MAGI) determines your eligibility for premium tax credits and cost-sharing reductions on GetCoveredIllinois, as well as Illinois Medicaid.
Check Medicaid eligibility: If your income is at or below 138% FPL, you likely qualify for Illinois Medicaid.
Compare marketplace plans: If your income is above 138% FPL, or if you prefer a marketplace plan, compare options from Ambetter, Blue Cross and Blue Shield of Illinois, Molina Healthcare, Oscar Health, and United Healthcare. Pay close attention to plan types (HMO, EPO, PPO), deductibles, out-of-pocket maximums, and prescription drug coverage.
Consider a licensed agent: A licensed health insurance producer can help you understand your options, compare plans from the 5 carriers available in Rating Area 2, and enroll in coverage through GetCoveredIllinois, all at no cost to you. They can also help clarify how subsidies and plan choices interact with the self-employed health insurance deduction.

Frequently Asked Questions

Who qualifies for the self-employed health insurance deduction in Westmont, IL?

To qualify, you must be self-employed (e.g., a contractor or small business owner), not eligible to participate in an employer-sponsored health plan (either your own or your spouse's), and have a net profit from your business. The deduction is capped at your net earnings from self-employment.

Can I deduct premiums for my family members?

Yes, you can include premiums paid for your spouse, dependents, and any child under age 27 at the end of the tax year, even if they are not your dependent, as long as they are not eligible for an employer-sponsored plan. All covered individuals must be included on your policy.

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

The deduction is claimed on Schedule 1 (Form 1040), line 17, as an adjustment to income. This means it reduces your adjusted gross income (AGI) and is an above-the-line deduction, which is more beneficial than a standard itemized deduction.

Are marketplace plans eligible for this deduction?

Yes, premiums paid for health insurance plans purchased through GetCoveredIllinois (Illinois' state-based marketplace) are eligible for the self-employed health insurance deduction, provided you meet all other IRS criteria. If you receive premium tax credits, you can only deduct the portion of the premium you actually pay out-of-pocket.

What types of health plans are available to contractors in Westmont, IL?

Contractors in Westmont can choose from various plan types available on GetCoveredIllinois, including Health Maintenance Organization (HMO), Exclusive Provider Organization (EPO), and Preferred Provider Organization (PPO) plans. In 2026, 5 carriers offer marketplace plans in Rating Area 2, which includes DuPage County.