What's the difference between working freelance and working as an employee?

This fall I’m going to go from working as a full-time employee to working as a freelancer. This is really only a technical designation necessary for my boss to keep me hired after the summer (I guess it has to do with the way budgeting works), but what should I know about the legal differences between working as an employee and working as a freelancer? For instance, I heard that freelancers have to pay a higher social security tax. Is that true?