If your employer offers insurance benefits, it can feel like a real employment win. When an employer pays for some or all of your monthly premiums, it can really help make health insurance affordable. It’s no surprise then that employer-based plans are the most common form of health coverage in the United States. In fact, more than half of the non-elderly population get their insurance through this kind of coverage.

But what if you don’t want the health insurance benefits through your job? Maybe because of the cost or the types of plans available, you might want to look elsewhere. And what if you are interested in enrolling in an Obamacare plan through the online Marketplace. Is this even an option?

Short answer: Yes. But there are some important caveats to consider. Here, we break down what you need to know about enrolling in Obamacare if your employer offers insurance benefits too.

Can I enroll in Marketplace health insurance (Obamacare) if my employer offers insurance?

The Affordable Care Act ensures that almost all Americans can buy individual and family health insurance from the online Marketplace. To qualify to shop on the Marketplace, there are just a few general requirements. You need to live in the U.S., not be incarcerated, and be a U.S. citizen. Or hold a number of permitted immigration statuses, from being a refugee, to being a green card holder, to being a survivor of domestic violence, and more. If you meet these general criteria, you can shop for Obamacare plans during the annual Open Enrollment Period (OEP). You can also shop on the Marketplace during a Special Enrollment Period (SEP) if you have a qualifying life event like a marriage, birth, or move.

Many people like to shop on the health insurance Marketplace for its comprehensive, affordable health insurance plans. Want to compare prices to see if Marketplace coverage might be less expensive than opting into your employer-provided plan? You’ll need to consider a few things, especially when it comes to your bottom-line costs.

If I decide to enroll in a Marketplace plan, will I be eligible for subsidies/savings?

First, your employer may contribute to your health insurance costs when you enroll in an employer-sponsored plan. Sometimes they even contribute 100%. But if you opt-out of your employer-sponsored plan for an Obamacare plan, they won’t. Want to opt-out of an employer’s plan? You’ll be handling the costs of your monthly premiums on your own and paying full price.

Second, if you turn down an employer plan and enroll in an Obamacare plan, you probably won’t get any subsidies/savings. Many job-based group plans meet the minimum standards that the federal government set for affordability and level of coverage. If your employer offers insurance that meets these minimum standards, than subsidies are off the table. That means you won’t be able to get things like the premium tax credit when shopping on the Marketplace. So, you may end up paying more for your Marketplace plan than you might have if you didn’t have the option of employee benefits. You can find out if your employer-sponsored plan meets the minimum requirements by asking your employer to complete this Employer Coverage Tool.

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I was already enrolled in a Marketplace plan when I got a new job. Do I need to cancel it?

If you’re currently enrolled in a Marketplace-based health insurance plan and then get hired and your employer offers insurance, there are a few things to know. First is that now you’re probably no longer eligible for any savings or subsidies on your Marketplace plan. And this is true even if you don’t accept the employer-sponsored insurance and opt to continue on your Marketplace plan. If you’re offered job-based insurance that meets the federal minimum standards, then you lose your eligibility for cost savings on the Marketplace. So, some people may want to cancel their Marketplace plans to enroll in job-based insurance. For many, this will best allow you to stay covered and keep your costs down.

If you want to cancel your Marketplace plan, you can log-in to your Marketplace account on HealthCare.gov to do so. Alternately, you may call the HealthSherpa Consumer Advocate team at (855) 772-2663 to cancel your Obamacare plan. A HealthSherpa Consumer Advocate can also help you figure out if you need to cancel for just yourself and/or keep certain family members enrolled.

What happens if I decline my health insurance through my employer?

If you decline individual health insurance through your employer, you can enroll in an Obamacare plan through the Marketplace. Although you most likely will not qualify for any subsidies or other financial assistance. You will only be able to qualify for cost savings if the following applies:

1. Your employer-sponsored health plan doesn’t meet the “minimum value standard.”

If your employer-provided plan does not include substantial coverage (including physician and inpatient hospital services), it doesn’t meet the standards. And if it doesn’t pay for at least 60% of covered medical costs, it won’t either.

2. The cheapest plan through your employer costs more than a certain percentage of your household income.

And again, that plan must meet the “minimum value standard”. This number is 9.56% in 2018; and each year the IRS issues an update on this percentage. This calculation is made using your portion of the monthly premium that covers you, the employee. This does not include premiums for others in your family. 

Most job-based health insurance plans are deemed to be affordable and found to meet the “minimum value standard.” But if your employer-sponsored plan isn’t, you may qualify for a Marketplace subsidy depending on your income level.

You also have certain protections against retaliation related to your insurance. It’s against the law for your employer to fire or retaliate against you for reporting violations regarding their offered insurance. It’s also against the law for your employer to fire you or retaliate against you for getting a subsidy or tax credit for insurance off the Marketplace.

A reminder: You can only enroll in a Marketplace plan during the annual Open Enrollment period, unless you qualify for a Special Enrollment Period.

If I stick with my employer-sponsored coverage, is that my cheapest option?

In most cases, sticking with your employer-sponsored coverage for your health insurance will be your cheapest option. Most employers contribute towards your monthly premium costs, meaning you might not be able to beat that price. Especially since some employers might even contribute up to 100% of your monthly costs for your health insurance premiums. 

Unless your employer offers health insurance that does not meet the minimum standards outlined in the ACA, you won’t be able to qualify for any subsidies for your monthly premiums on the Marketplace. So while an Obamacare plan may seem cheaper on the surface, a quality employer-provided plan might be more affordable when you look at the big picture.

Can I use a Health Savings Account to pay for a Marketplace plan?

When you shop on the Marketplace for a plan, you may be able to pay your premiums with pre-tax dollars through a Health Savings Account (HSA). A Health Savings Account is a special type of savings account. It let’s you set aside pre-tax dollars for certain kinds of qualified health expenses. Using an HSA can help you lower your healthcare costs overall through the use of pre-tax dollars. However, when it comes to the Marketplace, only certain plans let you use your HSA to pay for premiums. That means you would need to decide that enrolling through the Marketplace is the best option for you and then look specifically for an HSA plan. 

And unless you get a High-Deductible Health Plan (HDHP), you won’t be able to use pre-tax dollars for your premiums. On average, plans with deductibles of at least $1,350 for an individual qualify as being HDHP. Likewise, plans with deductibles of $2,700 for a family generally qualify as being a HDHP.  When you shop on the Marketplace, you can see which plans are HSA-eligible. Should you be able to use your HSA for your premiums, keep in mind that in 2018, the maximum amount you could contribute from an HSA for a HDHP was $3,450 for an individual and $6,900 for a family.

What percentage of health insurance do employers typically pay?

According to the most recent research by the Kaiser Family Foundation, most employees who are covered through employer-sponsored plan make some kind of contribution to the cost of their monthly premiums. On average, covered workers contribute 18% of the premium for single coverage and 29% of the premium for family coverage. This means that on average, employers typically pay 82% of monthly premium costs for single coverage and 71% of monthly premium costs for family coverage.

Employees at small businesses typically contribute a higher percentage of the premium for family coverage than employees at larger companies. And on average, employees who work for companies with a larger amount of lower-wage workers (where at least 35% of workers earn $25,000 or less a year) contribute more towards their monthly premiums for both single coverage and family coverage than employees do at companies with fewer low-wage workers.

What if the health insurance through my employer is too expensive?

Many people run up against the problem of their employer-provided health insurance seeming way too expensive. Especially when it includes covering their entire family. Unfortunately, if the costs are still underneath approximately 9.5% of your annual income, it is still “affordable” by legal standards, and you still aren’t eligible for subsidies through the Marketplace.

If you find it cost-prohibitive to ensure your children through your job-based health plan, you may have other options. Depending on your income level, you might be able to get them coverage separate from yours through the Children’s Health Insurance Program (CHIP). CHIP is the federal program that matches federal dollars with state dollars to provide healthcare for low-income families who earn too much to qualify for Medicaid. Children who live in a household where the household income meets the qualifications can enroll in CHIP. And this is true even when parents get or accept an insurance benefits offer from their employer.

The coverage offered by my employer doesn’t cover my spouse. What can I do?

If you spouse still needs health insurance coverage, they can shop on the Marketplace for an Obamacare plan. And if they don’t have insurance through their job or your job, they might be able to qualify for a subsidy. If your spouse has a subsidized Marketplace plan and you have insurance through your employer, that might be the most cost effective. 

Even if your spouse is eligible for coverage through your employer, they still can elect to shop on the Marketplace. And even if they don’t qualify for subsidies, they still might be able to find more affordable coverage for just themselves when compared to coverage through your employer-provided plan.

Do I have any other health insurance options?

If you don’t like the options you have for health insurance through your employer or through the Marketplace, you can work with an insurance broker to find an off-Marketplace plan in your state that works for you and your family. Many of the private insurance companies offer plans off of the Marketplace. These plans might be different than those listed through the online Marketplace. Though off-Marketplace plans are not eligible for any subsidies or other cost sharing measures to reduce your costs, you might be able to find a plan that works for your needs this way. However, this option may turn out to be more expensive than the others.

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Originally published in Jun 28, 2018.