Can I Drop My Employer Health Insurance in the Middle of the Year?

If your work plan is getting expensive, especially for your family, you might be wondering if you can just drop it and buy something else. The answer is usually yes, but timing matters.

Why you can't always drop it right away

Most employers take your health insurance premium out of your paycheck before taxes. Because of that tax break, your election is generally locked in for the plan year. You can usually only drop or change coverage:

• During your employer's open enrollment, which many companies hold in the fall
• After a qualifying life event, like getting married, having a baby, or a change in your spouse's coverage

Some employer plans also let you drop coverage so you can enroll in a Marketplace plan. Ask your HR or benefits team what your plan allows.

Watch out for the subsidy rules

If your employer offers coverage that counts as affordable under federal rules, you and your family usually can't get a Marketplace tax credit, even if you turn the work plan down. For family members, affordability is based on the cost of family coverage, not just your own.

That's why private health insurance is often the main alternative worth comparing for people leaving an employer plan.

Don't create a gap

If you're switching, line up your new coverage to start the day after your employer plan ends. Many private plans can start on the first of any month, which makes timing easier.

What to compare first

• What you pay per paycheck now, for yourself and for your family
• Private plan prices for your household
• Deductibles and out-of-pocket maximums
• Whether your doctors are in network
• Whether it makes sense to keep yourself on the work plan and move your family to a different plan

If your employer's open enrollment is coming up, now is the time to look. Send me what you're paying and I'll put the options side by side.