Dear Penny: Can I Switch Plans if Health Insurance Eats Up Half My Paycheck?

Dear C.,

When you have to dip into savings for basic expenses like healthcare, your situation is unsustainable. So yes, shop for a different job and a different health plan.

Unfortunately, you can only do the latter during open enrollment unless you experience what’s called a qualifying life event, like you lose your job-based coverage or get married or divorced. Open enrollment is usually a period of several weeks in the fall at most companies. But you can start comparing your options on the Health Insurance Marketplace using healthcare.gov so that you know whether you want to decline your employer’s coverage. If you opt for a Health Insurance Marketplace plan, you’ll have to enroll between Nov. 1 and Jan. 15 in most states.

I don’t know if a Marketplace plan would actually save you money. Employers generally pay at least part of your health premiums, and you’d be shouldering all of these costs on your own. But if your employer’s plan doesn’t meet the minimum affordability standards set by the federal government, it’s possible that you’d qualify for Marketplace subsidies.

One thing I’d suggest doing is comparing costs if you and your family don’t stay on the same plan. Most companies cover a significantly higher share of premiums for the employee than they do for family members, so it doesn’t always make sense to keep the entire family on a job-based plan.

If you and your husband have different medical needs, it may make sense not to stay on the same plan. For instance, when one spouse is relatively healthy and the other has a chronic medical issue, sometimes it makes sense to go with different plans so the healthier spouse can choose a plan with higher deductibles and lower premiums.

Though the Affordable Care Act allows people under age 26 to stay on their parents’ health plans, that isn’t always the best option. If your son is a college student, you could look into whether he could enroll in a campus health plan. He may also be able to get a cheaper plan on his own through the Marketplace.

The flip side, though, is that many plans charge a flat fee for family coverage instead of basing it on the number of people covered. If that’s the case, you wouldn’t save money by removing your son from the plan.

You may be able to find more affordable insurance through your employer when open enrollment comes around. If you have a traditional health plan, you could look into whether a high-deductible health plan with a health savings account is an option. As the name implies, you pay high deductibles (in 2024, that will be a minimum of $1,600 for individuals and $3,200 for families). Those high deductibles lower your premiums substantially, but your out-of-pocket costs are a lot higher.

The advantage is that you can save pre-tax money in your HSA and use that for out-of-pocket costs. Many employers will also contribute on your behalf.

It’s essential to consider your family’s health history before making this switch, though. A high-deductible plan with an HSA is often best for people who are relatively healthy who don’t require frequent specialist visits or take pricy medications.

In the meantime, you should definitely look for a different job with better health insurance. You might want to consider opportunities at larger companies, which can often negotiate more generous health plans for employees. Research benefits on sites like Glassdoor and Comparably to get a sense of how satisfied employees are with their coverage.

Even if you’d have to take a significant pay cut, you could come out ahead if you’re able to get a job with cheaper health insurance. So make health benefits just as high of a priority as salary during your job hunt.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].