Say there's a family of four living on one income. The income level is moderate, say in the $80-100k per year range, they live simply and budget carefully, and have a relatively comfortable, debt-free (including the house) lifestyle. All this to say, they do not have a hardship, nor a need to apply for any government-funded insurance plans.

Their employer covers 80% of the health insurance cost, but the family's portion is still upwards of $500/month. Is there any way for them to elect to pay basic things (well-checks, other doc visits, medications, etc.) out of pocket and find a non-employer-connected, catastrophe-only policy? All family members are healthy and require very little healthcare at all. I'm certain they would be money ahead in the end -- it would probably cost them far less than the $6,000 a year they are paying now for kitchen-sink policy.

They did research the other policy choice at work, by the way. The premium was lower but only by a few percent, and the plan would have them paying almost all these basic needs out of pocket.

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    If the employer pays 80% and you still have to pay $500/mo, then how much is the total, $2500/mo? That's quite expensive, maybe your employer should shop around...
    – littleadv
    Jul 1, 2022 at 21:21
  • Indeed. I approximated the numbers, but between employer and employee is really does cost in excess of $30,000.
    – nuggethead
    Jul 1, 2022 at 22:43
  • There are in fact catastrophic health care plans.
    – RonJohn
    Jul 2, 2022 at 1:57
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    A combined cost of $2500/month seems high. What's the deductible and MOOP of your current plan?
    – TTT
    Jul 2, 2022 at 3:52
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    @TTT: Kaiser reported national average $1852/mo or $22.2k/yr for employer family coverage last year, and the higest type and region (PPO, Northeast) $2152 or $25.8k. Add at least 5% inflation, and $2500 or $30k this year might be only 11% above average, quite realistic if employer (or maybe union) has chosen a 'generous' (inclusive) plan. Jul 3, 2022 at 6:06

2 Answers 2


What you are looking for is called a High Deductible health plan (HDHP). The way it works is that you pretty much pay for all medical costs up to a few thousand dollars per person/year, and the insurance kicks in above that deductible like any other insurance. An additional benefit of a HDHP is that having this type of plan allows you to open a Health Savings Account (HSA) where you can deposit money tax free to be used for medical expenses. The trick is that the money HAS to be be used for medical expenses once it is in the account (with some exceptions).

These plans are usually much cheaper than a standard HMO or PPO plan.

  • But are these available NOT through an employer?
    – nuggethead
    Jul 1, 2022 at 22:43
  • @nuggethead you can get them on ACA marketplace
    – littleadv
    Jul 1, 2022 at 22:59
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    @nuggethead - Of course, if you go through an ACA marketplace, you'll lose the money the employer is paying-- if they're covering 80% of the cost, you're very unlikely to come out ahead. Unless you qualify for a subsidy on the marketplace but that is unlikely given that you have the ability to enroll in an employer sponsored plan. Jul 1, 2022 at 23:16
  • @nuggethead - Many employers offer High Deductible plans. My last two did. Check with your benefits administrator.
    – JohnFx
    Jul 3, 2022 at 3:08

The question: Is the family is allowed to refuse an employer-provided plan in favor of a non-employer-provided catastrophic plan?

The answer for the employee is likely NO, because employers tend to give a better subsidy for the employee than for dependents; the answer for each dependent is likely YES.

To qualify for a Catastrophic plan, you must be under 30 years old OR qualify for a "hardship" or "affordability" exemption if you're over 30.

Affordability (income-related) exemptions: You can qualify for this exemption if the lowest-priced coverage available to you, through either a Marketplace or job-based plan, would cost more than 8.09% of your household income.


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