I started a new job...

The health insurance plan that is closest in comparison to my current plan is $300 MORE expensive per month. Coincidentally they cover $300/month (it's about $980/mo!!) so it's technically a "wash" premuim-wise however, two of my doctors are not their plan network and one medication (costly) is not covered. It would work out cheaper for me if I kept my old plan (purchased on the Marketplace in CT). If I keep it, someone at customer service at the exchange / marketplace said I would be penalized by the IRS for NOT taking the "affordable" plan at work. (The co-pays are higher, the coverage is less, I really want to keep my plan as it makes most financial sense).

Note: The employers plan DOES meet the MINIMUM guidelines, but with my health issues it ends up being MORE money out of my pocket.

Anyone know if the info I was given was correct? Will I have to pay a penalty? Also note: I do not get a reduction in premiums or subsidy - I pay full price, so I am not worried about "losing the right to a subsidy" by choosing t

Any/all help is appreciated.

Thank you!

1 Answer 1


You may decline your company's insurance and keep your existing insurance on the exchange. It's rare for the exchange to be cheaper than an employer's plan, in part because the employer subsidizes a portion of it. But, assuming your math is correct and you are better off staying on the exchange plan, there is no "penalty" for you to worry about. The normal concern is that you usually lose any subsidy you may have had, but that doesn't apply to you.

Regarding the math, make sure to consider the tax advantages of the employer plan. Typically the premiums you pay through your employer are pre-tax whereas your privately purchased premiums are not deductible (with some exceptions). Depending on your tax bracket this could easily swing the advantage back towards the employer plan.

It probably wouldn't hurt to ask your employer if you could get a small raise if you decline their insurance, since you're saving them a significant amount of money. (This worked for me once...)

As a side note, by keeping your existing insurance you also get the added benefit of not having to reset your deductible in the middle of the year.

  • 1
    Even if you are also selfemployed, as long as you are eligible for an employer plan you can't take the line 29 full-amount adjustment, only the Schedule A less-floor deduction, and that only if you itemize which fewer people will this year. If the employer doesn't want to be seen as 'rewarding' you for giving up health coverage, which might be trouble if they're a Large Employer under PPACA, another approach might be to ask for HSA (if your plan is HDHP) or FSA money, which could be argued as an 'alternate' health benefit. Jun 18, 2018 at 9:58
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    @dave_thompson_085 Good info. You made me realize that I opened a can of worms by starting to list some exceptions. That paragraph would get too long if it were thorough, and it's starting to deviate from the heart of the answer, so I changed it to an irs link to sum it all up. Thx.
    – TTT
    Jun 18, 2018 at 12:41
  • thank you SO MUCH for your help!!!! I appreciate it so much. I think with all things considered the CT plan I currently have might still work out to be the most economical. WOW - so grateful for the info! Jun 18, 2018 at 17:01

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