Employer Plan vs. Marketplace: Which Is Actually Cheaper?
When you change jobs, go freelance, or face open enrollment decisions, the question of employer-sponsored vs. self-purchased health insurance is one of the biggest financial choices you'll make. The answer isn't always obvious.
Employer-sponsored plans often appear cheaper because employers typically cover 70-80% of the premium. But the employee's share (average $150/month for individual, $500/month for family in 2024) plus deductibles and out-of-pocket maximums can add up significantly.
Marketplace (ACA) plans may come with premium tax credits if your household income is 100-400% of the federal poverty level — potentially making them free or near-free. At higher incomes, marketplace premiums can exceed employer plan contributions, especially without subsidy eligibility.
This calculator compares your monthly out-of-pocket cost for both options. Remember to also compare deductibles, co-pays, and in-network provider networks — premium alone doesn't tell the full story.
Frequently Asked Questions
You qualify for premium tax credits if your household income is 100-400% of the federal poverty level (FPL) and you don't have access to affordable employer coverage. In 2024, 400% FPL is about $58,320 for a single person. The Inflation Reduction Act extended enhanced subsidies through 2025.
COBRA lets you keep your exact employer plan but you pay 100% of the premium (employer + employee share), plus a 2% admin fee. This is often $500-$800/month for individual coverage. Unless you have ongoing medical needs that require plan continuity, marketplace plans are usually more cost-effective.