Can I buy health insurance on the exchange rather than signing up for my employer's insurance?

Question:

My employer offers health insurance as a benefit. It's a good plan, but I really like the HMO I have used for the past ten years. My employer doesn't offer the HMO as an option. I want to decline my employer's insurance and instead purchase coverage through the healthcare exchange, so I can keep going to the HMO. Even though the plan will be a bit more expensive, it's worth it to me to keep my same doctors and facility. Can I use Obamacare instead of my employer's health insurance? Are there any consequences to doing this?

Answer:

Legally speaking, you certainly can decide to purchase insurance through the online Healthcare Marketplace or health insurance exchange rather than choosing your employer's plan. Obamacare is available to everyone, whether or not their employers offer insurance.

From a practical standpoint, though, there are financial consequences to doing this. Often, an employer subsidizes part or all of their employees' coverage. But, if you decide not to go with your employer's plan, that benefit will not available. So, you may end up paying more to purchase your own insurance on the exchange rather than accepting the insurance your employer offers.

You probably won't be eligible for financial assistance from the government either. Government subsidies are available to pay a portion of the cost of health insurance premiums for certain low-income individuals who don't have access to affordable healthcare through their jobs. For 2015, the income threshold for receiving government subsidies is just under $47,000 for an individual.

If you are offered job-based insurance, you will qualify for a subsidy only if your income is low enough and your employer's insurance is not considered affordable and does not meet minimum quality standards. Most larger employers who offer insurance are trying to hit these quality and affordability benchmarks, in order to avoid having to pay penalties if their employees use the health insurance exchange to purchase insurance. If your employer is one of them, you'll have to pay the full cost of your marketplace coverage, regardless of your income level.