Should we dump wife’s work insurance plan?

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Q. I’m an independent contractor and we’ve had family health insurance from my wife’s job. Now we only need coverage for the two of us. How can I tell if it will be cheaper for me to get an individual plan? Her plan is great but it’s expensive – $400 every two weeks for just the two of us.
— Trying to save

A. It can be so tough to navigate health care options.

Based on the numbers you provided, it seems you’re paying $800 a month for a husband and wife. Not bad, said Toby Stark of Stark Associates Insurance Agency in Tinton Falls.

“If that is the case I would believe that the benefits are still getting subsidized by the employer,” Stark said.

He said medical insurance is based upon age, and based on your ages, it could be even more expensive if you go out to the individual market — you could see increases of 20 to 30 percent, he said.

You would not be eligible for a subsidy in the individual market because you are offered coverage through an employer, Stark said, but the question is: does it pass the affordability test?

“For example, if an employee’s share of the premium for employer-sponsored coverage meets the law’s definition of unaffordable — if it exceeds 9.5 percent of the employee’s adjusted gross income — the employee can purchase coverage through the exchange,” Stark said.

The employee can’t receive a tax credit unless the employer plan is deemed unaffordable or is inadequate, meaning it does not have an actuarial value of at least 60 percent as defined by HHS’s essential benefits package, Stark said.

“They would have to get an individual quote and compare to the coverage they have now, which probably won’t be apples to apples,” he said.

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The post was originally published in November 2017. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.