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How to Leave Employer Insurance Without Losing Coverage

Most people assume employer insurance is the best deal because the employer "pays part of it." But here's what they don't tell you: that employer contribution is part of your compensation. You're paying for it — just indirectly.

The Hidden Cost of Employer Insurance

A typical employer health plan for a family costs $24,000–$28,000 per year total. You see $800/month on your paycheck, but your employer is paying $1,600/month on your behalf. That $1,600 is money that could be going to your salary.

Some employers now offer ICHRA (Individual Coverage Health Reimbursement Arrangements), which give you the employer contribution as a tax-free allowance to buy your own coverage. If your employer offers ICHRA, you can use it to fund DPC + health sharing.

When Leaving Employer Insurance Makes Sense

  • You're self-employed or 1099 — no employer plan to leave
  • Your employer offers ICHRA instead of a group plan
  • You're paying $500+/month for coverage you barely use
  • Your employer plan has a $5,000+ deductible anyway
  • You're between jobs and COBRA costs $2,000/month

The Transition Plan

  • **Step 1**: Don't cancel anything yet. First, complete our savings assessment to see your options.
  • **Step 2**: Find and meet a DPC doctor in your area. Most offer free consultations.
  • **Step 3**: Apply to a health sharing plan (Zion, Sedera, or OneShare). Get your membership confirmed.
  • **Step 4**: Open and fund your HSA while you still have HDHP coverage.
  • **Step 5**: Once your new coverage is active, cancel your employer plan or COBRA during the next qualifying event.

Qualifying Life Events

You can leave your employer plan mid-year if you have a qualifying event:

  • Marriage or divorce
  • Birth or adoption
  • Job change or reduction in hours
  • Moving to a new state
  • Loss of other coverage

Otherwise, wait for your employer's open enrollment period.

What About COBRA?

COBRA lets you keep your employer plan for 18 months after leaving — but at the full cost (employer + employee share). At $2,000+/month for a family, it's usually the most expensive option. DPC + health sharing at $700–$1,200/month is a better deal for most families.

This article is for educational purposes only. Kailo does not provide insurance advice. Consult a licensed professional for your specific situation.