Can You Have Marketplace Insurance and Employer Insurance?

Health insurance in the United States is primarily obtained through employer-sponsored plans or individual plans purchased via the Health Insurance Marketplace, also known as the Affordable Care Act (ACA) marketplace. A common question is whether it’s possible or advisable to maintain both types of coverage simultaneously. This article explores the rules and practical considerations for individuals with access to both employer-provided insurance and a Marketplace plan.

Eligibility for Marketplace Subsidies

Access to employer-sponsored health insurance significantly impacts eligibility for premium tax credits, also known as subsidies, through the Marketplace. The Affordable Care Act establishes two main tests for employer plans: the “affordability” test and the “minimum value” test. If an employer’s plan meets both criteria, an individual and their family members are generally not eligible for Marketplace subsidies, even if they choose not to enroll in the employer plan.

For plan years beginning in 2025, an employer-sponsored plan is considered “affordable” if the employee’s share of the monthly premium for self-only coverage does not exceed 9.02% of their household income. This calculation is based on the lowest-cost plan offered that also meets minimum value. Employers may use methods like W-2 wages, rate of pay, or the federal poverty line to determine affordability.

The “minimum value” test requires an employer plan to cover at least 60% of the total allowed costs of benefits. If an employer’s plan satisfies both the affordability and minimum value standards, individuals generally cannot receive federal financial assistance to lower the cost of a Marketplace plan. However, individuals can still purchase a full-price Marketplace plan if they prefer it over their employer’s offering.

Coordinating Benefits Between Plans

When an individual has coverage from two health insurance plans, a process called coordination of benefits (COB) determines how the plans will share medical expenses. This process designates one plan as the “primary” payer and the other as the “secondary” payer. The primary insurer processes the claim first and pays its share according to its policy terms.

After the primary plan pays, the claim is sent to the secondary insurer. The secondary plan may then cover some or all of the remaining costs, potentially reducing the policyholder’s out-of-pocket expenses like deductibles, copayments, or coinsurance. This coordination prevents duplicate payments.

In most scenarios, the plan covering an individual as an employee is primary, while a plan covering them as a dependent (e.g., a spouse’s plan) would be secondary. For children covered by both parents’ plans, the “birthday rule” often applies, making the plan of the parent whose birthday falls earlier in the calendar year typically primary. If an individual has both an employer plan and a Marketplace plan, the employer-sponsored plan usually serves as the primary insurer.

Practical Considerations for Dual Coverage

While having two health insurance plans might seem to offer comprehensive protection, there are practical implications to consider. A primary concern is the financial burden, as individuals with dual coverage typically pay two separate premiums. Additionally, they may face the complexity of managing two different deductibles and out-of-pocket maximums. Although a secondary plan can help cover costs after the primary plan pays, the combined cost of two premiums often outweighs the additional benefits.

The administrative complexity of managing dual coverage can also be substantial. Policyholders must understand two distinct sets of benefits, navigate two claims processes, and potentially reconcile payments between both insurers. This can lead to increased paperwork and communication with multiple providers and insurance companies. For many individuals, the added cost and administrative effort of maintaining a second health plan may not provide a proportional increase in benefits.

Ultimately, the decision to maintain both employer and Marketplace insurance should involve a careful assessment of costs versus potential advantages. If a single comprehensive plan already offers robust coverage, adding a second plan might not be financially prudent. Individuals should evaluate their specific healthcare needs, review the benefit structures of both plans, and calculate the total out-of-pocket expenses to determine if the dual coverage is justified.