--- title: Employer Coverage vs. the Marketplace url: https://www.tnhealthcoverageexplained.org/employer-coverage description: Should you take your employer's health plan or buy on the marketplace? Compare premiums, networks, deductibles, total cost, and the 2027 affordability test. last_verified: 2026-10-17 publisher: TN Health Coverage Explained (independent; does not sell insurance) --- # Employer Coverage vs. the Marketplace Getting a job offer with health insurance doesn't automatically mean it's your best deal. Before you enroll, compare it against what the marketplace offers — and do the math on *total* cost, not just the premium. ## The 2027 affordability test Here's the rule that decides whether you can get marketplace help: for 2027, your employer's coverage is considered **"affordable"** if **your share of the premium for the lowest-cost self-only plan is 10.22% or less of your household income** (IRS Revenue Procedure 26-26). If the plan is affordable **and** meets minimum value standards, **you generally cannot get marketplace premium tax credits** — even if the marketplace plan itself would be cheaper. Quick gut check: if your employer pays most of the premium, you almost certainly can't get credits. If your paycheck deduction for the self-only plan feels painful, run the actual percentage — the test is precise, and plenty of people are surprised to land just under or just over the line. ## What to compare: a four-point checklist **1. The premium contribution.** What comes out of each paycheck for the plan you'd actually take — self-only, plus spouse, or family. Multiply by the number of pay periods and write down the annual number. **2. The network.** Are *your* doctors in-network? A cheap premium is worthless if your family's pediatrician and your specialist are both out of network. Employer plans can have narrow networks — so can marketplace plans. Check both against the names that matter to you. **3. The deductible and out-of-pocket max.** Look at the deductible you'd actually pay before coverage kicks in, and the out-of-pocket maximum — for 2027, plans can't exceed **$12,000 individual / $24,000 family**, but many employer plans land well below that, which is a real advantage. **4. Total cost: premium + expected care.** This is the number that decides it. Add a year's premiums to what you'd likely spend on care — regular prescriptions, the kids' checkups, the condition you're managing. Compare that total across options instead of comparing premiums alone. ## When the marketplace wins - **Part-time or hourly workers.** If you don't get an employer offer at all (or the offer is unaffordable), the marketplace with tax credits is usually the answer. - **Small employers with skimpy contributions.** Some employers technically "offer" coverage but pay so little of the premium that the affordability test fails — opening the door to tax credits. - **Family members priced out of the family plan.** Federal rules fixed the old "family glitch": now, family members' eligibility for tax credits is judged on the affordability of *family* coverage, not self-only coverage. If adding your family to the employer plan costs more than the threshold allows, they may qualify for credits even when you don't. ## When the employer plan wins Usually. Employer plans often have lower deductibles and richer benefits because the employer subsidizes them, and the employer's contribution is tax-free to you. If the premium is manageable and your doctors are in-network, take it and move on — this is the right answer for most full-time workers with decent employer plans. --- ## Frequently asked questions **Can I get a marketplace tax credit if my employer offers insurance?** Generally no — if your employer's plan is affordable (your self-only premium share is 10.22% or less of household income for 2027) and meets minimum value. If the offer is unaffordable or below minimum value, you may qualify. See [Subsidies in Tennessee for 2027](https://www.tnhealthcoverageexplained.org/costs/subsidies) for the income bands. **My employer offers me cheap coverage but adding my family costs a fortune. What can we do?** This is exactly what the "family glitch" fix addresses: your family members' eligibility for premium tax credits is judged on the cost of *family* coverage relative to household income, not your cheap self-only rate. If the family premium fails the affordability test, your spouse and kids may qualify for credits on the marketplace even though you don't. **What counts toward the 10.22% affordability test?** Only the employee's required contribution for the lowest-cost *self-only* plan that meets minimum value — compared against total household income. Not the family plan price, not the most expensive plan option. **I'm self-employed or work for a small business. Where do I fit in?** If your employer doesn't offer coverage at all, you're free to shop the marketplace with no affordability test in the way. Small business owners themselves should look at [Health Coverage for Tennessee Small Employers](https://www.tnhealthcoverageexplained.org/guides/small-business). **Can I have two health plans?** Yes, such as your own employer plan plus a spouse's. Coordination of benefits rules decide which pays first. But if either plan is affordable job-based coverage offered to you, you can't get a marketplace tax credit. **Is an employer plan usually better than a marketplace plan?** Usually, because the employer pays a large share of the premium. Compare total cost, deductible, and network; if the employer plan fails the 10.22% affordability test or minimum value, a marketplace plan with a tax credit may cost less. --- ## Sources - IRS Revenue Procedure 26-26: 2027 employer-coverage affordability threshold - Healthcare.gov: guidance on employer coverage and marketplace eligibility - 2026 HHS Federal Poverty Guidelines (governing 2027 coverage) --- **Your next step:** Run the affordability test on your offer — if your employer plan fails it or doesn't meet minimum value, see what tax credits could do for you at [Subsidies in Tennessee for 2027](https://www.tnhealthcoverageexplained.org/costs/subsidies) or start comparing plans at [The Marketplace](https://www.tnhealthcoverageexplained.org/marketplace).