What Employees Can Do If They Lose Healthcare Benefits

If employees lose their employer-sponsored healthcare benefits, they should reevaluate exactly which benefits remain, how much coverage they and their dependents require, if they need to purchase supplemental insurance, and more.

Have you recently lost the health insurance your employer used to offer you? Do you know you’ll be losing your benefits soon and don’t know what you’re going to do now?

This blog post is perfect for you. We’ll walk you through 11 steps you can take to make sure your health needs are insured. We’ll also discuss 11 of the most common strategies employers employ to decrease their financial burden from healthcare benefits.

With skyrocketing medical costs, employers are getting more concerned about their insurance budgets. While companies strive to retain top talent and increase employee engagement with the right mix of benefits, we at Pacific Prime have noticed that the pendulum has swung back in recent years for many businesses.

This means that companies are cutting back on, instead of enhancing, their employee benefits programs. If this is the reality in your business, consult our insurance experts for personalized advice on what you should do.

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11 Tips for Employees: When You Lose Health Insurance

If your company has cut or drastically reduced your employee healthcare benefits, follow these steps to get back on your feet:

1. Review the New Benefits Package Carefully
2. Reevaluate Your Healthcare Needs
3. Explore a Spouse’s or Domestic Partner’s Plan
4. Maximize Tax-Advantaged Accounts (HSA/FSA)
5. Consider Supplemental Insurance
6. Focus on Preventive and Cost-Saving Care
7. Understand COBRA Continuation Coverage
8. Check the ACA Marketplace for Affordable Plans
9. Consider Short-Term or Temporary Coverage
10. Talk to HR and Advocate if Needed
11. Purchase Health Insurance for Yourself

While having fewer healthcare benefits is certainly not good news for employees, it doesn’t necessarily mean you have to hand in your resignation letter right away. Below are a few suggestions of what you can do next.

Step 1: Review the New Benefits Package Carefully

Employees whose company drastically reduces their healthcare benefits should first take time to thoroughly review the changes. This may include increased premiums, higher deductibles, more exclusions, or reduced coverage for dependents.

It’s important to understand what’s still covered, what’s not, and how these changes affect you and your family before you can make a plan moving forward.

Here are some things you’ll want to check:

• New premium costs for you and your dependents
• Changes to deductibles, copays, and coinsurance
• Dropped or limited services (such as dental, mental health, or fertility)
• In-network provider restrictions
• Any deadlines or open enrollment dates

If your company has cut all of your healthcare benefits entirely, then you’ll skip this step and move on to number 2.

Step 2: Reevaluate Your Healthcare Needs

Employees should take an honest look at their current health status, frequency of care, and upcoming medical needs to decide if their current plan is still the best option, or if a lower-premium, higher-deductible plan could work better for them.

As coverage changes, your care strategies may need to change too, and this can turn into an opportunity to find a health plan that better meets your needs and medical care.

Here are some things to consider about how much coverage you need:

• Do you visit doctors regularly or only occasionally?
• Are you managing chronic conditions or are you on long-term medication?
• Do you have any planned surgeries, therapy, or specialist appointments?
• Do you need better prescription coverage?
• Do you have dependents who need to see the doctor regularly?
• Do you have dependents, such as children, who are more prone to receiving injuries or illnesses that will require medical attention?

Step 3: Explore a Spouse’s or Domestic Partner’s Plan

If your spouse or partner has access to employer-sponsored coverage, you may be able to switch to their plan. Most employers allow a special enrollment period if you lose or experience significant changes to your coverage. Determine if their plan is sufficient for your needs.

You can do this by:

• Asking their HR team about the special enrollment timeline (usually 30–60 days)
• Comparing premiums, coverage levels, and deductibles of your partners’ plan
• Checking that your doctors and medications are in-network
• Factoring in added costs for spouse/family coverage

Step 4: Maximize Tax-Advantaged Accounts (HSA/FSA)

For employees who are enrolled in a high-deductible health plan (HDHP), a Health Savings Account (HSA) lets you set aside money tax-free for medical expenses. Even if your employer reduces or stops contributing, you can still contribute on your own.

Flexible Spending Accounts (FSAs) are another option, though they have more restrictions.

Step 5: Consider Supplemental Insurance

If your employer cuts out coverage like dental, vision, or critical illness, you can often purchase individual supplemental policies to fill the gap. These are usually low-cost and can protect you from unexpected expenses.

Some examples would be:

• Dental and vision plans from private insurers
• Critical illness or accident insurance
• Hospital indemnity plans
• Life insurance (if also dropped by employer)

Step 6: Focus on Preventive and Cost-Saving Care

Most health insurance plans under the ACA still cover preventive services for free, even with reduced benefits. Employees who focus on staying healthy and catching issues early can reduce their out-of-pocket costs and cash in for their preventive care benefits.

Also, using tools like telehealth and prescription savings cards can help. As a rule, try to change your mind to a cost-saving mindset and look for savings deals.

Here are some money-saving tips to get you started:

• Schedule your annual physical and preventive screenings
• Use telemedicine for non-urgent issues
• Request generic medications when possible
• Compare procedure costs across providers before scheduling

Step 7: Understand COBRA Continuation Coverage

Employees who lose their employer-sponsored health plan completely can keep the same plan temporarily through COBRA, but they’ll pay the full premium plus up to 2% in administrative fees. While expensive, it may be worth it if you need uninterrupted coverage.

This temporary solution can be a lifesaver if you have ongoing treatments, pregnancy, or specialist care while you search for a more long-term solution to your healthcare situation.

 Here are some things to know about COBRA:

• You have 60 days to elect COBRA
• You can continue coverage for 18–36 months depending on the situation
• COBRA is usually more expensive than Marketplace plans
• Cancel anytime if you find a better option

Step 8: Check the ACA Marketplace for Affordable Plans

Losing job-based insurance triggers a Special Enrollment Period at Healthcare.gov or your state’s health exchange. Depending on your income, you might qualify for premium subsidies, and sometimes even $0 monthly premiums through expanded Medicaid or a silver-tier ACA plan.

Follow these steps to explore your ACA options as a U.S. citizen:

• Visit Healthcare.gov
• Compare plans with different deductibles and networks
• Enter your income to see if you qualify for subsidies
• Enroll within 60 days of losing your employer coverage

Step 9: Consider Short-Term or Temporary Coverage

Short-term health insurance can bridge the gap for employees who don’t have a long-term insurance plan selected yet, but need temporary coverage immediately while you search. These plans are less expensive but come with limited benefits and no coverage for preexisting conditions.

When it makes sense to get a short-term health insurance plan:

• You’re healthy and just need emergency coverage for a few months
• You missed your ACA window and need a quick solution
• You’re waiting on COBRA but want something cheaper short-term
• You’re moving to a new job with a waiting period before benefits

If this is a good fit for you, check out these Temporary Health Insurance Options and the Top 10 Short-Term Health Insurance Plans.

Step 10: Talk to HR and Advocate if Needed

Changes to benefits can be confusing and sometimes negotiable, HR can explain your options and help you understand what alternatives exist. If the changes are harmful or misaligned with industry norms, a collective response from employees may help prompt reconsideration or new solutions.

How to approach speaking up for yourself:

• Ask HR for a full breakdown of what’s changed
• Request clear documentation and help to understand your next steps
• Share concerns respectfully with leadership or through an employee forum
• Suggest alternatives like phased cost-sharing, HSA support, or flexible plan options

Step 11: Purchase Health Insurance for Yourself

Employees who determine their new health insurance plan is insufficient or who have no healthcare benefits at all anymore may decide securing their private health insurance plan is the best way to get coverage for their needs. The beauty of self-insurance lies in its flexibility and autonomy.

You are free to include or exclude any benefit items in or from your insurance plan or ask to impose co-payments on certain benefits. You may even pay a higher premium to increase your coverage limits.

You also can compare prices among different insurers to find the insurance solution that best matches your needs, versus being bound to a company-selected plan and insurer.

Consider talking to your broker about a top-up insurance plan, which can combine with your existing company-sponsored insurance to create a holistic insurance solution that is ideal for your needs.

11 Ways Companies Cut Back Their Healthcare Benefits

Companies may implement any of the following 11 strategies to reduce their employee health insurance benefits and manage their financial obligations:

1. Increasing Employee Cost-Sharing
2. Switching to Lower-Cost Plans
3. Reducing Coverage Levels
4. Delaying or Eliminating Employer Contributions
5. Changing Providers or Plans
6. Offering Only Minimal Coverage (ACA Compliance Only)
7. Introducing Tiered Benefits
8. Promoting Part-Time or Contractor Roles
9. Individualizing Healthcare Benefits
10. Cutting Dependent Benefits
11. Workplace Wellness Programs

In Mercer’s 2024 National Survey of Employer-Sponsored Health Plans, it states that companies are offering more health benefits than ever before. However, up to 86% of surveyed companies have expressed concern about increasing medical costs, and over half of respondents (57%) are seeking cost-containment measures.

This includes the implementation of panel arrangements and cutting back on employee wellness programs. As companies consider reducing their employee health benefits, employees will want to better understand the ways this may affect them.

Increasing Employee Cost-Sharing

When companies increase employee cost-sharing through higher deductibles and copayments, employees have to shoulder more responsibility for their healthcare costs. This can look like higher deductibles, premiums, co-pays, or co-insurance, depending on what your employer chooses.

• High-deductible plans usually have lower premiums, but employees have to foot a larger portion of the medical bills before submitting any claims.
• Higher premiums will require the employee to cover a greater portion of the monthly payment, though this paying method usually has a lower deductible.
• Higher co-payments usually come in the form of employees paying higher copays and coinsurance after doctor visits, hospital stays, and certain prescription drugs.

Switching to Lower-Cost Plans

Employers may choose to save money by switching to a lower-cost plan, such as a High-Deductible Health Plan (HDHP), paying for access to only a narrower network of providers, or covering only generic-brand drug coverage. These are a few ways to make a plan less expensive.

Reducing Coverage Levels

Some companies may cut back on comprehensive benefits and reduce their coverage level by excluding dental, vision, fertility treatment, mental health, or disability coverage, as well as life insurance, from their existing employee benefits program.

They may also cut back in more subtle ways, such as decreasing the number of therapy sessions or specialist visits that are covered. In addition, some companies go even further and cut out outpatient coverage altogether, leaving only the most basic in-patient benefits.

Delaying or Eliminating Employer Contributions

Employers may choose to stop contributing to employee health insurance accounts, leaving the full bill up to the employee, or they may reduce the amount they contribute. They could also choose to delay their contributions by limiting them to the following scenarios:

• Quarterly Contributions: Instead of monthly payments.
• Conditional Contributions: Employees will only receive contributions if they participate in wellness programs or health screenings, etc.
• Performance/ Tenure-Based Delays: Only funding HSAs after an employee hits a milestone of 6 months or a year of service.

Changing Providers or Plans

Companies may decide to switch insurers to a lower-cost insurance provider, which might have different policies or narrower coverage. Larger employers could also decide to self-insure to control costs more directly, often accompanied by more cost-containment policies.

Offering Only Minimal Coverage

Taking coverage benefits reduction to the next level, employers may decide to only provide the bare minimum coverage required by the law. They may offer employees a plan that meets only the minimum essential coverage under the Affordable Care Act to avoid penalties.

Introducing Tiered Benefits

Employers may decide to introduce different levels of coverage based on an employee’s job title or tenure. This may mean that while executives get comprehensive plans, newer or part-time employees get only the bare minimum.

Promoting Part-Time or Contractor Roles

A company may decide to not affect their existing employees, and instead decrease their budget spending by shifting their hiring practices to bring in more part-time workers or independent contractors who aren’t eligible for healthcare benefits.

Individualizing Healthcare Benefits

Instead of applying a ‘one-size-fits-all’ insurance plan to all workers, companies can secure individualized insurance plans according to the performance of employees. 

As a result, staff with better productivity will enjoy more comprehensive benefits, which can serve as an incentive boost for employees and ease the financial burden on companies.

Cutting Dependent Benefits

A company might cut dependent benefits by reducing or eliminating coverage options for spouses, children, or other family members under its health plan. This can be done by increasing the cost of premiums for dependents or excluding spouses who have coverage from their employer.

Companies can choose to remove certain dependent tiers altogether.  Employers might also shift to offering employee-only coverage or make dependent coverage fully employee-paid, framing the change as a necessary cost-containment measure.

Workplace Wellness Programs

Companies can provide financial incentives to employees by lowering their premiums if the employees participate in their company wellness programs. Not only does this protect their employees’ health in the long run, but it will also decrease medical bills that result from poor health and lifestyle.

Some wellness programs include:

1. Health Risk Assessments (HRAs)
2. Biometric Screenings
3. Tobacco Cessation Programs
4. Annual Physical Exams
5. Fitness Challenges or Activity Tracking
6. Preventive Screenings and Vaccinations
7. Stress Management or Mental Health Programs
8. Nutrition or Weight Loss Programs

Frequently Asked Questions

What can I do if my employer doesn’t offer health insurance?

If your employer doesn’t offer health insurance, you can get coverage through the ACA Marketplace, a spouse’s plan, Medicaid (if eligible), or private insurance. Short-term plans are also an option but offer limited coverage.

Can a company reduce my health benefits?

A company can reduce your health benefits, especially during open enrollment or budget changes. They must notify you, but reductions—like higher premiums, limited coverage, or dropped dependents—are legal if applied fairly and in compliance with laws.

What can discrimination look like in employee benefits?

An example of employee benefits discrimination is offering better health insurance to full-time male employees but not to female employees in the same role. Benefits must be offered fairly and equally to all eligible workers. Discrimination can be based on age, religion, and sexual orientation, etc.

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Seek Professional Advice From Pacific Prime

No matter whether you are looking for insurance plans for yourself or your company, Pacific Prime has you covered. With over 18 years of experience and nine offices around the world, we specialize in a wide variety of insurance products, including employee benefits and group insurance.

Our team of specialists knows the ins and outs of different insurance solutions and can fight for the best term and price for you. Contact us today for impartial insurance advice, an obligation-free quote, and a plan comparison!

You’ll also want to read these articles:

• How to Design Employee Benefits Plans in 2024
• Choosing the Best Employee Benefits Broker in 2025

• Author
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Anthony Chan

Senior SEO & Content Marketing Lead at Pacific Prime

With over 13 years of experience in bilingual content creation and digital marketing, Anthony Chan is a seasoned writer and editor for Pacific Prime and its subsidiary, Kwiksure. Leveraging his deep understanding of local and international insurance landscapes, he crafts a diverse range of online and offline articles, reports, e-newsletters, videos, and more.

His expertise encompasses a broad range of areas including international health insurance, employee benefits solutions, motor insurance, life insurance, and various other forms of general insurance. This breadth of knowledge enables him to distill an array of complex insurance concepts into a series of progressive, easily understandable articles.

Anthony earned his Bachelor of Arts degree from Lingnan University, majoring in Translation and minoring in English. He also studied at West Virginia University in the United States as an exchange student.

When he’s not working, Anthony can typically be found on the badminton court, in the gym, or at the theatre.

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