Pursuing a work-optional lifestyle takes a commendable amount of preparation, self-discipline, and personal drive. 

If you’re seeking to step away from your full-time job, have you considered how you’ll maintain medical coverage? 

Almost 155 million people use employer-sponsored healthcare coverage.1 Once you leave the office for good, you’ll likely be in the market for a new plan.

But what are your options for obtaining health insurance outside of an employer? Let’s discuss.

Before Leaving Your 9-5 Behind

You’re leaving the workforce early; that’s fantastic! But you’ll want to put finding replacement health coverage at the top of your to-do list. 

Most people don’t benefit from dropping coverage altogether. Especially considering, generally, the older you get, the higher your medical expenses.

Instead, obtaining new coverage (one not subsidized by your workplace) is something you’ll need to work into your post-employment spending plan. 

Wait, I Don’t Get Medicare?

Yes, you will likely be eligible for Medicare—but only once you reach 65. However, people under 65 with qualifying disabilities or medical conditions can access Medicare sooner.

If you’re eligible and seeking coverage, the open enrollment period runs annually between October 15 and December 7. Otherwise, you can sign up for Medicare Parts A and B during the three months before and after your 65th birthday.

Alternative Options for Obtaining Health Insurance

More and more people are leaving the workforce in their 50s, even their 40s. If that’s the case, you’ll need alternative coverage until you become eligible for Medicare. Here are a few options.

Continued Insurance for Retirees

It’s a rare benefit to find in today’s workforce, but some companies offer employees the option to continue maintaining their employer-sponsored coverage into retirement. The monthly premium will likely be higher than when you were employed, but the company will still cover a portion of the cost.


If you participated in your employer-sponsored health coverage a few weeks after leaving your job, you’d receive an application in the mail to apply for what the federal government calls the Consolidated Omnibus Budget Reconciliation Act, or COBRA.

COBRA allows you to maintain coverage for a limited period, up to 18 or 36 months, depending on the qualifying event.2 It essentially enables you to keep the same coverage you had while working, but you must pay the entire premium (rather than splitting the cost with an employer). 

This “catch” can make COBRA coverage significantly more expensive than other options. However, it may be useful for avoiding small coverage gaps until you decide on a more suitable long-term solution.

ACA Marketplace Coverage

The Affordable Care Act established the healthcare marketplace, which allows participants access to health insurance who aren’t covered by an employer or spouse’s plan. Each state has its own marketplace, allowing users to “shop” for coverage options that suit their needs and budget.

A notable advantage of using the marketplace is the Premium Tax Credit, which the Inflation Reduction Act recently extended. Under typical circumstances, you can only claim this tax credit if your household income is less than 400% of the federal poverty line. 

But, in response to Covid-19, the American Rescue Plan Act of 2021 (ARPA) suspended the income cap and allowed all users to claim the tax credit. This suspension was set to expire at the end of 2022, but it’s now extended through 2025.

Lawmakers estimate that tax credit will save marketplace users around $800 a month annually on health insurance premiums.3

Spouse’s Health Insurance Plan

If your spouse is still employed and their employer offers health insurance, joining their plan could be a cost-effective way to gain coverage. Just like Medicare, private insurers have an annual open enrollment period, typically toward the end of the year. During open enrollment, employees can opt in or make changes (like adding spouses and dependents to the plan).

However, losing coverage because you quit your job qualifies as a “significant life event,” and you may be able to obtain coverage outside the open enrollment period.4 

High Deductible Health Plan (With an HSA!)

A high-deductible health plan (HDHP) may be a good fit if you’re still relatively healthy and rarely seek medical care. Or, this type of plan may be doable if you can pay your deductible within 30 days of receiving a bill for a health event. High deductible plans tend to have lower monthly premiums than other coverage options, but you could incur a large bill following a medical emergency.

If you opt for an HDHP, you’ll have access to a health savings account (HSA). These are fairly flexible accounts to help cover qualifying medical expenses. Not to mention, they offer great tax benefits. 

You contribute pre-tax dollars to the account, the funds grow tax-free, and withdrawals remain tax-free as long as you use them on eligible expenses. HSAs also aren’t “use it or lose it,” meaning you can keep savings in them for as long as you like.

Part-Time Employment

Maybe you’ve been toying with the idea of picking up a part-time job for extra “fun money” or pursuing a personal interest. 

Look closely at the job listings because some employers offer health insurance to part-time employees. Especially around the holidays, employers boast competitive benefits to attract workers—and health insurance could be one of them.

Need Help Navigating Your Transition to Financial Freedom?

You’ve put so much dedication and preparation into reaching a “work-optional lifestyle,” don’t let a gap in health coverage wreak havoc on your plans. There are plenty of options beyond employer-sponsored plans, so do some research to decide what’s going to be right for you. 

If you need help determining how healthcare costs will factor into your budget post-work, reach out and schedule a time to talk


  1. Health Insurance Coverage of the Nonelderly
  2. FAQs on COBRA Continuation Health Coverage for Workers 
  3. BY THE NUMBERS: The Inflation Reduction Act
  4. Qualifying Life Event (QLE)

After a successful career in high-tech, Sheila McGinn, CFP® followed her passion and became a fee-only Financial Planner, where she helps clients navigate complex financial decisions and reach their financial goals.

Disclaimer: This content is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. For advice specific to your situation, consult a financial planner, accountant, and/or legal counsel. Reproduction of this material is prohibited without written permission from Brightview Financial Solutions, LLC, and all rights are reserved.