“Seguro Popular” is a universal insurance initiative introduced in 2002 to provide health insurance to Mexicans without Social Security. Without “Seguro Popular”, an employee needs to be hired formally to have access to health insurance coverage. Previous research finds that the availability of “Seguro Popular” reduces the incentives for employers to formally hire employees. Starting in 2015 there were important budget adjustments that reduced the universal insurance coverage in Mexico. This paper aims to investigate if this relationship is present also when a reduction in access occurs, i.e. if unenrollment increases formality.