The health benefits landscape is shifting in 2026. And one of the biggest changes employers are grappling with is the
expiration of enhanced ACA premium subsidies.
These temporary subsidy expansions, introduced during the COVID-19 pandemic, officially ended at the close of 2025. Now, as millions face higher premiums or loss of eligibility for ACA marketplace assistance, the effects are beginning to ripple through
employer-sponsored benefits strategies.
Whether you offer traditional group coverage or utilize Individual Coverage Health Reimbursement Arrangements (ICHRAs), this moment presents both challenges and opportunities for employers to adjust their plans, communication, and compliance strategies.
Marketplace Shift = Group Plan Pressure
In the years leading up to 2026, enhanced ACA subsidies significantly expanded eligibility and affordability, contributing to a major increase in exchange enrollment. With those subsidies now gone, many individuals are facing
substantial premium increases, while some no longer qualify at all.
As a result, employers are starting to see:
- Higher group plan enrollment during open enrollment.
- A potential influx of employees with
greater healthcare needs, impacting risk and claims.
- Pressure to
re-evaluate contribution strategies or cost-sharing arrangements.
You can work with your broker or agent to:
- Model cost impacts of increased participation.
- Explore plan design updates, such as tiered networks or virtual-first care options.
- Communicate clearly with employees about benefit changes.
Talent, Retention & Compliance Dynamics
This shift is also influencing labor dynamics. Workers who previously relied on exchange coverage may now be
more motivated to secure employer-sponsored benefits, particularly in industries where competition for talent remains strong.
At the same time, the expiration of subsidies may slightly reduce employer exposure to ACA “pay or play” penalties, as fewer employees will qualify for the tax credits that trigger those penalties. However, overall benefit cost forecasting may become more complex, especially for organizations already navigating high renewal increases.
ICHRA Strategies Need a 2026 Refresh
For employers using ICHRAs, the impacts of the subsidy rollback are often more immediate.
Without enhanced premium support, individual market plans are simply
less affordable for many employees. That’s putting pressure on:
- ICHRA allowance levels and
affordability compliance. Employers may need to increase contribution levels or adjust benchmark assumptions to remain compliant.
- Employee satisfaction and perceived value of the benefit.
- Employer decisions about whether to adjust funding or revisit group coverage options.
Now is the time to:
- Reassess ICHRA benchmarks and contribution levels.
- Pay attention to shifting participation trends.
- Communicate proactively to help employees make informed coverage decisions.
Final Thought: 2026 Requires a More Nimble Benefits Strategy
The expiration of enhanced ACA subsidies isn’t just a policy shift; it’s already changing how employees evaluate their employer coverage options and how employers need to approach their benefit offerings.
Whether you're reassessing ICHRA funding, seeing increased interest in group health plans, or trying to balance affordability with retention in a competitive labor market, now is the time to act with intention.
A focused, flexible benefits strategy that's grounded in data, compliance, and clear employee communication will help your organization navigate this transition successfully and stay competitive throughout 2026 and beyond.
