The Enhanced ACA Subsidies Just Expired. Expect More People on Your Plan.

On January 1 the enhanced premium tax credits that had been propping up the individual marketplace since 2021 expired. Congress did not extend them. I do not have a political opinion to share on that. What I do have is a stack of client calls from the first three weeks of January, and they all sound the same.

What changed

Benchmark silver premiums on the exchanges went up about 26% from 2025 to 2026, and the subsidy that used to cushion that increase got smaller or disappeared for a lot of households. The people most affected are the ones earning a little above four times the federal poverty level, which in Central Florida describes a lot of spouses, part-timers, and people running small side businesses.

When marketplace coverage gets expensive, people go looking for the next cheapest option. For a lot of them that is the employer plan they waved off at open enrollment.

What we are seeing

Three things. First, spouses and dependents who were on a marketplace plan are asking to be added to the employee's coverage. If your plan treats loss of subsidy as a qualifying event, and most do under the loss-of-coverage or significant cost change rules, you will get these requests mid-year. Second, COBRA election rates are up. When the marketplace was cheaper than COBRA, nobody elected COBRA. That math flipped for a lot of people. Third, HR is fielding questions it has not had to answer in years: what does the plan cost, can I add my husband, why is the marketplace quote so high.

What it means for your budget

More enrolled lives means more premium if you are fully insured and more claims exposure if you are self-funded. Neither is a crisis, but if you budgeted 2026 on last year's enrollment count, revisit it by the end of the first quarter. I would also look at your employer contribution for dependents. If you were lightly subsidizing spouse coverage on the assumption that spouses had a cheaper option elsewhere, that assumption may no longer hold.

The employer mandate did not change

Nothing about the enhanced credits expiring changes the 4980H rules. If you are an applicable large employer, you still have to offer affordable minimum value coverage to full-time employees. The 2026 affordability threshold is 9.96% of household income, up from 9.02% last year, which gives you slightly more room on employee contributions. The penalties for 2026 are $3,340 and $5,010 per employee per year, respectively.

If you want to know what a 10% or 15% enrollment increase does to your 2026 numbers, that is a thirty-minute conversation. Call us before the renewal, not after.