Enhanced ACA Health Insurance Subsidies Likely to End

Quick Hits

• The enhanced premium tax credits for individual health insurance from state-run exchanges or the federal exchange under the ACA will likely expire as Congress adjourns for the rest of the year without passing a measure to extend them.
• Employee demand for employer-sponsored health benefits will likely surge in 2026 if ACA premiums become unaffordable.
• It is unclear if Congress will pass a bill to revive the subsidies in 2026.

The enhanced premium tax credits are set to expire on December 31, 2025, unless Congress passes a bill to maintain them. The enhanced premium tax credits were introduced in 2021 during the pandemic and extended through the end of 2025 by the Inflation Reduction Act. The annual premiums that subsidized enrollees pay will more than double from an average of $888 in 2025 to $1,904 in 2026, if these subsidies expire, according to the Kaiser Family Foundation.

On December 18, 2025, the U.S. House of Representatives voted to support a discharge petition to force a House vote on a bill to extend the subsidies for three years. Because of the discharge petition, the House can vote on that bill in January 2026, but it is unclear if any such bill will pass both chambers in 2026.

Most people who buy an individual coverage plan through ACA exchanges lack access to employer-sponsored health coverage because they work part-time, work for a small employer, or are self-employed. The expiration of the subsidies could hit especially hard small employers that do not offer health benefits and larger employers with a lot of part-time workers who do not qualify for the employer’s health plan. Workers who cannot afford ACA coverage without the enhanced subsidies may seek to change jobs to get employer-sponsored health coverage.

Next Steps

The ACA requires employers with at least fifty full-time employees to offer minimum essential health coverage that is “affordable” and provides “minimum value” to at least 95 percent of their full-time employees or face potential penalties if their full-time employees qualify for premium tax credits. Going forward, employers may wish to analyze the impact of the expiring enhanced subsidies on the health care decisions their employees make.

Ogletree Deakins’ Employee Benefits and Executive Compensation Practice Group and Healthcare Industry Group will continue to monitor developments and will provide updates on the Employee Benefits and Executive Compensation and Healthcare blogs as new information becomes available.

James J. Plunkett is a shareholder in Ogletree Deakins’ Washington, D.C., office.

Timothy J. Stanton is a shareholder in Ogletree Deakins’ Chicago office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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