ACA Subsidies Update: Pending Legislation and What Employers Should Know
As employers continue to field questions about rising ACA Marketplace premiums, there is a new development worth watching closely. On January 8, 2026, a bill was introduced in Congress aimed at addressing the expiration of enhanced ACA subsidies. If the House and Senate agree and pass this legislation, it could significantly change the landscape for individuals enrolled in Marketplace coverage.
While details are still emerging, here’s what employers should know—and why this remains an evolving situation.
A Brief Look Back: ACA Subsidies Before and After 2021
Prior to 2021, ACA premium subsidies were available only to individuals with household incomes between 100% and 400% of the federal poverty level (FPL). Many individuals above that threshold paid the full cost of Marketplace coverage, which often made premiums feel unaffordable.
The American Rescue Plan Act (ARPA), passed in 2021, temporarily expanded these subsidies by:
• Increasing subsidy amounts for those already eligible
• Extended eligibility beyond the 400% FPL cap
• Capping the percentage of income individuals would pay toward Marketplace premiums
When those enhanced subsidies expired, many individuals saw significant premium increases or lost eligibility for assistance altogether.
What the Newly Introduced Bill Could Change
If Congress passes the bill introduced on January 8, 2026, enhanced ACA subsidies could be reinstated or modified in a way that reduces premium costs for individuals enrolled in Marketplace plans.
While the intent of the bill is to improve affordability, the final impact will depend on how the legislation is passed and implemented. Until the law is finalized and guidance is issued, many key questions remain unanswered.
Key Unknowns Employers Should Be Aware Of
Even if the bill passes, there are several areas of uncertainty that employers and employees should keep in mind, including:
• Timing: When would subsidy changes take effect, and would they approve retroactively?
• Eligibility Rules: Will subsidy income thresholds mirror prior ARPA rules, or will new limits be introduced?
• Duration: Are the subsidies temporary again, or intended to be extended longer-term?
• Employee Action Required: Will current Marketplace enrollees need to reapply or update their information to access enhanced subsidies?
• Interaction With Employer Coverage: Will any guidance be issued affecting affordability determinations or employer reporting obligations?
Until regulatory agencies release formal guidance, these questions remain open.
What This Means for Employers Right Now
Until regulatory agencies release formal guidance, these questions remain open.
At this stage, employers are not requires to take any immediate action. However, proactive communication can help manage employee expectations:
• Reinforce that Marketplace premium increases alone are not a qualifying life event for employer plan enrollment
• Acknowledge that legislative changes may be forthcoming, but details are still evolving
• Encourage employees enrolled in individual coverage to stay informed and monitor official Marketplace communications
Employers should avoid making assumptions or promises until legislation is finalized and guidance is issued.
Our Team Is Monitoring Developments Closely
We understand that uncertainty around ACA subsidies can create confusion for both employers and employees. Our team is actively tracking this legislation and related regulatory guidance. As more information becomes available, we will provide timely updates and practical insights to help employers navigate the changes.
If you have questions or would like to discuss how potential ACA subsidy changes could impact your workforce, please reach out to our team. We’re here to help you stay informed and prepared.
Justine Dickens
EMPLOYEE BENEFITS ADVISOR
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