Rising Premiums, Fewer Subsidies: A Smarter Path for Employers

If you’re a small business owner, you’ve probably noticed one thing about health insurance: it keeps getting more complicated and more expensive.

Over the last few years, many employees relied on enhanced ACA subsidies to make individual health insurance affordable. Those extra subsidies helped millions of people keep premiums low. But now that the enhanced subsidies recently expired at the end of 2025, affordability in the individual market is becoming far less predictable.

According to the Kaiser Family Foundation (KFF), ACA marketplace enrollment hit a record 24.3 million people in 2025, more than double what it was before enhanced subsidies began in 2021. More than 90% of those enrollees received enhanced premium tax credits that significantly reduced their monthly costs.

Here’s the problem: without those enhanced subsidies, many workers could see their premiums more than double in 2026 — and may already have. KFF estimates average annual premium costs could rise from about $888 to nearly $1,900.

That kind of jump hits low and middle-income employees the hardest, making them turn to their employer and ask, “Is there anything you can do to help?”

The Small Business Dilemma

As an employer, you want to support your team. But traditional group health plans often come with:

• Rising renewal costs
• Limited plan options
• Budget uncertainty year after year

For many small businesses, that isn’t sustainable.

This is where Individual Coverage Health Reimbursement Arrangement (ICHRA) can make a real difference.

How ICHRA Helps

An ICHRA allows you to contribute a set, tax-free amount toward your employees’ individual health insurance. Your employees choose the plan that works best for them, and you control your budget.

In simple terms:

• Employees who lose enhanced subsidies can use your contribution to help offset higher premiums
• You set the allowance, so there are no surprise renewals or unpredictable cost increases
• Employees own their coverage, which means more choice and portability if life changes

Instead of guessing what plan works for everyone, you’re giving your employees flexibility without taking on the financial risk of a traditional group plan.

A Smarter Way Forward

As the health insurance landscape shifts, the conversation is changing. The question is no longer whether employees need help accessing affordable healthcare — it’s how employers can provide that support in a way that actually works long term.

ICHRAs aren’t a silver bullet. But in a post-subsidy world, they offer a practical, predictable framework for employers trying to balance rising costs, evolving policy, and the very real need to offer meaningful benefits.