Enhanced ACA Subsidies Have Expired: Where Things Stand in January 2026

The enhanced premium tax credits that had been in place since 2021 expired on December 31, 2025. Marketplace enrollees are now paying 2026 premiums under the original ACA subsidy formula, and Congress is still debating whether to bring the enhancements back.

Here's where things stand as of mid-January and what it means for employer clients.

What happened in Congress

• December 11, 2025: In the Senate, a cloture vote to take up S. 3385, a bill to extend the enhanced credits, failed 51 to 48. Sixty votes were needed.
• December 17, 2025: The House passed H.R. 6703, the Lower Health Care Premiums for All Americans Act, 216 to 211. It doesn't extend the enhanced credits; it takes a different approach (details below).
• January 8, 2026: The House passed a three-year extension of the enhanced credits, 230 to 196, with 17 Republicans joining Democrats in support. The bill now goes to the Senate.

As of this writing, neither the extension nor H.R. 6703 has passed the Senate. Any extension would need to clear the Senate and be signed into law, and if it passed, there would be questions about how and when it would apply to 2026 coverage. Don't advise clients or employees based on a bill that hasn't been enacted.

What enrollees are facing now

For 2026, the IRS applicable percentage table sets expected contributions toward the benchmark silver plan from 2.10% of household income up to 9.96%, and households above 400% of the federal poverty level aren't eligible for any premium tax credit. Combined with higher 2026 premiums, many enrollees are seeing much larger net costs than in 2025.

HealthCare.gov's open enrollment period for 2026 coverage ends January 15, 2026. Some state-based marketplaces set their own deadlines. After open enrollment, people generally need a qualifying life event, such as gaining access to an ICHRA, to enroll.

What's in H.R. 6703

The House-passed bill includes several provisions relevant to employer benefits:

• Association health plans. It would allow groups or associations of employers to sponsor group health plans regardless of industry, subject to requirements such as having existed for at least two years.
• Stop-loss insurance. It would clarify that stop-loss policies purchased by self-insured plans aren't health insurance coverage under ERISA and would preempt state laws that prevent plans from insuring against excess claims.
• ICHRA codification. It would write ICHRA into the tax code as the "custom health option and individual care expense arrangement" (CHOICE arrangement), with a 60-day notice requirement instead of today's 90 days, permitted classes, and an allowance for employers to offer a small-group plan alongside the arrangement within a class.
• Cafeteria plans. Employees in a CHOICE arrangement could pay for Exchange coverage pre-tax through a cafeteria plan.
• W-2 reporting of CHOICE arrangement benefits.
• PBM oversight provisions and funding for cost-sharing reduction payments.

These provisions resemble the CHOICE sections the House passed in its 2025 reconciliation bill, which were dropped before that bill became law. Unlike that version, H.R. 6703 doesn't include a small-employer tax credit.

What it means for employer clients

Small employers whose workers use the Marketplace

Employees who buy their own coverage may be calling HR about higher premiums. Some employers will consider offering an ICHRA or QSEHRA mid-year. That's possible: an ICHRA plan year doesn't have to start in January, and newly eligible employees get a special enrollment period. Because employees generally must receive the ICHRA notice 90 days before the plan year begins, an employer starting the process now would typically be looking at a spring start or later. Remember that an employee offered an affordable ICHRA can't also receive a premium tax credit.

ICHRA sponsors

• Expect questions about allowances. If 2026 allowances were set before final premiums were known, some employees may be paying more than expected. Employers can change allowances at the start of a new plan year; mid-year changes need careful review against the same-terms rules.
• Affordability is still based on 9.96% for 2026 plan years, regardless of what happens with the enhanced credits.
• Opt-out decisions. Employees with unaffordable ICHRAs who waived in favor of a premium tax credit may find the credit smaller than they expected.

Group plan sponsors

Employees and dependents who previously chose subsidized Marketplace coverage may ask about joining the group plan at their next opportunity. Watch for enrollment changes that could affect participation, costs, and renewal underwriting.

What to tell clients this week

1. The enhanced credits are gone for now. The House has passed an extension; the Senate hasn't.
2. Open enrollment on HealthCare.gov ends January 15. Employees who still need 2026 coverage should act now.
3. ICHRA rules haven't changed. H.R. 6703 would codify and modify ICHRA, but it's not law.
4. Plan for current law. Build 2026 decisions around the rules in effect today and revisit if Congress acts.

We'll update this coverage if the Senate takes action.