What ACA Subsidies Ending Means for Staffing

As 2026 begins, a major structural shift in U.S. health insurance is coming into focus: the expiration of enhanced premium tax credits under the Affordable Care Act (ACA). These credits were expanded by the American Rescue Plan Act of 2021 and extended by the Inflation Reduction Act of 2022, and they officially lapsed at the end of 2025.

This change does not repeal the ACA itself. Employer responsibilities, such as offering minimum essential coverage (MEC) remain unchanged. But the end of enhanced subsidies will have real financial consequences for millions of Americans and, by extension, for staffing firms whose workforces rely on affordable healthcare options.

Below is a clear explanation of what has changed, why it matters for staffing firms, and how early planning, including actions taken by Benefits in a Card (BIC) well before this shift illustrates the value of anticipating systemic changes in the health care benefits landscape.

The end of enhanced ACA subsidies but not the ACA itself

The enhanced premium tax credits, in place since 2021, were designed to make ACA marketplace coverage broadly affordable by capping premium contributions relative to income and extending eligibility to those earning above 400% of the federal poverty level. These credits substantially lowered premiums for more than 20 million enrollees, in many cases, to nearly zero.

With those enhancements expired, the system has reverted to its previous structure.

• Subsidies are now limited to individuals earning up to 400% FPL.
• Contribution caps vary from roughly 2% to 9.5% of household income for benchmark silver plans.
• Individuals earning 400% of the federal poverty level receive no premium assistance.

This shift creates a “subsidy cliff,” meaning many individuals will face significantly higher premiums with no offsetting tax credits. It does not eliminate the ACA or its employer mandate, but it does make individual coverage less financially accessible for a sizable portion of the workforce. 

Why this matters to staffing firms

Staffing firms frequently employ part-time, variable-hour, or temporary employees, populations more likely to depend on individual marketplace plans than employer-sponsored health care coverage. The rollback of enhanced subsidies may result in

• Many employees seeing premium costs rise sharply, sometimes more than doubling, compared to 2025.
• Unaffordable coverage for middle-income earners who previously had access to subsidized healthcare
• Higher uninsured rates, reinforcing broader labor market challenges, including talent shortages and retention pressure.

The surge in premium costs

To put the surge in premiums into perspective, we found that:

• Subsidized annual premiums nationally averaged around $888 in 2025.
• In 2026, without enhanced tax credits, average yearly premiums for the same coverage are projected to be $1,900 per year or more, an increase of more than 100%.

For a lower-income employee, these increases represent a meaningful portion of take-home pay. For employers, this shift can result in:

• Greater reliance on employer plans as workers seek affordable options
• Increased administrative urgency to manage ACA compliance

Strategic positions for staffing leaders

In this post-subsidy environment, the most resilient staffing firms are those that take a proactive, strategic approach to benefits.

1. Strengthen compliance with value in mind

Employer mandates remain in force for applicable large employers (ALEs) with 50+ full-time equivalents. Ensuring MEC plans are compliant, affordable, and competitive protects against penalties while offering meaningful options to employees.

2. Enhance benefit appeal through flexibility

Given rising marketplace prices, employees will increasingly consider employer plans that offer real value. Flexible benefit plans, including optional ancillaries like dental, vision, or short-term disability, can differentiate a staffing firm in both employee retention and recruitment.

3. Lock in predictability

Market volatility is now a structural reality for health care insurance. Access to stable pricing, including multiyear rate guarantees, shields firms and their employees from the unpredictability of annual cost resets.

4. Educate and support

Clear communication about marketplace changes and employer options builds trust, reduces confusion, and helps workers make informed decisions. This requires thoughtful enrollment support, educational resources, and coordination with benefit advisers.

5. Monitor and advocate

Business leaders should track enrollment trends and engage with policy conversations through associations such as the American Staffing Association to ensure emerging risks are surfaced and addressed.

Planning ahead with a multiyear guarantee

Well before the subsidy expiration became a widely acknowledged risk, BIC helped shape a different model of stability.

In mid-2024, anticipating growing uncertainty around ACA subsidies and broader cost inflation, BIC introduced a two-year rate guarantee for all indemnity and ancillary offerings. This was a strategic decision, negotiated thoughtfully and intentionally, driven by the belief that structural uncertainties in the health care market could meaningfully disrupt premium predictability.

The guarantee reflected a clear view that staffing firms and their workforces benefit when administrative cost volatility is reduced and financial planning is more dependable.

Viewed from today’s perspective, with subsidy enhancements lapsed and premiums rising in the broader market, the value of that early guarantee becomes easier to understand, as it provided a controlled cost baseline at a time when many other coverage options were facing significant upward pressure.

This early action reinforces a broader point. Leaders who anticipate systemic change and act with clarity help their organizations navigate uncertainty more effectively.

Leading through structural change

The expiration of enhanced ACA subsidies is a systemic shift with meaningful implications for millions of individuals and the organizations that employ them. For staffing firms, the change underscores the strategic importance of benefits that balance compliance, affordability, and workforce value.

Understanding these dynamics and aligning benefit strategies with market realities equips staffing leaders to make decisions that support both organizational resilience and employee financial well-being.

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