As Congress moves to end the government shutdown, one critical benefit provision remains unresolved: the future of pandemic-era, enhanced Affordable Care Act (ACA) subsidies. Without a renewal, millions of Americans, especially those earning just above 400% of the federal poverty level, could lose access to affordable marketplace coverage.
For HR leaders, that uncertainty signals a potential shift in employee behavior heading into 2026 open enrollment.
“People who’ve relied on subsidized individual coverage may suddenly find it unaffordable,” says Ben Light, vice president of partnerships at benefits platform Zorro.
“That includes part-time workers, gig workers and employees at small businesses that don’t offer group plans. Many will look to their employers for more affordable options.”
Light suggests that the shift could drive up enrollment in employer-sponsored plans, increasing both participation and utilization. For HR teams already navigating tight budgets and competitive labor markets, the pressure to offer compelling benefits without overspending may be about to intensify.
‘Managing the downstream effects’
Light notes that HR leaders are already walking a fine line between cost control and benefit competitiveness. “The loss of subsidies doesn’t just affect individuals; it reverberates through the employer system,” he says. “Companies may see a spike in plan participation, especially among employees who previously opted out or relied on the exchanges.”
That increased demand could strain budgets, particularly for employers with leaner workforces or decentralized teams. “It’s not just about absorbing more people into the plan,” Light adds. “It’s about managing the downstream effects—higher claims, more questions and the need for better decision support.”
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Defined contribution models gain traction
To manage that complexity, some employers are turning to Individual Coverage Health Reimbursement Arrangements, or ICHRAs. These allow companies to set a fixed monthly contribution, which employees can use to purchase individual coverage that fits their needs.
“ICHRAs give employers cost predictability and employees more choice,” Light explains. He says they are especially useful for companies with diverse workforces that include remote teams, part-time staff or multiple locations, because they “decouple benefits from a single group plan.”
Light says ICHRAs also offer a hedge against market volatility. Employers are not “locked into” annual rate hikes or plan design constraints, he says. HR leaders can “scale contributions up or down, and employees still get access to quality coverage.”
AI brings personalization and efficiency
Technology is also reshaping how HR teams administer and personalize benefits. These platforms use artificial intelligence to streamline plan design, model contributions and guide employees through enrollment.
“AI lets HR leaders build smarter strategies,” Light says. “You can simulate different contribution scenarios, adjust for workforce changes and align benefits with company goals, all in real time.”
For employees, AI-powered decision-support tools make it easier to compare plans and select coverage that fits their health needs and financial situation. “It’s not just about reducing help tickets,” Light adds. “It’s about giving people confidence in their choices and reducing both over- and under-insurance.”
Planning for 2026 and beyond
Looking ahead, Light urges HR leaders to build flexibility into their benefits strategy now. That means adopting modular plan designs, scalable contributions and tools that can evolve with regulatory and market shifts.
“Resilience comes from adaptability,” he says. “The companies that will thrive in 2026 are the ones building systems today that can flex tomorrow.”
That includes preparing for multiple subsidy scenarios, modeling participation shifts and investing in tools that reduce administrative burden. “You don’t need to predict the future,” Light says. “You just need to be ready for it.”
