Subsidy Eligibility
- Have household income of at least 100% and no more than 400% of FPL for the taxpayer’s family size*;
- Not be eligible for coverage through a government-sponsored program; and
- Not be eligible for employer-sponsored health coverage that is affordable and provides minimum value.
*The subsidy enhancements temporarily removed this income cap.
Future of Enhanced Subsidies
- Unless extended by Congress, the subsidy enhancements will expire at the end of 2025.
- The spending bill enacted by Congress to end the government shutdown did not extend the enhancements.
- Although the Senate has agreed to vote on the enhanced PTC in December, its future remains uncertain.
Potential Impact
Employers may feel the impact of the expiration of the enhanced PTC in various ways, depending on their workforce demographics and benefit offerings. As premiums increase in the individual insurance market, more employees may seek to enroll in employer-sponsored coverage where it is available. Employees who are not eligible for affordable coverage through their current employers may consider switching jobs to gain access to such coverage. Also, if fewer employees qualify for the PTC, an applicable large employer’s potential liability for a pay-or-play penalty under the ACA may be reduced. However, employers that sponsor individual coverage health reimbursement arrangements (ICHRAs) that help employees pay their individual health insurance premiums may need to increase their contributions to keep coverage affordable for their employees.
This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2025 Zywave, Inc. All rights reserved.
