- On August 11, 2025
The intent of this article is to help employers understand how the One Big Beautiful Bill Act (“OBBB Act”)—specifically the rollback of Affordable Care Act (ACA) subsidies—may influence employee health coverage choices and drive enrollment back into your group health plan.
What Changed?
- The OBBB Act reduces or eliminates certain ACA premium tax credits and cost-sharing subsidies that have made individual marketplace coverage more affordable since 2021.
- Many individuals will now face higher monthly premiums and greater out-of-pocket costs for marketplace plans.
Why this Matters to Employers
- Employees who waived group health plan to buy subsidized marketplace coverage may now find it more expensive and less comprehensive.
- This could lead to higher enrollment in your group health plan, impacting both total benefits cost and employee retention.
The Employee Decision Equation
When choosing between individual coverage and your group plan, employees will weigh:
- Net Premium After Subsidies: Subsidy rollbacks mean higher employee-paid premiums in the individual market.
- Out-of-Pocket Risk: Group plans typically have lower deductibles and maximum out-of-pocket costs.
- Employer Contribution: Even moderate employer contributions can outweigh the loss of an ACA subsidy.
- Provider Access: Group plans often have broader provider networks compared to marketplace options.
Potential Impact for Employers
- Increased Enrollment – More employees may opt into your group plan during open enrollment or midyear if eligible.
- Higher Plan Costs – More participants could increase employer premium spend unless mitigated by plan design changes.
- Retention Advantage – A competitive group plan could become a key differentiator in recruiting and retaining talent.
Action Steps to Take Now
- Review Your Plan Competitiveness – Compare your plan’s cost, coverage, and network to current marketplace options.
- Model Cost Scenarios – Work with your consultant to forecast budget impacts under various enrollment increases.
- Update Communication Strategy – Highlight the stability, coverage quality, and employer contribution of your group plan to encourage early migration.
- Coordinate with Your Consultant – Leverage data and strategic guidance to balance competitiveness with cost control.
The OBBB Act will make individual coverage less financially attractive for many employees. Your group health plan will likely be the more affordable, stable option—making now the right time to evaluate its competitiveness and prepare for higher enrollment.