- On August 11, 2025
The One Big Beautiful Bill Act (“OBBB Act”), signed into law on July 4, 2025, is poised to reshape the health insurance landscape—particularly in the individual market. By rolling back key Affordable Care Act (ACA) subsidies, the legislation will likely drive premiums higher and reduce affordability for many individuals who have been relying on marketplace coverage.
For health and welfare benefits consultants, this creates both a challenge and an opportunity: the potential migration of individuals back to employer-sponsored group health plans. Being prepared to guide clients through this shift will be essential over the next plan year and beyond.
Why the Individual Market Will Become Less Attractive
The OBBB Act reverses or scales back several ACA-era premium tax credits and cost-sharing subsidies. While the full regulatory details are still unfolding, we can expect:
- Higher Premiums for Many Enrollees – Without enhanced subsidies, individuals—particularly those above the original ACA subsidy cliff—will feel the full brunt of actuarially determined premium costs.
- Reduced Cost-Sharing Support – Lower funding for cost-sharing reductions (CSRs) means higher deductibles, copays, and coinsurance in many silver-tier plans.
- Potential Plan Exits by Carriers – As premiums climb, enrollment may drop, prompting insurers to scale back offerings or withdraw from certain markets.
The result? Marketplace coverage will become less financially appealing for employees who have opted out of the group plan or have been enrolled via Individual Coverage Health Reimbursement Arrangements (ICHRAs).
How Rising Individual Premiums Affect Group Plan Enrollment Decisions
The economic equation for an eligible employee choosing between the marketplace and the employer plan hinges on total cost of coverage, including:
- Net Premium After Subsidies – As subsidies decline, the post-credit cost of marketplace coverage will rise, often surpassing the employee-share premium for group coverage.
- Out-of-Pocket Risk – Group plans generally offer richer benefits and lower maximum out-of-pocket limits than unsubsidized marketplace options.
- Employer Contribution Value – Even modest employer premium contributions can outweigh the loss of an ACA subsidy.
- Network Access & Provider Continuity – Marketplace network limitations may drive employees toward broader group plan networks.
In short, the less financial support available in the individual market, the more compelling the employer plan becomes—especially if the employer is making competitive contributions.
What Consultants Should Do Now
As a benefits consultant, you are uniquely positioned to help clients anticipate and respond to this shift. Consider the following steps:
- Model Enrollment Impact: Use current data to identify employees who waived group coverage in favor of individual market plans or ICHRAs. Estimate how many may return if their net premiums rise by 10%, 20%, or more.
- Evaluate Plan Competitiveness: Benchmark your clients’ group health plans against both other group plans in their industry and the now-less-subsidized marketplace options.
- Prepare Cost Scenarios for Employers: Re-enrollment could increase employer premium spend. Clients will need guidance on budgeting, contribution strategy, and whether plan adjustments are warranted.
- Strengthen Employee Communication Strategies: Educate clients on proactively communicating the value of their group plan as marketplace affordability declines. Clear messaging could encourage earlier migration back.
Why This Matters for Consultants’ Value Proposition
This is more than just a coverage shift—it’s an opportunity for consultants to demonstrate strategic foresight. Employers who understand the coming changes and adjust accordingly will be better positioned to attract and retain talent while managing benefits costs.
By anticipating the OBBB Act’s ripple effects, consultants can:
- Cement their role as a strategic partner, not just a plan administrator.
- Guide clients in balancing competitiveness and cost control.
- Help shape long-term benefits strategies that withstand legislative swings.
Bottom Line
The OBBB Act’s rollback of ACA subsidies is likely to set off a notable migration back to group health plans. For benefits consultants, this is the moment to model the impact, prepare employer clients for enrollment shifts, and position group coverage as the more stable, affordable choice for eligible employees.