Dec. 11, 2025 Update: A Democratic effort to extend Premium Tax Credits failed to advance in the Senate, as did the Republican-backed approach.
As Americans face rising concerns about the cost of health care and broader affordability challenges, the White House circulated a new proposal that would extend enhanced Premium Tax Credits (PTCs) for two additional years, keeping them in place through 2027.
There’s concern, however, that the new plan will not receive enough buy-in from Republicans in Congress. This could slow the effort to avert a looming spike in health insurance premiums.
For employers, the ultimate resolution of this issue has significant implications for eligibility tracking, affordability calculations, and ACA compliance planning heading into the 2026 and 2027 tax years.
Why the White House Is Pushing for a Two-Year PTC Extension
Enhanced PTCs, first introduced in the American Rescue Plan Act (ARPA) and extended through 2025 via the Inflation Reduction Act (IRA), dramatically lowered out-of-pocket premiums for Marketplace enrollees. They also expanded eligibility to individuals earning more than 400 percent of the Federal Poverty Line.
Without additional congressional action, these tax credits are set to expire on Dec. 31, 2025.
What’s driving the renewed push?
- Premium shock is already happening. Open enrollment began Nov. 1, and millions of Americans have already seen premiums rise sharply in anticipation of PTC expiration. KFF estimates the average subsidized enrollee will face more than double their current premium cost in 2026 without an extension.
- Affordability is a major voter concern. Recent polls show Americans are deeply concerned about rising healthcare and cost-of-living pressures.
- Marketplace enrollment is at historic highs. Marketplace enrollment has more than doubled since 2020. States won by President Trump account for 88% of Marketplace growth. Millions of those enrollees could lose coverage if PTCs are not extended.
The White House proposal aims to avert coverage losses and avoid premium spikes in 2026 and 2027.
What’s in the White House’s Draft Proposal?
Although details are still being finalized, early reporting indicates the plan includes:
1. A two-year extension of enhanced Premium Tax Credits (through 2027)
This is the centerpiece of the proposal and would maintain reduced Marketplace premiums for millions of enrollees.
2. Allowing individuals in bronze or catastrophic Marketplace plans to contribute to HSAs
This would expand consumer flexibility and give low-income or cost-conscious enrollees more tools to manage their healthcare spending.
3. Codifying the “program integrity rule”
This rule is aimed at reducing fraud, waste, and abuse in the Marketplace by strengthening income verification, eligibility checks, and data quality standards.
Employers should pay particular attention to any rule changes that may affect how the IRS verifies affordability or qualifies employees for premium tax credits.
Why Employers Should Pay Attention
Enhanced PTCs interact directly with ACA Employer Mandate enforcement. When an employee receives a subsidized Marketplace plan because the employer’s offer was unaffordable or not offered to a full-time employee, it may trigger:
- 4980H(a) penalties for failing to offer coverage to 95 percent of full-time employees
- 4980H(b) penalties for failing to offer affordable, minimum-value coverage
The expiration or extension of PTCs can significantly influence:
1. Employer affordability strategies
If PTCs were to expire, more employees might seek employer-sponsored coverage, increasing pressure on employers to offer coverage and maintain enrollment on employer-sponsored health plans.
A two-year extension may stabilize enrollment patterns temporarily, but employers should still model affordability impacts for 2026 and beyond.
2. Eligibility tracking and measurement
Premium tax credit availability can influence employee decisions during open enrollment.
If more individuals remain on subsidized Marketplace plans through 2027, employers must be vigilant in identifying:
- Full-time employees who decline employer coverage
- Variable-hour workers approaching full-time status
- Changes in workforce composition that may trigger Employer Mandate liability
3. Data integrity and ACA reporting risk
As Marketplace rules tighten under the “program integrity rule,” employers may face:
- More IRS-data matching
- More verification of coverage details
- More potential to receive 226J or 5699 notices if employer filings are incomplete or inaccurate
Accurate and defensible ACA reporting becomes even more critical as scrutiny increases.
What Happens Next?
Political negotiations remain ongoing.
Republicans have previously sought to address PTCs only after reopening the government. Democrats continue to push for early action, especially as open enrollment moves forward under premium uncertainty.
If Congress does not act, enhanced PTCs will lapse at the end of 2025.
If a deal is reached based on the White House proposal, millions of Americans could maintain affordable coverage through 2027, and employers may see more stability in enrollment behaviors.
Either outcome has compliance implications for employers.
How Trusaic Helps Employers Navigate Shifting ACA Requirements
With potential changes to Premium Tax Credits, Marketplace rules, and employer affordability standards, organizations need real-time insights and accurate ACA data more than ever.
Trusaic’s ACA solutions help employers stay ahead by providing:
- Penalty Risk Assessment to identify affordability and eligibility issues before the IRS does
- Time-series tracking of full-time status for accurate Employer Mandate compliance
- Automated affordability calculations across Rate of Pay, FPL, and W-2 Safe Harbors
- Certified integrations with systems like Workday and UKG for accurate year-round data
- Audit-ready reporting particularly important as the Marketplace strengthens verification rules
- End-to-end filing and furnishing services, including federal and state reporting
Whether Premium Tax Credits are extended or expire, employers must be prepared to comply in an increasingly complex regulatory environment.
The White House’s proposal to extend PTCs through 2027 could stabilize Marketplace premiums and influence employer strategies for multiple filing years.
We will continue to monitor legislative developments and their impact on ACA compliance.
To ensure your organization is ready for the 2026 and 2027 ACA filing seasons, schedule a demo today and see how Trusaic simplifies compliance from end to end.