Employee healthcare premiums could double by 2026 when ACA subsidies expire—and they’ll be looking to employers for relief. One proven strategy is already cutting healthcare costs by up to 70% while keeping employees healthier and more satisfied.
The healthcare landscape stands at a critical crossroads as millions of Americans face a potential affordability crisis. Enhanced ACA premium tax credits that have kept healthcare costs manageable for over 24 million marketplace enrollees are set to vanish at the end of 2025, creating unprecedented challenges for both employees and employers.
The numbers paint a stark picture of what's coming. Without enhanced premium tax credits, subsidized ACA marketplace enrollees will see their annual premium payments skyrocket by 114% on average—jumping from $888 in 2025 to an estimated $1,904 in 2026. This dramatic increase stems from the elimination of enhanced subsidies that have provided an average savings of $1,016 per enrollee annually.
The impact varies dramatically by income level. Lower-income individuals will face substantial increases in their premium contributions, while middle-income earners may lose financial assistance altogether. A 60-year-old couple making $85,000 faces a staggering $22,600 increase in annual premium payments, bringing their healthcare costs to approximately 25% of their total income.
The enhanced premium tax credits introduced in 2021 and extended through the Inflation Reduction Act have been a lifeline for millions. These subsidies both increased financial assistance for eligible enrollees and extended premium tax credit eligibility to middle-income households earning above 400% of federal poverty guidelines. The result? ACA marketplace enrollment more than doubled from 11 million to over 24 million people, with the vast majority receiving enhanced subsidies.
Adding fuel to the fire, insurance companies are proposing significant rate increases for 2026—the largest premium hikes since 2018. These increases reflect rising healthcare costs and uncertainty around federal policy changes. The combination of disappearing subsidies and increasing base premiums creates a perfect storm that will hit both individual consumers and employer-sponsored plans.
Recent legislative developments suggest little hope for relief. House Republicans blocked a vote to extend ACA subsidies, making it highly unlikely that new legislation will advance before the December 31st deadline. This political reality means employers and employees must prepare for the new cost landscape without relying on last-minute federal intervention.
When individual marketplace plans become unaffordable, employees will naturally seek alternatives through their employers. Many workers who currently rely on marketplace coverage may find employer-sponsored plans more attractive, even if they previously opted out due to cost or coverage preferences. This migration could significantly increase enrollment in group health plans across industries.
The influx of employees from marketplace plans will alter risk pools in employer-sponsored coverage. As healthier individuals who were previously satisfied with basic marketplace plans join group coverage alongside potentially sicker individuals who can no longer afford their medications or treatments, overall claims costs could rise. Employers may face higher premiums and increased financial pressure to maintain competitive benefits packages.
As healthcare costs spiral upward, forward-thinking employers are turning to proven cost-reduction strategies. TelehealthWatch has documented how virtual care solutions provide measurable relief from rising healthcare expenses while maintaining quality patient outcomes.
The cost differential between telehealth and traditional care is substantial. A 2017 study found average telehealth consultations cost $79 compared to $146 for standard in-person appointments—a 46% reduction. More recent analysis by Penn Medicine demonstrated nearly 25% cost reductions for employee telehealth visits compared to traditional care, with some specialties showing even greater savings.
Emergency departments represent one of the most expensive care settings, with average visits costing $1,500 or more. Telehealth effectively diverts non-emergency cases from EDs by providing immediate access to medical professionals who can assess symptoms, provide treatment recommendations, and determine appropriate care levels. Each successfully diverted emergency room visit can save $300-$1,500 while providing faster resolution for employees.
Traditional healthcare appointments often require significant time away from work—travel time, waiting room delays, and lengthy appointment durations. Telehealth consultations can be conducted from home or office, dramatically reducing employee absenteeism. The productivity gains from reduced time off often exceed the direct medical cost savings.
For businesses implementing virtual care solutions, healthcare cost reductions come from multiple sources: lower consultation costs, reduced emergency department visits, decreased specialist referrals for routine issues, and improved medication compliance through easier follow-up care.
Employee satisfaction with healthcare benefits directly impacts retention and recruitment success. Research shows 66% of employees highly value access to telehealth services, viewing virtual care options as a significant benefit. The convenience, accessibility, and reduced wait times associated with telehealth create positive employee experiences that extend beyond healthcare into overall job satisfaction.
Telehealth dramatically expands healthcare access for employees in rural areas, those with transportation challenges, or workers with demanding schedules. Virtual care programs help eliminate barriers that may affect traditional care delivery, providing more equitable access to medical services across diverse employee populations.
Traditional healthcare often involves delays that compound into longer treatment timelines. Missing an MRI scheduling window can mean waiting another 24 hours, followed by another day for results review, and additional delays for follow-up tests. Telehealth consultations typically occur within hours or days of requests, enabling faster diagnosis and treatment initiation that improves outcomes while reducing costs.
The American Medical Association's Return on Health Framework provides a methodology for measuring virtual care program value across multiple dimensions. Financial metrics include direct cost savings, reduced emergency department utilization, and productivity gains from decreased absenteeism. Clinical outcomes focus on patient health improvements, treatment adherence, and quality measures that demonstrate telehealth effectiveness.
Beyond financial returns, the AMA framework emphasizes experiential outcomes that affect long-term healthcare utilization and employee satisfaction. Key metrics include patient satisfaction scores, time-to-care improvements, access to specialists, and health equity measures. These indicators help employers understand how telehealth investments impact overall workforce health and engagement.
As ACA subsidy expiration creates unprecedented cost pressures, employers who proactively implement virtual care solutions position themselves to weather the storm more effectively. The combination of direct cost savings, productivity improvements, and enhanced employee satisfaction creates a multi-layered defense against rising healthcare expenses.
The data is clear: telehealth isn't just a convenience—it's a strategic necessity for managing healthcare costs in an increasingly expensive landscape. Organizations that invest in virtual care capabilities now will be better equipped to handle the cost pressures ahead while maintaining competitive employee benefits packages.
Smart employers are already recognizing that telehealth represents more than cost savings; it's a solution that addresses access, equity, and employee satisfaction simultaneously. As traditional healthcare becomes less affordable, virtual care emerges as the bridge that maintains quality healthcare access while controlling expenses.
