The United States is in the midst of its first federal government shutdown in six years, following Congress’s failure to pass new spending legislation for the fiscal year beginning October 1, 2025. The impasse, now stretching past one month, has left millions of Americans and employers wondering how long it will last and what ripple effects it could have across critical federal programs, including healthcare subsidies and benefits compliance.
The Congressional Budget Office estimates the shutdown could permanently reduce U.S. GDP by $7 billion to $14 billion if it continues for several more weeks. Beyond the immediate economic strain, the disruption raises questions about the future of healthcare premium subsidies under the American Rescue Plan (ARP) and the Inflation Reduction Act (IRA)—key policies designed to ensure that coverage remains affordable for millions eligible for subsidized Marketplace coverage.
When enacted, these laws provided enhanced premium subsidies that reduced insurance costs for eligible families and extended financial help to individuals earning above 400% of the federal poverty level, effectively removing the “subsidy cliff.” These enhancements are authorized through 2025, but if the shutdown delays congressional action on next year’s budget or tax measures, the long-term extension of those subsidies could remain in limbo.
While the uncertainty may seem daunting, it also creates a window for employers to prepare and plan proactively. Here’s what to do now.
1. Monitor policy developments and anticipate employee impact
If enhanced subsidies expire or become temporarily suspended due to federal inaction, individuals buying coverage through the Marketplace could face significant premium increases beginning in the 2026 plan year. That change would likely drive renewed interest in employer-sponsored coverage, especially among employees who previously waived it.
Stay close to your benefits advisor for up-to-date guidance on how shutdown-related delays might affect Marketplace operations or premium tax credit calculations. Employers that understand these shifts early will be better positioned to support employee decisions during open enrollment.
2. Reevaluate affordability and plan design
Even as some federal agencies pause operations, the Affordable Care Act (ACA) employer mandates remain in full effect. Applicable Large Employers (50 or more full-time or full-time-equivalent employees) must continue to offer affordable, minimum-value coverage or risk penalties under Sections 4980H(a) and (b) of the Internal Revenue Code.
Confirm that your 2025 and 2026 contribution structures still meet ACA affordability thresholds. With Marketplace plans potentially rising in cost, now is the time to reinforce the stability and predictability of your group coverage.
3. Strengthen employee communication
Uncertainty breeds misinformation. Employees may see alarming headlines about the shutdown and assume their benefits are at risk. Clear, consistent messaging can prevent confusion and build trust. Proactively communicate that your group plan remains secure and unaffected by the federal shutdown. Explain how employer contributions offset costs compared to Marketplace premiums and emphasize the reliability of your network and coverage.
4. Use this moment for strategic planning
The current shutdown underscores how intertwined federal policy and private benefits strategies have become. Employers that treat this period as a strategic checkpoint—not just a disruption—will emerge stronger. Use this time to evaluate your broader benefits approach. Consider whether supplemental or voluntary benefits, employee education campaigns, or updates to health plan design could improve long-term resilience and employee satisfaction.
Looking Ahead with Confidence
While no one can predict exactly how federal policy will evolve, both the individual and employer health markets have proven remarkably resilient.
Record enrollment in the individual Marketplace and steady participation in employer-sponsored coverage show that Americans continue to value and rely on comprehensive health benefits. Employers, advisors, and policymakers alike have worked to protect access and promote stability during years of rapid change.
As the industry looks ahead to 2026, continued collaboration will be key. Whether enhanced subsidies are renewed or new measures emerge, the shared goal of expanding access and maintaining affordability remains central to the nation’s health coverage system.
Stay informed. Stay prepared.
Towne Benefits can help your organization navigate compliance, evaluate affordability, and strengthen your benefits strategy during uncertain times. Please connect with us to discuss your 2026 planning priorities.