Earlier this year, we talked about what could happen when federal subsidies expire and how that might push people off individual plans like those offered through Covered California and back toward employer-sponsored coverage.
Now we’re starting to see that shift happen.
A recent analysis from the Kaiser Family Foundation (KFF) shows that 2026 ACA sign-ups are already down by more than one million compared to last year. And that could be just the start.
New proposals from the Centers for Medicare & Medicaid Services (CMS) suggest enrollment could drop by as many as two million more in 2027. When you combine current and projected declines, total enrollment could fall by up to 57%.
Why are ACA enrollments dropping?
Several proposed changes could make ACA plans less attractive, or less affordable, for individuals and families:
- Plans without provider networks (non-network plans) may be allowed to qualify
- Standardized plan options could go away in some markets
- Catastrophic only plans may become more widely available
- Out-of-pocket costs could continue to rise
In fact, the annual out-of-pocket maximum is expected to jump to $12,000 for individuals in 2027, up from $10,600 in 2026. For many people, that’s simply not realistic. The Federal Reserve Board says fewer than half of American households can cover a $1,000–$2,000 emergency expense using cash or savings.
What this means for small business owners
As costs go up and options shift, more employees and their family members may start looking to employer-sponsored health plans again. That includes people who may have previously declined your group coverage.
Here’s the catch: timing matters.
In many cases, employees can only join (or re-join) your plan if they experience a qualifying life event (QLE) like:
- Turning 26 and aging off a parent’s plan
- Getting married or divorced
- Having or adopting a child
- Moving to a new area
- Losing other coverage
- Changes in income that impact subsidy eligibility
Otherwise, they may need to wait until your next open enrollment period. For more information about QLEs, visit HealthCare.gov, or talk with your broker.
Why more employers are taking a fresh look at CaliforniaChoice
If you’re thinking about how to offer better coverage, without more admin responsibilities, this is where CaliforniaChoice stands out.
More choices for your team
CaliforniaChoice offers access to seven major carriers, including Anthem Blue Cross, Health Net, Kaiser Permanente, Sharp Health Plan, Sutter Health Plan, Western Health Advantage, and UnitedHealthcare. With 100+ plan options across HMOs, PPOs, and HSAs, employees can pick what actually works for them.
Built-in cost control
You decide how much to contribute. Employees use that amount to choose the plan that fits their needs and budget.
Broader access to care
Plans span all four ACA metal tiers, giving employees access to a wide network of doctors, specialists, and hospitals.
Extra benefits that go beyond health care
Add dental, vision, chiropractic, and life coverage. Plus, your team gets access to perks like discounts on travel, fitness, and entertainment.
Simple to manage
One bill. One point of contact. One easy-to-use online platform.
Explore your options
As the individual market continues to shift, employer-sponsored health coverage is becoming more important than ever. The question isn’t just whether employees will come back, it’s whether your plan is ready when they do.
Talk to your broker to explore your options. And if you don’t have one, you can easily find a licensed expert to help you get started. No matter your group size — one employee or 100+ — CaliforniaChoice makes it easier to offer coverage that works.
