Government Shutdowns, eAPTCs, and Premium Rates: What Does It Mean for Brokers and Employers?

At midnight EST on October 1, 2025, the federal government entered a shutdown, largely driven by the ongoing discussion over whether to extend the ACA Enhanced Advanced Premium Tax Credits (eAPTCs) beyond 2025.

The decision is critical to those in our industry and to the millions who may face average premium increases of 114% if the extensions aren’t approved. As the debate continues and both parties work toward reconciliation, here’s what brokers and employers need to know.

1. Subsidy-eligible individuals earning over 400% of the Federal Poverty Level (FPL) will be most affected.

Introduced in March 2021 as part of the American Rescue Plan Act (ARPA) and extended in 2022, the Enhanced Premium Tax Credits were a COVID-19-era provision intended to make health insurance more affordable for individuals earning above 400% of the FPL. eAPTC subsidies were based on the ratio of household income to the cost of a benchmark plan, with individuals qualifying for a tax credit if the benchmark premium costs exceeded 8.5% of their income.

The standard Advanced Premium Tax Credits (APTCs), or those designed for individuals making less than 400% of the FPL, aren’t expected to change. However, the eAPTCs are set to expire at the end of 2025 without further legislative action. 

If they’re not extended, individual market health insurance premium costs could rise by 114% across the country, putting affordable coverage out of reach for many individuals and families. 

In many cases, these individuals work for smaller employers that don’t offer health insurance or are contractors purchasing coverage through Healthcare.gov. 

As people drop coverage due to cost—especially younger, healthier individuals lacking major care needs—they’re likely to turn to costly emergency rooms for care. Additionally, individuals on a fixed income may stop taking necessary medications, which can lead to poorer long-term health outcomes.

For others, they may seek coverage through their job. However, if their employer doesn’t offer it—or can’t afford to—this could lead to higher turnover risk.

2. The longer the shutdown, the less chance to impact rates before open enrollment.

With open enrollment (OE) starting on November 1, the window to influence individual market rates is closing fast. Insurance carriers have already submitted proposed rates, ranging from a minor decrease in Alaska to a 37% rate hike in Mississippi, based on the anticipated end of the eAPTCs. 

While some carriers have finalized their rates, many are waiting to see what happens first:

• If eAPTCs are not extended: Premiums will likely increase according to the currently proposed rates. These increases, while higher than in previous years (read more about that here), are mostly within the ~15% average range that brokers and employers have been anticipating.
• If eAPTCs are extended: Carriers will likely revisit and adjust their rates, but the closer we get to OE, the less likely it is that they will have time to implement such changes.

3. In the meantime, the industry is at a standstill. 

As public offices close across the country and all eyes turn to D.C., brokers and employers await a final decision and approved rates. 

Should the push for the extensions fail, the ripple effects will be far-reaching—ultimately impacting millions of previously eligible individuals and potentially thousands of small businesses facing increased pressure to provide benefits for employees who can no longer afford coverage. 

If the eAPTCs are extended, it will certainly be a win for those hoping to maintain affordable coverage. However, an unexpected extension will likely force brokers and companies exploring or renewing an ICHRA to revisit their contribution strategies and adjust monthly allowances based on newly revised rates from carriers. 

In either scenario, the ongoing debate and resulting shutdown serve as stark reminders that employee benefits must be designed to weather volatility and administrative changes.

The path forward is uncertain, but here at Zorro, we’re steadfast in our commitment to making affordable healthcare a reality. Until then, we’ll continue to stand by brokers and employers as they navigate these turbulent times, providing the tools and guidance needed to ensure employees have access to the care they need—no matter what happens in D.C.