A Moving Target Heading Into 2027
For subcontractors, health benefits have become as much a compliance issue as a recruiting tool. In the past twelve months, federal subsidies for individual coverage expired, the Department of Labor moved to rewrite worker-classification rules and ACA employer-mandate thresholds and penalties climbed.
Each of these shifts lands differently on a 12-person specialty contractor than on a general contractor with hundreds of employees. But together they point to the same conclusion: the way your company, your crews, and your 1099 partners get health coverage deserves a fresh look before 2027 renewals. This column walks through what hanged, what it means for subcontractors, and how ASA members can use the ASAdvantage Health Plan to respond.
The Shifts Every Subcontractor Should Know
|
Shift |
Status (October 2026) | Why it matters to subcontractors |
|---|---|---|
| Enhanced ACA premium tax credits expired |
Ended Dec. 31, 2025; no extension enacted |
Owners, crews and 1099 workers buying their own coverage pay far more |
| Marketplace rates rising again |
Median proposed increase of 15% for 2027 |
“Send them to HealthCare.gov” is no longer a low-cost answer |
| DOL independent contractor rule |
Proposed Feb. 26, 2026; final rule pending |
Changes how the FLSA test treats your 1099 relationships |
| ACA employer mandate thresholds |
Set for 2027 plan years | Higher penalties for employers with 50+ full-time employees |
1. Individual coverage got much more expensive
The enhanced premium tax credits created in 2021 expired on January 1, 2026, after Congress failed to agree on an extension. KFF found average out-of-pocket premium payments for Marketplace enrollees jumped 58% in 2026, and average deductibles rose by about $1,000 per person.
Relief is not coming in 2027. Insurers have proposed a median Marketplace increase of 15% for next year, the second double-digit hike in a row. They cite rising medical prices and a sicker risk pool as healthier people drop coverage. For subcontractors, this hits owners and family members buying their own policies, employees who were told to “get it on the exchange,” and independent subs working alongside your crews.
2. Worker classification is being rewritten again
On February 26, 2026, the Department of Labor proposed rescinding the 2024 independent contractor rule and returning to a test built on two “core factors”: control over the work and the worker’s opportunity for profit or loss. The comment period closed April 28, 2026, and a final rule is still pending.
The proposal is generally viewed as friendlier to genuine contractor relationships. It also clarifies that requiring a contractor to meet safety standards or carry insurance is not, by itself, evidence of employer control. But it does not change IRS rules or stricter state tests, such as the ABC tests used in several states. Classification still deserves a careful audit, and workers who remain 1099 still need somewhere to get affordable coverage.
3. ACA employer mandate numbers moved for 2027
For firms with 50 or more full-time employees, the stakes rose. For plan years beginning in 2027, the IRS set the affordability threshold at 10.22% of household income, up from 9.96%. The “A” penalty for failing to offer coverage rises to $3,780 per full-time employee (minus the first 30), and the “B” penalty for unaffordable or inadequate coverage rises to $5,670 per subsidized employee. Seasonal hiring and crew swings make it easy to drift over the 50-employee line without noticing.
What It Means on the Jobsite
These changes converge on three practical pressures forASA members.
Recruiting and retention. Skilled trades remain hard to hire. When a worker’s own Marketplace premium jumps, a company-sponsored health plan becomes a deciding factor between your offer and a competitor’s.
Cost control. Small-group premiums keep rising, and the individual market no longer offers a cheap fallback. Owners need coverage that delivers real value per dollar, not just the lowest sticker price.
Compliance confidence. Classification rules and mandate thresholds are both in motion. Subcontractors need a benefits partner who tracks these changes so the owner does not have to.
For a small specialty contractor, the question is no longer whether to offer health benefits. It is how to offer competitive coverage at a cost the business can sustain.
How the ASAdvantage Health Plan Helps
The ASAdvantage Health Plan is an exclusive ASA member benefit, offered through ASA’s partnership with Affinity Benefits. It was built for subcontractors and suppliers, their employees and their dependents, and it puts the association’s collective purchasing power to work for member companies of every size.
Built for small groups. Major medical coverage for groups of 1 to 99, so a two-person shop has access to the same program as a growing firm.
Coverage that travels. A broad nationwide network of doctors and pharmacies follows your crews from one jobsite to the next.
Plan designs that fit. Multiple plan designs let owners match benefits to budget and workforce.
Built-in cost control. Reference Based Pricing (RBP) models help contain claim costs, which helps keep premiums competitive while the individual market climbs.
A partner watching the rules. Affinity Benefits works exclusively with associations and member organizations. Our team tracks ACA, Department of Labor and IRS changes so members can focus on running their jobs. With Marketplace premiums climbing for a second straight year, many members are
finding that group coverage through ASAdvantage compares favorably for owners and
employees alike. Certain state restrictions may apply.
Five Steps Before Your 2027 Renewal
1. Audit your workforce. Review who is W-2 and who is 1099, and confirm classifications with counsel under both federal and state tests.
2. Count full-time employees. If you are near 50, model your 2027 exposure using the new 10.22% affordability threshold and penalty amounts.
3. Price your options. Compare your current renewal, and what your people are paying on the Marketplace, against an ASAdvantage quote.
4. Talk to your team. Ask employees what coverage they have today. Many may be paying far more than they did a year ago.
5. Watch the classification rule. A final independent contractor rule could change how you structure your 1099 relationships in 2027.
Get a Quote
ASA members can request a no-obligation ASAdvantage Health Plan quote at asaonline.com/asadvantage-health-plan or contact the program administrator directly:
Jeanie Cunningham Affinity Benefits Director, ASAdvantage Health Plan Administrator
Affinity Benefits LLC jcunningham@affinitybenefits4u.com | 660-525-0274
affinitybenefits4u.com
This column is for general information only and is not legal or tax advice. Consult your
attorney or tax advisor about your specific situation.
Sources
KFF, How Much and WhyACA Marketplace Premiums Are Going Up in 2027 (Aug. 3, 2026)
HR Executive, ACA Marketplace insurers propose 14% premium hike for 2027
DLA Piper, DOL proposes independent contractor rule (Mar. 2, 2026)
Nelson Mullins, What Employers Need to Know about New DOL Changes to Independent Contractor Rule
HR Morning, IRS Releases 2027 ACA Affordability Percentage
FNA Insurance, IRS Releases Updated ACA Penalty Amounts for 2027 (May 7, 2026)
ASA, ASAdvantage Health Plan
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A Moving Target Heading Into 2027
For subcontractors, health benefits have become as much a compliance issue as a recruiting tool. In the past twelve months, federal subsidies for individual coverage expired, the Department of Labor moved to rewrite worker-classification rules and ACA employer-mandate thresholds and penalties climbed.
Each of these shifts lands differently on a 12-person specialty contractor than on a general contractor with hundreds of employees. But together they point to the same conclusion: the way your company, your crews, and your 1099 partners get health coverage deserves a fresh look before 2027 renewals. This column walks through what hanged, what it means for subcontractors, and how ASA members can use the ASAdvantage Health Plan to respond.
The Shifts Every Subcontractor Should Know
|
Shift |
Status (October 2026) | Why it matters to subcontractors |
|---|---|---|
| Enhanced ACA premium tax credits expired |
Ended Dec. 31, 2025; no extension enacted |
Owners, crews and 1099 workers buying their own coverage pay far more |
| Marketplace rates rising again |
Median proposed increase of 15% for 2027 |
“Send them to HealthCare.gov” is no longer a low-cost answer |
| DOL independent contractor rule |
Proposed Feb. 26, 2026; final rule pending |
Changes how the FLSA test treats your 1099 relationships |
| ACA employer mandate thresholds |
Set for 2027 plan years | Higher penalties for employers with 50+ full-time employees |
1. Individual coverage got much more expensive
The enhanced premium tax credits created in 2021 expired on January 1, 2026, after Congress failed to agree on an extension. KFF found average out-of-pocket premium payments for Marketplace enrollees jumped 58% in 2026, and average deductibles rose by about $1,000 per person.
Relief is not coming in 2027. Insurers have proposed a median Marketplace increase of 15% for next year, the second double-digit hike in a row. They cite rising medical prices and a sicker risk pool as healthier people drop coverage. For subcontractors, this hits owners and family members buying their own policies, employees who were told to “get it on the exchange,” and independent subs working alongside your crews.
2. Worker classification is being rewritten again
On February 26, 2026, the Department of Labor proposed rescinding the 2024 independent contractor rule and returning to a test built on two “core factors”: control over the work and the worker’s opportunity for profit or loss. The comment period closed April 28, 2026, and a final rule is still pending.
The proposal is generally viewed as friendlier to genuine contractor relationships. It also clarifies that requiring a contractor to meet safety standards or carry insurance is not, by itself, evidence of employer control. But it does not change IRS rules or stricter state tests, such as the ABC tests used in several states. Classification still deserves a careful audit, and workers who remain 1099 still need somewhere to get affordable coverage.
3. ACA employer mandate numbers moved for 2027
For firms with 50 or more full-time employees, the stakes rose. For plan years beginning in 2027, the IRS set the affordability threshold at 10.22% of household income, up from 9.96%. The “A” penalty for failing to offer coverage rises to $3,780 per full-time employee (minus the first 30), and the “B” penalty for unaffordable or inadequate coverage rises to $5,670 per subsidized employee. Seasonal hiring and crew swings make it easy to drift over the 50-employee line without noticing.
What It Means on the Jobsite
These changes converge on three practical pressures forASA members.
Recruiting and retention. Skilled trades remain hard to hire. When a worker’s own Marketplace premium jumps, a company-sponsored health plan becomes a deciding factor between your offer and a competitor’s.
Cost control. Small-group premiums keep rising, and the individual market no longer offers a cheap fallback. Owners need coverage that delivers real value per dollar, not just the lowest sticker price.
Compliance confidence. Classification rules and mandate thresholds are both in motion. Subcontractors need a benefits partner who tracks these changes so the owner does not have to.
For a small specialty contractor, the question is no longer whether to offer health benefits. It is how to offer competitive coverage at a cost the business can sustain.
How the ASAdvantage Health Plan Helps
The ASAdvantage Health Plan is an exclusive ASA member benefit, offered through ASA’s partnership with Affinity Benefits. It was built for subcontractors and suppliers, their employees and their dependents, and it puts the association’s collective purchasing power to work for member companies of every size.
Built for small groups. Major medical coverage for groups of 1 to 99, so a two-person shop has access to the same program as a growing firm.
Coverage that travels. A broad nationwide network of doctors and pharmacies follows your crews from one jobsite to the next.
Plan designs that fit. Multiple plan designs let owners match benefits to budget and workforce.
Built-in cost control. Reference Based Pricing (RBP) models help contain claim costs, which helps keep premiums competitive while the individual market climbs.
A partner watching the rules. Affinity Benefits works exclusively with associations and member organizations. Our team tracks ACA, Department of Labor and IRS changes so members can focus on running their jobs. With Marketplace premiums climbing for a second straight year, many members are
finding that group coverage through ASAdvantage compares favorably for owners and
employees alike. Certain state restrictions may apply.
Five Steps Before Your 2027 Renewal
1. Audit your workforce. Review who is W-2 and who is 1099, and confirm classifications with counsel under both federal and state tests.
2. Count full-time employees. If you are near 50, model your 2027 exposure using the new 10.22% affordability threshold and penalty amounts.
3. Price your options. Compare your current renewal, and what your people are paying on the Marketplace, against an ASAdvantage quote.
4. Talk to your team. Ask employees what coverage they have today. Many may be paying far more than they did a year ago.
5. Watch the classification rule. A final independent contractor rule could change how you structure your 1099 relationships in 2027.
Get a Quote
ASA members can request a no-obligation ASAdvantage Health Plan quote at asaonline.com/asadvantage-health-plan or contact the program administrator directly:
Jeanie Cunningham Affinity Benefits Director, ASAdvantage Health Plan Administrator
Affinity Benefits LLC jcunningham@affinitybenefits4u.com | 660-525-0274
affinitybenefits4u.com
This column is for general information only and is not legal or tax advice. Consult your
attorney or tax advisor about your specific situation.
Sources
KFF, How Much and WhyACA Marketplace Premiums Are Going Up in 2027 (Aug. 3, 2026)
HR Executive, ACA Marketplace insurers propose 14% premium hike for 2027
DLA Piper, DOL proposes independent contractor rule (Mar. 2, 2026)
Nelson Mullins, What Employers Need to Know about New DOL Changes to Independent Contractor Rule
HR Morning, IRS Releases 2027 ACA Affordability Percentage
FNA Insurance, IRS Releases Updated ACA Penalty Amounts for 2027 (May 7, 2026)
ASA, ASAdvantage Health Plan
