New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

KLA Retirees Face ACA Premium Shock—Here’s How Others Are Responding

Healthcare Provider Update: Healthcare Provider for KLA Corporation KLA Corporation, a leading supplier of process control and yield management systems for the semiconductor industry, offers its employees a robust healthcare plan through Aetna. Aetna provides a comprehensive suite of options that includes medical, dental, and vision coverage, ensuring that KLA employees have access to essential healthcare services. --- Potential Healthcare Cost Increases in 2026 In 2026, healthcare costs are expected to rise significantly for many individuals due to a combination of factors, including the expiration of enhanced federal subsidies under the ACA and rising medical costs. Preliminary reports suggest that health insurance premiums for ACA marketplace plans could see increases exceeding 60% in some states, leading to an alarming average out-of-pocket premium hike of over 75% for approximately 22 million enrollees. As insurers struggle with higher claims costs and regulatory pressures, securing affordable coverage may become a challenging task for consumers. Click here to learn more

'KLA employees approaching retirement should recognize that proactive income and health care planning can make the difference between preserving subsidy eligibility and facing sharply higher ACA premiums.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

'KLA employees planning their retirement should consider how income levels influence ACA subsidies, as even small adjustments in taxable withdrawals can affect future health care affordability.' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

How the expiration of enhanced ACA subsidies after 2025 could impact health care costs for retirees and early retirees.
Real-life case studies illustrating how different individuals are adjusting to rising ACA premiums.
Practical steps KLA professionals can take before enrolling in 2026 Marketplace plans.

by Brent Wolf, CFP®, Wealth Enhancement

As open enrollment for 2026 Marketplace plans begins, many households are seeing dramatic shifts in their renewal letters. Rising base premiums and the possible end of enhanced subsidies after 2025 could mean significantly higher out-of-pocket costs for anyone purchasing coverage through the Affordable Care Act (ACA) exchange.

The Kaiser Family Foundation (KFF) estimates that if Congress does not extend enhanced premium tax credits, average net premium payments could more than double in 2026. ¹

“It feels like a second mortgage to pay this premium.”

Profile: A couple in their early 60s who retired a few years before becoming Medicare-eligible.

What changed: Their ACA premium had been manageable due to increased subsidies. Their renewal now indicates a rise of about $1,000 to $1,200 monthly if enhanced credits expire.

Decision pressure: They faced hard choices—drawing more taxable income from IRAs, going without coverage, or returning to the workforce for employer-based insurance.

Our response: We reworked their income plan to align with the ACA’s income-based subsidy structure. By controlling their Modified Adjusted Gross Income (MAGI) through smaller IRA withdrawals, use of cash reserves, and partial Roth conversions, we kept them eligible for key subsidies. Comparing a Bronze high-deductible plan with a health savings account (HSA) to a Silver plan revealed the Silver plan—thanks to cost-sharing reductions—was more economical given their expected medical treatments.

“I can’t risk losing coverage while battling an illness.”

Profile: A single client in her early 60s undergoing ongoing medical treatment.

What changed: Without enhanced subsidies, her premiums nearly tripled.

Decision pressure: Balancing affordability with the need to keep her care team and prescriptions consistent.

Our response: We prioritized staying with her provider network and controlling her out-of-pocket costs. A dedicated “medical reserve” fund—equal to one year’s maximum out-of-pocket limit—gave her a cushion without liquidating investments during market declines. We also worked with her physicians to identify lower-cost prescriptions through her plan’s formulary.

“The new premiums are hurting our business margins.”

Profile: A self-employed couple—one partner managing asthma and the other a cardiac rhythm condition.

What changed: Without subsidies, their net premiums are expected to rise sharply.

Decision pressure: Continue paying high premiums, choose a plan with a very high deductible, or seek W-2 employment for benefits.

Our response: We compared total annual costs for a Silver plan versus a Bronze option, factoring in frequent specialist visits and prescriptions. Once total medical costs were considered, the Silver plan proved more cost-effective. We also aligned their life and disability coverage and tailored their tax approach to reflect potential changes in premium tax credits.

“I’m young and healthy—do I even need full coverage?”

Profile: An independent contractor in their 20s with minimal expected medical use.

What changed: Premiums for mid- and high-tier plans nearly quadrupled.

Decision pressure: Choosing between a high-deductible Bronze HSA plan and catastrophic coverage.

Our response: We modeled three options—a Bronze HSA-eligible plan, a mid-tier plan, and catastrophic coverage. The Bronze HSA option offered the best mix of lower premiums and long-term tax benefits. Monthly automated HSA contributions build a future medical fund that can later be used for qualified health care expenses or Medicare premiums (excluding Medigap) after age 65.

Five Steps to Take Before You Enroll

1. Evaluate your total annual cost, not just the premium. Factor in deductibles, copays, and the possibility of reaching your out-of-pocket maximum.

2. Manage your MAGI carefully. ACA subsidies depend on income. Coordinate Roth conversions, capital gains, and IRA withdrawals strategically.

3. Verify your doctor and prescription coverage. Always confirm your plan’s provider network and formulary before enrolling.

4. Maintain a medical reserve fund. Hold six to 12 months of premiums plus a portion of your maximum out-of-pocket in cash or short-term Treasuries.

5. Finalize your plan by December 15. Open Enrollment for 2026 coverage ends on December 15, with plans effective January 1.

If Affordability Is a Concern

Choosing to go without insurance can expose you to serious financial strain in case of illness or accident. Consider the most affordable Bronze plan that still meets ACA minimum coverage requirements. If your income decreases during the year, you may become eligible for Medicaid or CHIP and qualify for a Special Enrollment Period. ²

How The Retirement Group Supports KLA Professionals

For KLA employees approaching or already in retirement, the intersection of rising health care costs and income planning can be complex. The Retirement Group focuses on helping clients navigate ACA subsidy rules, tax-efficient withdrawal strategies, and health care cost planning during retirement transitions.

To speak with an advisor about aligning your retirement income and health care planning, call (800) 900-5867 today.

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Articles you may find interesting:

Sources:

1. Cox, Cynthia, et al. “ACA Marketplace Premium Payments Would More Than Double on Average Next Year if Enhanced Premium Tax Credits Expire.” Kaiser Family Foundation (KFF) , 2025, pp. n.p., https://www.kff.org/affordable-care-act/aca-marketplace-premium-payments-would-more-than-double-on-average-next-year-if-enhanced-premium-tax-credits-expire/ .
2. Centers for Medicare & Medicaid Services. ' Understanding Special Enrollment Periods. ' June 2025.
Other resources:
1. “When Can You Get Health Insurance? | Dates & Deadlines.” HealthCare.gov , U.S. Centers for Medicare & Medicaid Services, n.d., https://www.healthcare.gov/quick-guide/dates-and-deadlines/ .
2. Publication 969: Health Savings Accounts and Other Tax-Favoured Health Plans. Internal Revenue Service, 2024, pp. 8–9, https://www.irs.gov/pub/irs-pdf/p969.pdf .
3. “Silver vs. Bronze Plan Selection: Cost-Comparison Scenarios.” Centers for Medicare & Medicaid Services (CMS) , 23 Dec. 2024, pp. 1–3, https://www.cms.gov/files/document/silver-vs-bronze-cost-comparison-scenario-resource.pdf .
4. Murphy, Tom. “Expect Health Insurance Prices to Rise Next Year, Brokers Say.” AP News , Associated Press, 24 Aug. 2025, https://apnews.com/article/health-insurance-drug-costs-2026-rates-c4d865ec09c7088ecc6b55dc520f3566 .

What is the 401(k) plan offered by KLA?

KLA offers a 401(k) plan that allows employees to save for retirement through pre-tax contributions, which can help reduce their taxable income.

Does KLA provide a matching contribution for its 401(k) plan?

Yes, KLA provides a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.

How can employees enroll in KLA's 401(k) plan?

Employees can enroll in KLA's 401(k) plan through the company's benefits portal or by contacting the HR department for assistance.

What types of investment options are available in KLA's 401(k) plan?

KLA's 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to suit different risk tolerances.

Is there a vesting schedule for KLA's 401(k) matching contributions?

Yes, KLA has a vesting schedule for its matching contributions, which means employees must work for the company for a certain period before they fully own those contributions.

Can employees take loans against their 401(k) balance at KLA?

Yes, KLA allows employees to take loans against their 401(k) balance, subject to specific terms and conditions outlined in the plan.

What is the maximum contribution limit for KLA's 401(k) plan?

The maximum contribution limit for KLA's 401(k) plan is determined by IRS guidelines, which may change annually. Employees should check the current limits for the specific year.

How often can employees change their contribution percentage in KLA's 401(k) plan?

Employees at KLA can change their contribution percentage at any time, allowing them to adjust their savings based on their financial situation.

Does KLA offer any educational resources for employees regarding the 401(k) plan?

Yes, KLA provides educational resources, including workshops and online tools, to help employees understand their 401(k) options and make informed investment decisions.

What happens to my 401(k) account if I leave KLA?

If you leave KLA, you have several options for your 401(k) account, including rolling it over into an IRA or a new employer's plan, or cashing it out, though the latter may have tax implications.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Name of the Pension Plan: KLA’s pension plan is known as the KLA Corporation Retirement Plan. Eligibility and Qualification: Years of Service: Employees are generally eligible after completing 5 years of service. Age Qualification: Employees must be at least 55 years old to qualify for retirement benefits. Pension Formula: The pension formula is based on a Defined Benefit Plan where benefits are calculated using a formula that typically considers years of service and average salary. The formula includes factors such as Years of Service and Final Average Salary. Name of the 401(k) Plan: KLA’s 401(k) plan is referred to as the KLA Corporation 401(k) Plan. Eligibility and Qualification: Employees are generally eligible to participate in the 401(k) plan immediately upon employment. 401(k) Plan Details: Contributions can be made through pre-tax and Roth options. The company may offer matching contributions up to a certain percentage of the employee’s salary.

KLA Announces Workforce Reduction and Restructuring Plans: In July 2024, KLA announced a significant restructuring plan that includes a reduction of approximately 5% of its global workforce. The company cited the need to streamline operations and enhance efficiency as the primary reasons for these changes. This move is part of a broader strategy to adjust to current economic uncertainties and shifting market demands.

KLA Corporation Stock Options: Acronym: KLA Details: KLA Corporation offered stock options as part of their employee compensation package in 2022. Employees were eligible based on their role and tenure with the company. KLA Corporation RSUs: Acronym: KLA Details: RSUs were granted to key employees and executives. These units vested over a period, typically 3 to 4 years, aligning with the company’s performance goals.

2023-2024 Updates: KLA has been focusing on increasing access to mental health resources and expanding telehealth services. This includes partnering with new telemedicine providers and increasing support for mental health through improved Employee Assistance Programs (EAPs). Benefit Enhancements: There has been an emphasis on preventive care and wellness programs. KLA has updated its benefits to include more comprehensive coverage for mental health services and preventive care, reflecting broader trends in the industry.