The summer’s first regulatory heat wave hit the country a few weeks ago, when The Centers for Medicare and Medicaid Services (CMS) issued a final rule regarding “Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability.” The rule is aimed at protecting consumers from improper enrollments, strengthening income verification processes, tightening eligibility redeterminations, and refining premium and cost-sharing policies. However, the changes might also make it more difficult to obtain affordable coverage through public Marketplaces.
While the 501-page menu includes a substantial number of changes, safeguards, standards, and additions, the consequence of lost coverage for many individuals looms large.
Some of the many changes that we can take a deeper dive into include:
The ACA had long ago determined that people who were not lawfully present would be excluded from eligibility and enrollment in a Qualified Health Plan (QHP) or Basic Health Plan (BHP). In May of 2024, HHS clarified that Deferred Action for Childhood Arrivals (DACA) recipients were considered lawfully present individuals eligible for QHP and BHP coverage. This final rule now reverses that, removing DACA recipients from the definition of “lawfully present.” DACA recipients will be ineligible for QHPs, premium tax credits and cost-sharing reductions, and enrollment in a BHP in the states that offer such a plan.
Starting with the 2027 plan year, the Open Enrollment Period (OEP) for all Exchanges will commence no later than November 1st and continue until no later than December 31st. This applies to both on-Exchange and off-Exchange individual coverage. This shortening of many Exchange OEPs puts additional time burdens on brokers and agents, who are also helping the majority of their group and Medicare beneficiary clients during a busy 4th quarter enrollment period. This tightened period may also make it more difficult for eligible individuals to timely enroll.
There has been increased discussion and commentary concerning the rise of improper enrollments onto the Exchanges and the role that agents and brokers may have played in the process. In an effort to protect the program and safeguard consumer personally identifiable information (PII), HHS will take steps to hold non-compliant agents and brokers accountable and require more transparency regarding their Marketplace agreements. These actions will include termination of an agreement for cause and HHS applying a “preponderance of the evidence” standard of proof. The intent is to create a fairer standard for assessing a broker or agent’s compliance in assisting the consumer. There is a concern, however, that these changes could make it easier for CMS to terminate agreements for minor, inadvertent errors.
With plan years beginning in 2026, CMS has announced that specified sex-trait modification procedures cannot be covered as Essential Health Benefits (EHBs). This pertains to non-grandfathered small group and individual coverage. Issuers are not prohibited from voluntarily covering specified sex-trait modification procedures, and States are not prohibited from requiring coverage of such services. But in either case, such care will not be covered as an EHB. Brokers and employers should be mindful to check with issuers and state regulators regarding any applicable coverage requirements in their specific state.
The final rule removes the 60-day extension on top of the existing 90-day extension of time for applicants to provide necessary documentation that resolves income inconsistencies. This reduction from 150 days to 90 days is anticipated to cause a loss of Advanced Premium Tax Credit (APTC) eligibility for approximately 140,000 enrollees. The motivation for this change is to seek a reduction in the number of people who receive unverified APTCs, but there is certainly a risk that thousands will become uninsured as a result.
HHS updated the formula for calculating the “premium adjustment percentage” (which is used to set several ACA parameters) to make sure it aligns with trends beginning in 2026. The revised maximum annual limitation on cost-sharing for 2026 is $10,600 for self-only coverage and $21,200 for other than self-only coverage. This supersedes the previously announced 2026 limits of $10,150 and $20,300, respectively.
The ACA remains a key solution for millions of Americans who need affordable coverage. Many of the changes are anticipated to save money for the Federal government, but they will most certainly create a more difficult landscape for many, likely resulting in fewer individuals obtaining affordable coverage through Exchanges. As the open enrollment period draws closer in the coming months, we encourage brokers to prepare strategies for helping consumers navigate the new regulations and requirements.