The Trump Administration has released its Marketplace Integrity and Affordability Final Rule, which revises Marketplace eligibility and enrollment rules and increases obligations for participants to receive premium tax credits.
One key change from the proposal and the focus of this alert – some of the provisions “sunset.” Stakeholders will be required to devote time and resources to changes that may only be in effect for a year.
In March, the Trump Administration released its “Marketplace Integrity and Affordability” proposed rule. The proposal focused on actions that the Administration characterized as “strengthening the integrity of the Patient Protection and Affordable Care Act (ACA) eligibility and enrollment systems to reduce waste, fraud, and abuse.” The proposals ranged from rescinding the prohibition on health insurance issuers applying premium payments for new coverage to past-due amounts to re-defining who is “lawfully present” in the United States and thus, eligible to enroll in coverage through a Marketplace (also known as an “Exchange”) or the Basic Health Program in Minnesota or Oregon.
Stay tuned for a Groom alert outlining in more detail the Final Rule.
2026 Sunset Provisions
While the Final Rule largely finalized the proposal with little or no change, CMS “will finalize the following policies temporarily, requiring them to sunset at the end of PY 2026” (i.e., December 31, 2026):
- Failure to File Taxes and Reconcile APTC Process (§ 155.305(f)(4))*: requiring Exchanges to determine an individual ineligible for APTC if they failed to file their federal income taxes and reconcile APTC for one year (instead of for two consecutive tax years as implemented in 2024).
- Income Verification When Data Sources Indicate Income Less Than 100 Percent Federal Poverty Level (§ 155.320(c)(3)(iii)): requiring that Exchanges generate annual income inconsistencies in certain circumstances when a tax filer’s attested projected annual household income would qualify the taxpayer as an applicable taxpayer, while the income data returned by the IRS reports that the tax filer’s income is less than 100% of the FPL.
- Income Verification When Tax Data is Unavailable (§ 155.320(c)(5)): no longer requiring that Exchanges accept an applicant’s self attestation of projected annual income when the Exchange attempts to verify the attested projected annual household income with the IRS, but the IRS confirms there is no such tax return data available.
- Annual Eligibility Redetermination (§ 155.335(a), (n))*(not finalized for State Exchanges): requiring Exchanges on the federal platform to ensure that consumers who are auto-re-enrolled with no premium responsibility following application of APTC and without affirming or updating their eligibility information, are auto-re-enrolled with a $5 monthly premium (once the consumer confirms or updates their information, the $5 will be eliminated if they continue to be eligible for $0 premium after the application of APTC).
- Gross Premium Percentage-based and Fixed- dollar Premium Payment Thresholds (§ 155.400(g)): elimination of the fixed-dollar and gross percentage-based premium payment thresholds, allowing issuers to only adopt the net-percentage-based threshold.
- Monthly Special Enrollment Period for APTC- Eligible Qualified Individuals with a Household Income at or Below 150 Percent of the Federal Poverty Level (§ 155.420): repeal of the monthly SEP for individuals with projected household incomes at or below 150% of the FPL.
- All Exchanges Conducting Eligibility Verification for SEPs (§ 155.420(g))*(not finalized for State Exchanges): requiring Exchanges on the federal platform conduct pre-enrollment verification for SEP eligibility.
- All Exchanges Conducting Eligibility Verification for 75 Percent of New Enrollments through SEPs (§ 155.420(g))*(not finalized for State Exchanges): requiring pre-enrollment eligibility verification for at least 75% of new enrollments through SEPs for Exchanges on the federal platform.
*Importantly, some of these changes will only be effective for a single plan year (plan year 2026), because those provisions are only effective beginning in plan year 2026 and are set to sunset at the end of that year:
- Failure to File Taxes and Reconcile APTC Process,
- Annual Eligibility Redetermination,
- Exchanges Conducting Eligibility Verification for SEPs,
- Exchanges Conducting Eligibility Verification for 75 Percent of New Enrollments through SEPs.
CMS acknowledged stakeholder comments urging a delay in the effective date for many of the proposals, but argued that because improper Exchange enrollments are “pervasive,” it was not appropriate to delay implementation. However, CMS said that it would finalize some of the proposals aimed at “improper enrollments associated with fully-subsidized plans” only through the end of 2026 in order to avoid “burdening the Exchange over the long term.”
The result for stakeholders is a set of changes, many of which are effective immediately, but that will sunset at the end of next year.
The Federal Exchange and enrolling individuals are likely to be most burdened by these new requirements. Most of the sunsetting provisions are aimed at increasing documentation and review of enrollment and eligibility for the premium tax credit. But other stakeholders, including health insurance issuers, will have to anticipate changed enrollment patterns and may need to increase enrollment assistance or otherwise address the new rules, or else plan for potentially decreased enrollment.
If you have any questions or need assistance, please reach out to the author or your regular Groom attorney.
