The Centers for Medicare & Medicaid Services (CMS) released this week the Marketplace Integrity and Affordability Proposed Rule, which outlines standards for the Affordable Care Act (ACA) marketplaces and requirements for those who help marketplace consumers.
The 300-page proposed rule aims to eliminate “improper enrollments” in ACA marketplaces and reduce federal spending.
CMS said in the announcement about the rule that it is seeking to address the increasing number of people improperly enrolled in subsidized ACA coverage, which they said research indicates is four to five million people and costing taxpayers up to $20 billion. The agency said it is intending to save between $11 billion and $14 billion in federal spending by 2027.
“This proposal aims to reduce consumer confusion, streamline the enrollment process, align more closely with open enrollment dates for many employer-based health plans, encourage continuous coverage, and reduce the risk of adverse selection from consumers who otherwise may wait to enroll until they need health care services,” wrote CMS in the fact sheet.
Here is an overview of the proposals:
Increase consumer accountability and continuous coverage
CMS is proposing to allow issuers to require payment of past-due premiums prior to implementing new coverage. Additionally, CMS proposes to eliminate gross premium percentage-based and fixed-dollar premium payment thresholds, which would allow issuers to only adopt the net percentage-based threshold.
CMS is also proposing to shorten the Open Enrollment Period for all individual market coverage to run from November 1 through December 15, rather than through January 15.
Ensure subsidies for eligible individuals
CMS wants to amend the definition of “lawfully present” to exclude DACA recipients, making them ineligible to enroll in a qualified health plan through the marketplace, for premium tax credits, and cost-sharing reduction, and for the basic health plan (BHP) in states that elect to operate a BHP, reversing the 2024 DACA Rule.
Verify consumer income eligibility for insurance affordability programs
CMS also wants to reinstate its 2015 policy requiring exchanges to determine an individual ineligible for advance premium tax credits (APTC) if they (or their tax filer) failed to file their federal income tax and reconcile APTC for one year rather than for two consecutive tax years. The agency is also proposing to verify income when data sources indicate household income to be less than 100 percent of the federal poverty level (FPL) and no more than 400 percent of the FPL.
The proposals also aim to require marketplaces to verify income with other trusted data sources when tax data is unavailable. Additionally, CMS is proposing to stop the 60-day extension of statutorily-required 90-day period for resolving income inconsistencies, which was introduced in the 2024 Payment Notice.
Require annual eligibility redeterminations and SEPs
CMS is proposing to require marketplaces to ensure that consumers who are automatically re-enrolled without affirming or updating their eligibility information, and who would have been automatically re-enrolled in a QHP with a fully subsidized premium after the application of APTC, to be automatically re-enrolled with a $5 monthly premium.
Additionally, CMS aims to no longer allow marketplaces to automatically re-enroll CSR-eligible enrollees from a bronze to a silver QHP if the silver QHP is in the same product, has the same provider network, and has a lower or equivalent net premium as the bronze plan into which the enrollee would otherwise have been re-enrolled.
CMS also wants to remove the monthly SEP for people with household incomes at or below 150 percent of the FPL due to “concerns over increased unauthorized enrollments and adverse selection risks.”
Under the proposed rule, CMS would mandate pre-enrollment verification for SEP eligibility across all marketplaces, including state ones. The agency is proposing all marketplaces verify eligibility for at least 75 percent of new enrollments through SEPs. If unable to verify the consumer’s eligibility for enrollment through the SEP, the consumer would not be eligible for enrollment.
Align essential health benefits and employer-sponsored benefits
CMS is proposing that issuers subject to essential health benefit (EHB) requirements (non-grandfathered individual and small group market plans) will not be able to cover sex-trait modification services as an EHB. If approved, the rule would go into effect beginning in plan year 2026.
Update cost-sharing, premium adjustments, and plan options
CMS aims to update the methodology for calculating the premium adjustment percentage to establish a premium growth measure that captures premium changes, in both the individual and employer-sponsored insurance (ESI) markets, effective for the 2026 plan year and beyond. CMS also proposes the plan year 2026 maximum annual limitation on cost sharing, reduced maximum annual limitations on cost sharing, and required contribution percentage using the proposed premium adjustment percentage methodology.
Additionally, CMS wants to widen the de minimis ranges to +2/-4 percentage points for all individual and small group market plans subject to the actuarial value (AV) requirements under the EHB package, other than for expanded bronze plans, for which CMS proposes a de minimis range of +5/-4 percentage points. CMS also wants to remove from the conditions of QHP certification the de minimis range of +2/0 percentage points for individual market silver QHPs and specifying a de minimis range of +1/-1 percentage points for income-based silver CSR plan variations.
Set an evidentiary standard for termination of agents, brokers, and web-broker marketplace agreements for cause
CMS is also proposing to adopt in regulation a “preponderance of the evidence” standard of proof regarding issues of fact for the U.S. Department of Health and Human Services to assess whether an agent, broker, or web-broker’s marketplace agreements should be terminated due to noncompliance and to add a definition of “preponderance of the evidence.”
For more information, click here for a fact sheet and here for the proposed rule.