On Monday, March 10, the new administration released its first major proposed rule affecting the Health Insurance Marketplace and Affordable Care Act implementation. In the name of program integrity, the proposal revises several policies of the previous administration that reduced barriers to accessing or renewing coverage. CMS also focuses heavily on regulating agent/broker activity. We'll start with those impacts, then cover effects on consumers and the broader market.
CMS strongly asserts its authority to take enforcement actions against non-compliant agents, brokers, and web brokers, including potential termination of Marketplace agreements. When considering enforcement actions—particularly around improper enrollments that have recently troubled the Marketplace—the agency proposes using a "preponderance of the evidence" standard to determine whether a pattern of noncompliance exists and if it warrants enforcement action.
This standard, less rigid than our usual "beyond a reasonable doubt" standard in criminal cases, is a lower bar to clear. Instead, the accused would have "more likely than not" to have acted in noncompliance to be found guilty. This clear standard makes enforcement efforts more transparent for everyone.
However, agents should be more vigilant than ever to remain compliant. With a lower threshold for enforcement actions and a more subjective standard, encountering an agency official on a bad day could seriously impact your business.
Under the previous administration, the Open Enrollment Period (OEP) ran from November 1 through January 15, with coverage starting either January 1 or February 1, depending on enrollment dates. State-based marketplaces could extend their OEP if desired.
The proposed rule would restrict all Marketplaces to a uniform OEP: November 1 through December 15 only.
The previous administration gave insurers the option to use either a fixed-dollar or gross percentage-based premium threshold before imposing grace periods or terminating coverage. The proposed rule would eliminate both options, allowing insurers to use only a net percentage-based premium threshold for this purpose.
When premiums are past due, carriers can't require payment of these premiums before allowing enrollment in new coverage. However, CMS claims some consumers are exploiting grace periods and guaranteed availability rules by timing enrollments only when they need health services, rather than maintaining continuous coverage.
The proposal would allow insurers to add past-due premium amounts to the initial payment (binder payment) when a consumer chooses new coverage. New coverage wouldn't take effect until all premiums are paid in full.
Under current policy, consumers remain eligible for Advance Premium Tax Credits (APTC) even after failing to file and reconcile tax forms for two consecutive years. They only lose eligibility in the third year.
The proposed rule would require APTC recipients to file and reconcile tax forms each year to remain eligible for tax credits. This aims to reduce federal APTC spending and prevent ineligible enrollees from receiving surprise tax bills.
Consumers currently receive an automatic 60-day extension beyond the initial 90-day window to provide documentation verifying household income. During this extension, they continue receiving APTCs. Marketplaces may also accept a consumer's attestation of household size and income if the IRS or other trusted sources have no information on file.
The proposed rule would eliminate both the automatic 60-day extension (and associated APTCs) and the ability to accept consumer attestations. Marketplaces would need to verify household size and income through alternative methods. These changes aim to improve eligibility determination accuracy.
Currently, Marketplaces may allow consumers to enroll through a Special Enrollment Period (SEP) before verifying eligibility, with coverage getting revoked if the SEP is later found invalid.
The proposed rule would require all Marketplaces to verify eligibility for at least 75% of new enrollments through SEPs. CMS estimates most exchanges could meet this by verifying their two most common SEPs.
Some enrollees receive enough APTC to reduce their premium to $0, allowing passive re-enrollment year after year. Combined with the current two-year grace period for file-and-reconcile requirements, enrollees might go several years without paying premiums.
To encourage active re-enrollment and tax filing/reconciliation, the proposed rule would reduce APTC by $5 in the first month for automatically re-enrolled consumers. The reduction would continue until they update their Marketplace application.
CMS seeks feedback on whether $5 is appropriate and on alternatives like requiring active re-enrollment and income verification annually to receive APTCs.
Current policy automatically re-enrolls cost-sharing reduction (CSR) eligible consumers from Bronze to Silver plans (assuming comparable coverage, networks, and same/lower premiums) to maximize their CSR benefits. However, this approach may not always benefit consumers.
The new rule would prohibit this automatic re-enrollment, keeping consumers in their Bronze plan unless they actively choose to change.
The proposed rule would also:
Exclude Deferred Action for Childhood Arrivals (DACA) recipients from the "lawfully present" definition used for coverage eligibility
Prohibit including sex-trait modification as an Essential Health Benefit starting with Plan Year 2026
Re-adopt a premium growth measure used in Plan Years 2020-2021, affecting calculations for annual cost-sharing limits, affordability exemption eligibility, and employer-shared responsibility payment amounts
Expand de minimis thresholds for plan actuarial values at each metal tier from the current +2/0 percentage points to +2/-4 percentage points (except expanded Bronze plans, which would have +5/-4 points). CMS believes this will create more meaningful product variety
In this 301-page proposal, CMS outlines changes requiring consumers—and their agents—to be more proactive and knowledgeable shoppers. The rule should soon appear in the Federal Register, starting the public comment period. Agents should strongly consider submitting comments, as many policies will directly affect your clients' Marketplace experience.