Eligibility to Enroll and Qualify for Premium Tax Credits and Cost-Sharing Reductions
The Definition of “Lawfully Present”
The ACA specifically excludes individuals who are not “lawfully present” from eligibility to enroll in marketplace coverage. They also cannot receive APTCs and CSRs. Since enactment of the ACA, the definition of “lawfully present” was interpreted to mean that noncitizens in the U.S. under the Deferred Action for Childhood Arrivals (DACA) policy were not lawfully present for purposes of determining eligibility for the marketplace and qualifying for marketplace subsidies. In May 2024, the Biden administration published new regulations extending marketplace coverage to DACA recipients and updated the definition of “lawfully present” to include DACA recipients. The Proposed Rule would update the definition again, such that DACA recipients are no longer considered “lawfully present” for purposes of enrollment in a qualified health plan and for eligibility for APTC and CSRs.
Requiring $5 Premium Responsibility
To prevent fully subsidized enrollees from being automatically re-enrolled without taking an action to confirm their eligibility information, when an enrollee does not contact the Exchange to obtain an updated eligibility determination and select a plan on or before the last day of the annual OEP for January 1 coverage, and whose portion of the premium for the entire policy would be zero dollars after application of APTC through the Exchange’s annual redetermination process, all Exchanges would be required to decrease the amount of the APTC applied to the policy by $5 for the first month and every following month that the enrollee does not confirm their eligibility for APTC.
Enrollees automatically re-enrolled with a $5 monthly premium after APTC would be able to reinstate the full amount of APTC by updating their exchange application at any point to confirm their eligibility for APTC that cover the entire premium.
The Federally Facilitated Exchanges and the State-Based Exchanges on the federal platform would be required to implement this change with annual redeterminations for Plan Year 2026, Other State Exchanges would be required to implement the change with annual redeterminations for Plan Year 2027.
CMS also is seeking comments related to automatic re-enrollment that would provide more incentive for enrollees to confirm their eligibility for APTC and require them to do more than pay the $5 premium to continue to receive the balance of their APTC. CMS seeks comments on 1) whether $5 is the appropriate premium amount for the affected enrollees, 2) whether individuals should be required to re-confirm their plan and re-verify their income before they are eligible to receive APTC, and 3) whether the option for exchanges to automatically re-enroll individuals who qualify for fully or partially subsidized plans should be removed.
Satisfying Debt for Past Due Premiums
The policy restricting issuers from establishing premium payment policies that require enrollees to pay past-due premiums from prior coverage to effectuate new coverage would be repealed. Issuers also would be allowed, subject to applicable state law, to add past-due premium amounts owed to the issuer to the initial premium the enrollee must pay to effectuate new coverage, and to refuse to effectuate new coverage if the past-due and initial premium amounts are not paid in full.
Addressing Failure to File and Reconcile
The “failure to file and reconcile process” stated in current law would be revised to reinstate the policy that Exchanges must determine a tax filer ineligible for APTC if: 1) the U.S. Department of Health and Human Services (HHS) notifies the Exchange that the tax filer (or their spouse if the tax filer is a married couple) received APTC for a prior year for which tax data would be used for verification of income and 2) the tax filer or tax filer’s spouse did not comply with the requirement to file a federal income tax return and reconcile their APTC for that tax year. This proposed process would replace the existing requirement that Exchanges may not determine a tax filer eligible for APTC if HHS notifies the Exchanges that the tax filer or tax filer’s spouse: 1) received APTC for two consecutive years and 2) did not comply with the requirement to file a federal income tax return and reconcile APTC for that year and the previous year.
Stopping Extensions of the Period to Resolve Income Inconsistencies
The policies for consumers receiving APTC and CSRs when there is an income inconsistency between their self-reported income and a trusted data source would be strengthened to remove the requirement that applicants receive an automatic 60-day extension to the 90-day period allowed under the ACA to provide documentation to verify their household income. This policy would end APTC payments to individuals who have failed to provide documentation verifying their eligibility for APTC within 90 days.
CMS also proposes requiring all Exchanges to generate annual household income inconsistencies when a tax filer’s attested projected annual income is greater than or equal to 100 percent and not more than 400 percent of the federal poverty level (FPL) and trusted data sources indicate that projected household income is under 100 percent of FPL. Under the ACA, consumers do not receive APTC and CSRs if their income is below 100 percent FPL.
Finally, CMS proposes to remove the exception to the standard household income inconsistency process that requires Exchanges to accept an applicant’s attestation of household income and family size without verification when the Internal Revenue Service does not have tax return data to verify household income and family size.
Removing Re-Enrollment Hierarchy Standards
Under the ACA, only enrollees in silver qualified health plans are eligible to receive CSR. The proposed rule would remove the federal regulation that currently allows Exchanges to move a CSR-eligible enrollee from a bronze qualified health plan and re-enroll them into a silver qualified health plan for an upcoming plan year, if a silver qualified health plan is available in the same product, with the same provider network, and with a lower or equivalent net premium after the application of APTC as the bronze plan into which the enrollee would otherwise have been re-enrolled.
Conducting Eligibility Verification for Special Enrollment Periods (SEPs)
The regulation that enables HHS to reinstate pre-enrollment verification of eligibility of applicants for all categories of individual market SEPs would be amended to require all Exchanges to conduct pre-enrollment verification of eligibility for at least 75 percent of new enrollments through SEPs.
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