CMS finalizes new rule to safeguard Affordable Care Act coverage

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The Centers for Medicare and Medicaid Services has issued a rule for additional safeguards to protect consumers from unauthorized changes to their healthcare coverage in the Affordable Care Act marketplace.

The final Health and Human Services Notice of Benefit and Payment Parameters for 2026, or the final 2026 Payment Notice, sets standards for health insurance issuers, brokers and agents who connect consumers to Affordable Care Act coverage. 

The rule, effective January 15, is for marketplace coverage beginning in plan year 2026. 

WHY THIS MATTERS

The rule is intended to make it easier for consumers to understand their costs and enroll in coverage through HealthCare.gov, CMS said. For full details, see the final rule.

Below are some of the rule's actions.

Agents and broker enforcement action

To reduce unauthorized changes to coverage, the rule expands CMS' authority to immediately suspend an agent or broker's ability to transact information with the marketplace.

User fees

The rule sets user fees for monthly premiums. User fees are needed for the marketplace to remain financially viable and sustainable, CMS said.

For the 2026 benefit year, CMS is finalizing a federally facilitated marketplace user fee rate of 2.5% of monthly premiums, and a state-based marketplace on the federal platform user fee rate of 2% of monthly premiums. 

Enrollment projections are a key component to the calculation of user fee rates. The Inflation Reduction Act and the American Rescue Plan Act extended subsidies for marketplace enrollees, increasing the enrollment number. These premium tax credits are set to expire at the end of 2025.

If the subsidies are extended through the 2026 benefit year by July 31, the federal marketplace user fee rate would be 2.2% of monthly premiums, and the state-based user fee rate would be 1.8% of total monthly premiums. 

Risk adjustment fee

CMS, on behalf of HHS, will be responsible for operating risk adjustment in every state and the District of Columbia for the 2026 benefit year. 

A risk adjustment user fee is collected to cover a wide range of activities that support risk adjustment program activities. For the 2026 benefit year, CMS is finalizing a risk adjustment user fee of $0.20 per member per month. This is higher than the 2025 benefit year user fee to account for updated enrollment estimates in the individual and small group markets if enhanced tax credit subsidies expire at the end of 2025.

Cost-sharing reduction (CSR) loading
 
"CSR loading" refers to increasing premium rates to offset the cost of providing cost-sharing reductions to lower the amount consumers pay for deductibles, copayments and coinsurance. CMS is finalizing language to allow CSR loading when the issuer does not otherwise receive reimbursement for such amounts. 

Enrollees who receive premium tax credits to cover all or part of their premium costs get more support through these subsidies to cover higher premiums caused by CSR loading, CMS said.
 
Changes to the MLR to support underserved communities

CMS is finalizing a policy that would amend the medical loss ratio regulations to provide qualifying issuers with the option to modify the treatment of net risk adjustment receipts for purposes of the MLR and rebate calculations, such that these net receipts impact the MLR denominator, rather than the MLR numerator. 

This policy supports plans with unique business models that focus on underserved communities whose members often have higher rates of serious health conditions. These plans often rely heavily on risk adjustment payments versus premiums alone for their revenue.

Advancing health equity and mitigating health disparities

CMS is finalizing allowing issuers to implement a fixed-dollar premium payment threshold and/or one of two percentage-based premium payment thresholds, which will be used to enable consumers to maintain their coverage, even if they have not paid the full amount owed, as long as the amount paid does not exceed the premium payment threshold set by the issuer. 

This will help avoid triggering a "grace period," which typically begins when a consumer first fails to pay their monthly premium, and, by the end of which, the consumer needs to pay the full amount of their premium to avoid losing coverage. 

For the fixed-dollar threshold, CMS is finalizing a cap of $10 or less (adjusted for inflation), which means that if an issuer adopts a $10 fixed-dollar threshold, a consumer who has paid their first premium, and then subsequently owes $10 or less after the application of their advanced premium tax credit, will not be put into a grace period, as long as they owe $10 or less in premiums.

THE LARGER TREND

The final rule also includes:

• updates to the HHS-operated risk adjustment program (the permanent program that transfers funds from issuers of risk adjustment covered plans with lower-than-average risk to issuers of risk adjustment covered plans with higher-than-average risk).
• changes to calculations for the Basic Health Program (BHP).
• annual public reporting of aggregated, summary-level information from the ACA Quality Improvement Strategy, a program that aims to incentivize improved health outcomes for plan enrollees.

These and other policies in the final rule are designed to reduce administrative burden, ensure accurate risk adjustment transfers, promote transparency and enhance health equity in the marketplace, CMS said.

A new report shows that nearly 50 million people – or one in seven Americans – have had ACA Marketplace coverage at some point, CMS said. 

For this enrollment period, nearly 24 million people – a record number – have selected plans.
 

Email the writer: SMorse@himss.org