Marketplace Plan Regulatory Update

On June 20, 2025, the US Department of Health and Human Services released a final “Marketplace Integrity and Affordability” rule. The rule imposes new restrictions and administrative burdens on eligibility, enrollment, and subsidies for Marketplace insurance. HHS estimates that the policies included in this final rule will cause up to 1.8 million individuals to lose coverage in 2026. The coverage losses are intentional: the Administration maintains that millions of consumers are improperly enrolled in subsidized Marketplace coverage.

The rule’s policies take effect over varying timeframes – some as early as August 25, 2025. Two lawsuits have been filed to challenge some provisions of the rule, and on August 22nd, a federal district court entered an emergency stay preventing some of the rule’s provisions from going into effect while litigation continues. Matters remain in flux, as it is possible that the federal government could appeal the court ruling, or that HHS will provide additional guidance to states. Here is what we know for now about the near-term (2025-26) impacts of the rule, as well as rule provisions affected by the court ruling.

Eligibility and Enrollment Opportunities

Effective August 25, 2025:

• The rule ends the monthly special enrollment period (SEP) for people at or below 150% of the Federal Poverty Level (FPL), i.e., those who may “churn” on and off of Medicaid.
• The rule ends Marketplace and Basic Health Program (BHP) eligibility for Deferred Action for Childhood Arrival (DACA) recipients, reinstating a pre-2024 definition of “lawfully present.” DACA recipients who were enrolled in Marketplace or BHP plans will lose their insurance by August 31.
• The rule would have allowed insurers to deny new coverage to consumers who owe past-due premiums from previous years (notwithstanding the Affordable Care Act’s guaranteed issue protections). This policy was paused by the court order.

Effective Plan Year 2026:

• The rule would have reduced SEP enrollment opportunities by imposing stricter eligibility verification requirements. This policy was paused by the court order.
• The rule would have created new barriers to automatic re-enrollment in $0 premium plans: enrollees in such plans would have been required to pay premiums of at least $5/month until they update their application. This policy was paused by the court order.

Changes to subsidies (advance premium tax credits, or APTCs)

The rule would have imposed tighter income verification procedures on APTC applicants, with the stated aim of addressing improper APTC payments. Marketplaces would have been required to verify household income inconsistencies, and enrollees would have lost APTC-eligibility if they failed to file and reconcile APTCs for any single previous year. These policies were paused by the court order.

Changes to actuarial value (AV)

Effective August 25, 2025:

• The rule adopts a less protective threshold for APTC-eligible consumers who underpay their premiums by small amounts.

Effective Plan Year 2026:

• The rule would have allowed plans to make larger downward variations from the actuarial value AV requirements that apply to plans at different metal tiers. (AV is the calculation of how much a plan covers vs. a person pays in out-of-pocket costs.) This policy was paused by the court order.
• The final rule adopts a methodology that yields a higher premium adjustment percentage. This will result in higher annual out-of-pocket maximums and higher premiums for Marketplace enrollees but also, ultimately, for people with large group insurance.

The Marketplace Integrity and Affordability rule makes additional changes with later effective dates (e.g., shortening the open enrollment period for 2027 insurance). The Alliance will continue to provide updates on these policy changes, as well as on new litigation developments.