Labor & Employment Law Daily Wrap Up, BENEFITS NEWS—Extensive Affordable Care Act changes made, ‘Dreamers’ no longer covered, (Jun 24, 2025)
The ACA enrollment period is narrowed, and DACA recipients, often referred to as “Dreamers,” will no longer qualify for ACA marketplace health insurance, among other final rule changes.
HHS will make sweeping changes to the Affordable Care Act (ACA) that will impact eligibility, enrollment, cost sharing, subsidies, accountability, and the evidence standard for ending marketplace agreements for agents and brokers, according to an advance release of the Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability Final Rule. Notable is that the Deferred Action for Childhood Arrivals (DACA) recipients or “Dreamers” will no longer be eligible for health care insurance under the ACA. According to CMS, the rule finalizes additional safeguards to protect consumers from improper enrollments and changes to their health care coverage, as well as establishes standards to ensure the integrity of ACA Exchanges.
Coverage. DACA recipients are removed from the definition of “lawfully present” for eligibility and enrollment in Exchanges and Basic Health Program (BHP) coverage in states that elect to operate a BHP. CMS is also finalizing the repeal of the rule that prohibits issuers from denying health insurance coverage based on unpaid past-due premiums. On a temporary basis, through plan year 2026, CMS is finalizing elimination of the fixed-dollar and gross percentage-based premium payment thresholds, allowing issuers to only adopt the net percentage-based threshold.
Sex-trait modification procedures. Effective beginning in plan year 2026, issuers subject to essential health benefits (EHB) requirements (that is, non-grandfathered individual and small group market plans) may not cover specified sex-trait modification procedures as an EHB.
Enrollment. Beginning for plan year 2027, the open enrollment period (OEP) will run from November 1 through December 31 preceding the coverage year. However, exchanges may set their own OEPs within set parameters, but each OEP must start no later than November 1, end no later than December 31, and last no more than nine weeks.
Special enrollment periods. CMS is finalizing the repeal of the monthly special enrollment period (SEP) for individuals with projected household incomes at or below 150% of the federal poverty level (FPL). Marketplaces must conduct pre-enrollment verification for SEP eligibility beginning plan year 2026 for Marketplaces on the federal platform, but this requirement is not being finalized for state Marketplaces. CMS is finalizing a rule mandating pre-enrollment eligibility verification for at least 75% of new enrollments through SEPs beginning plan year 2026 (and sunsetting in 2026) for Marketplaces on the federal platform.
Credit eligibility. CMS is finalizing the requirement that Exchanges must determine an individual ineligible for advance payments of the premium tax credit (APTC) if they failed to file their federal income taxes and reconcile APTC for one year instead of for two consecutive tax years. Removed is the automatic 60-day extension of the statutorily required 90-day period for resolving income inconsistencies introduced last year, along with the requirement that Exchanges accept an applicant’s or enrollee’s self-attestation of projected annual household income when the Exchange attempts to verify income with the IRS. Applicants will be required to submit documentary evidence.
Annual eligibility redeterminations. A five-dollar monthly premium will exist, only for plan year 2026, and will be eliminated if plan members continue to be eligible for a $0 premium after application of APTC. CMS is not finalizing this requirement for state Marketplaces, but states will have the same ability to create such a process in 2027. The rule also finalizes the repeal of a regulation that allows Marketplaces to automatically re-enroll cost share reduction (CSR)-eligible bronze qualified health plan (QHP) enrollees in 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.
Premiums and plans. Updates to 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 markets for the 2026 plan year and beyond, are finalized. For de minimis thresholds, CMS is finalizing widening 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 is finalizing a de minimis range of +5/-4 percentage points. CMS is also finalizing removing 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.
Evidence standard. According to CMS, to improve transparency in the process for holding agents, brokers, and web-brokers accountable for compliance with applicable law, regulatory requirements, and their Marketplace Agreements, a “preponderance of the evidence” standard is adopted. That standard will be used for determining whether an agent, broker, or web-broker’s Marketplace Agreement should be terminated due to noncompliance with applicable HHS rules and the terms of their agreements.
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