What This Means for You
- Premiums and Plan Options: CMS is proposing changes that could expand catastrophic plan availability, eliminate standardized plan requirements, and allow new types of non-network plans.
- Subsidy Eligibility: The proposal would tighten income and immigration verification rules for premium tax credits and cost-sharing reductions.
- Fraud and Oversight: Stronger enforcement tools are proposed for agents, brokers, issuers, and state Exchanges to reduce improper enrollments and protect taxpayer dollars.
WASHINGTON, D.C. — Millions of Americans who buy health coverage through Affordable Care Act marketplaces could see changes to plan options, subsidy eligibility rules, and enrollment procedures under a sweeping set of regulations proposed Monday by the Centers for Medicare & Medicaid Services.
The proposed Notice of Benefit and Payment Parameters for 2027 outlines policy changes affecting federal and state-based Health Insurance Exchanges — the online marketplaces where individuals and families purchase ACA-compliant coverage and may qualify for federal premium subsidies.
CMS officials said the rule is intended to lower premiums, promote competition, and strengthen oversight of taxpayer-funded subsidies. The full proposal is available in the Federal Register at https://www.federalregister.gov/d/2026-02769. Public comments are due by March 13, 2026.
Expanding Catastrophic and Non-Network Plan Options
One of the most significant proposals would allow insurers to offer catastrophic health plans — typically lower-premium plans with high deductibles — with contract terms of up to 10 consecutive years.
Catastrophic plans are currently limited in availability, generally restricted to individuals under age 30 or those who qualify for a hardship exemption. CMS is proposing to expand hardship eligibility to certain individuals age 30 and older in all states, which could allow more consumers to access these lower-premium options.
The rule also proposes allowing “non-network” plans to qualify as Qualified Health Plans. Unlike traditional plans that rely on contracted provider networks with negotiated rates, non-network plans would set fixed benefit amounts that enrollees could use with any provider who accepts the payment as full compensation. CMS said this could reduce administrative overhead and increase price competition.
In addition, CMS proposes eliminating the requirement that insurers offer standardized plan designs — plans with uniform cost-sharing structures — and repealing limits on the number of non-standardized plans insurers may offer. Officials said the changes would provide issuers greater flexibility in plan design.
Strengthening Eligibility Verification and Subsidy Oversight
The proposed rule would significantly tighten verification requirements for premium tax credits and cost-sharing reductions — federal subsidies that lower monthly premiums and out-of-pocket costs for eligible enrollees.
CMS proposes limiting eligibility for advance premium tax credits (APTCs) to individuals who meet updated statutory requirements under the Working Families Tax Cut legislation, including immigration eligibility standards. Exchanges would be required to verify that applicants are “eligible noncitizens” before granting subsidies.
The rule also proposes reintroducing stricter income verification policies that were previously finalized and later stayed by a federal court. Under the proposal, consumers whose reported income falls below 100 percent of the federal poverty level would again be required to submit documentation to verify eligibility.
CMS further proposes reinstating and expanding pre-enrollment verification for certain Special Enrollment Periods — the windows outside of annual open enrollment when individuals may qualify to enroll due to life events such as loss of coverage. The agency would require Exchanges on the federal platform to verify at least 75 percent of new special enrollment applications.
Officials said these changes are intended to reduce improper enrollments and prevent excess subsidy payments.
Marketing and Broker Conduct Rules
The proposal includes expanded regulations governing agents, brokers, and web-brokers who assist consumers with Exchange enrollment.
CMS would clarify prohibited marketing practices, including offering cash or rebates to induce enrollment, falsely suggesting zero-dollar premiums, or misrepresenting enrollment deadlines. The agency also proposes requiring standardized consumer consent forms and eligibility review documentation to reduce unauthorized plan switching and inaccurate applications.
Additionally, CMS proposes sunsetting its vendor-approved broker training program while continuing to require annual training through the Marketplace Learning Management System.
State Flexibility and Essential Health Benefits
The rule would provide states with greater flexibility in conducting provider access and essential community provider reviews for Qualified Health Plan certification. States operating State-Based Exchanges could conduct their own certification reviews if CMS determines they have adequate authority and technical capacity.
CMS also proposes reducing the minimum percentage of Essential Community Providers — such as federally qualified health centers — that insurers must contract with from 35 percent to 20 percent in certain markets.
Another proposal would prohibit insurers from including routine non-pediatric dental services as an Essential Health Benefit, aligning coverage requirements with what CMS describes as the statutory scope of a typical employer plan.
In addition, CMS proposes revising cost defrayal rules for state-mandated benefits. Under the proposal, if a state requires benefits beyond federally defined Essential Health Benefits, the state — rather than the federal government or unsubsidized consumers — would be responsible for covering those added costs in Exchange plans.
Risk Adjustment and User Fees
CMS also proposes technical updates to the federal risk adjustment program, which redistributes funds among insurers to account for differences in enrollee health risk. The agency would recalibrate the risk adjustment model using updated enrollee-level data and maintain the proposed 2027 risk adjustment user fee at $0.20 per member per month.
For insurers participating in federally facilitated Exchanges, CMS proposes maintaining the user fee at 2.5 percent of monthly premiums, and 2.0 percent for State-Based Exchanges on the federal platform.
Quality and Enforcement Provisions
The proposal would expand CMS authority to conduct audits and compliance reviews of insurers participating in Exchanges, including oversight of premium tax credit and cost-sharing reduction programs.
It would also clarify civil money penalty authority and adjust administrative appeal procedures for issuer sanctions.
In addition, CMS proposes modifying Quality Improvement Strategy requirements by allowing insurers to select any two of five statutory quality focus areas, rather than mandating specific topics.
Next Steps
If finalized after the public comment period, the rule would take effect for the 2027 plan year. CMS officials said the proposals are intended to improve affordability, increase competition, and strengthen program integrity across federal and state Exchanges.
Stakeholders, including insurers, states, brokers, and consumer advocates, may submit comments through March 13, 2026, via the Federal Register link above.
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