What Does the Marketplace Integrity and Affordability Proposed Rule Mean for Qualified Applicable Large Employers?
What Does the Marketplace Integrity and Affordability Proposed Rule Mean for Qualified Applicable Large Employers?
In March 2025, the Centers for Medicare & Medicaid Services (CMS) introduced the “Marketplace Integrity and Affordability Proposed Rule,” aiming to enhance the integrity of the Affordable Care Act (ACA) Marketplaces. While the rule primarily targets individual and small-group markets, its implications extend to Qualified Applicable Large Employers (ALEs) under the ACA. This article delves into the proposed changes and their potential impact on ALEs.
Understanding the Proposed Rule
The proposed rule encompasses several key provisions:
- Income Verification Enhancements: CMS proposes stricter income verification processes to ensure eligibility accuracy for premium tax credits (PTCs). This includes removing exceptions that allowed self-attestation of income when tax data was unavailable.
- Special Enrollment Period (SEP) Modifications: The rule suggests reinstating pre-enrollment verification for SEPs and eliminating the monthly SEP for individuals with incomes below 150% of the Federal Poverty Level (FPL).
- Open Enrollment Period (OEP) Adjustment: CMS aims to shorten the annual OEP from November 1 through December 15, reducing the window for individuals to enroll in coverage.
- Premium Payment Policies: Insurers may be allowed to require payment of past-due premiums before effectuating new coverage, and the rule proposes eliminating fixed-dollar and gross percentage-based premium payment thresholds.
- Exclusion of DACA Recipients: The rule seeks to remove Deferred Action for Childhood Arrivals (DACA) recipients from the definition of “lawfully present,” affecting their eligibility for Marketplace coverage.
Implications for Qualified Applicable Large Employers
Qualified ALEs, defined as employers with 50 or more full-time employees, are subject to the ACA’s Employer Shared Responsibility Provisions. The proposed rule’s changes could impact ALEs in several ways:
- Increased Employer Plan Participation: With stricter income verification and reduced SEPs, employees may find it more challenging to obtain or maintain Marketplace coverage, potentially leading to increased enrollment in employer-sponsored plans.
- Potential for Increased Penalties: If employees lose Marketplace coverage due to the proposed changes and the employer’s plan is deemed unaffordable or lacks minimum value, ALEs could face penalties under the ACA’s Employer Shared Responsibility Provisions.
- Administrative Adjustments: ALEs may need to reassess their health coverage offerings and communication strategies to ensure compliance and to accommodate employees who might be affected by the Marketplace changes.
Strategic Considerations for ALEs
To navigate the potential impacts of the proposed rule, ALEs should consider the following actions:
- Review Health Plan Offerings: Ensure that employer-sponsored plans meet affordability and minimum value standards to mitigate potential penalties.
- Enhance Employee Communication: Provide clear information about health coverage options, especially in light of the shortened OEP and changes to SEP eligibility.
- Monitor Regulatory Developments: Stay informed about the finalization of the proposed rule and any subsequent guidance to adjust strategies accordingly.
Action is months away but information is always timely
While the Marketplace Integrity and Affordability Proposed Rule primarily targets individual and small-group markets, its ripple effects could influence the dynamics of employer-sponsored coverage. Qualified ALEs should proactively assess and adapt their health coverage strategies to align with the evolving regulatory landscape and to support their workforce effectively.
