Recent changes to ACA income verification rules
Executive summary
CMS finalized the 2025 “Marketplace Integrity and Affordability” rule that tightens income verification for Marketplace applicants, institutes new pre‑enrollment document checks for some Special Enrollment Periods (SEPs), and alters who can self‑attest income; HHS estimated added verification costs of roughly $20.2 million for the Federal Facilitated Marketplace and $12.4 million for State-Based Marketplaces in 2026 [1] [2]. Commenters and advocates warned these changes will reduce enrollment and administrative capacity; some provisions have been stayed by a federal court and others are phased in or time‑limited, leaving uneven implementation across states [3] [4].
1. What the rule changes actually require: tighter income checks and new document review
The final rule codifies “strengthening income verification processes,” meaning marketplaces will more often require documentary evidence instead of relying solely on self‑attestation in cases of missing or divergent tax data, and it establishes pre‑enrollment verification for certain SEPs to reduce what CMS calls improper enrollments [1] [2]. HHS explicitly adopted standards for when marketplaces must deny eligibility for advance payments of the premium tax credit (APTC) if a filer fails to reconcile prior credits, and it broadened the circumstances under which an applicant’s claimed income must be verified against federal databases [1] [2].
2. Who’s most affected: low‑income, people with missing tax records, and SEP applicants
Marketplaces will no longer accept self‑attestation in additional situations—specifically when no tax data exist for the person or when the applicant projects income above 100% FPL but federal records show income below that threshold—so people with limited or nonstandard tax records (e.g., recent immigrants, informal workers) face more verification hurdles [4]. The rule also ended the low‑income SEP that allowed some people under 150% FPL to enroll year‑round, which narrows the signup window for many lower‑income enrollees [4] [5].
3. Administrative and fiscal impacts: more verification work and higher operating costs
HHS and outside analysts estimate material operational costs: HHS put the FFM’s document‑review and verification costs at nearly $3 million to implement in 2025 and about $14.6 million to review consumer documents in 2026; combined marketplace operational costs for 2026 were estimated at roughly $20.2 million (FFM) and $12.4 million (SBMs), plus technology updates [2]. Industry advisers predict these burdens will increase administrative workload for exchanges and insurers and could raise premiums indirectly by changing enrollment composition [2] [3].
4. Enrollment consequences: officials predict fewer enrollees; advocates warn of chilling effects
CMS’s own projections and industry analyses flag potential enrollment declines—one legal/industry blog quoted the proposed rule’s estimate that 750,000 to 2 million fewer people could enroll in 2026 as a result of combined rule changes [3]. Health policy analysts and consumer groups argue stricter verification and narrower SEPs will discourage enrollment—particularly among younger and healthier people whose participation stabilizes risk pools—potentially destabilizing premiums if healthy enrollees drop out [3] [6].
5. Legal and implementation caveats: not all provisions are fully in force nationwide
Several provisions faced legal challenges; a federal judge issued an injunction on August 22, 2025, temporarily blocking seven provisions of the rule, and implementation varies by state—some state exchanges retain options to verify SEP eligibility differently than HealthCare.gov [4] [5]. That means the rule’s practical effects will be patchy: some verification changes apply immediately, others only for 2026 or 2027 plan years, and states may differ in how they operationalize new standards [2] [5].
6. Political and policy context: subsidy expirations and broader reforms amplify impact
These verification changes come as enhanced premium tax credits are scheduled to expire at the end of 2025 unless Congress extends them; KFF and other analysts warn that without those subsidies premiums and out‑of‑pocket costs will rise substantially in 2026, so verification tightening could magnify affordability problems and enrollment shocks [6] [7]. Republican and Democratic priorities diverge: proponents frame rules as anti‑fraud and integrity measures, while opponents say they will reduce access and increase uncompensated care [1] [3].
7. Practical advice for affected consumers and providers
Marketplaces and insurers advise consumers to prepare income documentation (pay stubs, W‑2s, 1099s, prior tax returns) and to check Healthcare.gov or state exchange sites beginning November 1, 2025 for enrollment options and notices about verification requirements; providers should incorporate insurance verification into workflows to reduce later denials [8] [9]. Health plans and advocates recommend tracking state‑specific guidance because some verification mandates and SEPs remain subject to litigation and state variation [5] [4].
Limitations: available sources do not mention long‑term actuarial modeling beyond CMS’s initial estimates and do not provide post‑implementation empirical enrollment data yet; litigation outcomes could change many of the provisions cited here [2] [4].