CMS proposes that Exchanges verify income, family size and residence before financial assistance
CMS proposed a rule that would stop Exchanges from providing financial assistance during inconsistency periods, effective with plan year 2028. The first pre-OE verification window would start August 1, 2027, for 2028 coverage.
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CMS proposed a rule that would require Exchanges to verify household income and family size, status as a citizen, U.S. national or eligible noncitizen, other qualifying coverage and place of residence before providing financial assistance, the agency said. Exchanges would no longer be permitted to provide financial assistance during inconsistency periods when certain eligibility criteria cannot be verified electronically. Consumers could still enroll in Exchange coverage without financial assistance while verifications are pending, and the provisions would be effective starting with eligibility determinations made for plan year 2028.
Why it matters
CMS said that under existing policy established by the Affordable Care Act (ACA), Exchanges provide advance payments of the premium tax credit (APTC) and cost-sharing reductions (CSRs) during the inconsistency period to consumers who otherwise appear eligible. CMS said consumers who do not submit documentation before the end of the inconsistency period generally have APTC and CSRs reduced or ended. Under the proposed rule, verification would come before the assistance starts. CMS said the change would align Exchange rules with new premium tax credit (PTC) eligibility requirements in the Working Families Tax Cuts (WFTC) legislation (P.L. 119-21).
The dates and the criteria
CMS published the fact sheet on Oct 23, 2026. The agency said the premium tax credit changes are proposed to be codified in regulations issued by the Department of the Treasury on October 15, 2026.
- criteria verified before financial assistance: household income and family size; status as a citizen, U.S. national, or eligible noncitizen (including lawfully present); eligibility for or enrollment in other qualifying coverage; place of residence
- effective: eligibility determinations made for plan year 2028
- pre-OE verification period: starts August 1 each year ahead of Open Enrollment (OE)
- first pre-OE window: August 1, 2027, for 2028 coverage
- public comments: a 30-day period following publication of the proposed rule
CMS said the proposed rule is available on the Federal Register.
What would change for consumers
CMS said the proposal would require annual verification. Currently enrolled consumers would be automatically re-enrolled with financial assistance only if they return to the Exchange to confirm certain eligibility criteria and have it re-verified. Consumers who do not return and have their information re-verified would be automatically re-enrolled without financial assistance.
CMS also proposed that Exchanges maintain or reduce the amount of financial assistance provided during an inconsistency period after an enrollee voluntarily reports a change in circumstances that affects eligibility.
CMS said the proposed regulations would ensure financial assistance is only provided when income can be verified. The agency said that could reduce the risk that consumers would have to repay excess APTC at tax filing because of inaccurate income estimates. It also said the requirements would reduce improper or fraudulent enrollments and improve program integrity.
Verification before Open Enrollment
CMS proposed that all Exchanges make a pre-OE verification period available to new and returning applicants. During it, consumers could provide a minimum set of eligibility information early for the next coverage year. CMS said the early opportunity would help enrollees have their eligibility fully verified before the upcoming coverage year.
Starting with plan year 2028, CMS proposed to permit Exchanges to provide the written annual OE notification to each enrollee before the pre-OE verification period, instead of in the month before OE starts.
Contingent plans and timing of assistance
CMS proposed requiring Exchanges to allow consumers to select a contingent plan during OE or a Special Enrollment Period (SEP). The plan selection would become effective only if the consumer is determined eligible for financial assistance. CMS said this would let consumers who elect not to enroll during their inconsistency period enroll once they are determined eligible, even if OE or their SEP has ended.
On effective dates, CMS proposed these rules:
- consumers already enrolled in a health plan when their eligibility is verified: financial assistance provided retroactively for the months of the inconsistency period when they were enrolled
- consumers who select a plan pending verification: enrollment and financial assistance start based on when eligibility is verified
- eligibility redeterminations when an enrollee who does not qualify for an SEP reports a change: Exchanges could no longer delay effective dates beyond the first of the month after the redetermination occurs
What the rule leaves open
CMS proposed waiving the new verification requirements for consumers with certain changes in family size, so that their financial assistance is based on attested application information during inconsistency periods. The waiver applies when a consumer or household member qualifies for an SEP triggered by birth, adoption, marriage, or loss of a dependent through divorce, separation, or death, if allowed by the Exchange.
CMS also seeks comment on how to strengthen Exchange requirements to verify family size and residency, including which data sources CMS should consider. The agency asked for ways to increase program integrity while limiting burden on consumers and costs for state and federal Exchanges.
State Exchanges
CMS proposed that a state submit its application to become a State-based Exchange 15 months before it begins operations for the pre-OE verification period, instead of 15 months before OE.