The Centers for Medicare & Medicaid Services (CMS) has finalized a set of regulatory updates to the Affordable Care Act (ACA) Marketplace, aimed at tightening eligibility verification, reducing improper enrollments, and standardizing enrollment procedures. The update also includes new restrictions and clarifications on federal subsidy eligibility.
Below are the key provisions of the 2025 CMS final rule.
1. Elimination of Monthly Special Enrollment Period for Low-Income Enrollees
Beginning in 2025, CMS will eliminate the monthly Special Enrollment Period (SEP) for individuals with household incomes at or below 150% of the federal poverty level. Previously, this SEP allowed qualifying individuals to enroll in Marketplace coverage at any time during the year.
CMS cited concerns that some brokers and agents had misused the SEP to switch enrollees between plans without consent, often for financial gain. The removal of this SEP is intended to limit unauthorized activity while preserving access to enrollment through standard SEPs based on qualifying life events.
2. Expanded Verification for Income and SEP Eligibility
This update strengthens verification protocols across the ACA Marketplace:
Real-Time SEP Eligibility Checks: Most consumers enrolling through Special Enrollment Periods (SEP) will now undergo real-time eligibility verification before plan selection and activation.
- This means that consumers signing up for health insurance outside of the normal Open Enrollment period will now have to prove their eligibility immediately, before selecting and starting a plan.
- Instead of submitting documents and waiting for approval later, the system will instantly check eligibility.
Subsidy Adjustment for Auto-Reenrollment: Consumers who are automatically reenrolled in fully subsidized plans without verifying their eligibility will have their Advance Premium Tax Credit (APTC) reduced by $5 per month. CMS designed this policy to encourage active consumer participation in the annual enrollment process.
Together, these measures aim to improve the accuracy of subsidy distribution and reinforce the integrity of enrollment operations.
3. Restrictions on Subsidies for Gender-Affirming Care Procedures
CMS added a new provision explicitly prohibiting federal premium subsidies from being used to pay for “specified sex-trait modification procedures.” While CMS has not detailed the full scope of this policy, it represents a new federal limitation on the use of public funds for certain gender-affirming medical services.
The inclusion of this restriction is expected to prompt legal review and discussion among advocacy groups and healthcare stakeholders.
4. Exclusion of DACA Recipients From ACA and Basic Health Program Eligibility
CMS reaffirmed that individuals covered under the Deferred Action for Childhood Arrivals (DACA) policy are not eligible for ACA Marketplace plans or the Basic Health Program. DACA is an immigration policy that offers temporary protection from deportation and work authorization to certain undocumented individuals who came to the U.S. as children. This restores a longstanding federal policy and maintains the exclusion of DACA recipients from subsidized Marketplace coverage.
5. Standardized Open Enrollment Period
Starting with the 2027 plan year, all ACA health insurance exchanges—both federal and state-based—will follow a standardized Open Enrollment Period that ends on December 31. The goal is to simplify timelines for consumers, reduce administrative complexity, and promote consistent enrollment behavior.
6. Sunset Clause for Select Provisions
Some provisions of the final rule, particularly those involving tighter eligibility verification, will expire after the 2026 plan year. CMS intends to monitor their effectiveness and determine whether to extend, modify, or remove them based on future evaluations.
Bottom Line
The 2025 CMS final rule brings notable structural changes to the ACA Marketplace, affecting consumers, providers, and agents. By combining administrative reforms with new eligibility limits, CMS aims to strengthen oversight and promote Marketplace stability. As implementation begins, stakeholders will closely watch how these changes impact access, affordability, and enrollment trends.
