Each year, the Department of Health and Human Services (HHS) and Department of the Treasury finalize various rules and regulations related to the implementation of the Affordable Care Act (ACA) and the health insurance marketplaces/exchanges.
The document used to update rules and regulations for the ACA and the marketplaces is called the Notice of Benefit and Payment Parameters (NBPP).
This article will outline some important changes that took effect in 2022 and 2023. In general, rule changes are applicable for the year in question as well as all future years (unless they’re changed in subsequent rulemaking). However, some of the changes in the 2022 NBPP were applicable prior to 2022, and some may or may not continue in future years.
2022 Rulemaking Was More Complex Than Other Years
These rules are usually finalized in the spring and then take effect the following January. The process was longer for 2022, however, because there was an administration change at the start of 2021.
So although some aspects of the 2022 rules had been finalized in early 2021 (under the Trump administration), there were various changes made after the Biden administration took office.
Under the Trump administration, HHS published the proposed 2022 NBPP in November 2021. They then finalized some parts of that proposal in January 2021. But that was only a few weeks after the public comment period had closed, and there wasn’t time to finalize some aspects of the proposed rules before the Trump administration left office.
So the “final” NBPP that was published in January 2021 was only a partial rule, and HHS/Treasury made that clear at the time. In April 2021, they finalized the rest of the originally proposed NBPP for 2022, but noted that “as a result of a change in administration priorities,” they would soon be issuing an additional proposed NBPP.
This process had to be followed because procedural rules prevent an administration from simply announcing new rules. Instead, the applicable agencies (in this case, Treasury and HHS) have to publish proposed rules, open a public comment period, and then issue finalized rules that incorporate the agencies’ responses to the public comments they received.
So in June 2021, HHS and the Treasury Department published another proposed 2022 NBPP. And in September 2021, they issued the final NBPP for 2022.
Changes Under the 2022 and 2023 ACA Marketplaces Rules
The final 2022 NBPP, issued in September 2021, reversed some of the changes that the Trump administration had finalized in early 2021, and also created some new rules.
But some aspects of the initial NBPP remained in place, and other rules were finalized in the NBPP that the Biden administration issued in April 2021. That was followed by the NBPP for 2023, and also separate rulemaking related to fixing the “family glitch.” So the changes described in this article stem from multiple NBPPs and regulations.
The NBPP addresses a variety of actuarial issues, including extensive guidelines related to risk adjustment and fees that insurers pay to sell coverage in the exchange. Those regulations are crucial in terms of how insurers design and price their products.
But this article will focus more on the regulations that would have a more direct impact on consumers who are seeking coverage in the health insurance exchange for 2022, 2023, and future years.
Maximum Out-of-Pocket Cap
For 2022 health coverage, the maximum out-of-pocket limit was $8,700 for a single person and $17,400 for a family. For 2023, these limits increased to $9,100 and $18,200, respectively. For 2024, they will increase again, to $9,450 and $18,900. (Note that this is no longer set via the NBPP, but rather via a separate HHS publication.)
The maximum limit on out-of-pocket costs applies to in-network care for essential health benefits.
Although the out-of-pocket limits apply to most health plans, they do not apply to grandmothered or grandfathered plans or “excepted benefits” such as short-term health plans and fixed indemnity plans. There is also no out-of-pocket cap on Original Medicare (Parts A and B).
Originally, the proposed out-of-pocket cap for 2022 had been $9,100 for a single person and $18,200 for a family. The methodology for calculating the maximum out-of-pocket had changed in 2020 and resulted in out-of-pocket limits that were higher than they would otherwise have been.
The public comments on this change were overwhelmingly negative ever since the rule change was proposed. This feedback continued with the comments received in response to the proposed 2022 limits.
So HHS and the Treasury Department opted to revert to the methodology in effect before 2020. The result was that the out-of-pocket limit for 2022 was $400 lower than it would otherwise have been, and the $9,100 limit didn’t go into use until the following year.
There are many health plans with out-of-pocket limits well below the maximum allowable amount. This includes many employer-sponsored plans and many individual/family health plans at the silver, gold, and platinum levels.
But all catastrophic plans have individual out-of-pocket limits that mirror the maximum allowable amount (this is a required aspect of catastrophic plans under the ACA). And many bronze plans also use this upper cap as their out-of-pocket maximum.
Note that the maximum out-of-pocket limits are lower for people who qualify for cost-sharing reductions (CSR). An applicant can receive CSR benefits if their household income is no more than 250% of the poverty level and they select a silver plan in the exchange.
If a person qualified for CSR and selects a silver plan in the exchange, the maximum out-of-pocket limits depend on the person’s household income and have been set at the following levels for 2023:
- Income between 100% and 200% of the poverty level: $3,000 for a single person and $6,000 for family coverage
- Income above 200% but not more than 250% of the poverty level: $7,250 for a single person and $14,500 for family coverage
Extended Open Enrollment Window
For states that use the federally run health insurance marketplace (i.e., HealthCare.gov), the open enrollment period for individual/family health plans has been extended through January 15. This applies to the open enrollment period that begins in the fall of 2021 as well as future years.
Enrollments must be completed by December 15, however, to have coverage effective January 1. Applications and plan changes submitted between December 16 and January 15 will take effect February 1 instead.
ACA-compliant individual/family health insurance debuted in the fall of 2013 for coverage effective in 2014. For the first few years, the open enrollment schedule changed each year as regulators worked on fine-tuning the system.
For 2018, 2019, 2020, and 2021 coverage, a November 1 to December 15 open enrollment window was used in states that use HealthCare.gov as their marketplace.
However, for 2022 and future years, the enrollment window has been changed to November 1 through January 15. But the final NBPP does clarify that states that operate their own exchanges (i.e., they don’t use HealthCare.gov) can set their own enrollment deadlines, as long as it’s not earlier than December 15.
For 2023 coverage, DC and 17 states run their own exchange platforms, while 33 states use HealthCare.gov (as of the 2024 plan year, Virginia will start to also run its own exchange platform, bringing the number of fully state-run exchanges to 19). Most of those 18 state-run exchanges were already accustomed to extending their enrollment windows, and most allow enrollment through January 15 or even later.
But Idaho opted to keep a December 15 deadline, and the deadlines in other state-run exchange do vary somewhat. So enrollees need to pay attention to the details of their own state.
The November 1 to January 15 deadline applies both on-exchange and off-exchange in states that use HealthCare.gov.
Year-Round Enrollment Window for Low-Income Applicants
The 2022 NBPP included a provision to creates a year-round enrollment opportunity for subsidy-eligible exchange enrollees with household income up to 150% of the federal poverty level.
This provision is applicable in the states that use HealthCare.gov, and optional in those that run their own exchange. But most of the fully state-run exchanges have adopted it, and some offer it with higher caps on the eligible income limit.
For a single person in the continental United States enrolling in 2023 coverage, that amounts to $20,385 in income in 2022. For a household of four, it’s $41,625. (Note that the limits are higher in Alaska and Hawaii and that the prior year’s federal poverty guidelines are always used.)
Enrollment in individual/family health plans is normally only available during the annual open enrollment period or a special enrollment period triggered by a qualifying life event.
For people with income up to 150% of the poverty level, enrollment is available anytime, assuming the applicant does not have access to Medicaid, premium-free Medicare Part A, or an affordable employer-sponsored plan that provides minimum value.
But unlike most special enrollment periods, this one may or may not continue to be available after 2025. The NBPP clarifies that it will only be offered for as long as the subsidy enhancements created by the American Rescue Plan (ARP) remain in place.
The ARP boosted the ACA’s subsidies to be large enough to fully cover the cost of the benchmark plan for people who earn up to 150% of the poverty level, for 2021 and 2022. The Inflation Reduction Act subsequently extended that provision through 2025. And additional legislation would be necessary to further extend it or to make it permanent.
But if that subsidy enhancement ends at the end of 2025—or at the end of a subsequent year, if it’s extended but not made permanent—the year-round enrollment opportunity would also end.
The NBPP clarifies that this ongoing enrollment option will help to ensure that low-income people are able to take advantage of the substantial premium tax credits for which they’re eligible.
Since the premium tax credits cover the full cost of the benchmark plan (or any plan priced below the benchmark plan), there is less likelihood of adverse selection because people are unlikely to drop their coverage after they receive medical care if the coverage itself is premium-free.
Special Enrollment Period When Employer or Government COBRA Subsidy Ends
Involuntary loss of coverage is a qualifying life event that allows a person to enroll in an individual/family plan outside of the annual open enrollment period.
But the 2022 NBPP clarifies that there is also a special enrollment period available if a person is receiving a government or employer subsidy for the continuation of benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA), and that subsidy ends.
The rules also specify that this special enrollment period was available for people whose government-funded COBRA subsidy (granted by the American Rescue Plan in an effort to address pandemic-related job losses) ended on September 30, 2021.
Government subsidies for the cost of COBRA are not common. There was one during the Great Recession, for people who lost their jobs between September 2008 and May 2010. And then the American Rescue Plan granted a full COBRA subsidy for up to six months for people who lost their jobs and were eligible for COBRA in 2021.
But employer-sponsored COBRA subsidies are much more common. Severance packages often include a provision that the employer will pay some or all of the cost of COBRA for at least a few months.
The rules now clarify that a person can take advantage of that subsidy and then—if they choose to do so—transition to a plan in the exchange after the subsidy ends. This will allow them to take advantage of the ACA’s premium tax credits if they’re eligible, rather than having to pay full price to keep their COBRA coverage in place.
Navigator Duties Expanded
Health insurance navigators work in communities across the country, providing assistance to people who need to enroll in health coverage.
The navigator position was created by the ACA, but navigator duties have changed over time. In the beginning, navigators were expected to just help people with the enrollment process. But as of 2018, navigator duties were expanded to include various post-enrollment assistance as well.
In the NBPP for 2020, that provision was reversed, eliminating the requirement that navigator organizations provide post-enrollment assistance. They could still do so if they were willing and able, but were not required to help consumers after the enrollment was completed.
In the NBPP for 2022, however, the rules were once again reversed. Navigators are again required to provide various post-enrollment assistance, including help with eligibility appeals, premium tax credit reconciliation (the marketplace aspects, but not specific tax assistance), and general help with how to use health insurance coverage.
The Biden administration has also boosted funding for the navigator program to a record high. Sixty navigator organizations received a total of $80 million in August 2021, allowing them to train 1,500 navigators—quadruple the number available the year before. And the funding grew even more tha following year, when Navigator organizations received a total of $100 million in August 2022.
And it’s noteworthy that the funding is only being spread across 30 states, since DC and the other 20 states fund their own navigator/enrollment assister programs.
Most of those states have fully state-run exchanges. Three have state-run exchanges that use HealthCare.gov as their enrollment platform, but those states still fund their own navigator programs.
No Separate Billing Requirements for Abortion Coverage
Abortion coverage on marketplace health plans has long been a controversial topic. Under the ACA, health plans can provide coverage for “elective” abortions but must charge at least $1/month for that coverage. To clarify, “elective” means abortions that aren’t due to rape, incest, or to save the mother’s life.
Abortions that stem from rape or incest, or are done to save the mother’s life, can be covered without the additional premium. But coverage for other abortions, also called “non-Hyde” abortions, can only be provided if the insurer charges that additional premium each month.
Insurers in some states simply don’t cover elective abortions at all, while insurers in a handful of states are required to provide elective abortion coverage. Under ACA regulations, plans covering elective abortion have to collect the additional premium and keep it segregated from the rest of their premium revenue.
Premium tax credits cannot be used to cover elective abortions. Even if a person’s premium tax credit is more than sufficient to pay the full cost of their premiums, they have to pay at least $1/month out of their own pocket if the plan covers elective abortions.
In late 2019, HHS finalized a rule change that required insurers that cover elective abortions to not only segregate the premium revenue but also send the policyholder a separate invoice each month for the abortion coverage premium.
This was challenged in court. A judge blocked it in 2020 before it could take effect. It remained blocked, and the 2022 NBPP officially repealed the separate invoice requirement. This means that insurers that provide elective abortion coverage can continue to send a single invoice each month.
They must continue to charge at least $1/month for the abortion coverage and keep that money segregated from the rest of their premium revenue. But that’s the same process used in the past, and it doesn’t require anything extra from the consumer.
Option for States to Eliminate the Exchange was Repealed
In the first NBPP for 2022, the Trump administration gave states the option to implement a system that would be known as “Exchange Direct Enrollment.”
The idea was that states would be able to abandon their centralized exchange platform (either HealthCare.gov or a state-run exchange) and instead use various private entities—including web brokers, insurance agents, and health insurance companies—to enroll people in health coverage.
HealthCare.gov already allows approved enhanced direct enrollment” entities to enroll people in health plans. Even though the enrollment is conducted entirely through the approved third party’s website, these enrollments are considered “on-exchange,” and the enrollees are eligible for the financial assistance (premium tax credits and cost-sharing reductions) provided via the exchange.
In the 2022 NBPP that was finalized in the spring of 2021, the rules were tightened up a bit to ensure that if an enhanced direct enrollment entity sells off-exchange plans and/or plans that aren’t ACA compliant—such as short-term health plans—these plans must be displayed on a separate web page, not on the same page with the on-exchange options.
But the “Exchange Direct Enrollment” program would have gone even further. If a state had chosen to pursue it, the state would not have had an exchange anymore at all and would have instead relied entirely on private entities to enroll people in health coverage.
Consumer advocates were concerned that enrollees would not receive unbiased enrollment assistance with a system like this in place, especially since there would not have been any public exchange portal for consumers to turn to instead.
There were also concerns that people eligible for Medicaid would not have received the sort of enrollment assistance they currently get from the public exchanges since there’s no financial incentive for private third-party entities to help people who are enrolling in Medicaid.
Thus, in the final 2022 NBPP, the Exchange Direct Enrollment option was repealed. No states had pursued this option after it was introduced in early 2021, although Georgia had previously secured federal approval to essentially create the same sort of system as of 2023.
That approval was revoked by the Biden administration. As of mid-2023, the federal government has told Georgia officials that they can operate a state-run exchange using the HealthCare.gov platform for 2024, and transition to a fully state-run exchange for 2025.
Section 1332 Waiver Guardrails Made Robust Again
Section 1332 of the ACA allows states to create and implement innovative approaches to their health coverage rules. A state can submit its proposal to HHS using a 1332 waiver application. If the proposal complies with federal requirements, it can be approved and implemented.
There are guardrails in place to ensure that if a state uses a 1332 waiver to modify its approach to healthcare reform, consumers will not be short-changed.
The basic idea is that a 1332 waiver has to result in coverage that’s at least as comprehensive and affordable as it would otherwise be, and that the number of people who have coverage is at least as many as it would be without the waiver. In addition, 1332 waivers cannot increase the federal deficit.
But in 2018, the Trump administration issued guidance that relaxed the guardrails for 1332 waivers and gave states examples of how they might use the relaxed rules to implement various changes. And the first 2022 NBPP, finalized in January 2021, incorporated that previous guidance into official regulations.
But the 2022 NBPP that was finalized in September 2021 repealed those earlier rule changes, meaning that the parameters for 1332 waivers are again as strict as they were prior to 2018. This is in an effort to protect consumers and ensure that as many people as possible are covered under robust, affordable major medical health coverage.
Georgia was the only state that had received HHS approval for a 1332 waiver utilizing the relaxed guidelines that were issued in 2018. And as noted above, that approval was subsequently revoked by the Biden administration. All of the other approved 1332 waivers have been for reinsurance programs, which easily comply with the more strict consumer protections that are once again part of the rules for 1332 waivers.
Fixing the “Family Glitch”
The ACA’s “family glitch” existed from 2014 through 2022. Here’s how it worked: A person is not eligible for subsidies in the exchange/Marketplace if they have access to comprehensive employer-sponsored health insurance that’s considered affordable. And through 2022, the affordability determination was based only on the cost to cover the employee alone.
The cost to cover additional family members was not taken into consideration. But if the coverage for the employee was considered affordable, the entire family was ineligible for subsidies to offset the cost of self-purchased coverage.
The Biden administration finalized a fix for the “family glitch” that took effect in 2023. Under the new rules, two affordability calculations are made when a family has access to employer-sponsored health insurance, two affordability calculations are made: One for the employee and one for the whole family.
Coverage is considered affordable in 2023 if the payroll-deducted portion of the premium isn’t more than 9.12% of the employee’s household income. But instead of just making that calculation based on the cost to cover the employee, the calculation is also made based on the cost to cover the whole family.
If the employee’s coverage is considered affordable, the employee is not eligible for subsidies to offset the cost of coverage in the exchange. But if the cost for the whole family is not affordable (meaning that it costs more than 9.12% of household income in 2023), the rest of the family is potentially eligible for subsidies to help cover the cost of coverage in the exchange.
Whether or not they’re actually eligible for subsidies will depend on how old they are, how much their household income is, and where they live.Here’s more about how subsidy amounts varywhen family members have coverage under different health plans.
If an employee’s family members are eligible for subsidies under the new rules, the family will need to decide whether it’s beneficial to obtain coverage under two separate plans (the employer-sponsored plan for the employee, and exchange/Marketplace coverage for some or all of the other family members).
Summary
Each year, rules and regulations covering the Affordable Care Act and health insurance marketplaces/exchanges are updated. The process to do this update for 2022 was complex but resulted in several favorable changes for consumers or rolled back proposed changes that would have negatively impacted consumers. Additional rules were finalized for 2023, including a fix for the ACA’s “family glitch,” making some families newly eligible for subsidies in the exchange.
A Word From Verywell
If you buy your health insurance in the individual market, it’s important to understand that the rules can change from one year to the next. The ACA and various other federal and state laws provide the overarching framework, but there’s a lot that’s left to regulatory guidance from HHS and the IRS. And those rules can and do change frequently—sometimes in response to insurer or consumer concerns, and sometimes because a new administration’s views differ from the previous administration’s views.
You don’t need to keep up with all the nuances. But it is important to check in with the exchange, your health plan, or your health insurance broker each year to make sure you haven’t missed anything important.
