Federal Court Postpones Effective Date of Several Provisions in ACA Marketplace Integrity Rule

On Aug. 22, the U.S. District Court for Maryland issued a decision and order staying (i.e., postponing) various provisions of the recently finalized Affordable Care Act (ACA) Marketplace Integrity and Affordability Final Rule.

The lawsuit, City of Columbus et al. v. Kennedy et al., was filed by a group of municipalities and nonprofit organizations and alleged various provisions of the rule are contrary to law and/or “arbitrary and capricious” under the Administrative Procedures Act (APA). The Court’s decision stays, pending a final ruling, the effective date of six of the eight challenged provisions, including: revision to the de minimis ranges for actuarial value calculations; a $5 monthly penalty for automatic re-enrollees to reconfirm eligibility; a requirement that enrollees pay past due premiums before being enrolled in new coverage; new verification requirements for special enrollment period (SEP) enrollments; a requirement that Exchanges verify household income inconsistencies when a tax filer’s attested projected annual household income differs from “trusted data sources”; and re-instituting the failure-to-reconcile tax data policy.

The Administration has 60 days to appeal. Regardless of the Administration’s decision, resolution could take several months and potentially result in further appeals, with a final decision likely not occurring until sometime next year. We expect that federal and state agencies will provide guidance to carriers in the interim for the 2026 plan year.