Supporting Statement A

Status: Original and derived artifacts are available for this document.

Download: docx | pdf | html

Supporting Statement – Part A
Annual Product Discontinuation and Renewal Notices
(CMS-10527/0938-1254)


    A. Background

The Patient Protection and Affordable Care Act, Pub. L. 111-148, was enacted on March 23, 2010, and the Health Care and Education Reconciliation Act of 2010, Pub. L. 111-152, was enacted on March 30, 2010 (collectively known as the “Affordable Care Act”). The Affordable Care Act reorganizes, amends, and adds to the provisions of Part A of title XXVII of the Public Health Service Act (PHS Act) relating to group health plans and health insurance issuers in the group and individual markets.

Section 1411(f)(1)(B) of the Affordable Care Act directs the Secretary of Health and Human Services (the Secretary) to establish procedures to redetermine the eligibility of individuals for premium tax credits on a periodic basis in appropriate circumstances. Section 1321(a) of the Affordable Care Act provides authority for the Secretary to establish standards and regulations to implement the statutory requirements related to Exchanges, qualified health plans (QHPs), and other components of title I of the Affordable Care Act. Under section 2703 of the PHS Act, as added by the Affordable Care Act, and sections 2712 (former) and 2741 of the PHS Act, enacted by the Health Insurance Portability and Accountability Act of 1996, health insurance issuers in the group and individual markets must guarantee the renewability of coverage unless an exception applies. 

    B. Justification

    1. Need and Legal Basis

The 2014 final rule “Patient Protection and Affordable Care Act; Annual Eligibility Redeterminations for Exchange Participation and Insurance Affordability Programs; Health Insurance Issuer Standards Under the Affordable Care Act, Including Standards Related to Exchanges” (79 FR 52994, September 5, 2014) (the 2014 Final Rule), provides that an Exchange may choose to conduct the annual redetermination process for a plan year (1) in accordance with the existing procedures described in 45 CFR 155.335; (2) in accordance with procedures described in guidance issued by the Secretary for the applicable benefit year; or (3) using an alternative procedure proposed by the Exchange and approved by the Secretary. 

The guidance document “Guidance on Annual Eligibility Redetermination and Re-enrollment for Marketplace Coverage for 2024 and Later Years”1 contains the procedures that the Secretary is specifying for the coverage year and specifies that these procedures will be used by all Exchanges using the Federal eligibility and enrollment platform, unless otherwise specified in future guidance or rulemaking. This guidance will be replaced by the Proposed Rule “Patient Protection and Affordable Care Act, Exchange Pre-Eligibility Verification Proposed Rule” (2026 Proposed Rule) [October 27, 2027 (91 FR 67656)].

The 2014 Final Rule amended the requirements for product renewal and re-enrollment (or discontinuance) notices to be sent by QHP issuers in the individual market Exchanges and specified content for these notices. The bulletin “Updated Federal Standard Renewal and Product Discontinuation Notices; Required Modification of Federal Standard Renewal and Product Discontinuation Notices; Enforcement Safe Harbor Related to 90-Day Product Discontinuation Notice Requirement in the Individual Market for Coverage in the 2027 Benefit Year” provides standard notices to be sent by issuers of individual market QHPs and other issuers in the individual market.2 

States that are enforcing the guaranteed renewability provisions under the Affordable Care Act3 may develop their own standard notices for product discontinuances, renewals, or both, provided the State-developed notices are at least as consumer-protective as the Federal standard notices.

Issuers in the small group market may use the draft Federal standard small group notices released in the June 26, 2014 bulletin,4 or any forms of the notice otherwise permitted by applicable laws and regulations. Small group market issuers not using the form and manner of the draft Federal standard notices released in the June 26, 2014 bulletin are expected to include the content described in the September 2, 2014 bulletin5 “Form and Manner of Notices When Discontinuing or Renewing a Product in the Group or Individual Market.”

The final rule “Patient Protection and Affordable Care Act; Individual Health Insurance Market and Exchange Program Integrity” (2025 Final Rule)6 shortened the annual Open Enrollment Period (OEP) for on- and off-Exchange individual health insurance coverage for benefit years starting January 1, 2026. This policy was vacated pursuant to an order of the U.S. District Court for the District of Maryland in City of Columbus v. Kennedy, No. 1:25-cv-2114 (D. Md). 

The 2025 Final Rule also required that when an enrollee does not submit an application for an updated eligibility determination on or before the last day to select a plan for January 1 coverage, and the enrollee’s portion of the premium for the entire policy would be zero dollars after application of advance payments of the premium tax credit through the annual redetermination process, the Marketplace will decrease the amount of the advance payments applied to the policy such that the remaining monthly premium owed by the enrollee for the entire policy equals five dollars (“five-dollar automatic re-enrollment policy”) for the first month and for every following month the enrollee does not confirm or update the eligibility determination. This policy was never implemented pursuant to an order of the U.S. District Court for the District of Maryland in City of Columbus v. Kennedy, 796 F. Supp. 3d 123 (D. Md. 2025).

The 2026 Proposed Rule proposes to implement new requirements specified under the Working Families Tax Cut (WFTC) legislation related to Exchange eligibility and verification. Under current section 36B of the Internal Revenue Code (Code), a taxpayer is only allowed a PTC for months that are coverage months for the taxpayer or other individuals in the taxpayer’s family (a taxpayer’s family consists of the taxpayer, the taxpayer’s spouse if filing a joint tax return, and the taxpayer’s tax dependents). Section 71303(a) of the WFTC legislation amends section 36B of the Code to provide additional criteria for whether a month to be considered is a coverage month, effective for tax years beginning after December 31, 2027. Effective January 1, 2028, Section 36B(c)(5)(A) of the Code will now provide that a month is generally not a coverage month for an enrollee in a QHP for any month that an Exchange fails to verify specific criteria related to the enrollee’s eligibility to enroll in a QHP through an Exchange and, to the extent relevant, for APTC for the coverage for that month. Section 36B(c)(5)(B) of the Code would provide that the following “applicable enrollment information” that, “to the extent relevant in determining eligibility described in [section 36B(c)(5)(A) of the Code]” for an enrollee, must be verified for a month to be considered a coverage month for an enrollee: (1) household income and family size of the enrollee, (2) whether the enrollee is an eligible alien, (3) whether the enrollee is eligible for MEC, other than individual market coverage, (4) the enrollee’s place of residence, and (5) such other information as may be determined by the Secretary of the Treasury (in consultation with the Secretary of HHS) as necessary to the verification prescribed under section 36B(c)(5)(A) of the Code. 

Section 71303(b) of the WFTC legislation modified section 36B of the Code by adding new paragraph (c)(3)(A)(ii). This new paragraph modifies the definition of QHP for the purpose of section 36B of the Code. Specifically, it excludes from the definition of QHP any plan that is enrolled in through an Exchange that does not provide a process through which any consumer may verify their household income and eligibility for QHP enrollment for the following plan year. This process must be in place no later than August 1, 2027 (and by August 1 for each subsequent year) to ensure applicants and current enrollees in QHP coverage who are seeking QHP coverage with APTC for PY 2028, and subsequent years, remain eligible for PTC and APTC, if otherwise eligible.

The 2026 Proposed Rule proposes to modify § 155.335(a) to specify that an Exchange may authorize APTC or CSRs on annual eligibility redetermination only if it verifies, in accordance with §§ 155.315 and 155.320, the following information provided or confirmed by an enrollee, or their application filer, on or after August 1 and no later than December 31 of the year preceding the applicable plan year: household income and family size, U.S. citizenship or status as an eligible non-citizen, eligibility for or enrollment in other MEC, and place of residence. HHS also proposes to amend § 155.335(b) to state the annual eligibility redetermination must be effective on the first day of the applicable plan year, and the Exchange must adhere to the existing notification standard for eligibility determinations under § 155.310(g).

As such, the Issuer Renewal and Discontinuation notices will be modified so that they inform returning consumers that they will need to return to their Exchange and provide or confirm specified eligibility information in order to be determined eligible for and re-enrolled with APTC and CSRs for the subsequent plan year under an Exchange’s procedures.

The Federal standard notices to be sent by issuers of individual market QHPs and other issuers in the individual market have been revised to reflect the policies proposed in the 2026 Proposed Rule and update out-of-date information. If finalized, the revised notices in this information collection (Attachments 1- 6) would be required for notices provided in connection with coverage beginning in the 2028 benefit year.

The Centers for Medicare & Medicaid Services (CMS) is requesting OMB approval for the revised notices included in this information collection request (ICR). 

    2. Information Users

Consumers will need the information in these notices in order to understand the annual renewal process and the Exchange redetermination process, as well as to make appropriate decisions regarding their coverage for the next plan year.

    3. Use of Information Technology

Exchanges and issuers may provide notices electronically.

    4. Duplication of Efforts

There will be no duplication of efforts.

    5. Small Businesses

Small businesses are not significantly affected by this collection.

    6. Less Frequent Collection

If these notices are not sent annually before the open enrollment period, consumers will not have the necessary information to make their decisions regarding health insurance coverage for the upcoming plan year.

    7. Special Circumstances

There are no special circumstances.

    8. Federal Register/Outside Consultation

The proposed regulation Patient Protection and Affordable Care Act, Exchange Pre-Eligibility Verification Proposed Rule (91 FR 67656) with requests for comments will be made available on October 27, 2026, providing the public with an opportunity to review and submit written comments related to these ICRs. 

    9. Payments/Gifts to Respondents

No payments or gifts are associated with this ICR.

    10. Confidentiality

No personal identifiable information is being collected. These are third party notifications and the issue of confidentiality between third parties is out of scope for these information collections. 

    11. Sensitive Questions

This ICR involves no sensitive questions.

    12. Burden Estimates (Hours & Wages)

To estimate the burden and equivalent costs associated with this ICR, we used the median hourly rate data from the Bureau of Labor Statistics’ May 2025 Occupational Employment Statistics7. Adjusted hourly labor rates include the costs of fringe benefits and other indirect costs (calculated at 100 percent of median hourly wage).

Table 1: Adjusted Hourly Wages Used in Burden and Equivalent Cost Estimates
Occupation Title
Occupational Code
Median Hourly Wage ($/hour)
Cost of Fringe Benefits and Other Indirect Costs ($/hour)
Adjusted Hourly Wage ($/hour)
Secretaries and Administrative Assistants, Except Legal, Medical, and Executive
43-6014
$22.86
$22.86
$45.72
Operations Manager
11-1021
$50.85
$50.85
$101.70
Computer Programmer
15-1251
$48.26
$48.26
$96.52

Annual Redetermination Notices
The 2014 final rule provided that an Exchange had three options when conducting the annual redetermination process for a plan year. The first option was to use existing procedures. The second option was to use the procedures described in the guidance document “Guidance on Annual Eligibility Redetermination and Re-enrollment for Marketplace Coverage for 2024 and Later Years,” and adopted by the Federally-facilitated Exchange. The third option for a State-based Exchange was to utilize alternative procedures approved by the Secretary based on a showing by the Exchange that such procedures meet specified criteria. The 2026 Proposed Rule proposes to no longer permit these procedures. Therefore, there would be no burden imposed on States regarding this requirement.

Renewal Notices
Health insurance issuers that are renewing coverage under a product in the small group or individual market, through or outside of the Exchanges, are required to send a notice to plan sponsors or individuals, as applicable. The following standard renewal notices are to be sent by issuers of individual market QHPs and other issuers in the individual market:

    • Renewal notice for the individual market where coverage is being renewed outside the Exchange; and
    • Renewal notice for the individual market where coverage is being renewed in a QHP offered under the same product through the Exchange.

Issuers in the small group market may use the draft Federal standard small group notices released in the June 26, 2014 bulletin, or any forms of the notice otherwise permitted by applicable laws and regulations. Small group market issuers not using the form and manner of the draft Federal standard notices released in the June 26, 2014 bulletin are expected to include the content described in the September 2, 2014 bulletin “Form and Manner of Notices When Discontinuing or Renewing a Product in the Group or Individual Market.” 

States that are enforcing the guaranteed renewability provisions of the Affordable Care Act may develop their own standard notices. However, we anticipate that fewer than 10 States will opt for this alternative. Under 5 CFR 1320.3(c)(4), this requirement is not subject to the PRA as it would affect fewer than 10 entities in a 12-month period.

We estimate that there are 1,087 issuers in the individual market, including 344 QHP issuers, and 5528 issuers in the small group market that will need to prepare the renewal notices to comply with the requirements in the guidance, with a total of 1,206 issuers in both markets. Since there are existing requirements for issuers to send renewal notices, we only estimate the burden to prepare and automate the notices.

For issuers in the individual market outside the Exchange and small group market, we estimate that it will require 3 hours for an administrative assistant (at a cost of $45.72 per hour) to prepare the notice using the Federal standard notice (or a standard notice provided by their State) and 1 hour for a manager (at a cost of $101.70 per hour) to review the notice. We also estimate that it will take a computer programmer 16 hours (at a cost of $96.52 per hour) to write and test a program to automate the notices. The total annual burden for each issuer to prepare the notice will be 20 hours with an equivalent cost of approximately $1,783. For all 1,087 issuers in the individual market, the total annual burden will be 21,740 hours with an equivalent cost of approximately $1.9 million. For all 552 issuers in the small group market, the total annual burden will be 11,040 hours with an equivalent cost of $984,315.

Table 2: Estimated Annualized Burden for Renewal Notices for Issuers Outside the Exchange

Individual Market QHP issuers will need to include some additional information in their notices and therefore will incur a higher burden. We estimate that it will require 3 hours for an administrative assistant (at a cost of $45.72 per hour) to prepare the notice using the Federal standard notice (or a standard notice provided by their State) and 1 hour for a manager (at a cost of $101.70 per hour) to review the notice. We also estimate that it will take a computer programmer 20 hours (at a cost of $96.52 per hour) to write and test a program to automate the notices. The total annual burden for each issuer to prepare the notice will be 24 hours with an equivalent cost of approximately $2,169. For all 344 QHP issuers, the total annual burden will be 8,256 hours with an equivalent cost of approximately $746,225.

Table 3: Estimated Annualized Burden for Renewal Notices for Individual Market QHP Issuers
Number of Respondents
Number of Notices per Respondent
Burden per Notice (Hours)
Labor Cost per Notice
Total Burden for all Respondents (Hours)
Total Cost for all Respondents
344
1
24
$2,169.26
8,256
$746,225.44

Discontinuation (or Re-enrollment) Notices
A health insurance issuer that is discontinuing coverage under a product in the small group or individual market, or a QHP issuer that is discontinuing a product offered through the individual market Exchange and automatically enrolling an enrollee in a QHP under a different product offered by the same QHP issuer through the Exchange, is required to send a notice to enrollees.

Issuers in the individual market will send one of two types of discontinuation notices depending on whether the issuer is automatically enrolling an enrollee in a plan under another product offered by the issuer. Issuers will send the following notices as appropriate:

    • Discontinuation notice for the individual market outside the Exchange and the issuer is automatically enrolling the enrollee in a different plan;
    • Notice for the individual market where coverage was in a QHP offered through the Exchange and the issuer is automatically enrolling the enrollee in a different product;
    • Discontinuation notice for the individual market outside the Exchange and the issuer is not automatically enrolling the enrollee in a different plan; and
    • Discontinuation notice for the individual market where coverage being discontinued was in a QHP offered through the Exchange and the issuer is not automatically enrolling the enrollee in a different plan.

Issuers in the small group market may use the draft Federal standard small group notices released in the June 26, 2014 bulletin, or any forms of the notice otherwise permitted by applicable laws and regulations. Small group market issuers not using the form and manner of the draft Federal standard notices released in the June 26, 2014 bulletin are expected to include the content described in the September 2, 2014 bulletin.

States that are enforcing the guaranteed renewability provisions of the Affordable Care Act may develop their own standard notices. However, we anticipate that fewer than 10 states would opt for this alternative. Under 5 CFR 1320.3(c)(4), this requirement is not subject to the PRA as it would affect fewer than 10 entities in a 12-month period.

We estimate that there are 1,087 issuers in the individual market, and 552 issuers in the small group market that will need to prepare the discontinuance notices to comply with the requirements in the guidance, with a total of 1,206 issuers in both markets. Since there are existing requirements for issuers to send product discontinuance notices, we only estimate the burden to prepare and automate the notices.

For issuers in the individual market outside the Exchange, we estimate that, for the notice when the issuer is automatically reenrolling the enrollee in another plan, it will require 2 hours for an administrative assistant (at a cost of $45.72 per hour) to prepare the notice using the Federal standard notice (or a standard notice provided by their State) and 1 hour for a manager (at a cost of $101.70 per hour) to review the notice template. We also estimate that it will take a computer programmer 5 hours (at a cost of $96.52 per hour) to write and test a program to automate the notices. The total annual burden for each issuer to prepare the template will be 8 hours with an equivalent cost of approximately $676. For all 1,087 issuers in the individual market, the total annual burden will be 8,696 hours with an equivalent cost of approximately $734,529.

We estimate that, for the notice when the issuer is not automatically reenrolling the enrollee in another plan, it will require 1 hour for an administrative assistant (at a cost of $45.72 per hour) to prepare the notice using the Federal standard notice (or a standard notice provided by their State) and 0.5 hours for a manager (at a cost of $101.70 per hour) to review the notice template. We also estimate that it will take a computer programmer 3 hours (at a cost of $96.52 per hour) to write and test a program to automate the notices. The total annual burden for each issuer to prepare the template will be 4.5 hours with an equivalent cost of approximately $386. For all 1,087 issuers in the individual market, the total annual burden will be 4,892 hours with an equivalent cost of approximately $419,723.

For issuers in the small group market, we estimate that it will require 3 hours for an administrative assistant (at a cost of $45.72 per hour) to prepare the notice using the draft Federal standard notice (or any forms of the notice otherwise permitted by applicable laws and regulations) and 1 hour for a manager (at a cost of $101.70 per hour) to review the notice template. We also estimate that it will take a computer programmer 8 hours (at a cost of $96.52 per hour) to write and test a program to automate the notices. The total annual burden for each issuer to prepare the template will be 12 hours with an equivalent cost of approximately $1,011. For all 552 issuers in the small group market, the total annual burden will be 6,624 hours with an equivalent cost of approximately $558,083.

Table 4: Estimated Annualized Burden for Discontinuance Notices for Issuers Outside the Exchange
Respondent
Type of Notice
Number of Respondents
Number of Notices per Respondent
Burden per Notice (Hours)
Cost per Notice
Total Burden for all Respondents
Total Cost for all Respondents
Issuer in Individual Market
Discontinuance notice with
re-enrollment
1,087
1
8
$675.74
8,696
$734,529.38
Issuer in Individual Market
Discontinuance notice without re-enrollment
1,087
1
4.5
$386.13
4,892
$419,723.31
Issuer in Small Group Market
Discontinuance Notice
552
1
12
$1,011.02
6,624
$558,083.04
Total

1,206



20,212
$1,712,335.73

Individual market QHP issuers, including issuers that are discontinuing a product offered through the Exchange and automatically enrolling an enrollee in a QHP under a different product offered by the same QHP issuer through the Exchange, will need to include some additional information in their notices and therefore will incur a higher burden. We estimate that, for the notice when the issuer is automatically reenrolling the enrollee in another plan, it will require 2 hours for an administrative assistant (at a cost of $45.72 per hour) to prepare the notice using the Federal standard notice (or a standard notice provided by their State) and 1 hour for a manager (at a cost of $101.70 per hour) to review the notice template. We also estimate that it will take a computer programmer 6 hours (at a cost of $96.52 per hour) to write and test a program to automate the notices. The total annual burden for each issuer to prepare the template will be 9 hours with an equivalent cost of approximately $772. For all 344 QHP issuers, the total annual burden will be 3,096 hours with an equivalent cost of approximately $265,657.44.

We estimate that, for the notice when the issuer is not automatically reenrolling the enrollee in another plan, it will require 1 hour for an administrative assistant (at a cost of $45.72 per hour) to prepare the notice using the Federal standard notice (or a standard notice provided by their State) and 0.5 hours for a manager (at a cost of $101.70 per hour) to review the notice template. We also estimate that it will take a computer programmer 4 hours (at a cost of $96.52 per hour) to write and test a program to automate the notices. The total annual burden for each issuer to prepare the template will be 5.5 hours with an equivalent cost of approximately $483. For all 344 QHP issuers, the total annual burden will be 1,892 hours with an equivalent cost of approximately $166,032.

Table 5: Estimated Annualized Burden for Discontinuance (or Re-enrollment) Notices for Individual Market QHP Issuers
Type of Notice
Number of Respondents
Number of Notices per Respondent
Burden per Notice (Hours)
Labor Cost per Notice
Total Burden for all Respondents (Hours)
Total Cost for all Respondents
Discontinuance notice with re-enrollment
344
1
9
$772.26
3,096
$265,657.44
Discontinuance notice without re-enrollment
344
1
5.5
$482.65
1,892
$166,031.60
Total
344



4,988
$431,689.04

Student Health Insurance Coverage
With respect to notices that are required to be provided for student health insurance coverage in connection with a renewal or product discontinuation effective after January 1, 2018 (that is, beginning with notices required to be provided in connection with the 2018-2019 academic year), the issuer’s requirement to provide the notice to student enrollees and their covered dependents generally will be considered satisfied if it ensures that another party (e.g., the institution of higher education) provides a timely and complete notice to the student. We believe that issuers will make arrangements with the institutions of higher education to notify students and their covered dependents of these changes. Since institutions of higher education routinely communicate with students about their health coverage options, it is expected that any additional burden will be negligible. 

Transfer of Products to a Related Issuer
In the HHS Notice of Benefit and Payment Parameters for 2018 final rule, CMS required that a product will be considered to be the same product under CMS regulations when offered by a different issuer within the issuer’s controlled group, provided any changes to the product otherwise meet the standards for uniform modification of coverage. This interpretation considers the product offered by the acquiring issuer in the controlled group to be the same as the product previously offered by the current issuer, thus the issuer of the coverage at the time notice must be provided (whether the current issuer or the acquiring issuer) will be required to provide a renewal notice using the applicable Federal standard renewal notice. This 
can result in the burden associated with the notification requirement being transferred 
to the acquiring issuer, but is not expected to result in new burden.

Table 6: Total Estimated Annualized Burden to Provide Required Notices by Individual Market Issuers Outside the Exchange, Individual Market QHP Issuers, and Small Group Market Issuers.

* Total number of respondents accounts for the overlap in individual market QHP issuers, individual market issuers outside the Exchange, and small group market issuers. 

    13. Capital Costs

Exchanges and health insurance issuers are expected to maintain copies of notices on file. The retention of copies would fall under normal record retention practices as part of customary and usual business and therefore would have a marginal annual cost.

    14. Cost to Federal Government

There is no cost to the Federal government. 

    15. Changes to Burden

There are no changes in burden. 

    16. Publication/Tabulation Dates

There are no plans to publish the outcome of the data collection.

    17. Expiration Date

The expiration date will be displayed on the first page of each instrument (top, right-hand corner).

    18. Certification Statement

There are no exceptions to the certification statement.

ATTACHMENTS:

Attachment 1: Renewal notice for the individual market where coverage is being renewed outside the Exchange
Attachment 2: Renewal notice for the individual market where coverage is being renewed in a QHP offered under the same product through the Exchange
Attachment 3: Discontinuation notice for the individual market outside the Exchange and the issuer is automatically enrolling the enrollee in a different plan outside the Exchange
Attachment 4: Notice for the individual market where coverage was in a QHP offered through the Exchange and the issuer is automatically enrolling the enrollee in a plan under a different product offered through the Exchange
Attachment 5: Discontinuation notice for the individual market outside the Exchange and the issuer is not automatically enrolling the enrollee in a different plan 
Attachment 6: Discontinuation notice for the individual market where coverage being discontinued was in a QHP offered through the Exchange and the issuer is not automatically enrolling the enrollee in a different plan