Starting with the 2026 plan year, CMS is expanding access to catastrophic health insurance plans on the Federally-facilitated Exchange (FFE). This move helps consumers who face significant premium increases and no longer qualify for subsidies.
Why This Matters for Agents
We expect premiums to increase substantially for 2026, with one of the most significant jumps seen in years. For clients who do not qualify for Advance Premium Tax Credits (APTC) or Cost Sharing Reductions (CSR), coverage can suddenly feel out of reach.
This is where the hardship exemption comes in. Starting November 1, 2025, clients who don’t qualify for subsidies due to income, either because they’re just below 100% Federal Poverty Level or above 400% FPL, will be able to get an exemption and enroll in catastrophic coverage.
What Catastrophic Plans Offer
Even though the name makes them sound bare-bones, catastrophic plans still check the ACA boxes.
- Lower premiums compared to standard Qualified Health Plans (QHPs).
- All essential health benefits are included.
- Free preventive care with no cost-sharing.
- Financial protection against major illness or injury.
For clients who don’t qualify for APTC or CSRs, these plans provide some peace of mind without the high monthly costs.
Who Qualifies?
- Ineligible consumers for APTC or CSRs because of income.
- Applies to FFE states, participating State-Based Exchanges (SBEs), and even off-exchange catastrophic coverage.
- CMS is also planning to streamline the process for people over 250% FPL who lose CSR eligibility.
How Clients Can Apply
Starting Open Enrollment 2026 (November 1, 2025), consumers will have two ways to get catastrophic coverage:
Option 1: Online (new)
- Apply on HealthCare.gov or through an enhanced direct enrollment partner.
- Hardship eligibility will be automatically checked using projected income data.
Option 2: Paper (existing)
- Complete the hardship exemption form.
- Select “Hardship 14 – You experienced another hardship” and give a short explanation.
CMS is also adding some flexibility. If a consumer applies under the wrong hardship reason, they may still get approved under a different one.
Takeaway for Agents
Agility expects 2026 premium increases to occur for many clients who suddenly lose access to subsidies. Instead of walking away uninsured, they now have the option of enrolling in a catastrophic plan with you. These plans may not work for everyone, but they can be a valuable safety net for specific clients who are younger and healthier who need coverage for worst-case scenarios at a lower monthly cost.
This update gives you another tool in your ACA sales toolbox. The Agility Producer Support team is here to answer all your questions about this change and its impact on the ACA Marketplace. You can contact our Producer Support team now at 866-590-9771 or email support@enrollinsurance.com for immediate assistance.
You can access our Medicare, ACA, Supplement, and Life and Annuities contracting pages as well, for additional revenue opportunities.
We can also add you to our email list to receive the latest updates on all insurance matters delivered to your Inbox!
