Important Health Exchange Subsidy Changes for 2026
From the bill: Section 112201 - provisions to passive renewals. Current law allows passive renewals of clients who are receiving subsidies. The new provision requires every client (and agent) to actively verify subsidy eligibility each and every year. Failure to do so results in plan cancellation and/or elimination of subsidies. Bottom line, you (or the client) will now have to re-prove subsidy eligibility.
Implications: consumers are used to passive renewals where they are automatically renewed on their existing plan with subsidies based on their good faith reporting when they signed up. Many of these consumers will assume the same for this year. If they ignore the requests to update and prove their income, their subsides will end. If this happens, they will likely come to you asking why you didn’t inform them!
To prevent any issues, please copy the verbiage below and send to your clients. Advise prospective clients that if their current agent is not providing this information, they should be working with you!
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To keep your subsidies for 2026, you MUST proactively update and verify your information during the Open Enrollment Period, which begins October 15, 2025 for California and November 1,2025 for all other states.
The Centers for Medicare & Medicaid Services (CMS) is implementing these rule changes to strengthen verification processes, reduce improper enrollments, and encourage active consumer participation in selecting the best plan for their needs.
It is crucial to report any changes to your income to Covered California promptly to avoid penalties. Failing to report income changes can lead to both financial penalties and legal consequences.
For 2026, The Health Exchanges continue to verify income by comparing your application to your IRS tax records. The income reported should be your Adjusted Gross Income (AGI), which is the figure on your federal tax return. If your reported income is higher than your IRS records, you may be required to repay some of the financial assistance you received.
What you need to do:
To keep your subsidies for 2026, you must proactively update and verify your information during the Open Enrollment Period, which begins October 15, 2025 for CA and November 1, 2025 in all other states.
1. Log into your Covered California Member Portal OR Health Exchange Member Portal -
https://apply.coveredca.com/static/lw-web/login. Do not assume you will be automatically re-enrolled with the correct subsidy.
2. Update your application with your projected income and household size for 2026.
3. Submit proof of income if there is a discrepancy with federal data. Acceptable documents include:
- Pay stubs
- W-2s
- Tax returns
- A document detailing new wages or contract work
4. Shop and compare plans. After updating your information, compare your current plan with other available options to find the best coverage and subsidy for your needs.
More information can be found here - https://www.cms.gov/newsroom/press-releases/cms-takes-aim-reduce-improper-enrollments-and-promote-more-affordable-health-insurance-marketplaces#:~:text=Strengthening%20verifications%20by%20requiring%20all,ending%20it%20on%20December%2015.