Key takeaways
- In most states, the last date to pick a new plan is January 15 (for a January 1 effective date, the deadline is December 15 in most states).
- Your premium subsidy might change (maybe by a lot) in 2025, so pay close attention to how your after-subsidy premiums will change.
- If your premiums are subsidized, auto-renewal could result in a higher premium if subsidies are declining in your area.
- HHS finalized important changes to the auto-renewal process for 2024, 2025, and future years.
- You may be eligible for auto-renewal, but without your premium subsidy (this is less common than it was in prior years).
- If you bought off-exchange or still have a pre-ACA plan, consider switching to an on-exchange plan.
If you have a health insurance plan in the individual market, on-exchange or off-exchange, you can probably just let it renew for the coming year without doing anything during open enrollment. But this is generally not in your best interest. It’s much better to actively compare the available plans during open enrollment (November 1 to January 15 in most states).
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As described in more detail below, HHS has made some adjustments to the auto-renewal process starting with the 2024 plan year. This will generally only be beneficial to consumers, but it’s still important to understand. You can see federal renewal and auto-renewal protocols here, under section (j); the new rules that took effect for 2024 are in subsection (j)(4) and the rules taking effect for 2025 are in subsection (j)(1)(v).
When does auto-renewal of a health plan happen?
HealthCare.gov and the state-run exchanges generally process auto-renewals on or around December 16. In most states, the deadline to pick a new plan with a January 1 effective date is December 15, so the auto-renewals are processed soon after that, for people who haven’t actively selected their own plan for the coming year. (Some state-run exchanges process auto-renewals earlier than that, although consumers still have the option to actively select a new plan at any time during open enrollment.)
For 2018 through 2021, open enrollment ended on December 15 in most states. That meant that in most parts of the country, people couldn’t make a different plan selection after their existing coverage was auto-renewed, unless they had a qualifying event that triggered a special enrollment period.
But starting with the open enrollment period for 2022 coverage, the enrollment window in most states has been extended through January 15. HHS noted that this was partly to ensure that people whose coverage is auto-renewed would still have a chance to pick a different plan if the auto-renewed plan’s benefits or pricing were to catch a person off-guard at the start of the new year. This could happen, for instance, if a person doesn’t closely read the renewal notices they get from the marketplace and/or their insurer in the fall.
State-run exchanges (ie, states that don’t use HealthCare.gov) can still choose to keep their enrollment deadline at December 15, and HHS has given them the option to do this. For 2024 coverage, Idaho ended open enrollment on December 15, 2023. But in the rest of the country, changes could be made until at least January 15. (For 2025 and future years, HHS has finalized a rule change that will generally require all state-run exchanges to continue their open enrollment period through at least January 15. There is a provision to allow Idaho to continue to end open enrollment before that, as long as their enrollment window continues for at least 11 weeks.)
Understand, however, that plan changes made after December 15, in nearly all states, will take effect February 1, rather than January 1 (there are some states with later deadlines for a January 1 effective date). So if a plan auto-renews and then you select a new plan in the latter half of December or in early January, you’ll have your auto-renewed coverage for January, and then your new plan would take effect in February. This is why it’s important to pay attention to the information that the exchange and your insurer send you in the fall, and finish whatever changes you want to make by December 15.
If I expect my subsidy to change, should I auto-renew my plan?
You should expect your subsidy amount to change each year. If it decreases, auto-renewal could result in higher premiums even if your own plan’s rate doesn’t increase. In 2017 and 2018, benchmark (second-lowest-cost Silver) premiums rose considerably, which meant that premium subsidies got much larger. But for 2019, 2020, 2021, and 2022, average benchmark premiums declined each year, leading to reductions in subsidy amounts for people whose household income stayed at the same percentage of the poverty level.
For 2023 coverage, full-price premiums increased modestly in most states,1 and the same was true for 2024.2 In the states that used HealthCare.gov, average benchmark premiums increased by 4% for 2023, and by another 4% for 2024.3
For 2025, proposed overall average rate changes are mostly increases in the range of 5% to 10%, although there is variation from one state to another and from one carrier to another. And many states had not yet publicized proposed 2025 rates as of July 20244
But benchmark premiums don’t always increase when the overall average premium for existing plans increases — especially in states where new insurers enter the market or existing insurers exit the market. That can sometimes lead to a reduction in premium subsidies, if the new insurer undercuts the premiums of the existing insurers, or if the exiting carrier previously had the benchmark spot. The introduction of new insurers into your market is also a perfect opportunity to see if any of the new insurer’s plans might be a better fit for you than the plan you currently have – but you won’t know unless you actively compare the available options during open enrollment.
There can be significant changes in the benchmark premiums in a given area, even if the overall rate changes in the area are modest. And sometimes the benchmark premium decreases even when overall average rates increase. If that happens, premium subsidies decrease – since they’re based on the cost of the benchmark plan – and after-subsidy premiums increase. So even if your plan’s rates don’t end up increasing significantly, your after-subsidy premium could still increase significantly if the premium subsidy in your area goes down.
It’s also important to note that if your plan is being discontinued and you don’t select a replacement plan during open enrollment, auto-renewal will involve the exchange or your insurer enrolling you in the plan that’s most similar to the plan you already had. In some cases, this may be the plan you would have picked anyway, but actively selecting your own plan during open enrollment means that you get to choose your plan, rather than letting someone else choose it for you. (Note that if you’re enrolled in a plan outside the exchange and your carrier is leaving the market altogether, there is no entity that can pick a new plan for you and you’ll be uninsured on January 1 if you don’t pick your own replacement plan.)
The American Rescue Plan’s (ARP) subsidy enhancements will continue to be in effect through 2025, thanks to the Inflation Reduction Act. So subsidies will continue to be larger than they would have been if ARP subsidy enhancements had been allowed to expire. And some families will find that they’re newly eligible for subsidies, due to the “family glitch” fix.
Has HHS made changes to the auto-renewal process?
Yes, HHS finalized some important changes to the auto-renewal process that took effect in the fall of 2023, for coverage effective in 2024. Some additional changes have been finalized for 2025, related to automatic re-enrollment into a non-catastrophic plan when a person has catastrophic coverage that will either not be available for the coming year or for which the person will no longer be eligible.5
Under pre-2024 rules, if a person’s plan continued to be available in the exchange and the person did not return to the exchange to actively renew it or select a new plan, the existing plan was automatically renewed for the coming year. And if the enrollee’s plan would no longer be available, the automatic re-enrollment protocol involved moving the person into a plan at the same metal level and product type (HMO, PPO, EPO).
But starting with the 2024 plan year, eligibility for cost-sharing reductions (CSR) and provider networks is also taken into consideration. Specifically:
- If a person is eligible for CSR but enrolled in a bronze plan that will continue to be available, the auto-renewal process will switch them to a silver-level plan (with CSR benefits) if one is available with the same provider network and product type, and with equal or lesser premiums after the premium subsidy is applied. This bronze-to-silver crosswalk change is being implemented because bronze plans do not include CSR benefits, and people who are CSR-eligible will have lower out-of-pocket costs with a silver-level plan, if and when they need medical care. This protocol will be used by HealthCare.gov, but it will be optional for state-based marketplaces (CMS notes that some state-based exchanges, including those in Massachusetts and California, had already adopted similar auto-renewal approaches).
- If a person is eligible for CSR and enrolled in a bronze plan that will no longer be available for the coming year, the automatic re-enrollment process can follow the same protocol, moving the person to a silver-level plan with the same network and equal or lesser premiums. But if a silver plan with the same network is not available, the person can be auto-enrolled into a bronze plan with the same network, if available.
- If a person is not eligible for CSR, the current auto-renewal process will continue to be used, with the addition of network considerations: If their current plan continues to be available, it will be automatically renewed. If not, they will be automatically re-enrolled into a plan at the same metal level, same product type, and most similar network.
A few comments about these changes to the auto-renewal protocol:
- For the bronze-to-silver crosswalk protocol, the exchange will be looking at the coming year’s plans when comparing provider networks and premiums. So the network could still be different from the current year’s network, due to year-over-year changes in provider networks. And the premium could still be higher than the current year’s premium, as long as the new silver plan’s premium will be no more than the new bronze plan’s premium would have been.
- Some enrollees have chosen bronze plans specifically because they’re HSA-compliant, and a switch to a silver plan with CSR benefits would mean that they’re no longer HSA-eligible. Consumers with income below 250% of the poverty level who have selected an HSA-compliant plan at the bronze level should be aware of the auto-renewal protocol change, and actively select their own HSA-compliant plan for the coming year if that’s their preference.
Enrollees continue to have the option to select their own plan, either by December 15 for a January 1 start date, or by January 15 for a February 1 start date. But a significant number of people do rely on auto-renewal: Nearly 6.6 million Marketplace enrollees allowed their coverage to be auto-renewed for 2024.6 Some of these enrollees could have been affected by the new bronze-to-silver crosswalk protocol, but only if they were eligible for CSR (and electing to utilize their advance premium tax credit) and a silver plan with the same product type and network was available at an equal or lower price than their bronze plan.
Note that although HHS (under the Trump administration) had previously considered the possibility of auto-renewal without any premium subsidies if the subsidies would otherwise have covered the entire cost of the enrollee’s plan, they ultimately abandoned that idea amid overwhelmingly negative public comments. The changes that HHS implemented for 2024 are designed to make coverage and care more affordable.
For 2025 and future years, HHS has finalized a change in how automatic re-enrollment is handled when a person has catastrophic coverage.5 Under current rules, there is no mechanism for the exchange to automatically select a replacement plan for a person with catastrophic coverage if the person will no longer be eligible for a catastrophic plan in the coming year (these plans are only available to enrollees under age 30 or with a hardship exemption) or if the catastrophic plan will no longer be available (some state-run exchanges do have a protocol for this).
The new rule change will allow the exchange to select a new plan in these circumstances. It will be a bronze plan in the same product (HMO, PPO, etc.) with a similar provider network. If a bronze plan isn’t available, the automatic re-enrollment plan will be the lowest-cost plan in the same product with a similar provider network. As is always the case, consumers in this situation would still be able to select their own replacement plan during open enrollment.
Auto-renewal might result in a loss of your premium subsidy
Although auto-renewal is available to nearly all exchange enrollees, some caveats are particularly important for people with premium subsidies. Details were clarified in April 2015 with CMS guidance on re-enrollments, along with a re-enrollment notice published in August 2015, and the 2017 Benefit and Payment Parameters published in early 2016. But note that there have been some COVID-related changes as well:
- HealthCare.gov enrollees who didn’t provide the exchange permission to obtain updated tax return data for use in the annual subsidy eligibility determination process will be eligible for auto-renewal of coverage but without subsidies. (A subsidy can still be obtained if you return to the marketplace and verify your updated financial information). State-run exchanges can set their own rules regarding enrollees in this situation.
- In the past, enrollees who got a premium subsidy the previous year and failed to file a tax return or reconcile their tax credit with the IRS were eligible for auto-renewal of their policy, but without any subsidies. Note that this was suspended for 2021, 2022, and 2023, due to the COVID pandemic. So a person whose coverage auto-renewed for one of those years could potentially continue to receive premium tax credits even if they had failed to reconcile a prior year’s premium tax credits with the IRS.
- In the rulemaking for 2024 and future years, HHS finalized a more lenient approach than simply resuming the pre-COVID rules: The new rules call for subsidies to only be terminated if the applicant has failed to reconcile their premium tax credit for two consecutive years. HHS noted that this is a compromise solution designed to reduce the number of people who lose their advance premium tax credit (and usually, their health insurance) after a single year of failing to reconcile, while also preventing people from incurring large multi-year debts for erroneous premium tax credits that potentially have to be repaid to the IRS.
- In the 2025 rulemaking, HHS and the IRS have finalized a requirement that Exchanges nationwide will have to send a notification to consumers after their first year of failure to reconcile their premium tax credit, letting them know that they’re at risk of losing subsidies if they fail to reconcile for a second year.7
- In prior years, subsidies were eliminated on auto-renewals where the most recent tax return indicated an income of at least 500% of the poverty level, or an income that was below the poverty level. But neither of these is applicable for current coverage. The American Rescue Plan eliminated the income cap for subsidy eligibility (this rule change is currently set to expire at the end of 2025), so some households are eligible for subsidies even with income well above 500% of the poverty level. And in 2021, a judge overturned the rule that eliminated subsidies for auto-renewed policies when an income tax return indicated an income below the poverty level. So auto-renewals in those scenarios will not necessarily result in the elimination of premium subsidies. But again, it’s always in your best interest to actively renew your coverage or select a new plan, rather than relying on auto-renewal.
If you’re in a situation in which your subsidy will be changing for the coming year, you’ll receive a notice from the exchange regarding your renewal. If that happens, it’s vitally important that you communicate with the exchange to make sure that your information is updated and accurate.
If I have an off-exchange plan or pre-ACA plan, should I let it auto-renew?
If you have an ACA-compliant plan that you purchased outside the exchange, it’s worth checking again during open enrollment to see whether you’d be better off with a plan through the exchange (or possibly with a different off-exchange plan).
This is especially true now that the American Rescue Plan and Inflation Reduction Act have greatly enhanced the premium subsidies that are available, and extended subsidy eligibility to more people. If the last time you shopped for on-exchange coverage was before mid-2021, you may not be aware of the additional subsidies that are now available.
The vast majority of Marketplace enrollees qualify for subsidies,8 which can only be used with on-exchange plans. So it’s particularly important that you comparison shop in the exchange before deciding to renew your off-exchange plan.
If you do decide to keep your off-exchange plan, keep in mind that some off-exchange plans’ premiums include the added cost to cover cost-sharing reductions in some states. This mostly applies to silver plans, and in many states the off-exchange versions of the silver plans do not include the cost of CSR; check with a local broker or the insurance company to understand how this works in your state. So you’ll want to pay close attention to make sure you select the plan that represents the best value for the coming year. In some cases, you might find that bronze or gold plans provide a better value, if you’re in a state where the cost of CSR is added to silver plan rates both on- and off-exchange.
Premium subsidies (premium tax credits) are crucial for keeping coverage affordable for millions of people, but they’re only available if you buy your coverage in the exchange. You can have the tax credit applied to your premium to reduce the amount you pay each month, or you can pay full price and claim the whole tax credit on your tax return. But either way, you can only get the tax credit if you have on-exchange coverage. So for people with off-exchange coverage, open enrollment is a great time to reconsider whether you’d be better off with a plan through the exchange.
If your plan is grandmothered (purchased after the ACA was signed into law but before the bulk of the ACA’s provisions took effect in January 2014), it may be eligible for auto-renewal or it may not, depending on where you live and what health insurance carrier you have. The same is true of grandfathered plans, which can continue to renew indefinitely, but with renewal at the discretion of the insurer.
If you’ve kept a grandmothered or grandfathered plan for all these years, it’s more important than ever to compare your on-exchange options during the open enrollment period for ACA-compliant coverage. Again, the subsidies are much larger and more widely available than they used to be. So even if you checked within the last few years and found that keeping your existing plan was the best option, that might not be true anymore. You might find that you’re now eligible for subsidies — even if you weren’t a few years ago — but you’ll have to switch to an on-exchange health plan to claim the subsidy.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.
Footnotes
- UPDATED: FINAL Unsubsidized 2023 Premiums: +6.2% Across All 50 States +DC. ACA Signups. Accessed November 2023. ⤶
- So How’d I Do On My 2024 Avg. Rate Change Project? Not Bad At All! ACA Signups. December 2023. ⤶
- Plan Year 2024 Qualified Health Plan Choice and Premiums in HealthCare.gov Marketplaces. Centers for Medicare and Medicaid Services. October 25, 2023. ⤶
- ”2025 Rate Changes” ACA Signups. Accessed July 26, 2024 ⤶
- ”Patient Protection and Affordable Care Act, HHS Notice of Benefit and Payment Parameters for 2025; Updating Section 1332 Waiver Public Notice Procedures; Medicaid; Consumer Operated and Oriented Plan (CO-OP) Program; and Basic Health Program” U.S. Department of the Treasury; U.S. Department of Health and Human Services. April 2, 2024. ⤶ ⤶
- “2024 Marketplace Open Enrollment Period Public Use Files” (State-level zip file, Column L) CMS.gov, March 22, 2024 ⤶
- ”Patient Protection and Affordable Care Act, HHS Notice of Benefit and Payment Parameters for 2025; Updating Section 1332 Waiver Public Notice Procedures; Medicaid; Consumer Operated and Oriented Plan (CO-OP) Program; and Basic Health Program” U.S. Department of the Treasury; U.S. Department of Health and Human Services. April 2, 2024 ⤶
- ”Effectuated Enrollment: Early 2024 Snapshot and Full Year 2023 Average” CMS.gov, July 2, 2024 ⤶
