Today, HHS posted new guidance to streamline access to catastrophic coverage for consumers who are ineligible for advance payments of the premium tax credit ("APTC") or cost-sharing reductions ("CSRs"). Under this guidance, more individuals will be able to qualify for catastrophic health coverage based on need, beginning November 1^st with the start of open enrollment. 

Catastrophic plans generally have lower monthly premiums, are designed to protect consumers from very high medical costs in the event of serious illness or injury, and are required to cover three primary care visits pre-deductible. Consumers under the age of 30 have always been eligible for catastrophic plans through HealthCare.gov, but this exemption will allow individuals of any age to apply for an exemption to enroll in catastrophic health coverage if the individual is ineligible for APTC or CSRs. Under the new guidance, individuals may qualify for a hardship exemption to purchase a catastrophic plan on or off the Exchange if they are determined or expect to be ineligible for APTC or CSRs based on their projected annual household income. HHS plans to begin streamlining this process for consumers ineligible for APTC due to income and expand to consumers who are over 250% of the FPL and are only ineligible for CSRs.

Beginning November 1, 2025, individuals can apply for the hardship exemption in two ways:

• Apply online for Marketplace coverage on HealthCare.gov or through a certified enhanced direct enrollment partner. Household income will be reviewed as part of the application process.
• Submit a hardship exemption form by mail. 

In addition, HHS may approve an individual for a different hardship reason than the one originally requested when reviewing a completed and signed paper hardship exemption application, if: (i) the consumer has completed and signed their hardship exemption application; and (ii) the accompanying documentation or written explanation provided by the individual meets the established criteria for another applicable hardship reason not attested to on their application.

HHS’ hardship exemption guidance for catastrophic coverage can be viewed on CMS.gov here.