On September 4, 2025, the U.S. Department of Health and Human Services (HHS) issued new guidance regarding catastrophic health coverage. This guidance outlines when individuals who are ineligible for premium tax credits or cost-sharing reductions may still qualify for a hardship exemption and enroll in catastrophic plans. The goal is to improve access to affordable coverage as premium increases are expected in 2026.
Background
Catastrophic health plans offer low premiums and high deductibles to protect against major medical costs. These plans are available to individuals under 30 or those who qualify for an affordability or hardship exemption.
Key Facts
HHS guidance allows individuals with incomes below 100% or above 250% of the federal poverty level, making them ineligible for premium tax credits or cost-sharing reductions, to qualify for a hardship exemption and enroll in catastrophic plans where available.
This guidance applies to most states using the Federally-facilitated Exchange, and certain State-based Exchanges, except for California, Connecticut, Maryland, and the District of Columbia.
How to Apply
Starting November 1, 2025, individuals can apply for a hardship exemption online at HealthCare.gov or by mail. HHS has simplified the application process to make accessing catastrophic coverage easier for those facing hardship.
Download the bulletin for more details.