--- title: New HHS Rule Expands Catastrophic Coverage Access description: HHS’ 2027 final rule expands hardship exemption eligibility nationwide, allowing more individuals to enroll in catastrophic coverage, with changes effective July 20, 2026. image: https://blog.nisbenefits.com/hubfs/blog-headers/catastrophic-cov-b.jpg --- ![catastrophic health insurance written in notebook](https://blog.nisbenefits.com/hubfs/blog-headers/catastrophic-cov-b.jpg) # New HHS Rule Expands Catastrophic Coverage Access - Home - [Employee Benefit News for School, City and County Employers](https://blog.nisbenefits.com) - New HHS Rule Expands Catastrophic Coverage Access [ Steve Smith ](https://blog.nisbenefits.com/author/steve-smith) 07/06/2026 [ Legislative News](https://blog.nisbenefits.com/topic/aca-other-legislative-news), [ The Administrator's Corner](https://blog.nisbenefits.com/topic/the-administrators-corner), [ Mental Health](https://blog.nisbenefits.com/topic/mental-health) [0 Comments ](https://blog.nisbenefits.com/new-hhs-rule-expands-catastrophic-coverage-access#postComment) 1 Minutes The U.S. Department of Health and Human Services’ (HHS) [Notice of Benefit and Payment Parameters for 2027](https://www.federalregister.gov/documents/2026/05/20/2026-10050/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2027-and) expands hardship exemption eligibility to individuals ineligible for advance payments of the premium tax credit or cost-sharing reductions because their projected household income is below 100% or above 250% of the federal poverty level. The final rule takes effect on July 20, 2026.   ## **Background** Catastrophic health plans are [specialized plans](https://www.healthcare.gov/choose-a-plan/catastrophic-health-plans/), sold in the individual market. They offer low premiums and high deductibles to protect against very high medical costs. They are available only to individuals under age 30 or those who qualify for an affordability or hardship exemption.   ## **Prior Guidance** On September 4, 2025, HHS issued [hardship exemption guidance](https://www.cms.gov/files/document/guidance-hardship-exemptions.pdf) to help consumers manage expected 2026 premium increases. Starting November 1, 2025, individuals could apply online through HealthCare.gov or a certified partner, or by mailing a paper application. This guidance applied to individuals in Federally-facilitated Exchange (FFE) states and in states using the FFE for exemptions, but not to California, Connecticut, Maryland, or the District of Columbia.   ## **Related Developments** Effective January 1, 2026, all individual market bronze and catastrophic plans are health savings account (HSA) compatible high deductible health plans, allowing eligible enrollees, including those using the expanded hardship exemption, to open and contribute to an HSA.   ## **Final Rule** HHS’ final rule extends hardship exemption eligibility nationwide including California, Connecticut, Maryland, and D.C. so any qualifying individual may enroll in catastrophic coverage, if otherwise eligible. The final rule also permits catastrophic plans to run for up to 10 consecutive years, with eligibility locked in at enrollment. For more information, see HHS’ Notice of Benefit and Payment Parameters for 2027 Final Rule [Fact Sheet](https://www.cms.gov/newsroom/fact-sheets/hhs-notice-benefit-payment-parameters-2027-final-rule). Download the [bulletin](https://blog.nisbenefits.com/hubfs/blog-supporting-docs/bulletin-hhs-finalizes-hardship-exemption-expansion.pdf) for more details. 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