Reconciliation & Validation Strategies for ACA Plan Year 2026

In this episode, Regulatory Joe walks through the critical roles of reconciliation and validation in preparing ACA plans for the 2026 plan year.

Joe covers:

• How to balance required CMS changes with strategic updates

• What’s new in MPMS and CMS templates

• Why treating draft templates as final saves time

• Tips to align cross-functional teams and avoid submission rework

This episode is a must-listen for issuers and compliance teams looking to streamline filings and reduce last-minute surprises.

Episode Transcript

(00:00):
Hey everybody, welcome to Regulatory Joe.
I'm Joe Boyle, President of RegulatorySolutions here at Penstock, and on today's
episode we'll be discussing reconciliationand validation for plan year 2026.
So, what is reconciliation and validation?
So, in the short of it, reconciliationis making sure all the lessons learned
that you completed and collected fromthe prior year are incorporated into your

(00:21):
plan portfolio for the future year, aswell as the absolute required changes from
CMS and the states that participate in.
Validation, on the other hand, is makingsure that you're incorporating the
unplanned and strategy changes into yourportfolio following the required changes,
making sure that you still meet allthe required ranges, actuarial values,

(00:43):
metallic tiers, and compliant rules.
It's a really even balance, similar to aseesaw, to making sure that once you are
compliant that you can also be competitivein the marketplace without being subject
to penalties or other circumstances.
There's really two fundamentallayers and components of how you
should be approaching this process.
First and foremost, it's makingsure that you're incorporating all

(01:06):
required federal and state changesthat are non-negotiable into your
plan portfolios for the new plan year.
The second tier of reconciliationis making sure all your unplanned or
customized strategy changes are alsoincorporated in that second layer
below the federally required changesand the state required changes.
We recommend that you tackle the requiredchanges first to making sure such things

(01:28):
like the required deductible limits,maximum out-of-pocket limits, and other
such PCP co-pays or specialist co-paysdictated by the states you participate
in are codified in your form documents,in the databases that your organization
uses, whether it's a Cognos database,a data warehouse, or a custom build
report, or even something as simpleas a Excel spreadsheet for those

(01:50):
organizations that may be smaller andnot have those large data capabilities
to house your cost shares and co-pays.
It's really important to make sureyou make those required changes
first, because you need to make sureyour issuers are filing compliant
plans in the Federal Marketplace.
It's also very important to make surethat the required changes are done
first, because as you make your unplannedstrategy changes to your portfolio, that's

(02:13):
going to move your actuarial value andthe actual metallic limits of your plan.
Making sure your plans are compliantis going to be very important, because
it's going to be a race against theclock as you get closer to submission
deadlines, both internal and external.
The other key part aboutreconciliation and validation, it's
really important to understand thechanges that you're making and the
versioning control of those changes.

(02:34):
Generally speaking, when we talk aboutthe ideation and timeline of developing
your product strategy, it's reallyimportant to know that that takes time.
It should take a number of weeks fora product strategy team to make sure
you can codify those benefits, priceyour strategy to an appropriate premium
price, and your go to market strategy.
We encourage you to wrap a timelinearound to set key dates between now and

(02:56):
your submission due dates externally toCMS and the state you participate in to
make sure you don't miss any deadlines.
It's really important to have astructure in place once you've harnessed
reconciliation and validation withinyour organization to making sure you
establish the right work groups, yourimplementation with stakeholders across
all your functional business areas,to make sure that when you make those

(03:17):
required federal changes and statechanges and those customized strategic
changes that everybody else in yourdownstream partners are aware, they're
informed of the changes, they're readyto accept the changes and making sure
that they're coding them, whether it'sin their downstream documents, materials,
their own templates that are required forplan filings, internally or externally.

(03:39):
The last thing you want is asituation where changes are not
communicated effectively and that itwould result in rework, objections,
downtime, or even worse, a penaltyor a fine or a member complaint.
Making sure that these changes arecollected and captured up front
will only streamline your businessprocess and help your team focus
on more strategic initiatives.

(04:00):
So what exactly ischanging in plan year 2026?
Well, it's important to know that whileCMS has not finalized and released
everything that they intend to, to dateright now, we already can anticipate
that CMS is changing the templates,the tools and the instructions like
they do every single plan year.
To get a head start on these newmaterials, we encourage issuers to

(04:21):
start playing in the sandbox environmentof MPMS, starting to tinker around
with templates from last year inanticipation of CMS releasing new 2026
templates for the future plan year.
So while some of you may be thinkingthat it's too early to start this
work and testing your plan designs inMPMS and running the validation tools,
it's always important to remember withthe draft templates being released,

(04:41):
generally speaking, the first week ofApril on each year, the final templates
are almost always released by thesecond or third week of April annually.
So while we understand that an urgeto wait for those final templates
to be released, historically, pleaseremember, CMS has almost never changed
the templates between draft and final.
Always try to treat your drafttemplates as final templates.

(05:02):
It will ultimately save you weeks anddozens of hours of your time if you start
to populate those drafts, run the toolswith the validation functions that are
proposed to be final, and augment andjust make these small, tiny changes,
if needed, at that final release date.
We know at minimum, CMS will bereleasing up to 7 new templates, the
business rules template, the rate datatemplate, even the most complicated,

(05:25):
the plan of benefit template.
All those core templates will also besupplemented with new sets of instructions
and business rules alongside them.
Really where the tricky part comesinto play, which we're encouraging
issuers to really hone in andtrack and follow is the tools.
Now, it's really tricky becauseCMS, as you all know, folks close
to the work last year are startingto migrate the desktop tools that

(05:46):
were previously published into MPMS.
With the webinars from CMS startingto be released, we encourage you all
to attend those to understand thechanges, collect updates, and understand
which of the desktop application toolsthat you're most familiar with will
then be migrated from the desktopup into MPMS for plan year 2026.
While the functionality may be alittle bit easier, it's actually

(06:08):
hard or even impossible to tell atthis point if they've changed the way
error reconciliation will be produced,the actual error reconciliation
numbers to tie back to instructionsto understand the root cause of
what the issue is and how to fix it.
And to bring it full circle, it's reallyinteresting because when we put this on
a timeline, CMS releases these items onan annual basis based on the feedback,

(06:31):
the performance, and the quality ofwhat issuers provide the year before.
So full circle.
When the draft Notice of Benefit andPayment Parameters is released and
issuers are given the comment periodto provide feedback on what worked well
for them and where there's opportunityfor improvement, you should also be
incorporating comments in a position onyour issuer and your performance of the
templates, the tools, the instructions,the validation components, and even

(06:56):
such things like the methodology ofhow CMS is creating these tools and
what the results and reconciliationefforts mean for your company.
So a few strategies we recommendas you enter busy season are
first and foremost, be organized.
And when I say that, regardless if youhave your plan designs working on an Excel
spreadsheet, a Word document, or even aOneNote, recommend breaking that up into

(07:18):
easily digestible and understandable tabs.
Something as simple as a tab for yoursmall group business, your individual
business, and actually breaking itdown in subsets based on metallic tier.
Gold, silver, bronze, expandedbronze, even platinum.
It's going to be important because asyou work with your work group and your
implementation team and your projectmanager and your product team, you need
to make sure that as decisions are beingmade by your plan, by plan ID, or even

(07:42):
plan variant ID, that you're incorporatingthose into your benefit grid.
This could be referred to as somethingas a product grid, a benefit grid,
or even something like a marketinggrid as you go downstream to
your broker and sales partners.
What you really want to do is makesure this becomes your source of truth.
Ultimately, what's going to happen overtime is as you make your decisions,
whether it's your first plan yearentering a new market, or if this

(08:04):
is your second, third, or fourthplan year, renewing yourselves in an
existing market, is this will becomeyour single one-stop shop document that
you'll rinse and repeat year over year.
So that being said, whether you'readding plans, discontinuing plans, or
crosswalking plans because they don't meetcertain AV values or Certain components
dictated by the state you're participatingin are by CMS, that's why it's so

(08:27):
important that you're running the toolsconstantly, whether it's on your desktop
or within CMS on MPMS on the web, tomake sure that the plan decisions you're
making are actually going to make it intoyour portfolio so a member can enroll and
click and pay their premium for the plan.
It's really interesting because theideation of product development is you
can have ideas and make changes thatare strategic for your company and for

(08:50):
your organization, but not necessarilyfeasible financially for your plan
or operationally to actually execute.
So what we've learned over thepast number of plan years is that
certain plan decisions actually mayresult in substantial plan changes.
We've seen carriers add new plansto be more competitive where their
previous plans are falling out ofrange or falling out of compliance.

(09:11):
What does that mean for that member?
If you are discontinuing plans,always make sure that cost shares
and co-pays have a member impact.
Members should always be at theforefront of the plan decisions you're
making, especially if it involvesplan crosswalking them into different
metal levels or metallic tiers.
So I'll just reinforce one more pointbecause everything we just discussed
is much easier said than done.

(09:32):
Over the course of April, May, and June,just make sure that you keep consistent
and persistent with your implementationwork groups, your versioning control,
and the collaboration between yourproject manager, your product team,
and your internal stakeholders.
That said, thankseverybody for listening in.
Give us a like, give us a share,and we'll see y'all next time.