Failure to File and Reconcile (FTR) Operations Frequently Asked Questions (FAQ)
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Operational guidance requiring Exchanges using the federal eligibility and enrollment platform to resume FTR operations and apply a new two-year failure-to-file-and-reconcile policy for advance premium tax credit (APTC) eligibility beginning November 1, 2024; affects consumers, tax filers, and Exchanges on the federal platform.
Exchanges must determine a consumer ineligible for APTC only after the consumer or their tax filer has failed to file and reconcile APTC for two consecutive tax years instead of one.
CMS will resume FTR operations and require all Exchanges on the federal platform to resume by November 1, 2024, using new IRS two-year FTR data codes for PY 2025 and beyond.
APTC Eligibility and FTR-Based Rules
APTC eligibility criteria based on FTR status
Rules determining APTC eligibility based on IRS FTR status for Exchanges using the federal eligibility and enrollment platform.
ALL of the following
- IRS indicates the consumer or their tax filer failed to file/reconcile APTC for one of the two most recent tax years
Consumers with one-tax year FTR remain eligible for APTC for the upcoming coverage year if otherwise eligible but are at risk of losing APTC if they fail to file and reconcile for a second consecutive year (include in pre-OE notices and FTR Recheck).
ALL of the following
- Send pre-Open Enrollment notices to consumers and tax filers identified with one-tax year FTR status; send direct USPS notice to tax filer addresses of record for one-tax year FTRs
Notices inform tax filers they need to file and reconcile or risk future ineligibility; messaging designed to avoid improper disclosure of FTI.
- Include one-tax year FTR consumers in January FTR Recheck after OE to verify filing/reconciliation status
Provides an additional opportunity to educate and allow consumers/tax filers to file and reconcile.
ALL of the following
- If IRS shows failure to file/reconcile for two consecutive tax years and the consumer does NOT attest on application that they have filed and reconciled
Consumer will be determined ineligible for APTC at the point of application submission.
- If IRS shows two-tax year FTR but the consumer attests on application that they or their tax filer have filed and reconciled
Consumer will be provisionally found eligible for APTC at application submission, if otherwise eligible, pending verification during FTR Recheck in January.
ALL of the following
- Exchanges perform FTR Recheck in January after OE to cross-reference attestations with updated IRS data
Allows time for IRS data refresh; included for both one- and two-tax year FTR statuses.
- If, after the Spring final IRS check, IRS data still indicates a two-tax year FTR status
Consumer remains in QHP coverage but APTC will be ended effective the month after the final check (CMS intends April check → APTC removal effective May 1, 2025).
ALL of the following
- Exchanges will use IRS data for the two most recent tax years available for eligibility determinations
For PY 2025, IRS will send tax years 2022 and 2023.
ALL of the following
- Exchanges will send notices to consumers and tax filers identified as one- or two-tax year FTR prior to OE and during FTR Recheck
Notices advise filing and reconciling using IRS Form 8962 as soon as possible and describe actions consumers can take (including attesting on application).
- Consumers who file and reconcile after APTC removal should update their application and attest to regain APTC; may appeal to the Marketplace Appeals Center if they believe removal was erroneous.
APTC eligibility criteria tied to FTR status
Rules determining APTC eligibility based on filing and reconciliation status:
ALL of the following
- Consumer failed to file and reconcile for one tax year (e.g., tax year 2023)
Consumer remains eligible for APTC for the upcoming plan year if otherwise eligible; included in FTR Recheck in January; at risk for next year if they fail to file and reconcile for a second consecutive tax year.
ALL of the following
- Consumer failed to file and reconcile for two consecutive tax years (e.g., tax years 2022 and 2023)
Consumer is ineligible for APTC for the plan year; consumer may still purchase QHP without APTC. If the consumer attests on application that they have filed and reconciled, they may be provisionally eligible pending FTR Recheck; if attestations are unverified after final IRS check, APTC will be removed effective the month after the final check (CMS intends April final check → removal May 1, 2025).
ALL of the following
- Action if consumer files and reconciles after APTC removal
Consumer should update their application and attest to having filed and reconciled to regain APTC eligibility.
- Appeals
Consumers who believe APTC was ended erroneously may file an appeal with the Marketplace Appeals Center.
IRS FTR Codes and Indicators
| one-tax year FTR status | IRS code indicating tax filer has not filed or reconciled APTC for one tax year |
| two-tax year FTR status | New IRS code indicating tax filer has not filed or reconciled APTC for two consecutive tax years |
| valid filing extension | IRS code indicating filer received a valid filing extension |
| new FTR IRS code | IRS code indicating a consumer is in a two-tax year FTR status available for testing and live environments |
Notices, Verification, and Appeals
Send pre‑OE notices, USPS tax‑filer notices, and run FTR Recheck + final IRS check
Send pre–Open Enrollment notices to both consumers and their tax filers who are identified with one‑ or two‑tax year FTR status. For one‑tax year FTR tax filers, send tax‑filer notices via USPS. Perform an FTR Recheck in January after Open Enrollment and a final IRS data check in Spring (CMS intends an April check for PY2025).
- Notices to consumers will alert them they are at risk of losing APTC and list recommended actions to remain eligible.
- Notices to tax filers will state IRS data shows they have not filed/reconciled and that they or household members are at risk of losing APTC.
- FTR Recheck verifies attestations in January; unresolved two‑tax year FTRs are subject to a final Spring IRS check leading to APTC removal the month after the check.
File and reconcile past APTC using IRS Form 8962 promptly
Require consumers or their tax filers to file and reconcile past APTC using IRS Form 8962 as soon as possible; attestations that they have filed/reconciled may be verified during the FTR Recheck and false attestations can lead to loss of APTC.
- Tax filers who have not filed and reconciled for two consecutive tax years (e.g., 2022 and 2023) after FTR Recheck will receive a warning and must file immediately or lose APTC eligibility.
- If IRS data still indicates two‑tax year FTR status after the final Spring check, APTC will be ended effective the month after that check (CMS intends April check → removal May 1, 2025).
Appeal APTC termination to the Marketplace Appeals Center
Inform consumers they may appeal if they believe the Exchange erroneously ended their APTC by submitting an appeal to the Marketplace Appeals Center (HHS appeals entity).
- Consumers can contact the Marketplace Appeals Center at 1‑855‑231‑1751 (TTY: 711) or visit https://www.healthcare.gov/marketplace-appeals/getting-help/ for appeal filing instructions.
- Eligibility Determination Notices also provide instructions on how to submit an appeal; State‑based Exchange enrollees should use their SBE appeals entity (see healthcare.gov for SBE information).
Key Terms and FTR Definitions
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