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May 21, 2026 – After a long period of anticipation, the final course has arrived! The Centers for Medicare & Medicaid Services (CMS) issued the final 2027 Notice of Benefit and Payment Parameters (NBPP) on May 15, 2026. The NBPP is the annual rule that revises policies pertaining to federal and state exchanges under the Affordable Care Act (ACA). As described in a previous Regs & Eggs blog post, the proposed NBPP, issued in February 2026, included an expansive set of proposals impacting the standards that qualified health plans (QHPs) participating on the ACA marketplace must comply with, as well as new requirements for exchanges, agents, brokers, and web-brokers. In the final rule, CMS finalized most but not all of what it proposed.
Here are some of the main ingredients included in the final course.
If regulatory meals could have themes that tie all the dishes together into a cohesive culinary experience, the themes of this reg would be providing states with more flexibility and expanding coverage options. Taken together, the policies in the NBPP could have a significant impact on the ACA marketplace by:
While it remains to be seen if the policies in the rule will have a large impact on the overall market – including which plans decide to enter, how many consumers decide to enter or leave, and which plan options consumers choose to purchase – the reg has the potential to be a meal that we will remember for a long time. CMS estimates that based on the policies in the reg, average marketplace enrollment for 2027 will decrease by 1.2 million to 2 million people compared to a “baseline” scenario (i.e., what enrollment would be if none of the policies in the NBPP were enacted). CMS believes that many enrollees will discontinue coverage when stronger eligibility verifications identify that they are no longer eligible for subsidies, and that healthier enrollees are more likely to discontinue coverage.
A significant number of policies center on broadening the types of plans that can participate on the exchange and enticing more people to purchase plans that will likely have lower overall premiums (but higher potential out-of-pocket costs).
Currently, the opportunity to purchase a catastrophic plan is limited to people under age 30 or people over age 30 who don’t qualify for a marketplace plan. Otherwise, individuals must receive a “hardship exemption” to purchase a catastrophic health plan. In September 2025, the US Department of Health and Human Services (HHS) published guidance expanding eligibility for hardship exemptions to certain enrollees over age 30 or ineligible for an advanced premium tax credit (APTC) or cost-sharing reduction due to their projected household income being below 100% or above 250% of the federal poverty level (FPL). In the final NBPP, CMS finalized its proposal to codify this expansion of hardship exemption eligibility.
CMS also finalized its proposal to allow catastrophic plan issuers to enroll individuals for multiple plan years, up to a period of 10 years. An individual who satisfies the requirements for catastrophic plan enrollment at the time of enrollment in the multi-year plan will qualify for the term of the plan. As finalized, catastrophic plans with a term of at least two years will be allowed to offer expanded coverage for preventive services prior to the deductible and cost-sharing limits. CMS noted that there will be no material differences in the regulatory requirements for such plans and for one-year catastrophic plans besides the fact that a multi-year catastrophic plan could have a term of up to 10 consecutive plan years for individuals who qualify for such a plan upon enrollment and that coverage could be provided before the deductible is met for certain value-based insurance design benefits.
In a change from the proposed rule, CMS will not allow multi-year catastrophic plans to make plan-level adjustments to the index rate to account for design features such as additional preventive services covered before the deductible is met. Also, multi-year catastrophic plans will not be permitted to apply the annual cost-sharing limit on an annual basis or averaged over the life of the contract, as CMS originally proposed.
CMS finalized proposals to change cost-sharing parameters for bronze and catastrophic plans. The maximum out-of-pocket limit for catastrophic plans will increase to 130% of the maximum annual limit on cost sharing. Catastrophic plans will not be required to provide benefits for any plan year until an amount equal to 130% of the annual limitation on cost sharing is reached (except for the new value-based insurance design allowances mentioned earlier). Recognizing the significance of this change, CMS determined that this provision will take effect beginning with 2028 rather than 2027 as initially proposed.
CMS made the case that these changes provide cheaper coverage options to individuals over the long term. Since catastrophic plans come with extremely high deductibles, the assumption is that “healthy” individuals who do not expect to use many healthcare services will enroll. However, because catastrophic coverage does not kick in until individuals reach their deductible (which this policy also increases), some stakeholders have questioned whether people will be attracted to this option, since it still requires a monthly premium but offers very little coverage. Some have also questioned the rationale for pulling people out of an annual shopping opportunity by permitting multi-year enrollment in catastrophic plans. What might be an appropriate choice one year for an individual may not be the following year if their circumstances change and they qualify for APTCs, for example.
CMS finalized a new policy to allow plans that do not use a network (non-network plans) to receive QHP certification beginning in 2028 (rather than 2027 as proposed). The agency stated that a non-network QHP must demonstrate sufficient access to a range of providers that accept the non-network plan’s benefit amount as payment in full, including essential community providers (those that serve predominantly low-income, medically underserved individuals) and providers that specialize in mental health and substance use disorder services, to ensure that services are accessible without unreasonable delay.
CMS also clarified in the final NBPP that non-network plans must abide by the patient protections embedded in the No Surprises Act, including the ban on balance billing. CMS added a requirement that non-network plans implement a strategy for providing consumer-friendly information to enrollees on how to navigate an episode of care that involves services from multiple providers. CMS stated that “this information is important so that non-network plans can assist enrollees in avoiding balance billing and additional out-of-pocket costs beyond their control when receiving care that may trigger multiple benefit amounts that could not be reasonably anticipated.”
Overall, CMS believes that these plans will help improve price transparency, reduce overall health care costs by allowing consumers to better shop for lower prices and negotiate directly with providers, and “eliminate substantial administrative overhead associated with traditional network management, which in turn can result in lower premiums.” Many will be closely watching to see whether the introduction of non-network plans into the ACA marketplace will achieve these intended objectives.
One of the first major rules issued in this administration was the 2025 Marketplace Integrity and Affordability final rule. As the name implies, the rule aimed to address program-integrity-related concerns about the ACA marketplace and help make healthcare coverage more affordable. A federal court subsequently stayed several of the rule’s policies in City of Columbus v. Kennedy. The final NBPP reinstitutes several of these policies:
The NBPP includes policies to help address CMS’s longstanding concerns about practices by agents, brokers, and web-brokers related to consumer consent documentation and marketing.
Agents, brokers, and web-brokers are also currently required to document consumer consent on the FFEs and SBE-FPs prior to providing enrollment assistance. CMS has found that this documentation sometimes lacks required information or is unclear. CMS finalized its proposal that documentation must be effectuated by having the consumer “take an action” to execute the HHS-created consumer consent form. Such an action may include a hand-written or electronic signature or initials made directly on a document indicating a person’s consent, approval, or agreement; an email from the consumer; a recorded verbal conversation; or other clear and verifiable means.
CMS originally proposed that these requirements would be effective beginning in 2027, but the final NBPP delayed implementation until 2028 to reduce burden on agents, brokers, and web-brokers and give them time to update their processes.
CMS finalized several policies aimed at providing more flexibility to states operating state-based exchanges (SBEs), but not all of what was proposed.
In a shift from the proposed NBPP, CMS did not finalize its proposal to give states the option to rely entirely on one or more web-brokers to implement and operate consumer-facing websites that facilitate the eligibility and enrollment process in a state exchange, referred to as the SBE enhanced direct enrollment (EDE) option. Under this proposal, states could have used private websites to help with eligibility and enrollment functionalities, instead of being required to use a centralized platform on the state exchange’s website.
In deciding not to finalize the proposal, CMS cited a high volume of thoughtful, substantive comments and not enough time to give them thorough consideration before publishing the final rule for PY 2027. CMS did not directly respond to comments, but noted that the agency will address this proposal and public comments during the 2028 NBPP cycle or in another rulemaking. CMS reminded state exchanges that they can implement EDE programs even though this proposal was not finalized federally.
To make it easier for states to transition from an FFE to an SBE, CMS eliminated the current requirement that a state operate for one year as an SBE-FP prior to its transition. CMS believes that this change will eliminate an unnecessary barrier that delays states from fully operating their own exchanges. To reduce the administrative burden of becoming an SBE, CMS also rescinded a requirement that a state provide CMS with certain documentation of the state’s progress towards milestones outlined in CMS’s “Blueprint for Approval of State-Based Health Insurance Exchanges.”
To ensure that individuals have reasonable access to providers within a health plan’s provider network, certain “time and distance” standards apply to different types of markets, including Medicare Advantage, and to the FFEs. Currently, SBEs and SBE-FPs are required to establish and impose time and distance network adequacy standards that are at least as stringent as standards for QHPs on the FFEs. CMS will remove this requirement and instead have states ensure that plans provide sufficient choice of providers in a manner that best meets the needs of the individual state. CMS proposed for this policy to be effective in PY 2027. However, given the delay in implementation of the non-network plan provisions, this policy will be effective generally in PY 2027 and in PY 2028 for non-network plans in FFE states. This reflects the ability of SBEs and SBE-FPs to allow non-network plans to be offered beginning PY 2027.
In a related policy, CMS finalized its proposal, with minor clarifications, to defer reviews of QHP issuer network adequacy to FFE states that have an effective provider access review program. CMS specified six criteria an FFE state will need to meet to be considered as having an effective provider access review program and therefore able to conduct its own network adequacy review. For example, an FFE state will have to establish and maintain clear procedures and timeline requirements for regular provider access reviews, including processes that ensure reviews occur prior to completion of each PY’s QHP certification cycle. CMS finalized, as proposed, that it can grant an exception to these criteria, but states seeking this approval will need to demonstrate that they meet applicable criteria for both network and non-network plans. CMS believes the criteria are comprehensive while also providing flexibility to states.
CMS included provisions to implement Sections 71301 – 71304 of the One Big Beautiful Bill Act.
In general, federal agencies are required to annually estimate and report on improper payments in the programs they administer that have been determined to be susceptible to significant improper payments. CMS has determined that APTC payments administered by state exchanges are susceptible to significant improper payments and are subject to additional oversight. CMS will establish a state exchange improper payment measurement program to monitor program integrity issues for SBEs. The program will specify a methodology to develop state exchange improper payment estimates and provide for the accurate calculation and subsequent reporting of an improper payment rate in CMS’s Agency Financial Report. CMS will require that state exchanges provide CMS with access to certain state exchange data, including eligibility determinations and enrollment information. State exchanges found to have significant improper payments could be required to develop corrective action plans to address improper payment root causes.
CMS finalized several changes related to essential health benefits (EHBs).
The ACA requires non-grandfathered health insurance coverage in the individual and small group markets to cover EHBs, which include services in at least the following 10 benefit categories:
CMS defines EHB based on state-specific EHB-benchmark plans, and states currently have several options for selecting an EHB-benchmark plan. CMS paused review of state applications to select EHB-benchmark plans because the agency is actively conducting a comprehensive review of authorities under Section 1302 and is considering future rulemaking to revise regulations related to EHBs.
CMS also finalized its proposal to prohibit issuers from including routine non-pediatric dental services as an EHB. CMS received many comments on this proposal and responded to them in the final rule. Overall, CMS believes that this policy will better align the scope of EHBs to the scope of benefits provided under a typical employer plan and does not believe that Congress viewed routine non-pediatric oral and vision care as an EHB at the time the ACA passed. CMS acknowledged that oral health can have a significant impact on overall health and quality of life and stated that this prohibition on including routine non-pediatric dental services as an EHB will not prevent states from addressing non-pediatric oral health and overall health outcomes through alternative policy mechanisms. CMS also stated that this policy will not impact the “typicality test,” which is a quantitative comparison that measures whether the actuarial value of a state’s proposed EHB benchmark plan falls within the range of actuarial values of typical employer plans in the state.
Under current law, states can require QHPs to offer benefits “in addition to the essential health benefit,” but states are required to make payments (to the enrollee or QHP) to defray the cost of these additional benefits. Regulations specify that any state-required benefits enacted on or before December 31, 2011, are considered EHBs and not subject to defrayal. The 2025 NBPP modified this policy so that benefits in a state’s EHB-benchmark plan would be considered EHBs and not subject to defrayal, even if the benefit was enacted by a state after December 31, 2011.
CMS finalized its proposal to reverse course so that any state-required benefits are considered in addition to EHBs and thus not EHBs if the benefits are:
These benefits will also be considered in addition to EHBs regardless of whether they are embedded in a state’s EHB-benchmark plan. State-required benefits that are in addition to EHBs are not subject to the rules applicable to EHBs, including the prohibition on discrimination, limitations on cost sharing, and restrictions on annual or lifetime dollar limits.
CMS proposed for this change to be effective beginning PY 2027 but finalized an effective date of PY 2028 because of concerns about states not having enough time to reassess benefits and secure appropriations for defrayal, if necessary. CMS believes that as a state enacts more benefit mandates and includes them in an EHB-benchmark plan, plan premiums increase, which leads to increased federal spending on APTCs. Because some consumers do not receive APTCs, CMS is concerned that unsubsidized consumers experience those higher premiums and may be disincentivized to enroll in the marketplace. CMS noted that in any state newly required to defray the cost of state-required benefits beginning PY 2028, the percentage of premiums attributable to coverage of EHBs for purpose of calculating APTCs may decrease, leading to reduced federal spending.
CMS finalized its proposal to discontinue all standardized plan option policies for the federal exchange beginning in PY 2027, including removing the definition of “standardized option,” removing all requirements for issuers to offer these plans, ending the requirement for these plans to be meaningfully different, and removing rules for the display and publication of these plan options. CMS specified that issuers may continue offering standardized plan options, with either the same or modified cost sharing. If an issuer decides to discontinue a standardized plan option, enrollees will be cross-walked to another plan under existing rules.
Beginning in 2027, CMS will discontinue non-standardized plan option limits and exceptions. Issuers will no longer be subject to two non-standardized plans per product network type, metal level, inclusion of adult dental benefit coverage, pediatric dental benefit coverage, and adult vision benefit in any service area. Issuers will not be required to discontinue chronic and high-cost condition plans originally offered through the non-standardized plan option limit exceptions, but will be permitted to choose whether to discontinue these plans or continue offering them with either the same or modified cost sharing.
Essential community providers (ECPs) are providers that serve predominantly low-income, medically underserved individuals. The ACA directed the HHS secretary to establish certification criteria for QHPs, including criteria that require QHP issuers to include ECPs within health insurance plan networks. The ECP criteria have changed over time, and the proposed rule would have reduced the minimum percentage requirement from 35% to 20% for both medical QHP and stand-alone dental plan issuers, such that issuers would have been required to contract with at least 20% of available ECPs in each plan’s service area to participate in the plan’s network, and separately, at least 20% of available federally qualified health centers and 20% of available family planning providers that qualify as ECPs in the plan’s service area. However, after receiving comments from stakeholders, CMS did not finalize this change and will retain the existing threshold requirements at 35%.
That said, CMS finalized its proposal to allow states with FFEs to elect to conduct their own ECP certification reviews of health plans that apply for certification. To conduct their own reviews, FFEs will be required to demonstrate that they meet specific criteria that CMS has established for having an “effective ECP review program.”
Now that the final NBPP is out, stakeholders, including health plans, must quickly digest the final policies. Both the proposed and final NBPPs were released later than usual this year. There is a whole process for certifying plans prior to the start of the new plan year, and the QHP application window actually opened last month. The initial deadline for issuers to submit QHP applications to CMS is June 10, 2026, so there isn’t much time to sit back, relax, and fully digest the large regulatory meal!
Until next week, this is Jeffrey saying, enjoy reading regs with your eggs.
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