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February 19, 2026 – Since the passage of the Affordable Care Act (ACA), the Centers for Medicare & Medicaid Services (CMS) within the US Department of Health and Human Services (HHS) has issued an annual rule, called the Notice of Benefit and Payment Parameters (NBPP), that revises policies pertaining to federal and state Exchanges. Last week, CMS released the 2027 proposed NBPP, which included an expansive set of policies 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. There is a lot to consume in this rule, and to help me dig into it, I’m bringing in my colleague Debbie Curtis.
The proposed NBPP came out later than usual this year. Typically, CMS releases the proposed NBPP in November or December, more than a year before the start of the plan year (PY) in which the policies become effective, and issues the final NBPP a few months later. There is a whole process for certifying plans prior to the start of the new PY, and the QHP application window typically opens in mid-April. The proposed rule’s traditional early release gives health plans time to understand and prepare for the changes prior to submitting their applications.
As an example, for PY 2025:
CMS released the proposed NBPP for PY 2027 on February 9, 2026, and comments are due by March 13, 2026. This leaves a smaller window than usual for CMS to process comments and turn a final rule around by April. The window for issuers to submit plans for certification is scheduled to open on April 16, 2026. It would not be surprising to see commenters push back on the implementation timelines for many new policies given the lateness of the proposed NBPP.
A significant set of proposals centers on broadening the types of plans that can participate on the exchange.
Catastrophic plans
CMS proposes to revise cost-sharing parameters for bronze and catastrophic plans and increase the maximum out-of-pocket limit for catastrophic plans by 30%. Aside from up to three primary visits and preventive care, individual enrollees in a catastrophic plan would effectively receive no other benefits (while paying a monthly premium) until they spent $15,600 out of their own pocket in 2027. For family enrollees, the out-of-pocket cap would surpass $27,000.
CMS also proposes to allow catastrophic plan issuers to enroll individuals for multiple PYs, up to a period of 10 years. The proposed NBPP would implement a provision from the One Big Beautiful Bill Act (OBBBA) that ends auto-enrollment into coverage through the ACA and requires people to actively reenroll each year. For catastrophic plans, however, the proposed NBPP would permit auto-enrollment for up to a decade.
CMS makes the case that these changes would 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 require many healthcare services will enroll. However, because catastrophic coverage does not kick in until after individuals reach their deductible (which this proposal would raise), some stakeholders have questioned whether people would be attracted to this option, since it still requires a monthly premium but offers very little coverage. Because catastrophic plans are not eligible for advanced premium tax credits (APTCs), some commenters have also questioned whether marketing practices could result in APTC-eligible individuals choosing these plans and losing out on affordable comprehensive plans for which they are eligible.
“Non-network” plans
CMS proposes to allow plans that do not use a network (non-network plans) to receive QHP certification beginning with PY 2027. The agency states 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 does not specify how it would measure such access with no network, however. Some stakeholders may raise concerns about these policies and request that CMS, at a minimum, include strong consumer protections in the final NBPP that would enable an enrollee to switch to another plan if the policy does not meet their needs.
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 proposed NBPP reintroduces several of these policies:
The proposed 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:
CMS is proposing a number of policies aimed at providing more flexibility to states operating state-based exchanges (SBEs).
Direct enrollment action
While CMS’s proposed broker policies highlight the agency’s ongoing concerns about fraud, CMS proposes a policy about which some stakeholders have previously raised program integrity concerns. CMS proposes 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 option). In other words, instead of relying on a centralized consumer-facing eligibility and enrollment platform on the state exchange’s website, states could use private websites to help with these functions. Under the SBE-enhanced direct enrollment option, web-broker-run websites would facilitate the online submission of eligibility applications by individuals seeking coverage through a state exchange, and facilitate their selection and enrollment into QHPs on a state exchange. Those websites would be required to interface with the back-end of the state exchange’s website (which the state would still be required to operate) and transmit information from the broker website to the state website. Information transmitted could include consumer eligibility application information and QHP selection and enrollment information.
The first Trump administration introduced a similar concept, but the Biden administration rolled it back. Stakeholders who opposed the concept argued that private websites might not have standardized features to enable consumers to easily shop and compare plans, perhaps resulting in consumers being steered to plans that would not meet their healthcare needs and financial parameters. We can expect many comments on the NBPP’s proposal similar in nature to the feedback the first Trump administration received.
Transitioning from a FFE to an SBE
CMS is proposing to make it easier for states to transition from an FFE to an SBE by eliminating the current requirement that states operate for one year as an SBE-FP prior to its transition. CMS believes that this proposal would eliminate an unnecessary barrier that delays states from fully operating its own Exchange. In addition, to reduce the administration burden of becoming an SBE, CMS is proposing to rescind a requirement that a state provide CMS with certain documentation that highlights the state’s progress towards meeting milestones outlined in its “Blueprint for Approval of State-Based Health Insurance Exchanges.”
Exchange network adequacy standards
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 proposes to 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 includes provisions to implement and seek comment on implementation of Sections 71301 – 71304 of the OBBBA:
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 proposes to establish a state exchange improper payment measurement program to monitor program integrity issues for SBEs. The program would 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 proposes to require that state exchanges provide CMS with access to certain state exchange data, including eligibility determinations and enrollment information. CMS further proposes that state exchanges found to have significant improper payments could be required to develop corrective action plans to address improper payment root causes.
Individual market health insurance issuers are required to pay rebates to enrollees if issuers do not spend at least 80% (or higher depending on state regulations) of their premium revenue on reimbursement for clinical services provided to enrollees under health insurance coverage and on activities that improve healthcare quality. This benchmark is referred to as the minimum loss ratio (MLR) standard. CMS notes that it is taking a comprehensive look at HHS regulations to determine whether any changes would help stabilize the individual market, including by potentially lowering premiums. While CMS does not propose any such actions in the NBPP, the agency seeks comments on whether it should allow a state to institute a different MLR standard, or whether CMS should be able to impose a different MLR on a particular state.
That was quite a smorgasbord, and we are still digesting the rule. At a high level, the policies in the proposed NBPP could have a significant impact on the exchanges by:
The rule will likely garner a lot of attention and receive significant public input during the comment period. We will see if and how CMS decides to modify any of the proposed policies and timelines in the final NBPP!
Until next week, this is Jeffrey (and Debbie) saying, enjoy reading regs with your eggs.
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