On January 13, 2025, the Centers for Medicare and Medicaid Services (CMS) released its latest Notice of Benefit and Payment Parameters, the annual rule governing policies related to qualified health plans (QHPs) and the health insurance marketplaces. These updates are relevant for state leaders and regulators who oversee state health insurance markets and marketplaces.

The final rule provides annual updates to ongoing policies and programs, including the risk adjustment program, annual marketplace user fees, actuarial value calculators, and benefit design. It also includes updates and technical corrections to affirm and codify established policies and authorities. Notably, this year’s rule includes several changes related to oversight and transparency, most significantly, the assertion of CMS’s authority over agents, brokers, and web brokers that interact with marketplaces and enforcement mechanisms to protect against “unacceptable risk.”

A summary of changes made by the final rule include:

Requirements for health insurance marketplaces

• Updated marketplace user fees: Each year, the final rule establishes a modified user fee, or per member assessment, charged to issuers participating in the federally facilitated marketplace (FFM). For 2026, the fee will be 2.5% for issuers in states using the Federal Marketplace (FFM) and 2.0% for those in states with a hybrid state-based marketplace (SBM-FP). If Congress extends the enhanced premium tax credit structure, currently set to expire on December 31, the user fee will be reduced to 2.2% and 1.8% in recognition of expected changes to enrollment.
• Public reporting of State-based marketplace (SBMs) metrics: The rule codifies a proposal for future public reporting of metrics related to the SBMs. Specifically, CMS will annually post information related to outreach spending, call center performance during open enrollment, website visits, and visitors. CMS will only post data that is reasonably comparable between states operating SBMs and SBM-FPs and will work with states to define the metrics and methodologies used before its first publication.
• Expediting data resolutions: The rule codifies existing guidance requiring that marketplaces review and resolve any data accuracies from issuers within 60 calendar days of receipt. The marketplace must also submit a description of the resolution to HHS. 

• Notices for failure-to-reconcile (FTR): Marketplace enrollees receiving advanced premium tax credits (APTCs) must reconcile tax issues if they are flagged for having received an overpayment of premium tax credits (known as FTR). If these issues are not reconciled within two years, the enrollee risks loss of future ATPC eligibility. Marketplaces are required to send notices to these enrollees, alerting them to potential loss of APTC eligibility. The rule clarifies the information that may be included in these notices to more directly alert consumers about potential tax filing issues while also protecting privacy over tax information.
• Flexibility on filing appeals: The final rule clarifies that application filers (those authorized to file marketplace applications on behalf of a consumer), are also permitted to file appeals on behalf of those consumers.
• Basic Health Program: The rule updates the methodology for calculating payments to states operating a Basic Health Program. The updates are so that calculations better account for states in which the program was only implemented for a partial year. It also clarifies which benchmark plans are used to calculate payments in rating areas where multiple benchmarks may exist. 

• Plan Certification Authority: The rule affirms the authority of marketplaces to deny certification to any health plan that does not meet QHP criteria or in cases where the plan is not in the interest of enrollees. This is a clarification of existing language, which gives marketplaces authority over plan certification.

Regulations on Qualified Health Plans

• Release of the annual Actuarial Value (AV) Calculator: The annual AV Calculator sets the standards by which issuers measure the appropriate metal tiers for their health plans. CMS will streamline and accelerate the process of releasing the annual AV calculator by eliminating the draft calculator and subsequent comment period. Instead, CMS will only release the final calculator, which it expects will be released 3-6 months before the end of the first quarter of the preceding plan year. Any comments on the AV Calculator will be reviewed and incorporated into the Calculator for the subsequent year.
• Flexibility in the case of partial premium payments: The rule grants issuers greater flexibility over the thresholds they are permitted to use to issue grace periods or terminate coverage in the case of partial payments. Issuers may now opt to set thresholds at a fixed amount of $10 or as a percentage of premiums, either 98% or higher of gross premiums or 95% or higher of net premiums.
• Affirming state authority to adjust market rates in response to cost-sharing reductions: State regulators have considerable authority over individual and small-group market plans sold in their states. The rule asserts the authority of states to regulate market adjustments, specifically, policies enacted to address financing for federally mandated cost-sharing reductions (CSRs), as long as these policies are actuarially justified.
• Adjustments to Standardized Plan Options in the FFM: The rule proposes minor changes to standard plan options available in states that utilize the FFM, mainly to enable plans to meet requirements to be categorized in certain metal tiers. Most significantly, the rule lowers cost-sharing and copay requirements while increasing the annual cost-sharing limit for expanded bronze plans. New requirements also mandate that issuers offering multiple standardized plans meaningfully differentiate between these plans, meaning plans must either offer different provider networks, covered prescription drugs, or benefits. Finally, the rule codifies existing flexibility for issuers to offer non-standard options across each network type, metal level, or based on the provision of adult dental, pediatric dental, and adult vision.
• Public release of Quality Improvement Strategy (QIS) information: As a condition of QHP certification, all plans must submit a QIS indicating its proposed work aimed at improving the quality of their health plan, including efforts to: improve health outcomes, prevent hospital readmission, improve patient safety, reduce medical errors, promote wellness, and reduce disparities. In 2026, CMS will begin annually publicly posing an aggregated summary of QIS reports for plans participating in the FFM.

Oversight Enhancements Over Issuers, Brokers, Agents, and Web-Brokers

• Enforcement over brokers, agents, and web brokers: The rules codify CMS’s authority to take enforcement action against agents and brokers, including suspending those entities in the case that they pose an “unacceptable risk” to the marketplace or its enrollees. The rule also outlines a process for what it may monitor to assess risk across brokers and agents, the elements of noncompliance that may lead to suspension or termination, and the ability of brokers to submit evidence to demonstrate that they have remedied any issues identified by CMS.
• Standards for appeal of certification denials: The rule codifies parameters for requiring issuers participating in the FFM to provide clear and convincing evidence when appealing a federal denial of a plan’s certification.
• CMS review of Essential Community Provider (ECP) requirements: All QHPs must meet a minimum set of standards for including ECPs in their network. Largely, CMS has relied on states to oversee the maintenance of these requirements, partly due to a lack of federal data available to monitor appropriately. However, CMS can now collect relevant data directly from issuers and will begin independent reviews of ECP data as part of certification reviews in FFM states.
• Updating broker consent forms: The rule finalizes a modification to model consent forms used by brokers to require documentation that affirms that information has been reviewed and confirmed by consumers before submission by a broker. This will include scripts that can be used for documentation of audio consent.

Annual modifications to the Risk Adjustment (RA) program

• Changes to RA adjustment factors: The risk adjustment program provides an annual transfer of funds from QHPs that take on lower-than-average actuarial risk to those that take on higher risk. Operated by the federal government (at states’ discretion), the program relies on complex rules to calculate risk and fund transfers. These calculations are adjusted annually based on changing market dynamics.

  This year’s changes include phasing out a unique adjustment for Hepatitis C drugs to use the same calculation for these drugs as for other specialty medications. This also includes the creation of a new rating factor – Affiliated Cost Factors (ACF) – to better account for services not tied to a specific diagnosis. The rule establishes HIV pre-exposure prophylaxis (PrEP) as the first and currently only ACF that will be used as part of 2026 RA calculations. Typically, the final NBPP also includes the coefficient figures to be used in that year’s RA calculations. However, the coefficients will be issued this year via future guidance, likely later this spring. 

• RA operational updates: The rule also includes several updates to the operation of the RA program, including changes to the program’s appeals process and adjustments to the methodology used for program audits.
• Adjusted Medical Loss Ratio (MLR) calculations: The rule adjusts MLR reporting and rebate calculations to better reflect unintended impacts on certain issuers receiving large RA payments.