HHS Finalizes Annual Exchange Rules 

Earlier this month, the Department of Health and Human Services (HHS) finalized the annual Exchange regulations – the Notice of Benefit and Payment Parameters for 2027 (NBPP)– that it initially proposed in February. These annual regulations are accompanied by several pieces of guidance, including the 2027 Letter to Issuers on the Federally-facilitated Exchanges, which currently remains in draft form.  

As carriers prepare to submit Qualified Health Plan (QHP) filings and states across the country prepare for certification reviews, PCG subject matter experts have updated our summary of the key changes to QHP certification and Exchange standards for the final rule, with changes from our summary of the proposed rule flagged in red. For more information on these topics and others – including changes to the risk adjustment program, broker standards, eligibility standards, insurance reporting requirements, medical loss ratio, and user fees – we encourage you to consult the full rule. 

The rule goes into effect on July 20, 2026, though many provisions are effective for the 2027 or 2028 plan year.

1: Standardized Plans

The NBPP finalizes the proposal to “discontinue standardized plans” on the Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the Federal Platform (SBE-FPs), despite the successful legal challenge to a similar proposal in 2019. Under the NBPP: 

• • FFE and SBE-FP issuers will no longer be required to offer standardized plans.  

• • The FFE will no longer have differential display for standardized plans.  

• • Issuers will no longer be limited in the number of non-standardized plans they can offer.  

The federal government will no longer design and publish yearly standardized plan templates. However, issuers are not required to discontinue existing standardized plans and states can continue to require standardized plans, though only those on State-based Exchanges could have differential display.

2: Network Adequacy and Essential Community Providers (ECP)

The NBPP finalizes the proposal to remove the requirement that states that conduct network adequacy reviews use quantitative time and distance standards that are at least as stringent as federal standards. Instead, similar to a policy that was also previously overturned by the ruling in City of Columbus v. Cochran, states will be able to review for network adequacy as long as the states have the authority and capacity to conduct reviews and ensure plans provide sufficient access to providers.  

The NBPP finalizes the proposed Effective Essential Community Provider (ECP) Certification Review Program for FFE states, allowing states to conduct ECP reviews if they meet requirements similar to those for network adequacy.  

The NBPP also finalizes the removal of the justification narrative if a plan does not satisfy the ECP standard. 

HHS decided not to finalize its proposal to reduce the ECPs threshold (the minimum percentage of available ECPs that must be included within the provider network). Instead, it will maintain the current standard that issuers must contract with at least 35% of ECPs in each service area. 

The rule finalizes the provision allowing non-network plans to be newly certified as QHPs as long as they are determined to provide sufficient access to providers – based on having a benefit amount for a covered service that is sufficient enough that an adequate number of providers will accept it as payment in full – and meet other QHP standards. The effective date of this provision is delayed to plan year 2028.

3: Essential Health Benefits (EHB)

HHS is finalizing the change to require states to defray the cost of all state-mandated benefits enacted after 2011, even services that are embedded in the state’s EHB-benchmark plan. This requirement will only apply if the additional benefit is mandated by the state, not if it just is in the benchmark. This change will go into effect in plan year 2028. 

The rule also finalized the proposal to prohibit states from including routine non-pediatric dental services as an EHB, even if the State’s current EHB-benchmark plan includes such services as covered benefits.

4: Cost-sharing Limits 

HHS is finalizing significant updates to cost-sharing rules for bronze and catastrophic plans, allowing insurers to offer such plans with cost sharing that exceed statutory maximum out-of-pocket (MOOP) limits.  

For bronze plans in the individual market, starting in plan year 2027 HHS will permit issuers that offer at least one plan that complies with cost-sharing limitations to offer an alternative cost-sharing design plan in the same service area with a MOOP of up to 130% of the statutory limits ($15,600 for an individual and $31,200 for a family in 2027). Starting in plan year 2028, catastrophic plans will provide no benefits (except preventive services, including three primary care visits) for any plan year until enrollees reach a MOOP of 130% of the maximum annual limitation for those plans, rounded down to the nearest $50. 

 5: Catastrophic Plans 

The NBPP finalized other significant changes to catastrophic plans. First, HHS is codifying guidance released based on H.R. 1 to allow anyone who is ineligible for advance premium tax credits based on income to enroll in catastrophic plans regardless of age.  

The final NBPP will also allow issuers to offer multi-year catastrophic plans and enroll individuals for periods of up to 10 years. Individuals could remain enrolled as long as they were eligible at the initial time of enrollment. However, the final rule clarifies that MOOPs and deductibles cannot accumulate across plan years.  

6: Advance Premium Tax Credit (APTC) Eligibility and Basic Health Plan

The rule finalized implementation of the H.R.1 provision that redefines the term “eligible noncitizens” (who are eligible for APTCs) as an individual who is either lawfully admitted for permanent residence, an individual who has been granted the status as Cuban-Haitian Entrant, or an individual who is lawfully residing in the U.S. as a COFA migrant.  

Additionally, states that enroll other non-citizens in the Basic Health Plan (BHP) will not be eligible for federal BHP payments for those individuals.

7: Establishment of State-based Exchanges (SBE) and Direct Enrollment 

HHS is finalizing the proposal to rescind the requirement that states must operate a State-Based Exchange on the Federal Platform (SBE-FP) for one year before establishing a SBE. 

However, HHS elected not to finalize the proposed SBE-Enhanced Direct Enrollment (SBE-EDE) model or the elimination of the requirement that SBEs operate a centralized consumer-facing eligibility and enrollment platform.  HHS noted that it may finalize that proposal in the 2028 NBPP or other rulemaking.