The Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), released the Notice of Benefit and Payment Parameters Proposed Rule for 2027 on February 9, 2026.
What is the Notice of Benefit and Payment Parameters Proposed Rule?
CMS publishes the HHS Notice of Benefit and Payment Parameters annually. It outlines guidelines and parameters for the Health Insurance Marketplaces established under the Affordable Care Act (ACA). The Payment Notice helps shape the implementation of the ACA.
The Payment Notice undergoes a formal rulemaking process. That process includes a period for public comment before the provisions become finalized and effective. This iterative process ensures that stakeholders provide feedback and contribute to the development of the regulations.
What Key Changes Did CMS Propose?
The proposed rule introduces several significant policy changes aimed at reducing regulatory complexity, enhancing state flexibility, and improving plan innovation.
Changes to Plan Design and Choice
The rule proposes discontinuing the requirement that issuers on the Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the Federal platform (SBE-FPs) offer standardized plan options. This change will take effect in plan year 2027.
CMS plans to roll back the current limit of two non-standardized plan designs per metal level, as well as the associated exceptions process. This is intended to give issuers more room to innovate and compete.
For the first time since plan year 2023, the proposed rule would allow CMS to certify non-network health plans as qualified health plans (QHPs). These plans must demonstrate a “broad enough slate of provider options” and sufficient choice of providers who accept the plan’s benefit amount as payment in full.
Catastrophic and Bronze Plan Flexibilities
The proposed rule would permit plans to offer catastrophic coverage for up to 10 consecutive years rather than just one year. This change is intended to allow for greater investment in the long-term care of individuals. The rule also proposes new hardship exemptions for individuals over age 30, making it easier for them to choose a catastrophic plan if they find metal-tier plans unaffordable.
To maintain the viability of bronze plans, the rule proposes allowing them to include higher out-of-pocket maximums that exceed the standard annual limit in certain circumstances. This keeps actuarial values (AV) near 60%. For catastrophic plans, the rule proposes a required cost-sharing limit of 130% of the maximum annual limitation, which makes them more distinct from bronze plans.
State Exchange Operations
States would be allowed to establish a new exchange option where web-brokers serve as the exclusive pathway for eligibility applications and QHP enrollment, removing the requirement for the State Exchange to operate its own centralized consumer-facing website.
The rule also proposes removing the requirement that a State must first operate as an SBE-FP for at least one year before transitioning to a full State Exchange. It also rescinds the requirement for States to provide supplemental documentation to demonstrate progress toward meeting Blueprint requirements.
Network Adequacy and Essential Community Providers (ECPs)
HHS proposes to defer network adequacy and ECP certification reviews to FFE States that elect to conduct them and demonstrate the authority and technical capacity to do so (designated as “Effective Review Programs”).
For network plan issuers, the proposed rule would reduce the minimum ECP threshold from 35% to 20% of available ECPs in a plan’s service area.
Program Integrity and Eligibility
The rule proposes several changes to align with the Working Family Tax Cut (WFTC) legislation. These include limiting Premium Tax Credit (PTC) eligibility to “eligible noncitizens” and removing PTC eligibility for certain lawfully present individuals with income below 100% of the Federal Poverty Level (FPL) who are ineligible for Medicaid due to immigration status.
The rule also proposes a return to a 1-year Failure to File and Reconcile (FTR) policy requiring all Exchanges to find enrollees ineligible for Advance Premium Tax Credits (APTC) if they failed to file and reconcile for a single prior year. This would begin in plan year 2028.
The rule would establish the State Exchange Improper Payment Measurement (SEIPM) program to measure and report improper payments of APTC administered by State Exchanges.
Finally, HHS plans to mandate a standardized consumer consent form for agents and brokers and introduce stronger standards to deter fraud and misleading marketing.
Benefit and Financial Parameters
Beginning in plan year 2027, the rule proposes to prohibit issuers from including routine non-pediatric dental services as an Essential Health Benefit (EHB).
For 2027, the proposed user fee rates are 2.5% of total monthly premiums for FFEs and 2.0% for SBE-FPs. That’s no change over the current rates.
The rule proposes a risk adjustment user fee of $0.20 per member per month for the 2027 benefit year. It also notes a 5.7% sequestration rate for risk adjustment payments from fiscal year 2026 resources.
How might these changes impact health insurers?
The proposed rules for 2027 skew toward deregulation and increased flexibility for health insurers, aiming to reduce administrative burdens and encourage plan innovation.
The following are the key impacts the proposed rules will have on health insurers:
Expanded Plan Design and Innovation
Insurers will no longer be required to offer standardized plan options on the FFEs or SBE-FPs. This should reduce the burden of creating and submitting certification applications for plans that often saw low consumer uptake. Also, by eliminating the current limit of two non-standardized plans per metal level, insurers can again offer a wider variety of unique plan designs. This includes those with tiered networks or separate medical and drug deductibles, which were previously constrained.
For the first time in recent years, insurers may be able to certify non-network plans as QHPs. These plans, which often use reference-based pricing rather than contracted networks, must demonstrate they provide a sufficient choice of providers who accept the plan’s payment amount as payment in full.
New Flexibilities for Bronze and Catastrophic Plans
The proposed rule enables insurers to offer catastrophic coverage for terms of up to 10 consecutive years. Doing so incentivizes insurers to invest in the long-term health of enrollees through wellness programs and improved disease management, as the issuer would retain the enrollee for more than a year.
Changes that enable insurers to exceed the standard maximum out-of-pocket for bronze plans provide insurers more flexibility, even though they must also offer at least one bronze plan in the same area that remains within the standard MOOP limit.
Reduced Administrative and Review Burdens
For network plans, CMS would reduce the minimum Essential Community Provider (ECP) threshold from 35% to 20% of available ECPs in a service area. This will reduce regulatory burden, particularly for insurers in rural areas. Also, by replacing open-ended narrative justifications for ECP satisfaction with standardized contract status data in the certification system, CMS will streamline the application process.
Financial and Compliance Impacts
Starting in PY 2027, insurers who “load” silver-tier premiums to account for unfunded Cost-Sharing Reductions (CSRs) must provide detailed justifications in their rate filings. This includes reporting actual CSRs paid and demonstrating that the premium load is actuarially justified and not excessive. Insurers must also adapt to stricter eligibility checks for premium tax credits (PTCs) following the Working Families Tax Cut (WFTC) legislation, which limits credits to “eligible noncitizens” and removes them for certain individuals below 100% of the Federal Poverty Level.
What Happens Next?
The next steps for the HHS Notice of Benefit and Payment Parameters for 2027 involve a formal public comment period, review by federal agencies, and the eventual implementation of the finalized standards for the 2027 plan year.
The most immediate step is the public comment phase, which allows stakeholders—including health insurers, state regulators, consumer advocates, and the general public—to provide feedback on the proposed changes. All comments must be received by March 13, 2026, to be assured consideration.
Following the close of the comment period, the HHS and CMS will analyze the feedback provided. These notices are typically finalized several months before the start of the next plan year.
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