Patient Protection and Affordable Care Act, HHS Notice of Benefit and Payment Parameters for 2027; and Basic Health Program

Based on estimated costs, enrollment in the FFEs (including anticipated enrollment loss due to certain States transitioning from the FFE to SBE-FPs or from SBE-FPs to State Exchanges), and premiums for the 2027 benefit year, we proposed a 2027 user fee rate for all participating FFE issuers of 2.5 percent of total monthly premiums.

Section 156.50(c)(1) provides that, to support the functions of FFEs, an issuer offering a plan through an FFE must remit a user fee to HHS, in the timeframe and manner established by HHS, equal to the product of the monthly user fee rate specified in the annual HHS notice of benefit and payment parameters for the applicable benefit year and the monthly premium charged by the issuer for each policy where enrollment is through an FFE. As in benefit years 2014 through 2026, issuers seeking to participate in an FFE in the 2027 benefit year will receive two special benefits not available to issuers offering plans in State Exchanges: (1) the certification of their plans as QHPs; and (2) the ability to sell health insurance coverage through an FFE to individuals determined eligible for enrollment in a QHP. For the 2027 benefit year, issuers participating in an FFE will receive special benefits from the following Federal activities:

Provision of consumer assistance tools;

Consumer outreach and education;

Management of a Navigator program;

Regulation of agents and brokers;

Eligibility determinations;

Enrollment processes; and

Certification processes for QHPs (including ongoing compliance verification, recertification, and decertification). Activities performed by the Federal Government that do not provide issuers participating in an FFE with a special benefit are not covered by the FFE user fee.

The proposed user fee rate reflected our estimates for the 2027 benefit year of costs for operating the FFEs, premiums, enrollment, and transitions in Exchange models from the FFE and SBE-FP models to either the SBE-FP or State Exchange models. The total enrollment in Exchanges in States anticipated to transition from operating an SBE-FP to a State Exchange model represents premiums for which we will no longer collect user fees, and the total enrollment in Exchanges in States anticipated to transition from an FFE to an SBE-FP model represents premiums for which we will assess user fees at the lower SBE-FP rate. Thus, these anticipated transitions impact our total projected collections, may affect the FFE and SBE-FP user fee rates, and were considered as part of our calculation of our proposed user fee rates.

As stated in the proposed rule, to develop the proposed 2027 benefit year FFE user fee rate, we considered a range of costs, premiums, and enrollment projections. For the 2027 benefit year FFE user fee rate, we estimated that budget costs would be lower in 2027 than the budget costs that we used to

project the 2025 and 2026 benefit year FFE user fee rates. Specifically, while we stated that we expect small increases in costs from the 2026 benefit year to the 2027 benefit year will be due to the structure of contracts and inflationary pressure, recent efficiency exercises have reduced baseline cost structures that were used in the projection of budgets for benefit years 2025 and subsequent years.

We took several factors into consideration in choosing which premium and enrollment projections will inform the proposed 2027 FFE user fee rate. First, for our estimated premium trend rate projections, we expected premiums will increase in 2026. We also expected that while the rate of premium increase will be smaller in benefit year 2027 increases in premiums will persist.

For the 2021 through 2025 benefit years, the individual non- catastrophic market risk pool in all States generally experienced increased enrollment. Our 2026 estimates accounted for projected decreased 2026 benefit year Exchange enrollment in the individual market due to the impact of the expiration of the enhanced PTC subsidies. For the 2027 benefit year, we estimated a further decrease in Exchange enrollment in the individual market due to the expiration of subsidies at the end of the 2025 benefit year as well as the effects of the WFTC legislation and the Marketplace Integrity and Affordability final rule (90 FR 27074).\236\

\236\ We considered the most recent projections from the Congressional Budget Office at the time, as we have in prior rulemakings, and our own internal data. See, for example, 89 FR 26218; see also, Congressional Budget Office (CBO). (2025, September 18). The Estimated Effects of Enacting Selected Health Coverage Policies on the Federal Budget and on the Number of People With Health Insurance. https://www.cbo.gov/system/files/2025-09/61734-Health.pdf.

After taking into consideration a projected reduced budget, enrollment decreases, and a higher premium trend rate, we proposed a 2027 benefit year FFE user fee rate of 2.5 percent of total monthly premiums, which is the same as the 2026 benefit year FFE user fee rate. We stated in the proposed rule that based on our estimates, the proposed FFE user fee rate will allow us to have sufficient funding available to fully fund user fee-eligible FFE activities. We noted that if any events occurring between the proposed rule and the final rule significantly changed our estimated FFE operational costs, or if our enrollment or premium projections changed (especially based on the availability of more recent data), we may finalize an FFE user fee rate that differs from the proposed rate to reflect those changes. We acknowledged that the 2026 open enrollment period closed prior to release of the proposed rule, but we stated that we did not consider that data in developing the proposed user fee rates because the data available at the time was too premature to use for our proposed rule estimates. As discussed in the proposed rule, our intention was to reconsider the enrollment estimates for the final rule. We stated that if the actual 2026 enrollment numbers are lower than the projected enrollment numbers we used to set the proposed user fee rate, the final 2027 user fee rate may be higher. We also stated that if the actual 2026 enrollment numbers are higher than our projected enrollment numbers, the 2027 user fee rate may be lower. b. SBE-FP User Fee Rate for the 2027 Benefit Year

In the 2027 Payment Notice proposed rule (91 FR 6367), we proposed to charge issuers offering QHPs through an SBE-FP a user fee rate of 2.0 percent of the monthly premium charged by the issuer for each policy under plans offered through an SBE-FP for the 2027 benefit year.

In Sec. 156.50(c)(2), we specify that an issuer offering a plan through an SBE-FP must remit a user fee to HHS, in the timeframe and manner established by HHS, equal to the product of the monthly user fee rate specified in the annual HHS notice of benefit and payment parameters for the applicable benefit year and the monthly premium charged by the issuer for each policy where enrollment is through an SBE-FP. SBE-FPs enter into a Federal platform agreement with HHS to leverage the systems established for the FFEs to perform certain Exchange functions and enhance efficiency and coordination between State and Federal programs. The benefits provided to issuers in SBE-FPs by the Federal Government include use of the FFE information technology and call center infrastructure used in connection with eligibility determinations for enrollment in QHPs and other applicable State health subsidy programs, as defined at section 1413(e) of the Affordable Care Act, and QHP enrollment functions under 45 CFR part 155, subpart E. The user fee rate for SBE-FPs is calculated based on the proportion of total FFE costs associated with Federal activities that provide SBE-FP issuers with special benefits, including costs that are associated with the FFE information technology infrastructure, the consumer call center infrastructure, and eligibility and enrollment services.

To calculate the proposed SBE-FP user fee rate for the 2027 benefit year, we used the same assumptions related to budget, enrollment, and premiums as we used for the proposed FFE user fee rate. As we stated in the proposed rule, the user fee rate for SBE-FPs is calculated based on the proportion of the total FFE costs associated with Federal activities that provide SBE-FP issuers with special benefits, which we stated we continue to estimate to be approximately 80 percent of total FFE costs. These FFE costs associated with Federal activities that provide SBE-FP issuers with special benefits include the costs associated with the FFE information technology infrastructure, the consumer call center infrastructure, and eligibility and enrollment services. Additionally, we stated that the proposed user fee rate for SBE-FP issuers for the 2027 benefit year includes assumptions about States transitioning from either the FFE model to an SBE-FP, or from an SBE-FP to a State Exchange for the 2027 benefit year, which impacts the SBE-FP enrollment projections.

Based on this methodology and our projected reduced budget, enrollment decreases, and a higher premium trend rate that were described in section III.E.1.a. of the proposed rule, we proposed a 2027 benefit year SBE-FP user fee rate of 2.0 percent of total monthly premiums, which is the same as the SBE-FP user fee rate we established for the 2026 benefit year. Specifically, we noted in the proposed rule that changes in budget, enrollment, and premium trends have the same impact for the SBE-FPs as the FFE. We further noted that if any events occurring between the proposed rule and the final rule significantly change our estimated Federal platform operational costs, or if our enrollment or premiums projections change (especially based on the availability of more recent data), we may finalize an SBE-FP user fee rate that differs from the proposed rate to reflect those changes.

We sought comment on the proposed 2027 benefit year FFE and SBE-FP user fee rates.

After the proposed rule was published, we revised our premium projections because of newly available data analysis based on the 2026 open enrollment period that occurred between November 2025 and January 2026. This data analysis found that 2026 premiums increased from what we previously estimated and used for the proposed 2027 user fee rates. After consideration of comments, the reasons outlined in the proposed rule and this

final rule, including our responses to comments, and revised premium projections, we are finalizing a 2027 benefit year user fee rate for all participating FFE issuers of 1.9 percent of total monthly premiums and a user fee rate for all participating SBE-FP issuers of 1.5 percent of total monthly premiums. We note that we establish FFE and SBE-FP user fee rates annually using the most recent data and assumptions available at the time to project costs, premiums, and enrollment.

After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these 2027 user fee rates as described in the above paragraph. We summarize and respond to public comments received on the proposed FFE and SBE-FP user fee rates for the 2027 benefit year below.

Comment: Most commenters supported the 2027 benefit year user fee rates, with several of these commenters supporting user fee rates that adequately fund Federal programs. Some commenters supported increasing the 2027 user fee rates. These commenters stated that a higher user fee rate could be used to enhance user fee-funded services, such as Navigators and consumer outreach and education.

Response: Due to revising our projections between the proposed and final rules based on newly available data, we are finalizing a lower FFE user fee rate of 1.9 percent of total monthly premiums and a lower SBE-FP user fee rate of 1.5 percent of monthly premiums for the 2027 benefit year. We revised our premium trend projections between the proposed and final rules based on newly available data as a result of the 2026 open enrollment period that showed higher 2026 premiums than previously estimated when setting the proposed 2027 user fee rates. We believe the 2027 benefit year user fee rates of 1.9 percent of total monthly premiums for FFE issuers and 1.5 percent of total monthly premiums for SBE-FP issuers will ensure sufficient funding of Federal programs and do not believe that higher user fee rates are needed to maintain current funding for Navigators and consumer outreach and education. Further, we note that in finalizing the 2027 user fee rates in this final rule that are lower than the current 2026 user fee rates, we are putting downward pressure on 2027 premiums compared to if the user fee rates remained the same between the 2026 and 2027 benefit years.

Comment: Some commenters requested increased transparency on user fees, wanting additional information on how user fees support HHS' policy goals for the Exchanges. Some of these commenters requested enumerated costs of providing Federal eligibility and enrollment platform service and infrastructure to each State.

Response: In the proposed rule (91 FR 6366 through 6368), we provided information on the assumptions used to calculate the proposed 2027 benefit year user fee rates, including the assumptions related to budget, enrollment, and premiums. In this final rule, we provide information on our revised assumptions used to calculate the finalized 2027 benefit year user fee rates and explain why our assumptions changed between the proposed and final rules. HHS collects user fees in accordance with section 1311(d)(5)(A) of the Affordable Care Act, which permits an Exchange to charge assessments or user fees on participating health insurance issuers as a means of generating funding to support its operations. Therefore, our goal in collecting user fees is to collect user fees at a rate that will allow us to sustain the operations of the FFEs and SBE-FPs. 2. Permitting Plan-Level Adjustments for Multi-Year Catastrophic Plans (Sec. 156.80(d)(2)(ii))

As discussed in section III.E.6. of the 2027 Payment Notice proposed rule (91 FR 6370), we proposed to modify the requirements for catastrophic plans at Sec. 156.155(a)(6) to specify that a catastrophic plan may have a plan term of either 1 year, or of multiple consecutive years not to exceed 10 years, and sought comment on whether to also specify such standards for individual market metal level plans. To align with that proposal and comment solicitation, and under our authority to implement the single risk pool requirements in section 1312(c)(1) and (2) of the Affordable Care Act, in the 2027 Payment Notice proposed rule (91 FR 6368), we proposed to amend Sec. 156.80(d)(2)(ii) to permit issuers of multi-year catastrophic plans to make plan-level adjustments to the index rate that reflect the length of the entire term. We stated in the proposed rule that such plan-level adjustments would account for the benefit design characteristics of such plans, such as their deductible and maximum out-of-pocket cost structure. We further stated that the proposal to codify standards for catastrophic plans to have multi-year terms of up to 10 consecutive years would clarify certain aspects of the structure of multi-year plans, such as permitting such plans to cover certain additional preventive service benefits before an enrollee satisfies their deductible and annual limitation on cost sharing. We stated that allowing issuers of multi-year catastrophic plans to make plan-level adjustments to the index rate would permit these issuers to take such plan design features into account when developing premiums for such plans. We further stated that, given that these plan design features, which are discussed in section III.E.6 of this final rule, will be unique to multi-year catastrophic plans, it would be appropriate for issuers to take them into account when setting premiums for such plans. We stated that an issuer's calculation of the magnitude of this plan- level adjustment must be accurate, and therefore, must be actuarially justified.

We sought comment on all aspects of the proposal, including whether a separate plan-level adjustment based on term length should be permitted for multi-year catastrophic plans, and whether and the degree to which the risk profile of multi-year catastrophic plans that are otherwise identical to single year catastrophic plans would justify plan-level adjustments over and above those that would be made to account for the different features of such plans.

After consideration of comments, we are not finalizing this proposal because, as discussed below, current regulations already allow issuers to make plan-level adjustments to account for the benefit design characteristics of multi-year catastrophic plans. We summarize and respond to public comments received on the proposal.

Comment: Several commenters noted their belief that plan-level adjustments to each multi-year catastrophic plan are unnecessary, citing varying reasons. One commenter stated that current rules already allow issuers to apply a plan-level adjustment that reflects the AV and cost-sharing design of a plan, which would already account for multi- year catastrophic plans' unusual deductible and MOOP structure. Another commenter noted their belief that CMS had not articulated a reason why any other multi-year plans' benefit characteristics might justify a plan-level adjustment. Another commenter stated that issuers of multi- year plans will need to set premiums for such plans on an annual basis to comply with statutory requirements, obviating the need for a plan- level adjustment that accounts for the length of the plan term.

Response: We agree that current regulations at Sec. 156.80(d)(2) that permit plan-level adjustments to the index rate already permit appropriate plan-level adjustments for multi-year catastrophic

plans. Specifically, current regulations at Sec. 156.80(d)(2)(v) permit a plan-level adjustment for the expected impact of the specific eligibility categories for catastrophic plans, and this provision would apply to multi-year catastrophic plans as well as 1-year catastrophic plans. Additionally, current regulations at Sec. 156.80(d)(2)(iv) permit all plans, including catastrophic plans, to make a plan-level adjustment for administrative costs, excluding Exchange user fees. To the extent a multi-year catastrophic plan has lower administrative costs than a 1-year plan, this could be considered through such a plan- level adjustment. Also, as discussed below, this final rule will permit multi-year catastrophic plans to utilize value-based insurance designs to provide benefits before reaching the deductible, under guidelines issued by the Departments of HHS, Labor, and Treasury (the Departments) under section 2713(c) of the PHS Act. Current regulations at Sec. 156.80(d)(2)(i), which permit plan-level adjustments for the actuarial value and cost-sharing design of the plan, would permit a plan-level adjustment to take into account the actuarial value and cost-sharing design adjustments that would result from the implementation of any such value-based insurance design after guidelines are issued by the Departments. We do not agree that setting rates for multi-year plans on an annual basis will obviate the need for plan-level adjustments to the index rate for such plans, because the calculation of the factors that can be taken into account when making plan-level adjustments can vary from year to year. However, such plan-level adjustments are already permitted under current regulations.

We note that in making plan-level adjustments for multi-year catastrophic plans, such plans can have different rates from each other only if they are different plans, as that term is defined in Sec. 144.103.

Comment: A commenter stated that plan-level index-rate adjustments associated with multi-year catastrophic terms may introduce additional complexity into premium comparability and consumer understanding.

Response: We do not agree. Plan and premium comparability and consumer education have been HHS' and health insurance issuers' focus long before passage of the Affordable Care Act. We will continue to evaluate, implement, and offer methods and resources aimed at making plan comparisons and coverage choices clearer for consumers, including choices involving multi-year catastrophic plans. As with any novel coverage offering, we further expect health insurance issuers and consumer advocates will engage in activities to educate consumers on how to evaluate and compare multi-year plans to other coverage offerings. For these reasons, we are of the view that concerns regarding consumer confusion do not outweigh the potential positive benefits of making new, more affordable opportunities for coverage available in the individual market.

Commenter: One commenter stated that because catastrophic plan enrollees turn over frequently, a multi-year catastrophic plan is unlikely to develop meaningfully different risk characteristics than a traditional single-year offering.

Response: Under current regulations, risk characteristics for catastrophic plans, that is, the expected impact of the specific eligibility categories for those plans, can be considered when making plan-level adjustments for such plans. To the extent such characteristics vary based on the length of the term, those variations can be considered when making plan-level adjustments for multi-year plans. Given that multi-year plans would offer a unique opportunity for longer-term insurance contracts with the potential for greater out-of- pocket savings over time, we believe it is premature to conclude there will be no meaningful difference between the risk characteristics of single-year and multi-year offerings. Under this final rule, individuals who are under the age of 30 or who are eligible for a hardship or affordability exemption when first enrolling in a multi- year catastrophic plan are considered eligible for the duration of the multi-year term. Therefore, it is likely that multi-year catastrophic plans would have an older population than 1-year catastrophic plans, resulting in different risk characteristics. Also, for reasons stated earlier, it is our view that features of multi-year catastrophic plans might cause enrollees to remain in the plans for extended periods, reducing the churn that the commenter mentions. 3. State Selection of EHB-Benchmark Plan for Plan Years Beginning on or After January 1, 2020 (Sec. 156.111)

Section 1302 of the Affordable Care Act provides for the establishment of an EHB package that includes coverage of EHBs (as defined by the Secretary), cost-sharing limits, and AV requirements. Among other requirements, the law directs that the EHBs be equal in scope to the benefits provided under a typical employer plan, and that they include at least the following 10 general categories and the items and services covered within the categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.

We established requirements relating to the coverage of EHBs in the EHB Rule (78 FR 12834). In the 2019 Payment Notice (83 FR 17009), we added Sec. 156.111 to provide States with additional options from which to select an EHB-benchmark plan for plan years beginning on or after January 1, 2020. We revised the EHB-benchmark plan selection process in the 2023 Payment Notice (87 FR 27290) and the 2025 Payment Notice (89 FR 26218).

As we stated in the 2027 Payment Notice proposed rule (91 FR 6368), we have paused review of State applications to select EHB-benchmark plans in accordance with Sec. 156.111. We are actively conducting a comprehensive review of section 1302 of the Affordable Care Act, as we are considering future rulemaking to revise Sec. 156.111 and other regulations relating to the EHBs.

We received several comments regarding this pause. We summarize and respond to public comments received below.

Comment: Many commenters stated that they did not agree with the approach CMS has taken to pause the review of State applications to update their EHB-benchmark plans. These commenters urged CMS to resume its review and approval of pending EHB-benchmark plan applications under current regulations, noting that States that have submitted such applications to CMS used a considerable number of resources to do so, and that the States' proposed changes that are currently pending address current gaps in their EHB-benchmark plans. In addition, some commenters requested that CMS prioritize regulatory clarity before making procedural changes. Specifically, these commenters suggested that any revisions to Sec. 155.170 regarding State-mandated benefits should first be formally codified through rulemaking, and noted that codifying clear regulations would provide States with the certainty needed to effectively design EHB-benchmark plans and submit EHB- benchmark plan updates. Some commenters requested that CMS preserve the current framework that gives States flexibility to update their EHB- benchmark plans

specific to their populations, support State innovation initiatives to modernize their EHB-benchmark plans, and establish a transparent process for future review and approval of EHB-benchmark plan changes.

Response: We acknowledge that commenters have concerns regarding the pause in the review of State applications to update their EHB- benchmark plans and the effort and resources States applied to the application process. However, we believe that approving State EHB- benchmark plan applications and then immediately proposing a new policy that has the potential to render those changes moot or to require further revisions would potentially create greater burdens and hardship for States. Thus, while we realize that the pause creates some uncertainty, it gives HHS time to ensure that the policies implementing section 1302 of the Affordable Care Act are rooted, as required, in the “best reading” of the statute. See Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024). We will take these comments into consideration as we conduct a comprehensive review of section 1302 of the Affordable Care Act. We appreciate that States are trying to address gaps in coverage by updating their EHB-benchmark plans and believe that this is a worthy objective. While we realize that the pause may seem to frustrate that objective, we believe that the review of section 1302 of the Affordable Care Act and EHB policy in general can facilitate the same goal of helping coverage better meet consumers' needs. 4. Provision of EHB (Sec. 156.115(d))

In the 2027 Payment Notice proposed rule (91 FR 6368), we proposed to revise Sec. 156.115(d) to prohibit issuers from including routine non-pediatric dental services as an EHB.

In the EHB Rule (78 FR 12834), we finalized at Sec. 156.115(d) that issuers of a plan offering EHBs may not include, among other services and benefits, routine non-pediatric dental services as an EHB, even if the State's current EHB-benchmark plan includes such services as covered benefits. Section 1302(b)(2) of the Affordable Care Act directs the Secretary, in defining the EHBs, to ensure that they are equal in scope to the benefits provided under a typical employer plan. In the proposed EHB Rule (77 FR 70644), in support of the proposed prohibition at Sec. 156.115(d), we noted that routine non-pediatric dental services are not typically included in the medical plans offered by employers and are often provided as excepted benefits \237\ by the employer.

\237\ For more information, see 45 CFR 144.103 for excepted benefits, 45 CFR 146.145(b)(3)(i) and (iii)(A) for limited scope dental benefits for group health plans, and 45 CFR 148.220(b)(1) for limited scope dental benefits in the individual market.

In the 2025 Payment Notice, we finalized removal of this prohibition at Sec. 156.115(d) for plan years beginning on or after January 1, 2027. In support of this policy, we noted, as we did in the 2025 Payment Notice proposed rule (88 FR 82597), that a more natural reading of section 1302(b)(2) of the Affordable Care Act is one that considers all the benefits typically covered by employers, regardless of whether such benefits are historically considered a “health benefit” or whether such benefits are “typically covered” by an employer's major medical plan. We also stated that based on recent data, it appeared that routine non-pediatric dental services were commonly covered as an employer-sponsored or other job-based benefit to a degree that warranted removing the prohibition on coverage of these services as an EHB. We further stated that oral health has a significant impact on overall health and quality of life,\238\ and that removing the prohibition on issuers from including routine non- pediatric dental services as an EHB will remove regulatory and coverage barriers to expanding access to routine non-pediatric dental benefits for those plans that must cover EHBs. We further stated that this policy will allow States to work to improve non-pediatric oral health and overall health outcomes, which are disproportionately low among marginalized communities such as people of color and people with low incomes.\239\

\238\ Spanemberg, J.C., Cardoso, J.A., Slob, E.M.G.B, & Lopez- Lopez, J. (2019). Quality Of Life Related To Oral Health And Its Impact In Adults. Journal of Stomatology, Oral and Maxillofacial Surgery, 120(3), 234-239. https://doi.org/10.1016/j.jormas.2019.02.004.

\239\ Northridge, M.E., Kumar, A., & Kaur, R. (2020). Disparities in Access to Oral Health Care. Annual Review Of Public Health, 41, 513-535. https://doi.org/10.1146/annurev-publhealth-040119-094318.

However, to better align our regulation at Sec. 156.115(d) with section 1302(b)(2)(A) of the Affordable Care Act, which directs that the scope of EHBs be equal to the scope of benefits provided under a typical employer plan, in the 2027 Payment Notice proposed rule we proposed to reinstate the regulatory prohibition on issuers from including routine non-pediatric dental services as an EHB. In the proposed rule, we acknowledged that in the 2025 Payment Notice proposed rule (89 FR 26342), we previously interpreted section 1302(b)(2)(A) of the Affordable Care Act as supporting a more natural reading that considers all the benefits typically covered by employers, regardless of whether such benefits are historically considered a “health benefit” or whether such benefits are “typically covered” by an employer's major medical plan. Upon further consideration of the statutory framework, we stated in the proposed rule that we now believe a more precise interpretation of section 1302(b)(2)(A) of the Affordable Care Act should apply.

Specifically, we stated that we believe the language of section 1302(b)(1) of the Affordable Care Act, which outlines the 10 EHB categories and specifically includes, “Pediatric services, including oral and vision care,” suggests that Congress did not view routine non-pediatric oral and vision care as an EHB at the time the Affordable Care Act passed. We further stated that this language indicates Congress' intention to differentiate pediatric from non-pediatric dental services and explicitly limit EHB coverage to pediatric oral care. We stated that if Congress had intended for non-pediatric dental services to be included in the list of the 10 EHB categories it would have explicitly included these services, as it explicitly included pediatric oral care. Thus, we stated that the best reading of the statute, which only mentions pediatric oral care, indicates non- pediatric oral care was not meant to be included as an EHB.

In the proposed rule, we acknowledged that the 10 EHB categories set the floor for what constitutes EHB and that routine non-pediatric dental services could theoretically be added on top of this minimum set of EHBs. However, we noted that the EHB typicality standard at section 1302(b)(2)(A) of the Affordable Care Act requires the scope of EHB to be equal to the scope of benefits provided under a typical employer plan, as determined by the Secretary. As we stated in the 2025 Payment Notice (89 FR 26345), the statutory term “a typical employer plan” is ambiguous as to whether it references a single major medical plan, or the entire suite of benefits provided by the employer. We stated that given Congress' intent reflected in section 1302(b)(1) of the Affordable Care Act to specifically include pediatric oral care and not non-pediatric oral care as an EHB category, and the fact that standalone non-pediatric dental plans are excepted benefits, we now interpret “a typical employer plan” under section 1302(b)(2)(A) to refer to an employer's major medical plan rather than the entire suite of benefits typically covered

by employers. We stated that this interpretation of the typicality standard, along with the statutory framework that distinguishes pediatric from non-pediatric dental services, warrants reinstating the regulatory prohibition on issuers from including routine non-pediatric dental benefits as an EHB.

Additionally, we noted that KFF Employer Health Benefits surveys in recent years show most employers do not include dental benefits as part of their traditional medical plan. In KFF's 2019 survey, 59 percent of small firms (3-199 workers) and 92 percent of large firms (200 or more workers) offered separate dental benefits.\240\ More recently in KFF's 2023 survey, 90 percent of small firms and 94 percent of large firms offered separate dental plans.\241\ We stated that since these benefits are typically offered as separate insurance products and are not included in the traditional medical plan, they should not be included in the scope of benefits used to establish the scope of the typical employer plan. Additionally, we noted that while a high percentage of large firms offer separate dental benefits, small firms are less likely to offer any dental benefits (as indicated by the KFF survey data cited above) and small firms comprise the majority of employers in the U.S.\242\ The 2019 KFF survey data was cited in the 2025 Payment Notice (89 FR 26343) as evidence that routine non-pediatric dental services are commonly covered as an employer-sponsored or other job-based benefit. However, we stated that the relevant consideration is not whether routine non-pediatric dental services are commonly covered as an employer-sponsored or other job-based benefit, but whether employers offer these benefits as part of their medical plans or as separate benefits. We further stated that this separation of dental benefits from medical coverage as indicated by KFF's surveys further supports the interpretation that Congress intended to omit non-pediatric dental coverage from the 10 categories of EHBs. We stated that employers traditionally and commonly offering dental coverage as separate plans, as demonstrated by the KFF surveys, is consistent with Congress' determination that non-pediatric dental coverage should not be a part of the 10 EHB categories representing core medical benefits required to be offered in small group and individual plans.

\240\ KFF. (2019, September 25). Employer Health Benefits: 2019 Annual Survey. https://www.kff.org/health-costs/report/2019-employer-health-benefits-survey/.

\241\ KFF. (2023, October 18). Employer Health Benefits: 2023 Annual Survey. https://www.kff.org/health-costs/report/2023-employer-health-benefits-survey/.

\242\ According to 2025 U.S. Bureau of Labor Statistics data, smaller firms (defined by BLS as up to 249 workers) comprise 73 percent of all firms. See U.S. Bureau of Labor Statistics (BLS). Employment By Size Of Establishment, Private Industry. https://www.bls.gov/charts/county-employment-and-wages/employment-by-size.htm.

Further, in the proposed rule we acknowledged that oral health can have a significant impact on overall health and quality of life. We clarified that the proposed prohibition on including routine non- pediatric dental services as an EHB would not prevent States from addressing non-pediatric oral health and overall health outcomes through alternative policy mechanisms. We noted, for example, that States could mandate coverage of routine non-pediatric dental services as a non-EHB and defray the cost associated with that benefit. We stated that we believe achieving better alignment of the regulatory requirements at Sec. 156.115(d) with section 1302(b)(2)(A) of the Affordable Care Act regarding the EHB typicality standard outweighs these other policy considerations.

We stated in the proposed rule that if the proposal to prohibit issuers from including routine non-pediatric dental services as an EHB were finalized, there would be fewer operational concerns for issuers associated with States adding routine non-pediatric dental services as an EHB. As we acknowledged in the 2025 Payment Notice (89 FR 26347), if States added routine non-pediatric dental services as an EHB, States would need to consider that some medical plans may not currently have infrastructure or experience working with Current Dental Terminology (CDT) codes that report dental procedures to dental payers. More specifically, for plans that do not directly reimburse using dental codes, the transition to new coding will require investments in technology, staff, and internal expertise. As we further stated in the 2025 Payment Notice (89 FR 26347), these investments may have led to additional premiums and an overall increase in health care spending. Under the proposal, we stated that issuers would not have to consider operational and cost concerns related to developing infrastructure around CDT codes. Additionally, we noted that, as we stated in the 2025 Payment Notice (89 FR 26347), if States added routine non-pediatric dental services as an EHB, this may have required plans to establish new networks of dental providers if plans did not already have such networks available.

Furthermore, we stated in the proposed rule that if this proposal were finalized, we believe there would be fewer impacts on cost-sharing and stand-alone dental plans (SADPs). As we stated in the 2025 Payment Notice (89 FR 26343), while section 1302(b)(4)(F) of the Affordable Care Act permits a medical QHP sold on the Exchange to omit coverage of pediatric dental EHB services if an SADP is offered through an Exchange,\243\ there is no statutory basis to extend this exception to routine non-pediatric dental services. We stated that absent the change we proposed, this would have meant that plans subject to an EHB- benchmark plan that includes routine non-pediatric dental services as an EHB would be prohibited from omitting such coverage on the basis that an SADP already provides such coverage through an Exchange. We stated that this would have required routine non-pediatric dental EHB services to be embedded in medical plans, which would have potentially impacted cost-sharing, as such embedded non-pediatric benefits would be subject to any applicable plan deductible, unless a State requires pre- deductible coverage. We further stated that depending on the benefits, pre-deductible coverage could have also made the plan incompatible with health savings accounts (HSAs). Additionally, we stated that requiring such embedded benefits would have conflicted with the established market structure in which non-pediatric dental services are more commonly provided through SADPs.\244\ Further, as we acknowledged in the 2025 Payment Notice (89 FR 26347), there could have been impacts on SADP premiums sold on the Exchange if a State added routine non- pediatric dental benefits as an EHB, leading to potential disparities between dental plan premiums on- versus off-Exchange. We noted that under Sec. Sec. 146.145(b)(3) and 148.220(b)(1), limited-scope dental plans are considered excepted benefits that are not required to provide EHBs. Thus, we stated that if a State adds routine non-pediatric dental benefits as an EHB, SADPs are not required to cover such benefits, whether on- or off-Exchange.

\243\ See section 1311(d)(2)(B)(ii) of the Affordable Care Act for more information on offering SADP benefits.

\244\ Elani, H.W., Rahman, M.S., Wallace, J., Rosenthal, M.B., & Sommers, B.D. (2024). Availability of Adult Dental Plans in the Affordable Care Act Marketplaces, 2016-23. Health Affairs, 43(11), 1587-1596. https://doi.org/10.1377/hlthaff.2024.00307.

In addition, we noted in the proposed rule that the proposal to prohibit routine non-pediatric dental services from being covered as an EHB would not impact

the typicality test at Sec. 156.111(b)(2)(ii), as the methodology and requirements for the typicality test remain unchanged. The typicality test 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. We noted that, as we stated in the 2025 Payment Notice (89 FR 26346), nothing in regulation prohibits a State from including the quantitative value of routine non-pediatric dental services, routine non-pediatric eye exam services, long-term/custodial nursing home care benefits, or non- medically necessary orthodontia in its typicality analysis. Specifically, we noted that if a typical employer plan used in the typicality comparison includes any of these services, the actuarial value of those services may be included when calculating that employer plan's overall value for purposes of the typicality test. We stated that this does not mean, however, that these services may be covered as EHBs in the State's EHB-benchmark plan itself. We stated, in summary, that, while the proposal would change what services are permitted to be covered as an EHB, it would not alter how States conduct the typicality test or what may be considered when calculating the actuarial value of typical employer plans for comparison purposes. We stated that States would still be required to ensure the value of covering all the benefits in the State's proposed EHB-benchmark plan is between (or equal to) the value of the least and most generous typical employer plans in the State.

We acknowledged in the proposed rule that under the current policy, States could have submitted applications to HHS to add routine non- pediatric dental services as an EHB by the May 7, 2025 deadline for effectiveness in PY 2027 via the EHB-benchmark update application process under Sec. 156.111. We further acknowledged that although no States submitted applications to make this change by the May 7, 2025 deadline, other States may have already begun work towards their applications to update their EHB-benchmark plan to add routine non- pediatric dental services as an EHB for a future plan year. We noted that the proposal, if finalized, would therefore frustrate these States' efforts.

We sought comment on the proposal to revise Sec. 156.115(d) to prohibit issuers from including routine non-pediatric dental services as an EHB, including the impact the proposal, if finalized, would have on health insurance coverage in the individual, small group, and large group markets, as well as on self-insured plans. We stated that if finalized as proposed, the proposed policy to prohibit coverage of routine non-pediatric dental services as an EHB would be effective upon the effective date of the final rule.

After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing, as proposed, our proposal to revise Sec. 156.115(d) to prohibit issuers from including routine non-pediatric dental services as an EHB. We summarize and respond to public comments received on the proposed policy below.

Comment: A majority of commenters opposed this proposal. Many of these commenters stated that they opposed the proposal because of the important and direct role oral health plays in overall health, well- being, and quality of life, including nutrition, chronic disease management, and employability. Several commenters noted the important impact oral health has on chronic conditions, including but not limited to HIV/AIDS, diabetes, and cancer. Many commenters also noted the importance of preventive care as it relates to oral health. Some commenters noted that growing research has confirmed the connection between oral and whole-body health, and stated that the proposed prohibition is inconsistent with the Trump Administration's “Make America Healthy Again” (MAHA) initiative, pointing to public statements by Secretary Kennedy acknowledging that oral health plays a critical role in overall health and quality of life. One commenter stated their hope that the MAHA movement would influence policymakers to consider the body as a whole entity, rather than continuing to separate oral health from medical care. Many commenters also stated that they opposed this proposal because it does not address the importance of improving oral health disparities and achieving health equity by improving low-income/economic disparities, rural disparities, and racial disparities in oral health.

Response: We agree that oral health plays an important role in overall health, well-being, and quality of life, including nutrition, chronic disease management, and employability. However, this alone does not mean that issuers must be required or permitted to cover all benefits that could broadly improve health or further public health initiatives as an EHB. Regarding commenters who stated that this proposal is inconsistent with the Trump Administration's “Make America Healthy Again” initiative, we acknowledge the Administration's commitment to improving overall health and well-being, including oral health. However, the EHB framework is a statutory and regulatory structure subject to the typicality standard at section 1302(b)(2)(A) of the Affordable Care Act, and policy goals related to whole-person health can be advanced through mechanisms outside of the EHB framework. As we stated in the proposed rule, the prohibition on issuers from including routine non-pediatric dental services as an EHB would not prevent States from addressing non-pediatric oral health and overall health outcomes through alternative policy mechanisms. We noted, for example, that States could mandate coverage of routine non-pediatric dental services as a non-EHB and defray the cost associated with that benefit. If States mandate coverage of routine non-pediatric dental services as a non-EHB and defray the cost, this could help improve oral health outcomes, including overall health, well-being, and quality of life, and could help address oral health disparities, including those affecting low-income individuals, rural communities, and racial and ethnic minorities, to the extent States choose to exercise this option. States are well-positioned to tailor such mandates to the specific oral health needs and disparities present in their populations. We continue to believe achieving better alignment of the regulatory requirements at Sec. 156.115(d) with the typicality standard at section 1302(b)(2)(A) of the Affordable Care Act outweighs these other policy considerations.

Comment: Many commenters stated that they opposed this proposal because it removes State flexibility to allow issuers to include routine adult dental services as an EHB. Several commenters contended that EHB prohibitions stifle State flexibility to address urgent and unmet health care needs. Some commenters stated that States should retain the authority to assess the needs of their populations and design benefit packages accordingly. One commenter noted that the Affordable Care Act's framework for EHBs was designed to allow States to define benchmark plans reflecting the specific health care priorities, disease burden, and population health needs of their residents. This commenter stated that this was a deliberate and appropriate policy design choice, as States are closer to their populations, have direct knowledge of their public health

challenges, and are accountable to their constituents in ways that Federal regulators are not. This commenter also noted that restricting State authority in this domain would predictably worsen health outcomes, drive avoidable emergency department utilization, and increase long-term health care expenditures, and that the proposal would override State-level policy judgments without superior clinical evidence. Several commenters also noted that removing State flexibility risks widening gaps in access to oral health care, particularly in rural and medically underserved communities.

Response: We acknowledge commenters' concerns regarding State flexibility. While we recognize that the 2025 Payment Notice provided issuers with flexibility to include routine non-pediatric dental services as an EHB, we believe the prohibition we are finalizing better aligns with the statutory intent of the Affordable Care Act, which classified only pediatric oral benefits as EHB under section 1302(b)(2)(A). We do not believe that this policy impermissibly restricts State flexibility, as States retain the ability to address routine non-pediatric dental coverage through other mechanisms, including mandating coverage as a non-EHB.

We also do not agree that this policy overrides State-level policy judgments without justification. Given that the Affordable Care Act expressly identifies pediatric oral health services, and not routine non-pediatric dental services, as an EHB category, the EHB framework is not the appropriate vehicle for expanding routine non-pediatric dental coverage, and reinstating the prohibition at Sec. 156.115(d) reflects a considered determination to restore alignment with the statutory structure.

Regarding the commenter who argued that the Affordable Care Act's EHB framework was deliberately designed to allow States to define benchmark plans reflecting their specific health care priorities, disease burden, and population health needs, we agree that the EHB framework at Sec. 156.111 grants States flexibility in designing their EHB-benchmark plans. However, that flexibility outlined in regulation operates within the statutory framework established by the Affordable Care Act, including the typicality standard at section 1302(b)(2)(A) and the EHB categories at section 1302(b)(1), which do not require, and in our view do not permit, the inclusion of routine non-pediatric dental services as an EHB. The EHB framework at Sec. 156.111, which allows for State flexibility, does not override the statutory boundaries within which that flexibility must be exercised.

Regarding commenters' concerns that this policy would worsen health outcomes, increase emergency department utilization, and increase long- term health care expenditures, we acknowledge, consistent with our position in the 2025 Payment Notice, that oral health and overall health are inextricably linked. We further acknowledge that lack of access to routine non-pediatric dental services may contribute to an increase in emergency department visits and downstream health care expenditures. We note that employers must also balance these potential downstream health care expenditures with the added costs of routine non-pediatric dental services and as discussed further below, the typical employer continues to offer dental coverage as a separate plan from their major medical plan. By design, the statutory framework for establishing EHBs aims to align with the cost-benefit analysis made by the typical employer. We also recognize commenters' concerns regarding access to oral health care in rural and medically underserved communities, although we do not agree that this policy will widen existing gaps in access to care. States retain meaningful tools to address routine non-pediatric oral health needs outside of the EHB framework; for example, by mandating coverage of routine non-pediatric dental services as a non-EHB benefit and, where applicable, defraying the associated costs. To the extent that States exercise these options, they can help mitigate the risk of worsening health outcomes, increased emergency department utilization, and downstream costs associated with unmet dental care needs. States are well-positioned to tailor such mandates to the specific oral health needs and access challenges present in their populations, including those in rural and medically underserved areas. We therefore do not agree that this policy unduly restricts State action to address the oral health needs of their populations; rather, it ensures that the EHB framework remains consistent with the Affordable Care Act's statutory structure while preserving State flexibility through other available mechanisms.

Comment: Many commenters who opposed this proposal stated that permitting issuers to include routine non-pediatric dental services as an EHB makes such coverage more accessible and affordable for enrollees. Several of these commenters noted that allowing issuers to include routine non-pediatric dental services as an EHB supports more comprehensive and affordable coverage options for enrollees by reducing fragmentation between medical and dental coverage. One commenter stated that classifying the oral cavity as separate from the rest of the human body is medically incorrect, pointing to the routine requirement for dental clearance before major medical procedures. Some commenters noted that removing the ability of issuers to include routine non-pediatric dental services as an EHB would mean such dental benefits would continue to only be available as separate plans from major medical health insurance policies, creating logistical and affordability barriers to access. Many commenters also noted that inclusion of routine non-pediatric dental services as an EHB extends Exchange consumer protections to these services--including MLR standards, annual and lifetime limit prohibitions, and cost-sharing protections--which ensure that premium dollars are directed towards patient care rather than issuer overhead. Several commenters further stated that prohibiting inclusion of routine non-pediatric dental services as an EHB would undermine broader goals of fostering competition and lowering overall health care costs. A few commenters also noted that the prior decision to allow issuers to include routine non-pediatric dental as an EHB in the 2025 Payment Notice was made following a diligent review of extensive interested party feedback. A few commenters also noted that individuals who lose Medicaid coverage often turn to the Exchange for affordable health insurance coverage, and that allowing issuers to include routine non-pediatric dental services as an EHB would help ease transitions between coverage programs and support more consistent access to dental care for low- and middle-income individuals.

Response: We acknowledge commenters' concerns regarding affordability, coverage fragmentation, and Federal consumer protections. We note that, prior to the 2025 Payment Notice, issuers were prohibited from including routine non-pediatric dental services as an EHB under Sec. 156.115(d), such that the absence of EHB protections for adult dental coverage has historically been the status quo in the individual and small group markets. By reinstating this prohibition, we are restoring alignment with that longstanding baseline. Moreover, we note that routine non-pediatric dental coverage in the private market-- including through SADPs--has not historically been subject to the full suite of EHB-related consumer protections, such as the prohibition on annual and

lifetime dollar limits and cost-sharing limitations under section 1302(c)(1) of the Affordable Care Act. The structure we are reinstating is therefore consistent with how adult dental coverage has long been offered and accessed by consumers and does not represent a reduction in protections relative to the market as it existed prior to the 2025 Payment Notice.

In response to the commenter who noted that classifying the oral cavity as separate from the rest of the human body is medically incorrect, we agree; as we mentioned in the 2025 Payment Notice, we agree that oral health and overall health are inextricably linked. However, the distinction drawn here is not a medical one, but a statutory and market-based one: routine non-pediatric dental benefits have historically been administered, priced, and delivered separately from major medical coverage, and reinstating the prohibition at Sec. 156.115(d) is consistent with this established structure and with the typicality standard under Sec. 156.111(b)(2)(i) and section 1302(b)(2)(A) of the Affordable Care Act.

As we stated in the proposed rule, the prohibition on issuers from including routine non-pediatric dental services as an EHB would not prevent States from addressing these concerns through alternative policy mechanisms. States may, for example, mandate coverage of routine non-pediatric dental services as a non-EHB and defray the associated costs. Additionally, routine non-pediatric dental coverage remains broadly available to consumers, including through SADPs offered on the Exchange, which are specifically designed to administer dental benefits. We continue to believe that achieving better alignment with the typicality standard at section 1302(b)(2)(A) of the Affordable Care Act outweighs these other policy considerations.

We also do not agree with commenters who stated that reinstating the prohibition at Sec. 156.115(d) undermines the goals of fostering competition and lowering overall health care costs. States retain the ability to mandate routine non-pediatric dental coverage as a non-EHB benefit, and SADPs will remain available on the Exchange, which supports robust competition among dental issuers and preserves consumer choice. In response to commenters who noted that the prior decision to allow issuers to include routine non-pediatric dental as an EHB was based on extensive interested party input, we acknowledge that the 2025 Payment Notice was informed by that feedback. However, upon further evaluation of relevant regulatory and policy considerations, we have determined that reinstating the prohibition better aligns with the statutory structure of the Affordable Care Act and the typicality standard at section 1302(b)(2)(A) of the Affordable Care Act.

Further, we acknowledge commenters' concerns regarding coverage continuity for individuals transitioning from Medicaid to the Exchange. We recognize that such transitions can create gaps in access to dental care, particularly for low- and middle-income individuals. However, as we have previously mentioned, States retain the ability to address routine non-pediatric dental coverage through alternative mechanisms outside of the EHB framework, including by mandating such coverage as a non-EHB benefit and defraying the associated costs, which could help support more consistent access to dental care for individuals navigating coverage transitions.

Comment: Many commenters stated that they support this proposal because it better aligns with the statutory intent of the Affordable Care Act. Many commenters stated that they support this proposal because it appropriately realigns Sec. 156.115(d) with section 1302(b)(2)(A) of the Affordable Care Act, which explicitly designates pediatric, not non-pediatric, dental services as an EHB. One commenter noted that, as CMS has recognized and as Kaiser Family Foundation data confirms, routine adult dental services are not typically included in employer-sponsored major medical coverage, and that reinstating the prohibition on issuers including routine non-pediatric dental services as an EHB restores statutory consistency and avoids unnecessary market disruption. One commenter also stated that this proposal better aligns with the Affordable Care Act's statutory framework and congressional intent by reaffirming a consistent interpretation of the “typical employer plan” standard. One commenter stated that classifying routine non-pediatric dental as an EHB under the Ambulatory Patient Services category, as was stated in the 2025 Payment Notice final rule, is inconsistent with how that category is commonly understood, which is referring to medical care delivered on an outpatient basis, such as office visits and urgent care. This commenter also stated that this categorization does not align with how employer-sponsored coverage typically treats dental care, representing a significant departure from longstanding industry practice.

On the other hand, many commenters who opposed the proposal disagreed with the legal argument that Congress intended only for pediatric dental services to be an EHB. Many of these commenters noted their belief that Congress' decision not to include routine non- pediatric adult dental services as an EHB was not a permanent exclusion, but reflected market considerations at the time of the Affordable Care Act's enactment. These commenters also noted that Congress granted HHS authority under sections 1302(b)(4)(G) and (H) of the Affordable Care Act to periodically review and update EHB to reflect evolving evidence, market practices, and consumer needs, indicating that EHB standards are intended to be dynamic. One commenter stated that the ten categories of EHBs are only a minimum and HHS can include other benefits as EHBs. This commenter also noted that the Affordable Care Act does not link EHB coverage to excepted benefits and stated that HHS offers “wildly differing and at-times erroneous interpretations” of the “typical employer plan” provision. Some commenters opposing this proposal also stated that routine non- pediatric dental services are commonly covered in employer-sponsored plans, suggesting that this exclusion may not be warranted under the typical employer plan standard. At least one of these commenters explained that according to Delta Dental, approximately 90 percent of employers with 500 or more employees offer dental benefits.\245\ At least one of these commenters also stated that HHS should continue to allow issuers to include routine non-pediatric dental benefits as an EHB to ensure Exchange beneficiaries are not disadvantaged compared to individuals with private coverage.

\245\ See Delta Dental. (2025). Using Dental Benefits To Improve Employee Retention. https://www.deltadental.com/protect-my-smile/employee-dental-benefits/using-dental-benefits-to-improve-employee-retention/.

Additionally, one commenter stated that the proposed prohibition on issuers including routine non-pediatric dental services as an EHB is procedurally invalid and inadequately justified. This commenter contended that the Department failed to abide by the procedural requirements in section 1302 of the Affordable Care Act, which include a requirement for the Secretary of Labor to conduct a survey of employer-sponsored coverage and for the Secretary of HHS to submit a report to Congress, and that this failure deprived States and commenters of the

ability to meaningfully engage with the underlying data. This commenter further stated that CMS' reliance on section 1302(b)(1)(J) of the Affordable Care Act, which explicitly includes pediatric oral care as an EHB, as evidence that Congress intended to exclude adult dental from EHB is illogical, and that CMS improperly substitutes “typical employer plan” with “typical major medical employer plan” to avoid confronting evidence that employer plans commonly cover adult dental benefits.

A few commenters also warned that a final rule reinstating this prohibition could be vulnerable to challenge under the APA's arbitrary and capricious standard if CMS fails to meaningfully engage with the substantial body of peer-reviewed evidence on oral-systemic health linkages, the cost savings of preventive dental care, and the consequences of dental coverage gaps on emergency department utilization and population health. One commenter expressed their belief that the proposal is arbitrary and capricious because it does not reasonably explain departing from the view cited in the 2025 Payment Notice that routine non-pediatric dental services can reflect a typical employer plan and promote health equity.

Response: We agree with commenters that this change better aligns Sec. 156.115(d) with section 1302(b)(2)(A) of the Affordable Care Act. While we agree with commenters that the statute provides authority for periodic review of EHB, the statute also requires CMS to adhere to the “typical employer plan” standard when determining the scope of EHB. Consistent with this standard, typical employer-sponsored health plans do not typically include comprehensive adult dental services within their medical benefit packages. More often, routine non-pediatric dental coverage is available through products separate from the employer-sponsored major medical coverage.

In response to commenters who stated that routine non-pediatric dental services are commonly covered in employer-sponsored plans and therefore meet the typical employer plan standard, we acknowledge that many employers offer dental benefits. However, as discussed further below, the relevant inquiry under the typicality standard is whether routine non-pediatric dental services are typically included in employer-sponsored major medical plans, not whether employers offer dental benefits through any vehicle, including SADPs or limited-scope excepted benefit dental plans. The data cited by commenters reflects employer dental benefit offerings broadly and does not establish that routine non-pediatric dental services are typically included within major medical coverage. We also disagree with the characterization that HHS has offered erroneous interpretations of the “typical employer plan” provision; as explained in the proposed rule and in this final rule, our current interpretation reflects a reasoned and well-supported reading of the statutory framework consistent with the regulatory history at Sec. 156.115(d).

In response to commenters who stated that the Congress' decision not to include non-pediatric dental services as an EHB was not a permanent exclusion and that HHS has authority to update EHB standards under section 1302(b)(4)(G) and (H) of the Affordable Care Act, we agree that the statute requires periodic review of EHB. We also acknowledge that the ten EHB categories established in section 1302(b)(1) of the Affordable Care Act represent a minimum floor, and that HHS retains discretion to include additional benefits as EHBs. However, the exercise of that authority and discretion must remain consistent with the typicality standard at section 1302(b)(2)(A) of the Affordable Care Act. We have evaluated the relevant evidence and policy considerations and have determined that reinstating the prohibition better aligns with the statutory structure and the typicality standard, as routine non-pediatric dental services are not typically included in employer-sponsored major medical plans.

Further, we do not agree with the commenter who stated that this proposal is procedurally defective because the Secretary of Labor failed to conduct a survey of employer-sponsored coverage and the Secretary of HHS failed to submit a report to the Congress before proposing to revise EHB. Reinstating the prohibition at Sec. 156.115(d) restores the longstanding regulatory baseline that existed prior to the 2025 Payment Notice and was developed after considering the Secretary of Labor's survey of employer-sponsored coverage,\246\ and is supported by a reasoned explanation consistent with the requirements of the APA. We also do not agree with the commenters who stated that our reliance on section 1302(b)(1)(J) of the Affordable Care Act as evidence that the Congress intended to exclude routine non- pediatric dental services from EHB is illogical. The explicit inclusion of pediatric oral care in the statutory EHB categories, combined with the absence of any corresponding inclusion of routine non-pediatric dental services, supports our interpretation that the EHB framework was not designed to require coverage of routine non-pediatric dental services. We further do not agree that we have improperly substituted “typical employer plan” with “typical major medical employer plan.” As we previously noted in the proposed rule, the statutory term “a typical employer plan” is ambiguous, but given Congress' intent reflected in section 1302(b)(1) of the Affordable Care Act and the fact that standalone non-pediatric dental plans are excepted benefits, we interpret a “typical employer plan” to refer to an employer's major medical plan. We also acknowledge that the Affordable Care Act does not explicitly link EHB coverage to excepted benefits; however, the prohibition at Sec. 156.115(d) is independently grounded in the typicality standard at section 1302(b)(2)(A), and the structure of the excepted benefits framework is relevant evidence that routine non- pediatric dental services are not typically included in employer- sponsored major medical plans.

\246\ See U.S. Department of Labor (DOL). (2011). Selected Medical Benefits: A Report from the Department of Labor to the Department of Health and Human Services. https://www.supremecourt.gov/opinions/URLs_Cited/OT2011/11-393/11-393.PDF.

In response to commenters who raised APA concerns, we have considered the evidence on oral-systemic health linkages, the cost- effectiveness of preventive dental care, and the ability of States to address dental coverage gaps through alternative mechanisms outside of the EHB framework, as reflected throughout this preamble. We have determined that, notwithstanding these important public health considerations, reinstating this prohibition better aligns with the statutory structure of the Affordable Care Act and the typicality standard, and that States retain meaningful tools to address adult oral health needs outside of the EHB framework.

We also do not agree with the commenter who stated that Exchange enrollees would be disadvantaged compared to individuals with private coverage. First, we note that EHB applies to all non-grandfathered individual and small group market plans, which is inclusive of some private coverage. Second, we are required by statute to ensure that EHB is equal in scope to a typical employer plan. A policy goal such as equalizing coverage generosity across markets does not negate that statutory requirement. We also believe that routine non-pediatric dental coverage remains available to many Exchange enrollees

through SADPs, which often offer adult benefits, and are the same vehicle through which the majority of privately insured individuals access dental benefits.

Lastly, in response to the commenter who stated that classifying routine non-pediatric dental as an EHB under the Ambulatory Patient Services category is inconsistent with how that category is commonly understood, we appreciate this concern and understand why the inclusion of dental services under a category typically associated with outpatient medical care, such as office visits and urgent care, may seem incongruous. However, we note that categorization of EHBs in a State's EHB-benchmark plan is not Federally defined or required. Any State categorization of a benefit within a particular EHB category does not independently determine whether a benefit may be included as an EHB, and we do not believe the categorization question has bearing on the EHB-benchmark application or approval process.

Comment: Many commenters who supported this proposal expressed concerns with the policy finalized in the 2025 Payment Notice, which would have required issuers to embed adult dental benefit, that is, incorporate routine non-pediatric dental coverage directly into a QHP medical plan rather than offer such coverage as an SADP, when such issuers elected to include non-pediatric dental services as an EHB. These commenters noted that enrollees would be subject to a combined medical and dental deductible, effectively creating an “illusory benefit” for routine non-pediatric dental services. Many of these commenters also noted that embedded dental benefits are inconsistent with how most enrollees receive dental benefits (that is, through SADPs), and that the current policy leads to market disruption for SADP issuers by undermining the SADP market. One commenter also noted that the current regulation creates a structural misalignment in the delivery of dental services, because SADPs, which are the primary vehicle through which most enrollees access dental benefits, cannot offer non-pediatric dental as an EHB, resulting in inconsistent treatment of pediatric and adult dental services and confusion for consumers and providers. Several commenters also noted that the regulation currently in effect would increase operational and administrative costs for medical QHPs and result in market disruption for SADPs and enrollees. Some commenters noted that SADPs offer specialized expertise in dental networks, claims administration, and benefit design tailored to oral health care. A few commenters noted that not all QHPs have dental networks, much less networks of the size and scope of SADPs, which further contributes to the illusory nature of the embedded benefit.

A few commenters also noted that annual benefit maximums would not apply to adult dental EHB services if embedded into QHPs, which would raise the costs of PPO dental plans and drive issuers toward offering narrower-network Dental Health Maintenance Organizations (DHMOs) to control expenses. These commenters noted that these DHMO networks would lack the capacity to absorb large numbers of new enrollees, resulting in care disruptions, reduced access to the broader PPO options consumers prefer, and a potential decline in quality of care. These commenters also warned that this shift toward DHMO networks would create substantial financial barriers for consumers and risk eroding the competitive SADP market that currently helps keep dental coverage affordable. One commenter additionally noted that embedding adult dental benefits into QHPs would limit consumer choice and reduce access to affordable coverage.

Some commenters also stated that reinstating the prohibition would correct what they characterized as administrative overreach and preserve a stable dental insurance market currently serving millions of enrollees, and noted that embedding these benefits into QHPs could reduce consumer choice, increase costs, subject services to higher cost-sharing, and disrupt existing dental provider networks.

However, some commenters who opposed this proposal stated that QHPs already possess the necessary infrastructure to offer adult dental benefits, as evidenced by the 36 States where QHPs already embed such benefits.\247\ One commenter stated that operational concerns regarding CDT codes are not a sufficient justification for the prohibition, as CDT coding is a long-standing administrative standard and issuers already handle specialized coding for other benefits. This commenter also noted that provider network concerns are manageable, as dental networks are widely established and issuers already coordinate with SADPs. One commenter also stated that SADPs have low annual maximums (around $1,500), which limit access to comprehensive care. Additionally, one commenter noted that States could have addressed cost-sharing concerns related to an embedded non-pediatric dental benefit under the current policy by requiring separate dental and medical deductibles, rather than requiring pre-deductible coverage, and that this approach could also address potential incompatibility with health savings accounts (HSAs).

\247\ See Elani HW, Rahman MS, Wallace J, Rosenthal MB, Sommers BD. (2024). Availability Of Adult Dental Plans In The Affordable Care Act Marketplaces, 2016-23. Health Affairs 43(11):1587-1596. doi:10.1377/hlthaff.2024.00307.

Response: We appreciate the comments in support of this proposal and agree that these considerations further support finalizing the proposal as proposed. As we discussed in the proposed rule, routine non-pediatric dental benefits are typically provided through separate products that are structured and priced differently from major medical coverage. To the extent that States, using the flexibility under the current policy, updated their EHB-benchmark plans to allow issuers to include routine non-pediatric dental services as an EHB, such coverage would have needed to be embedded in QHPs, which could have impacted SADPs. Specifically, embedding routine non-pediatric dental services as an EHB within a QHP would have required non-pediatric dental coverage to be subject to the QHP's combined medical and dental deductible, unless a State required pre-deductible coverage. This structure is inconsistent with how dental benefits are typically delivered and accessed, that is, through SADPs, which are structured and priced separately from major medical coverage and generally do not subject enrollees to a combined medical deductible. As a result, enrollees may have found the embedded dental benefit difficult to access due to high deductible thresholds, creating what commenters described as an “illusory benefit.” Further, pre-deductible dental coverage would be incompatible with requirements for an HSA. We also agree with the commenter who noted that the current policy created a structural misalignment by prohibiting SADPs from offering non-pediatric dental as an EHB while permitting QHPs to do so, which could result in inconsistent treatment of pediatric and non-pediatric dental services and may cause confusion for consumers and providers. We also agree with commenters that not all QHPs have dental networks, which would have further limited enrollees' practical ability to access embedded dental benefits. Although, as we mentioned in the 2025 Payment Notice, issuers could have contracted with a dental vendor to administer the routine non-pediatric dental benefits under the current policy, it would have likely increased costs for the issuers.

Additionally, we agree with commenters that SADPs offer specialized expertise in dental networks, claims administration, and benefit design that is specifically tailored to oral health care, which is expertise and infrastructure that is distinct from that of medical QHPs.

While we do not necessarily agree with commenters' concerns that the current policy limits consumer choice, we do believe that prohibiting routine non-pediatric dental services from being covered as an EHB is a better approach for market stability. Including routine non-pediatric dental services as an EHB could have disrupted the existing SADP market by reducing enrollee demand for separate dental plans. Additionally, SADPs are the primary avenue through which enrollees access non-pediatric dental benefits in the existing market, and reinstating the prohibition better aligns the Exchange market with that established market structure. We also acknowledge commenters' concerns that, because annual benefit maximums would not apply to non- pediatric dental services embedded as an EHB in a QHP, this could have raised the costs of PPO dental plans and may have created incentives for issuers to offer narrower-network dental HMOs to control expenses-- networks that may have faced challenges absorbing large numbers of new enrollees, which could have potentially resulted in care disruptions and reduced access to the broader PPO options consumers prefer. Embedding adult dental services as an EHB in QHPs could have undermined the SADP market by reducing enrollee demand for SADPs, given that dental coverage would already be incorporated into their QHP. We agree with commenters who noted that reinstating the prohibition preserves the stable dental insurance market structure that currently serves millions of enrollees. Additionally, States and issuers may have faced various operational challenges, including the need to establish new dental provider networks, develop infrastructure for processing CDT codes, and ensure seamless enrollment and cost-sharing arrangements, which are burdens that could have further destabilized the existing SADP market structure. We acknowledge that some commenters stated that these operational concerns are overstated, pointing to the 36 States where QHPs already embed non-pediatric dental benefits as evidence that the necessary infrastructure exists, and asserting that CDT coding is a long-standing administrative standard that does not present a meaningful barrier. Although CDT coding is an established standard, there is operational complexity that arises from integrating two distinct types of codes with claims processing practices. We also acknowledge the argument that dental provider network concerns are manageable given the widespread establishment of dental networks and existing coordination between QHP issuers and SADPs. While we recognize that some issuers have developed capacity to embed dental benefits, we do not believe that the existence of such capacity in certain markets is sufficient to conclude that the operational and market disruption concerns raised by the majority of commenters are without merit. Moreover, the fact that some QHPs currently embed adult dental benefits does not mean that such embedding is consistent with how dental benefits are typically structured or accessed, nor does it resolve the structural concern that embedding dental coverage within a combined medical deductible framework creates an illusory benefit for enrollees. We further note that the existence of coordination between QHP issuers and SADPs does not mean all QHP issuers already have the dental network infrastructure necessary to administer embedded dental benefits as an EHB at scale. We also acknowledge the comment that SADPs have low annual maximums that may limit access to comprehensive care; however, SADP benefit limits reflect how those products are designed and priced in the market and are not a consequence of this prohibition. States retain the ability to address benefit adequacy through other mechanisms, including State insurance mandates.

However, we note that these potential effects on SADPs would have depended on the State-specific decisions regarding EHB-benchmark plans and would not have necessarily occurred uniformly across all States. Specifically, under the current policy finalized in the 2025 Payment Notice, it would have been up to each State to determine whether to add routine non-pediatric dental services as an EHB and, if so, to define the scope of those benefits, within the confines of the typicality standard under Sec. 156.111(b)(2)(i). Because States likely would have taken varied approaches to adopting routine non-pediatric dental services as an EHB, any resulting impact on SADPs would not have been uniform or guaranteed across all States.

In response to the commenter who suggested that States could have required separate dental and medical deductibles as an alternative to pre-deductible coverage under the current policy, we acknowledge this as a potential State-level option; however, we note that this does not resolve the broader concern that embedded dental coverage is inconsistent with how dental benefits are typically delivered and accessed.

Comment: Many commenters also discussed the cost implications of this proposed policy. Many of the commenters who supported this proposal stated that the current policy, which permits issuers to include routine non-pediatric dental services as an EHB, results in increased operational and administrative costs, which increases issuer burden and administrative complexity. Some commenters also noted that mandating coverage of routine non-pediatric dental benefits in Affordable Care Act plans raises plan costs, premiums, and Federal subsidies, while creating pressure for other States to adopt the same benefit as EHB since they share in the costs and subsidies. One commenter stated that designating routine non-pediatric dental services as an EHB would increase adverse selection risk and increase premiums. Another commenter supported this proposed policy because they stated an improperly structured routine non-pediatric dental services EHB could create consumer confusion, increase cost sharing, and lead to coverage loss.

Some commenters who opposed this proposal stated that reinstating the prohibition on issuers including routine non-pediatric dental services as EHB would deny consumers Federal premium tax credits and cost-sharing reductions for the dental portion of their coverage, strip EHB protections--including prohibitions on annual and lifetime limits and cost-sharing caps--and require States to defray the costs associated with routine non-pediatric dental benefits from their own budgets. Many commenters also stated that this proposal would increase downstream costs, and that it is significantly less costly to provide preventive dental services upfront than to pay for avoidable emergency room visits for dental emergencies. Some commenters cited relevant data, including one commenter who explained that according to the American Dental Association, a dental Emergency Department (ED) visit costs approximately three times more than an office visit ($749 vs. $90-$200), with national ED dental costs totaling approximately $1.6 billion annually (one-third of which is paid by

Medicaid),\248\ and that every dollar invested in preventive dental care may save $8 to $50 in downstream costs.\249\ Other opposing commenters noted that excluding routine non-pediatric dental services from EHB would increase unmet dental needs, raise cost-sharing, shift costs to States and local communities, discourage plan inclusion, and further limit access for adults facing financial and geographic barriers to care.

\248\ See American Dental Association (ADA). (2026). Emergency Department Referrals. https://www.ada.org/resources/community-initiatives/action-for-dental-health/emergency-department-referrals.

\249\ See UnitedHealthcare Dental. (2025). The role of preventive care in reducing health care costs. https://www.uhcdental.com/dental/united-healthcare-dental-news/article-preventive-care-reduces-costs.html.

Some commenters had recommendations for CMS if the proposal to reinstate the prohibition on inclusion of routine non-pediatric dental services as an EHB were finalized. One commenter recommended that if the proposal is finalized, CMS clearly articulate the viable pathways through which States and issuers may continue to support routine non- pediatric dental access outside the EHB framework without creating coverage fragmentation or administrative complexity that deters enrollment. In addition, this commenter also encouraged CMS to evaluate and describe the likely consumer impacts of the policy, including whether it increases the likelihood that consumers forgo dental coverage entirely and whether coverage separations create barriers for patients who require coordinated medical and dental care.

Response: We agree with the commenters concerns that the current policy allows for increased operational and administrative costs, which increases issuer burden. We note that we acknowledged in the 2025 Payment Notice that removing the prohibition on inclusion of routine non-pediatric dental services as an EHB may have increased costs for issuers that would have needed to expand their networks to cover these services, and that some States would have been more affected than others given that the size of non-pediatric dental networks varies by State. By reinstating the prohibition at Sec. 156.115(d), this policy avoids these potential network expansion costs and the associated operational and administrative burdens on issuers. Additionally, as noted in the proposed rule, no State elected to add routine non- pediatric dental services as an EHB under the current policy finalized in the 2025 Payment Notice. Accordingly, this policy change will not result in new costs to States or Federal programs relative to the current baseline of State EHB-benchmark plans.

Regarding commenters' concerns that the current policy would lead to increased plan costs, premiums, and Federal outlays, we acknowledge that plan costs, premiums, and Federal outlays would have likely increased under the current policy in States that adopted routine non- pediatric dental services as an EHB. However, as we noted in the 2025 Payment Notice (89 FR 26348), despite the prohibition on annual and lifetime dollar limits for EHB and States' ability to choose how comprehensive a routine non-pediatric dental EHB would be, there would have been a limit on the extent to which premiums and Federal outlay could increase because States' ability to increase benefit generosity is constrained by the typicality standard at Sec. 156.111(b)(2)(i), which requires that the scope of benefits of a State's EHB-benchmark plan fall within the range defined by the State's least and most generous typical employer plans.

In response to the commenter who stated that the current policy, which allows for the designation of routine non-pediatric dental services as an EHB, would increase adverse selection risk, we note that, as stated in the 2025 Payment Notice, adverse selection has not been a significant concern in prior EHB-benchmark plan applications, and the Affordable Care Act has established mechanisms--including the risk adjustment program, premium subsidies, and limited enrollment windows--to help prevent unchecked adverse selection.

We also acknowledge the commenter who stated that an improperly structured routine non-pediatric dental services EHB could create consumer confusion, increase cost sharing, and lead to coverage loss. Embedding routine non-pediatric dental services as an EHB within a QHP would have subjected those services to the QHP's combined medical and dental deductible--a structure inconsistent with how a majority of consumers access dental benefits--which could have rendered the benefit difficult to use in practice, increased effective cost sharing relative to standalone dental products, and potentially discouraged enrollment. Reinstating the prohibition avoids these outcomes by preserving the SADP market structure through which consumers are accustomed to accessing dental benefits.

We acknowledge commenters' concern that reinstating the prohibition would deny consumers Federal premium tax credits and cost-sharing reductions for the dental portion of their coverage. However, because no State added routine non-pediatric dental services as an EHB under the current policy, no enrollees are currently receiving APTC or CSRs for such coverage. Accordingly, reinstating the prohibition does not result in a loss of existing enrollee subsidies. In response to commenters' concerns regarding the loss of EHB consumer protections, including the prohibition on annual and lifetime limits and cost- sharing caps, we refer readers to our discussion regarding those concerns earlier in this preamble to Sec. 156.115(d). We also acknowledge that reinstating the prohibition would generally require States to defray the costs of routine non-pediatric dental benefits if they choose to mandate such coverage. States retain the flexibility to determine whether to mandate such coverage and take on the associated defrayal costs.

For commenters' concerns related to downstream costs and the cost- effectiveness of preventive dental care, we acknowledge, as we noted in the proposed rule and the 2025 Payment Notice, that oral health and overall health are inextricably linked, and that improving access to routine dental services can yield downstream savings in overall health care expenditures and reduce costly emergency room visits for dental care. A discussion of the downstream cost data cited by commenters, including emergency department utilization costs and the cost- effectiveness of preventive dental care, is included in the Regulatory Impact Analysis section of this final rule. However, we note that this prohibition does not prevent States from addressing non-pediatric oral health outcomes through alternative policy mechanisms. For example, States could mandate coverage of routine non-pediatric dental services as a non-EHB benefit and defray the associated costs. We emphasize that States retain meaningful tools to address oral health needs outside of the EHB framework, which States can use to improve access to dental health services and reduce costly emergency room visits for dental care.

We also acknowledge the recommendation that CMS articulate viable pathways for States and issuers to support access to non-pediatric dental services outside the EHB framework and evaluate likely consumer impacts. As noted throughout this section, States may mandate non-EHB routine non-pediatric dental coverage and defray associated costs, and SADPs remain

available on the Exchange. We believe these mechanisms mitigate the risk that consumers forgo dental coverage entirely or face barriers to coordinated medical and dental care.

Comment: A few commenters noted clinical quality and patient safety concerns related to this proposal. One commenter who supported this proposal stated that embedding routine non-pediatric dental in the EHB framework without adequate actuarial value creates perverse economic incentives that drive down reimbursement rates, which this commenter stated could lead to substandard care and irreversible patient harm. This commenter further contended that keeping routine non-pediatric dental outside the EHB framework preserves market-based quality incentives.

On the other hand, one commenter who opposed this proposal noted that dental exams are a required component of care before cancer patients begin certain treatments (such as chemotherapy, radiation, and stem cell transplants) because untreated oral infections can cause serious, irreversible complications, including osteonecrosis of the jaw. This commenter stated that prohibiting issuers from including routine non-pediatric dental services as an EHB would put access to these necessary preventive services at risk.

Response: We appreciate the comments that raise clinical quality and patient safety concerns. In response to the commenter who supported this proposal, we note that the SADP market is specifically structured to deliver dental benefits, with established networks and reimbursement methodologies tailored to dental care. We agree that embedding adult dental in the EHB framework could risk disrupting this established SADP structure, potentially undermining the quality and reimbursement incentives specific to the SADP market.

In response to the commenter who raised concerns about cancer patients' access to pre-treatment dental care, we acknowledge that dental clearance is an important component of care for patients undergoing certain cancer treatments, and that untreated oral infections can cause serious complications. However, the prohibition on including routine non-pediatric dental services as an EHB does not eliminate access to dental care for these patients. Routine non- pediatric dental coverage remains available through SADPs offered on the Exchange, and States retain the ability to mandate such coverage as a non-EHB benefit and defray the associated costs. We therefore do not believe this prohibition forecloses access to the preventive dental services that cancer patients require prior to treatment. 5. Publication of the 2027 Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage in Guidance (Sec. 156.130(e))

As established in part 2 of the 2022 Payment Notice (86 FR 24238), starting with the 2023 benefit year, for benefit years in which we are not making changes to the methodology to calculate the premium adjustment percentage index (PAPI), the required contribution percentage, and the maximum annual limitation on cost sharing and reduced maximum annual limitation on cost sharing, we publish these parameters in guidance annually by January of the year preceding the applicable benefit year. In the 2025 Marketplace Integrity and Affordability final rule (90 FR 27166 through 27168), we finalized a change to the methodology for calculating these parameters starting with the 2026 benefit year such that we will use private health coverage premiums (excluding Medigap and the medical portion of accident insurance [“property and casualty” insurance]) as the definition of premiums for calculating the premium adjustment percentage and related parameters. In the 2027 Payment Notice proposed rule (91 FR 6370), we did not propose to change the methodology for calculating these parameters for the 2027 benefit year. As such, these parameters are not included in this rulemaking. Instead, we published the 2027 benefit year parameters in guidance,\250\ using the methodology finalized in the 2025 Marketplace Integrity and Affordability final rule.

\250\ CMS. (2026). Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage for the 2027 Benefit Year. https://www.cms.gov/files/document/2027-papi-parameters-guidance-2026-01-29.pdf.

We summarize and respond below to public comments received regarding the publication of the 2027 PAPI, the maximum annual limitation on cost sharing, the reduced maximum annual limitation on cost sharing, and the required contribution percentage in guidance.

Comment: Several commenters expressed support for the annual update to PAPI, the associated payment parameters, and the data used to calculate PAPI as well as concerns regarding PAPI's effects on year- over-year maximum annual limitation on cost sharing growth, the affordability of catastrophic plans, and coverage limitations. Some commenters provided recommendations related to cost sharing and policy measures to stabilize or slow the growth of the maximum annual limitation on cost sharing.

Response: While these comments are out of scope for this final rule because they do not relate to the specific proposals included in the proposed rule, we appreciate the commenters' attention and feedback. 6. Multi-Year Terms for Catastrophic Plans To Improve Health (Sec. Sec. 156.130(c) and 156.155(a)(6))

In the 2027 Payment Notice proposed rule (91 FR 6370), we proposed to codify requirements under which issuers of catastrophic coverage may enroll individuals for multiple plan or policy year terms with periods of up to 10 years. We proposed modifying the requirements for catastrophic plans in Sec. 156.155 to specify that a catastrophic plan has a plan term of either 1 plan or policy year, or of multiple consecutive plan or policy years not to exceed 10 years.

We proposed that catastrophic plans with terms of at least 2 plan or policy years may utilize value-based insurance designs (VBID) to offer benefits for preventive services under section 2713(c) of the PHS Act, in addition to those specified in section 2713(a) of the PHS Act, without the enrollee having to first satisfy their deductible or annual cost-sharing limitation. We requested comment on the proposal at Sec. 156.130, that issuers of multi-year catastrophic plans have the option to apply the annual limitation on cost sharing for each plan year of the contract on an annual basis, or, on average, over the life of the contract. We stated, for example, that as an alternative to applying the annual limitation on cost sharing on an annual basis, an issuer could opt to offer a 5 year catastrophic plan that would apply the annual limitation as follows: the average over 5 years of the annual limitation on cost sharing in the plan equals the average over 5 years of the annual limitation on cost sharing as required by statute. Alternatively, we stated that the issuer could opt to vary the annual limitation on cost sharing in the plan by disease, for example, cancer, if that disease requires treatment that spans multiple years, so long as the average over all plan participants and over years of the annual limitation on cost sharing equals the average over 5 years of the annual limitation on cost sharing as required by statute. We stated that the value of

varying the annual limitation on cost sharing in the plan over time in a long-term plan is that a higher annual limitation in early years may allow the plan to lower the limitation in later years to entice participants to remain in the plan for its duration, without altering the expected actuarial value of the plan over its duration as of the plan's start date.

Finally, as more fully discussed in section III.E.2. of this final rule, we proposed to amend Sec. 156.80(d)(2)(ii) to allow issuers of multi-year catastrophic plans to make a plan-level adjustment to the index rate. We stated that this proposal was intended to promote innovation in health coverage plan design that could exert downward pressure on premiums and costs, while increasing access to coverage and care and improving health outcomes.

We proposed that an individual who satisfies the requirements for a catastrophic plan at the time of enrollment in the plan under section 1302(e)(2) of the Affordable Care Act would remain eligible for the duration of its multi-year term.\251\ We sought comments on the proposal and how it would interact with other laws.

\251\ Due to an oversight, the proposed rule stated that “an individual who satisfies the requirements for a catastrophic plan at the time of enrollment in the plan under section 1302(e)(2) of the Affordable Care Act at the time of enrollment in the multi-year plan.”

We stated in the proposed rule that given the large increases in premiums for health coverage in recent years, we are interested in offering additional alternatives for individuals to enroll in less expensive options. We stated that we believe that Congress' recent decision to designate all catastrophic and bronze plans as high- deductible health plans, as well as our recent broadening of the hardship exemption for individuals to qualify for catastrophic health plans,\252\ is in keeping with that objective. We stated that we also believe that when individuals receive preventive services and effective disease management, those interventions can help reduce costs in the long run,\253\ which in turn may ease pressure on premiums. However, we noted that issuers that do a particularly effective job of promoting these sorts of interventions often do not reap the long-term advantages of those reduced costs because they might retain those enrollees for only short durations and therefore cannot moderate premiums accordingly. We stated that this is because the single-year plan terms in the individual market promote churn where individuals cycle out of particular individual market plans, with enrollees often switching health insurance issuers on a frequent basis,\254\ sometimes annually.\255\ We stated that, in such cases, an individual who receives such interventions while enrolled with a given issuer for 1 plan or policy year, and thereby may improve their health prospects for the future, is often not enrolled with that same issuer when those health benefits accrue. We stated that, in this way, the incentives for individual market issuers differ from those for large employers, that often have an incentive to invest in the health of their long-term employees through wellness programs and offering of other workplace programs that promote physical fitness, smoking cessation, and other initiatives aimed at reducing sick days and improving long term health outcomes.

\252\ See CMS. (2026). Guidance on Hardship Exemptions for Individuals Ineligible for Advance Payment of the Premium Tax Credit or Cost-sharing Reductions Due to Income, and Streamlining Exemption Pathways to Coverage. guidance-on-hardship-exemptions.pdf.

\253\ Musich, S., Wang, S., Hawkins, K., & Klemes, A. (2016). The Impact of Personalized Preventive Care on Health Care Quality, Utilization, and Expenditures. Population Health Management, 19(6), 389-397. https://doi.org/10.1089/pop.2015.0171; and Maciosek, M.V., LaFrance, A.B., Dehmer, S.P., McGree, D.A., Flottemesch, T.J., Xu, Z. Solberg, L.I. (2017). Updated Priorities Among Effective Clinical Preventive Services. Annals of Family Medicine. https://pmc.ncbi.nlm.nih.gov/articles/PMC5217840/.

\254\ See Hill, S.C. and Jacobs, P.D. (2024). Changes In Coverage Stability And Churning For Private, Individual Insurance Under The Affordable Care Act. Health Affairs. https://pmc.ncbi.nlm.nih.gov/articles/PMC11747866/; and Fang, H., Frean, M., Sylwestrzak, G., and Ukert, B. (2022). Trends in Disenrollment and Reenrollment Within US Commercial Health Insurance Plans, 2006-2018. JAMA Network Open. https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2789399.

\255\ Wolf, E., Slosar, M., and Menashe, I. (2022). Assessment of Churn in Coverage Among California's Health Insurance Marketplace Enrollees. JAMA Health Forum. https://jamanetwork.com/journals/jama-health-forum/fullarticle/2799211.

We stated in the proposed rule that, in addition to incentivizing investments in health promoting activities, health insurance contract terms that exceed a year may decrease the administrative costs associated with marketing and enrollment and encourage alternative pricing structures where administrative efficiencies are reflected in lower premiums and enrollees in plans with multi-year terms are insulated from short-term premium spikes. We stated that, from the perspective of the individual, remaining enrolled with the same plan or issuer for a longer period of time might also promote adherence to disease management programs, and thus promote better overall long-term health. Because of the potential positive impacts on enrollee health and plan affordability, we proposed modifying the requirements for catastrophic plans in Sec. 156.155(a)(6) to specify that a catastrophic plan has a term of either 1 plan or policy year, or of multiple consecutive plan or policy years not to exceed 10 years. We stated in the proposed rule that if we should finalize the proposal to codify requirements for multi-year catastrophic plans, we would consider expanding these or other similar requirements to multi-year plans of one or several metal levels.

We noted that section 1302(e)(1)(B) of the Affordable Care Act specifies benefits that catastrophic health plans are required to provide pre-deductible, including three primary care visits per year and preventive services specified in section 2713 of the PHS Act. Section 2713(a) of the PHS Act requires applicable health plans to cover: (1) evidence-based items or services that have in effect a rating of “A” or “B” in the current recommendations of the United States Preventive Services Task Force (USPSTF); (2) immunizations that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention for the individual involved; (3) for infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA); and (4) for women, such additional preventive care and screenings not described in paragraph (1) as provided for in comprehensive guidelines supported by HRSA.

Section 2713(c) of the PHS Act authorizes the Secretary to develop guidelines to permit health plans to utilize VBID. As described above, we stated in the proposed rule that we believe broadening plan terms beyond a single plan or policy year for catastrophic plans would increase the value provided to consumers in the form of better incentives for the issuer to invest in the long-term health of its enrollees. As such, we proposed under our authority at section 2713(c) of the PHS Act that catastrophic plans with a term of at least 2 plan or policy years may utilize a VBID in the context of designing health coverage for preventive services such that benefits related to said design may be offered prior to satisfaction of the plan's deductible and prior to satisfying the plan's cost-sharing limitation, in addition to those benefits that can be offered prior to satisfaction of the plan's deductible and cost-sharing limitation enumerated in section 1302(e)(1) of the Affordable Care

Act. We sought comment on the types of benefits plans could offer under the proposal, such as benefits that are designed to improve the long- term health of enrollees. We noted that any such benefits must satisfy all applicable non-discrimination requirements. While the proposal was limited to catastrophic plans, we also sought comment on whether additional clarification or guidance specific to the group market is necessary.

We proposed at Sec. 156.130 that issuers of multi-year catastrophic plans have the option to apply the annual limitation on cost sharing for each plan year of the contract on an annual basis, or, on average, the life of the contract. We stated, for example, that the limitation applicable to a specific year under each plan year of the coverage could be divided by 12 to determine the monthly limit on cost sharing under the plan.

We noted in the proposed rule that, currently, enrollees can experience dramatic coverage changes when insurance contracts reset or change from one year to the next as deductibles and out-of-pocket limits reset. We further noted that this can lead to significant shifts in cost sharing from month to month for the same services. We stated that given that multi-year plans would not be subject to renewal at year's end (other than after the final year of the multi-year term), we believe it is appropriate to allow for a benefit structure that does not reset every 12 months. We stated that we believe that providing a consistent, predictable monthly out-of-pocket limit would reduce consumer confusion, improve financial planning, and bolster adherence to treatment plans.

We stated in the proposed rule that under the example above under which an issuer chooses to divide by 12 to determine the monthly limit on cost sharing, the monthly limitation on cost sharing during any plan or policy year contained in the multi-year plan would reflect one- twelfth of the annual limitation for the plan or policy year for which the Federal annual limitation has been calculated. We stated that it is our view that this approach is consistent with how the annual limitation on cost sharing must be calculated by plans. We further stated that under the proposal to set requirements for catastrophic plans with multi-year terms, issuers would be able to choose the length of the multi-year term up to a maximum of 10 years, and could offer as many or as few such plans as desired, with different maximum terms. We also stated that issuers would not be required to offer a 1-year plan that is otherwise identical to each multi-year plan. We noted that catastrophic plans with multi-year terms would continue to be subject to the Affordable Care Act guaranteed availability and guaranteed renewability requirements for individuals who are eligible for catastrophic plans under Federal law (as is the case for catastrophic plans with terms of 1 year). We further noted that individuals dropping coverage under a multi-year catastrophic plan, either at the end of the term or mid-term, would be treated the same as individuals dropping coverage under a 1-year policy either at the end of the year or mid- year, respectively, for open enrollment and special enrollment periods. Additionally, we noted that other Federal requirements, including, but not limited to, the Mental Health Parity and Addiction Equity Act, the Women's Health and Cancer Rights Act, the Newborns' and Mothers' Health Protection Act, Michelle's Law, and the No Surprises Act, would continue to apply to such coverage.

We stated in the proposed rule that under current policy, an enrollee could terminate their enrollment in a multi-year catastrophic plan at any time and for any reason, without a penalty or being liable for the premium for the remainder of the multi-year term. An issuer could discontinue the product or exit the market under the same guaranteed renewability exceptions that apply generally under section 2703 of the PHS Act. That said, we stated that we understand the importance of certainty for issuers and enrollees in unlocking the aforementioned benefits of multi-year plans and the improvements in incentives they create. We sought comment on how Federal policies could promote continuous coverage in multi-year plans and defray the risk of termination by either the enrollee or issuer, including by promoting continuous coverage for individuals who churn in and out of the individual market through the use of individual coverage health reimbursement arrangements.

We stated in the proposed rule that all multi-year catastrophic plans would be expected to disclose that the plan has a multi-year term, and the length of that term. We further stated that, to the extent multi-year catastrophic plans utilize the monthly method of applying the annual limitation on cost sharing discussed earlier in this preamble, plans would be expected to include that information in marketing and enrollment materials.

We also stated that under the proposal, issuers could apply the deductible that applies in the first year of coverage on an annual basis for each year within the coverage, or divide the annual deductible by 12, and apply it equally to each month of the policy throughout the entire term of coverage, similar to how a multi-year plan could choose to apply the annual limitation on cost sharing, as discussed in this section of the rule. We stated, for example, that if the plan had an annual deductible of $6,000, it could apply \1/12\ of that deductible monthly ($500 per month). We sought comment on if, and the degree to which, a plan could modify the amount of the annual deductible for each year of the multi-year policy.

We acknowledged that multi-year plans in individual health insurance markets represent a novel idea that could necessitate changes to other programs and processes that affect individual and group market plans. We stated, for example, that we would need to consider how to treat multi-year catastrophic plans for purposes of the HHS-operated risk adjustment program, but to do that we would want to consider what the benefits and drawbacks are to each option.

Therefore, we sought comments on all aspects of the proposal, including whether there are any specific plan duration terms that would incentivize enrollees to adopt longer term, health-promoting habits. We also requested comment on ways that plans with multi-year terms could be a more affordable option for consumers over single-year terms, including how premiums and rating practices for these plans might differ from other catastrophic plans that have a standard 1-year term; and whether plan terms of more than 10 years would better facilitate rating and promote lower premium products. We also sought comment on if and how any terms of coverage should be permitted to change over the course of the multi-year term, such as reduced deductibles or other cost-sharing, or reduced maximum cost-sharing requirements, and in what intervals such changes could be permitted.

We also requested comment on whether any further modifications to HHS risk adjustment regulations under 45 CFR part 153 may be needed to align with any expected differences in rating practices and any resulting risk selection; whether we should use the same catastrophic HHS risk adjustment models regardless of whether the catastrophic plan is offered for a standard plan year or on a multi-year basis or whether we should have separate models or factors for these catastrophic plans (or enrollees in catastrophic plans) offered on a multi-year basis and, if so, what data, trending

assumptions, and plan benefit design assumptions should be used for those models; whether we should calculate risk adjustment transfers for catastrophic plans offered for a standard plan year separately from risk adjustment transfers for catastrophic plans offered on a multi- year basis; and whether and how the State average premium term in the State payment transfer formula \256\ should be modified to account for the influence of the length of the plan term in regard to the State average premium term of the formula, plan allowable rating factor, or for any other reason (78 FR 15428 through 15434). We also requested comment on whether and how plans with longer terms should be treated for MLR purposes, particularly whether the current MLR standard set forth in 45 CFR part 158 is appropriate for measuring revenue and claims experience of multi-year plans, and whether multi-year plans should be considered under the same book of business as plans with a traditional 1-year plan term for purposes of MLR. We also sought comment on what incentives or disincentives issuers would have to offer multi-year catastrophic plans, potential administrative barriers for issuers, and how long it would take issuers to develop and offer these plans. We sought comment on whether to require or permit issuers to offer multi-year terms for individual market catastrophic and metal level plans, and if so, which ones and why. We requested comment on potential interactions between this proposal and the health insurance market rules in 45 CFR parts 144 and 147, including rules for guaranteed availability and guaranteed renewability, fair health insurance premiums, specifically for premium variations based on age and restrictions to the 3:1 age rating, and uniform modifications to coverage; and whether more regulatory changes would be needed to effectuate this policy. Finally, we requested comment on how this proposal would exist and interact with other laws related to tax policy such as health savings accounts and individual coverage health reimbursement arrangements (ICHRAs), and any changes, either to the proposal or such other laws, that would resolve any such conflict between the proposal and those laws.

\256\ For resources explaining the State payment transfer formula, see Pope, G.C., et al. (2014). Risk Transfer Formula for Individual and Small Group Markets Under the Affordable Care Act. Medicare and Medicaid Research Review, 4(3). https://www.cms.gov/mmrr/downloads/mmrr2014_004_03_a04.pdf.

After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy, applicable for plan years beginning in 2027, with the following modifications. We are finalizing Sec. 156.155(a)(6) with minor revisions to refer to “plan years” instead of “years” for greater clarity and precision. We are also finalizing modifications stating that multi-year catastrophic plans may utilize VBID to provide benefits before reaching the deductible, pursuant to guidelines issued by the Secretaries of HHS, Labor, and the Treasury under section 2713(c) of the PHS Act. We are not finalizing the proposed conforming amendments to Sec. 156.155(a)(1), as multi-year catastrophic plans, like other catastrophic plans, must meet all applicable requirements for health insurance coverage in the individual market. We also are not finalizing the proposed addition of Sec. 156.130(c), which provided that in the case of a catastrophic plan with a multi-year term, the annual limitation on cost sharing for the initial plan year of the contract may apply on an annual basis, or on average over the life of the contract. Therefore, as finalized, a multi-year catastrophic plan could have a term of up to 10 consecutive plan years, individuals eligible for catastrophic coverage at the time of enrollment would remain eligible for the duration of the multi-year term, and coverage could be provided before the deductible is met for certain VBID benefits to be specified in future guidance. Otherwise, there would be no material differences between the regulatory requirements for such plans and 1-year catastrophic plans, although as described in the preamble of the proposed rule and in the response to the public comments, the longer coverage terms of such plans could result in valuable advantages to both issuers of such plans and their enrollees.

We summarize and respond to public comments received on the proposal below.

Comment: Several commenters supported the proposed standards for multi-year catastrophic plans. Commenters stated that such plans would give unsubsidized or price-sensitive consumers another lower-premium option, expand HSA use, spread risk over a longer horizon, lessen the up-front financial shock that can make annual catastrophic coverage hard to use, reduce churn, encourage investment in prevention and care management, and reduce the hassle and costs of annual health insurance plan selection. One commenter noted that an individual has more knowledge of their projected health status for the next year, than for the next several years, and can therefore engage in adverse selection more easily when selecting a plan each year than if selecting a plan over a longer term.

Response: We agree with these commenters, and, as discussed above, we set forth some of these reasons for proposing regulatory modifications to allow for the offering of catastrophic plans with terms of multiple consecutive plan years.

Comment: One commenter questioned the comparison we made in the proposed rule between permitting individuals to remain enrolled in multi-year catastrophic plans so as to allow the issuers to reap the benefits of a healthier enrolled population over time, and the efforts large employers make in their health plans to encourage wellness for their long-term employees. The commenter stated that we failed to provide evidence to support our statement that benefits provided by large group employers result in better health outcomes among their employees compared to individual market enrollees. The commenter also suggested that extending the duration of an individual market contract does not make it comparable to an employer-employee relationship or make individual market coverage equivalent to employer-sponsored coverage.

Response: Our comparison was limited. We noted that issuers that do a particularly effective job of promoting prevention and wellness often do not reap the long-term advantages of those reduced costs of a healthier population because they might retain those enrollees for only short durations and therefore cannot moderate premiums accordingly. We noted that therefore, the incentives for individual market issuers differ from those for large employers, that often have an incentive to invest in the health of their long-term employees through wellness programs and offering of other workplace programs that promote physical fitness, smoking cessation, and other initiatives aimed at reducing sick days and improving long term health outcomes. We did not state that employer-sponsored coverage produces better health outcomes than individual market coverage. We also did not suggest that multi-year catastrophic plans create an employer-like relationship. We recognize these relationships are fundamentally different.

Comment: Some commenters disagreed with our statement that multi- year catastrophic plans could moderate premiums by decreasing the administrative costs associated with marketing and enrollment. The commenters stated that premium increases are primarily driven by medical costs and that we did not provide evidence supporting administrative savings.

Response: We agree that medical costs are a primary driver of premium increases. However, we believe that reductions in marketing and administrative costs associated with multi-year catastrophic plans could help moderate premiums increases. We did not conclude that such reductions would occur, only that they may occur (91 FR 6371).

Comment: Several commenters stated that allowing individuals to remain enrolled in a catastrophic plan for the duration of its multi- year term violates the Affordable Care Act. They stated that eligibility for catastrophic coverage must be determined annually and stated that individuals who no longer satisfy the eligibility criteria for a plan year--because they are 30 and older or no longer qualify for a hardship or affordability exemption--cannot remain enrolled. Some commenters also raised concerns that allowing multi-year enrollment conflicts with eligibility verification requirements, such as section 71303 of the WFTC legislation and other eligibility verification provisions of the proposed rule.

Response: Under section 1302(e) of the Affordable Care Act, an individual is eligible for enrollment in a catastrophic plan “for any plan year” if the individual has not attained the age of 30 before the beginning of “the plan year” or has a certification in effect “for any plan year” that the individual qualifies for a hardship or affordability exemption. We interpret “the plan year” as the first plan year of coverage and interpret “any plan year” as the first plan year of coverage plus any other plan year within the term of coverage. Therefore, an individual who is eligible for a catastrophic plan for the first plan year of the coverage remains eligible for the entire term of coverage until renewal, as coverage following renewal is a different term of coverage. This interpretation applies to catastrophic plans with both single-year and multi-year terms. In response to commenters' concerns that this interpretation does not align with the eligibility verification requirements of the WFTC legislation, generally, the purpose of verification is to protect Federal spending on premium tax credits. Because enrollees in catastrophic plans cannot receive such financial assistance, it is our view that annual verification of eligibility for catastrophic coverage with regard to enrollees in multi-year catastrophic plans is not contemplated by the statute.

Comment: Some commenters suggested that multi-year catastrophic plans would conflict with the Affordable Care Act's 12-month plan year framework and related requirements, including guaranteed availability, the annual limitation on cost sharing, MLR, risk adjustment, and rating rules.

Response: We acknowledge that a plan year or policy year is generally defined as a 12-month period.\257\ The proposal did not change that definition. Instead, it would allow a single contract to span multiple plan or policy years. Such a plan would be subject to guaranteed availability during every open enrollment period and would be available for enrollment through a special enrollment period in a manner no different than 1-year catastrophic plans (that is, plans with a term of one 12-month plan year), as well as the rating rules that require issuers in the individual market to set their rates on a plan year basis (that is, annually). Additionally, given that we are not finalizing certain proposals related to the annual limitation on cost sharing, for each 12-month plan year within a multi-year catastrophic plan, the plan must comply with the Federal annual limitation on cost sharing that applies for that plan year. As stated below, we are not making any changes to the treatment of multi-year plans for purposes of MLR and rebate calculation and reporting requirements under part 158 in this rulemaking.

\257\ See 45 CFR 144.103 and 155.20 (defining “policy year” generally as the calendar year and “plan year” as “a consecutive 12 month period during which a health plan provides coverage for health benefits,” respectively). See also 80 FR 75488, 75494 (Dec. 2, 2015) and 81 FR 12204, 12210 (Mar. 8, 2016) (providing that a plan year may be shorter but not longer than 12 months).

Furthermore, we believe that the HHS risk adjustment methodology is flexible enough to appropriately accommodate multi-year catastrophic plans without making changes to the HHS risk adjustment models or State payment transfer formula. First, as described elsewhere in this preamble, multi-year catastrophic plans would be required to update their out-of-pocket maximums annually, to account for the updated maximum annual limitation on cost sharing that would apply for each plan year included in the catastrophic plans' contract term. As such, the plan liability assumptions that underlie the HHS risk adjustment models for a given plan year would be largely consistent between multi- year and single-year catastrophic plans, resulting in HHS risk adjustment models for catastrophic plans that are applicable regardless of the contract term of the plan. Furthermore, risk scores calculated from the HHS risk adjustment models would continue to be calculated on a plan year basis. For example, an enrollee who remained enrolled for the entirety of the first plan year of a multi-year catastrophic plan's contract term but ended their enrollment in the second plan year of the contract term would receive no HCC-contingent enrollment duration factor in their risk score for the first plan year because HCC- contingent enrollment duration factors only apply to adult enrollees with 6 or fewer months of enrollment. This enrollee could receive an HCC-contingent enrollment duration factor in their risk score for the second plan year to the extent that they also have an HCC recorded in their enrollee-level EDGE data for that plan year. The enrollee's HCCs, RXCs, and demographic factors would similarly be determined on a plan year basis using their age, diagnoses, and prescription drugs from the claims and demographic data in the plan's enrollee-level EDGE data for the applicable plan year. Similarly, we will be able to continue to conduct HHS-RADV activities with reference to the HCCs, RXCs, and demographic factors that appear in a multi-year plan's enrollee-level EDGE data for an applicable plan year.

For the State payment transfer formula, the Statewide average premium used for catastrophic plan risk adjustment transfers is an enrollment-weighted average premium for all catastrophic plans in the State. Likewise, all plan-level variables in the State payment transfer formula are enrollment-weighted variables. As such, these variables can all be updated for an applicable plan year using the data of the enrollees who remain enrolled in the plan for that plan year. We will continue to calculate HHS risk adjustment transfers (and HHS-RADV adjustments to HHS risk adjustment transfers) on a plan year basis across all catastrophic plans with active enrollment in that plan year by using the enrollee-level EDGE data for the applicable plan year and the applicable plan years' HHS risk adjustment models for catastrophic plans.

Comment: Several commenters stated that the proposal did not include enough detail to allow for meaningful comment or implementation. One commenter suggested that this lack of

detail violated the Administrative Procedure Act. Several commenters indicated that the rule should not be finalized due to what they characterized as uncertainty about the proposal's requirements, and others suggested that the proposal not be applicable until at least 2028. Commenters stated that certain details of the proposal were too uncertain for issuers to implement, including, among others, which provisions would be fixed at the time a multi-year contract is effectuated, whether premiums would be fixed, whether rate increases for the whole term would be set at the initial filing, and whether rating area factors would be fixed. For changes within the plan, one commenter stated that any mid-term changes in premiums, benefits, or networks would constitute issuer gaming that denies consumers their chosen coverage.

Other questions raised by commenters, which they stated were not sufficiently addressed, include: Would enrollees progress through the age curve each year? Would the issuer have to keep any dependents on the contract until the full term expired? Would covered benefits be fixed? What valuation assumptions would be fixed? Would issuers be able/required to adjust rates annually as part of the annual single risk pool premium filing? How would coverage apply for newly added dependents during the plan's term? How would premiums be handled for consumers who move between rating areas? Would the plan-level adjustment for multi-year catastrophic plans have a trend component, like the quarterly trend adjustment in the small group market? If the adjustment functions like a quarterly trend, when would premium refilings be permitted? If premium refilings are permitted, would refilings affect the rates of currently issued products? How would multi-year plans be treated under State 1332 waiver programs? What kinds of novel financial reporting issues would multi-year plans raise under GAAP and statutory accounting? What discount rates would be appropriate for any longer-term valuation of benefits? Would any cash value accumulate if there is a disconnect between premiums collected and benefits received over the contract term? What modifications to regulatory capital requirements would be warranted for multi-year plans to reflect the increased risk they pose to issuers? What additional rate review requirements would be required for multi-year catastrophic plans, particularly if contract terms are largely fixed at pricing.

Response: We believe the proposal included detail sufficient to satisfy the Administrative Procedure Act. However, we will provide additional guidance or rulemaking, as necessary, to address certain aspects of this policy.

In response to the comments that stated that any mid-term changes in premiums, benefits, and networks would constitute issuer gaming that denies consumers their chosen coverage, we note that we expect benefits and networks to generally remain stable for the length of the term, and such coverage would continue to be subject to applicable Federal and State laws, and premiums will vary annually as issuers of multi-year plans comply with the single risk pool, risk adjustment, and other requirements that impact rating.

For rate setting, rate calculations for multi-year plans, including plan-level adjustments, would be determined each year, as they are for a 1-year plan that renews each year. Thus, rate increases for the whole term would not be set at the initial filing; premiums for the entire term and rating area factors would not be fixed at effectuation, but would be set annually; and enrollees would not progress through the age curve each year. Rather, as with 1-year plans, the enrollee's age as of the date of policy issuance or renewal must be used, under Sec. 147.102(a)(1)(iii). With respect to multi-year catastrophic plans, the date of renewal is the first day the coverage is renewed after the multi-year term has expired. For example, if an individual enrolls in a catastrophic plan with a term of 5 consecutive plan years, the date of renewal would be the first day following the expiration of the 5 plan- year term. With respect to the comments regarding valuation assumptions and discount rates, we note that rates for a multi-year catastrophic plan would be set annually under the single risk pool requirements in Sec. 156.80. We defer to the appropriate governing boards for any novel financial reporting issues that multi-year plans might raise under GAAP and statutory accounting standards. For any modifications to regulatory capital requirements for multi-year plans, issuers would be subject to the capital requirements set by State regulators. For the question about what additional rate review requirements would be required for multi-year catastrophic plans if contract terms are largely fixed at initial pricing, we again note that rates would not be set in advance for the entire term of the policy, but would be set annually, under the single risk pool requirements set forth at Sec. 156.80. Therefore, no additional rate review requirements would be required or necessary. The issuer would keep any dependents on the contract until the full term expired, unless the enrollee voluntarily dropped the dependent from coverage or the dependent ceases to satisfy the plan's terms of eligibility for dependent coverage, consistent with 45 CFR 147.120. Coverage would apply for newly added dependents during the plan's term, and premiums for consumers who move between rating areas would be handled no differently than in 1-year plans. State law would determine whether a multi-year catastrophic plan may have a cash value that the policyholder may borrow against, or for which the plan could be sold.

For section 1332 waivers, the Departments of HHS and the Treasury recognize that multi-year plan designs may raise unique considerations over the waiver period. To the extent a waiver application, waiver amendment, or other proposed change presents such considerations, the Departments of HHS and the Treasury will address them through the appropriate section 1332 waiver processes. Specifically, the Departments of HHS and the Treasury will continue to seek public comments on each waiver application or proposed waiver amendment and consider those comments in assessing whether the waiver application or proposed waiver amendment, satisfies the statutory guardrails set forth in section 1332(b)(1)(A) through (D) of the Affordable Care Act.

Comment: One commenter questioned how issuers can consider the claims experience of all enrollees in all health plans in the individual market (other than grandfathered plans) when setting rates for multi-year plans under the single risk pool provision at Sec. 156.80 if future plans are not yet designed.

Response: As is the case with 1-year plans, issuers do not base rates on plans that do not yet exist.

Comment: Several commenters stated general support for disclosures to consumers as applied to multi-year catastrophic plans. These commenters recommended disclosures describing the differences and limitations of these arrangements, including mid-term cost, benefit, and provider network changes; disclosures of any variable rate terms to consumers at the outset, while having consumers proactively indicate they understand the terms and conditions of their coverage, including any limitations or excluded benefits; disclosure of rights to terminate coverage; disclosure at enrollment of the full annual limitation on cost sharing and deductible (and any other material cost-sharing features);

and disclosures about the practical implications of multi-year enrollment, including the consumer's ability to change plans, transition between metal levels, or move to other coverage when circumstances change.

Response: We expect issuers of multi-year catastrophic plans to furnish the disclosures mentioned in the proposed rule, in which we stated that we expect such issuers to disclose that the plan has a multi-year term and the length of that term. The length of the term of an insurance policy is universally disclosed by issuers for 1-year policies and is generally required by and enforced by States, so our expectation is in line with what issuers currently disclose. We note that no commenters objected to those disclosures. The other disclosures mentioned by the commenters are either not as universally disclosed by issuers, so we therefore do not expect issuers of multi-year catastrophic plans to necessarily disclose them, or are required to be disclosed under current law and regulations. For example, the summary of benefits and coverage requires issuers, including issuers of catastrophic plans, to disclose benefits and benefit limitations. To the extent the disclosures mentioned by the commenters go beyond those disclosures, issuers of multi-year catastrophic plans may provide them.

We also proposed that, to the extent multi-year catastrophic plans utilize the proposed monthly method of applying the annual limitation on cost sharing discussed earlier in this preamble, plans would be expected to include that information in marketing and enrollment materials. Given that we are not finalizing that method of applying the annual limitation on cost sharing, issuers of multi-year catastrophic plans would not be expected to make such disclosure in marketing and enrollment materials.

Comment: One commenter stated that there are some fundamental infrastructure challenges to implementing multi-year plans. The commenter mentioned maintaining accurate, auditable accumulators across a multi-year plan term, given that current health plan administration systems are designed around annual accumulator cycles, with deductibles and out-of-pocket maximums resetting January 1. The commenter stated that certification of multi-year plans should include an assessment of the issuer's infrastructure capability to manage multi-year accumulator lifecycles with audit-grade integrity.

Response: As mentioned above, for out-of-pocket maximums, multi- year catastrophic plans would have their out-of-pocket maximums reset annually, to account for the updated out-of-pocket maximums that would apply for the next plan year. Thus, they could not have out-of-pocket maximums that accumulate across multiple plan years, nor could deductibles accumulate across multiple plan years. Therefore, there is no reason for our QHP certification processes to include an assessment of the issuer's infrastructure capability to manage multi-year accumulator lifecycles.

Comment: One commenter stated that multi-year catastrophic plans in each market area should also be limited to issuers that have already sold plans in the Affordable Care Act's Exchange for several years--and these issuers should each be limited to offering a single multi-year plan. The commenter stated that this would also deter issuers from neglecting or abandoning mature plans with sicker pools of enrollees. Another commenter stated that limiting the proposal initially to catastrophic multi-year plans with a 2-year term would allow for a controlled pilot, minimizing systemic risk while enabling regulators and interested parties to monitor outcomes and gather data.

Response: We might consider future rulemaking to propose expanding the standards in these final regulations to other types of plans, but first, we wish to evaluate the experience of issuers and enrollees in multi-year catastrophic plans. If we were to limit these final regulations to the types of issuers or to the contract duration the commenters mention, we do not believe we would have a sufficient universe of issuer and longer-term enrollee experience with such plans to be able to make such an evaluation. We note that to the extent the issuer of a multi-year catastrophic plan discontinues the product, an enrollee would have the same legal protections under special enrollment and under open enrollment periods to select another plan, and the same plans from which to select, as do enrollees in 1-year plans that an issuer might discontinue. Therefore, there is no reason to limit the universe of multi-year catastrophic plans in the manner the commenters suggest. Additionally, given the aforementioned benefits that we believe multi-year plans can afford enrollees, we do not want to arbitrarily limit the universe of issuers that may offer such plans, provided they comply with all applicable requirements.

Comment: For our comment solicitation on if, and to what degree, a plan could modify the amount of the annual deductible for each year of a multi-year plan, one commenter stated that allowing plans to collect more premiums or submit patients to higher cost sharing on the front end as a way to “entice” participants to remain in the plan for its duration do not align with the inherent purpose of these statutory limits to protect patients from untenable out-of-pocket costs in a given plan year and should not be allowed. However, this same commenter stated that, regarding mid-plan changes for multiple-year plans, if term changes would benefit the patient, such as reduced deductibles or cost sharing to entice a patient to remain enrolled in a particular plan, these changes should be permitted.

Another commenter stated that multi-year plans should allow deductible carryover or premium stability features--for example, if an enrollee does not meet the deductible in year one, the issuer could offer premium stability or enhanced benefits in subsequent years. This commenter also stated multi-year plans should be permitted to incorporate higher out-of-pocket cost exposure in early years paired with reduced exposure, enhanced benefits, or premium stability in subsequent years for continuously enrolled individuals, while another commenter stated that multi-year plans should be permitted to provide upfront pledges of rebates to premiums for those who remained enrolled.

Another commenter stated that people often cannot predict when they will experience a health condition. This commenter and other commenters stated that front-loading cost sharing early in a multi-year term will lead people to forego needed care early, leading to high costs and suffering. Several commenters stated it is unreasonable for enrollees to be expected to pay higher cost sharing in the early years of a term, as they might not be able to afford to. Other commenters stated that multi-year designs can create consumer expectations that value will accrue over time (for example, if cost sharing is structured to be less burdensome later in the term), but if a product is discontinued mid- term, or if CMS were to later prohibit this practice, enrollees may not be able to realize the benefit trajectory that was offered at enrollment. According to one commenter, this risk is structural and is not fully addressed through general disclosures.

Response: We appreciate the comments we received on this topic. However, section 1302(e) of the Affordable Care Act prohibits catastrophic plans from covering any benefits, other than as provided for in section 2713 of the PHS Act and at least

three primary care visits, until an enrollee has satisfied the annual limitation on cost sharing for the applicable plan year, as determined by statute. This means catastrophic plans cannot impose a deductible or annual limitation on cost-sharing other than the applicable limit on cost sharing for the applicable plan year. Therefore, we are not finalizing the provision in proposed Sec. 156.130(c), which would have provided that, in the case of a multi-year catastrophic plan, the annual limitation on cost sharing for the initial plan year of the contract may apply on an annual basis, or on average over the life of the contract.

However, varying cost sharing by plan year in a manner that deviates each year's cost sharing from its statutory limitation on cost sharing would not be statutorily prohibited for other metal-level plans and might be a very appealing feature to some enrollees. Unlike catastrophic plans, which are prohibited from setting their annual limitation on cost sharing for a plan year above or below the applicable limit for that plan year, metal-level plans may set their annual limitation on cost sharing for a plan year below the statutory limitation for that plan year, provided the plan satisfies the appropriate actuarial value standards for its metal tier.\258\ Thus, multi-year metal-level plans would have flexibility to set an annual limitation on cost sharing that declines each year over the life of the contract, provided it is below the statutory limitation for each plan year. We also note that, unlike catastrophic plans, the deductible for a metal-level plan for a given plan year does not have to equal the annual limitation on cost sharing for that plan year, and metal-level plans are permitted to provide benefits following satisfaction of the plan's deductible, before the annual limitation on cost-sharing is met.

\258\ See section III.E.7 of this final rule, which explains how in this final rule, we are finalizing a proposal with modifications to increase the annual limitation on cost sharing that is required for catastrophic plans to be 130 percent of the annual maximum limitation on cost sharing and to delay implementation of this policy until PY 2028; and to newly allow QHP issuers in the individual market already offering a bronze plan that offers an annual limitation on cost sharing at or below the annual maximum limitation on cost sharing to also offer, within the same service area, bronze plans that use a higher annual limitation on cost sharing and to set a maximum limitation for bronze plans starting with PY 2027.

Insurance with vanishing or reduced deductibles over the life of the insurance contract has become more common in certain insurance markets such as automobile insurance. We believe such a feature has the potential to be of great value to both issuers and enrollees in the health insurance context. To the extent the promise of more generous coverage as a plan term progresses would cause an enrollee to remain in the plan, this would help further ensure that an issuer's focus on offering preventive and wellness benefits in the earlier years of the term might pay off in the form of a healthier enrollment base, which could encourage issuers to focus on offering and promoting such benefits. Also, the promise of more generous benefits in later years of the term might incentivize enrollees to remain in their plan, even after carefully considering other options, as the increased benefits might be superior to those other options. Depending on issuers' and enrollees' experience with multi-year catastrophic plans, we might consider through rulemaking extending multi-year standards to metal level plans, including applying the declining cost sharing concept to such plans.

We note that multi-year and 1-year catastrophic plans may be able to offer relief from the high deductible and maximum annual limitation on cost sharing through other mechanisms. For example, issuers of catastrophic plans could consider financing the deductible by providing enrollees a loan. To the extent permitted by applicable Federal and State law, this could be especially helpful for enrollees who, before reaching their deductible, incur a large amount of medical costs within a short period of time. Under this approach, as long as the loan terms require repayment, the plan would not be considered to be covering those services prior to satisfaction of the deductible for purposes of section 1302(e)(1)(B)(i) of the Affordable Care Act. To the extent permitted by applicable Federal and State law, issuers of multi-year catastrophic plans could offer repayment flexibility as defined in the loan contract with the enrollee.

For the comment suggesting an adjustment to an individual's premium from one year within a multi-year catastrophic plan to the next, based on whether or not the individual had satisfied their deductible, we note that such an adjustment, or any other based on a factor other than those permitted in Sec. 147.102(a), is prohibited.

Comment: Several commenters discussed the idea of the annual limitation on cost sharing being prorated on a monthly basis. One commenter stated that allowing enrollees to meet one-twelfth of the annual limitation per month, after which the plan would cover benefits for that month (other than for preventive services, or primary care visits below the applicable threshold) would violate section 1302(e) of the Affordable Care Act, as it would allow issuers to cover benefits in a plan year prior to the enrollee incurring expenses equal to the annual limitation.

A few commenters stated that allowing the annual limitation on cost sharing to be prorated on a monthly basis would help to alleviate up- front “shock” of high out-of-pocket costs. Another commenter stated that allowing deductibles or limitations on cost-sharing thresholds to reset on a monthly or similarly frequent basis would undermine the core purpose of catastrophic coverage by repeatedly restarting a consumer's financial exposure during ongoing treatment. One commenter stated that an annual limitation on cost sharing that is prorated monthly could be significantly favorable to consumers in lowering limitations on cost sharing for specific services within a month. However, this commenter pointed out that a range of challenges exist, including that claims can take 6 months or more to be paid. This commenter stated that, at most, that means the payment can occur in the next plan year, but potentially 6 or more monthly limitation on cost sharing cycles, which could lead to consumer confusion and additional administrative complexity. This commenter also stated that new consumer utilization patterns such as stacking services within a month to take advantage of the lower limitations on cost sharing could arise, particularly if multiple, higher cost elective services are in play. The commenter stated that this could lead to material increases in actuarial value which, if unpriced for, could create significant solvency challenges. This commenter also stated that current actuarial continuance does not take into account how consumer behavior might change under a monthly benefit.

Another commenter stated that smaller monthly limits would help both acute and chronic patients by limiting the one-time cost burden for the former and spreading known, recurring costs over the year for the latter. This commenter stated that limiting monthly cost sharing to one twelfth of the annual limit will likely benefit individuals with single acute medical events, while being harmful to either healthy individuals who face higher premiums if actuarial value increases or to individuals with chronic medical costs if actuarial value is held constant but monthly limits increase.

Response: We appreciate the comments submitted on this topic. As stated above, section 1302(e)(1)(B)(i) of the Affordable Care Act states, in

relevant part, that a catastrophic plan “provides no benefits for any plan year until the individual has incurred cost-sharing expenses in an amount equal to the annual limitation in effect under subsection (c)(1) for the plan year.” Therefore, a plan that prorates the annual limitation on cost sharing on a monthly or other basis would not meet the statutory definition of a catastrophic plan. We stated above how a catastrophic plan, to the extent permitted by applicable law, may exercise loan repayment flexibility to protect enrollees from high deductibles and maximum out-of-pocket costs. However, should we propose, in a separate rulemaking, standards for metal-level plans to have multi-year terms, we note that monthly prorated deductibles could be permissible under applicable statute. This is because for metal- level plans, the deductible can be an amount different than the maximum limitation on cost sharing, and Federal law does not prohibit metal- level plans from providing coverage for costs incurred below the maximum limitation on cost sharing set by the plan. As we stated above, depending on issuers' and enrollees' experience with multi-year catastrophic plans, we might consider proposing through rulemaking standards for issuers of metal-level plans to offer plans with multi- year terms as set forth for catastrophic plans in this final rule, at which time we might propose to allow annual deductibles to be prorated monthly or over another interval.

Comment: Several commenters suggested that disease-specific annual limitations on cost sharing in multi-year catastrophic plans would discriminate based on health status, in violation of several different Federal statutes. One commenter stated that disease-specific limitations on cost sharing would also create significant confusion for both physicians and patients, particularly for individuals with multiple chronic conditions whose care cannot be attributed to a single diagnosis. Another commenter stated that such limitations would allow issuers to design plans that are highly unattractive to sicker people, while one commenter stated that a limitation on cost sharing based on disease should not be permitted if prohibited by State law.

Response: We are not finalizing the provision in the preamble to the proposed rule that would have permitted disease-specific limitations on cost sharing if that disease requires treatment that spans multiple years, so long as the average over all plan participants and over years of the annual limitation on cost sharing equals the average over the life of the contract of the annual limitation on cost sharing as required by statute. As stated above, the limitation on cost sharing for each plan year of a catastrophic plan must equal the statutory maximum annual limitation on cost sharing for that plan year and cannot vary by disease or other health status.

Comment: One commenter noted that multi-year plan terms can be misaligned with current employer plan cycles, and expressed concern about potential administrative and compliance complexities of attempting to align multi-year plans with annual employer benefit updates, such as for ICHRAs and qualified small employer health reimbursement arrangements (QSEHRAs).

Response: Group health plans and QSEHRAs are not always offered by employers on a calendar year cycle, and therefore might not align with individual health insurance coverage. Therefore, the issue the commenter mentions is not unique to multi-year plans. The Departments continue to see great promise in ICHRAs and QSEHRAs, and will continue to examine how to make them easier and more attractive for employers to offer, including examining how such arrangements could be integrated with multi-year catastrophic plans.

Comment: One commenter remarked that States will need clear guidance regarding expectations for review and oversight.

Response: As the market for multi-year catastrophic plans develops, we expect to provide such guidance, and we welcome suggestions from States in this regard.

Comment: One commenter suggested that CMS monitor enrollment in multi-year catastrophic health plans and their impact on individuals with chronic conditions or disabilities and report these data publicly.

Response: We appreciate the comment, and it is something we might consider doing in the future.

Comment: One commenter suggested stronger pre-enrollment counseling about multi-year catastrophic plans for high-risk applicants.

Response: We agree that it is important for individuals to understand their coverage options prior to enrollment. We encourage agents, brokers, web-brokers, and assisters to help consumers evaluate whether a multi-year catastrophic plan meets their needs. We expect to issue materials to assist such parties and issuers in that regard.

Comment: We received several comments related to the proposal that multi-year catastrophic plans with a plan term of at least 2 consecutive years may utilize VBID to provide benefits for preventive services under section 2713 of the PHS Act beyond those specified in section 2713(a)(1) through (a)(4) prior to the enrollee's satisfaction of the plan's deductible and prior to satisfying the plan's annual limitation on cost sharing. Several commenters supported allowing multi-year catastrophic plans to utilize VBID to cover additional preventive services before the plan's deductible and annual limitation on cost sharing is satisfied. Other commenters opposed this approach. They stated that the Secretary's authority under section 2713(c) of the PHS Act does not permit expanding the types of services that catastrophic plans may cover before an individual satisfies their deductible or annual cost-sharing limitation. Commenters also stated that VBIDs referenced in section 2713(c) of the PHS Act are not intended to refer to preventive services beyond those listed in section 2713(a)(1) through (a)(4) of the PHS Act.

Response: Section 2713(c) of the PHS Act states, the Secretary may develop guidelines to permit a group health plan and a health insurance issuer offering group or individual health insurance coverage to utilize value-based insurance designs. This provision contains no language restricting VBID to the specific categories of preventive services enumerated in section 2713(a) of the PHS Act. Section 1302(e) of the Affordable Care Act provides that a catastrophic plan provides no benefits for any plan year until the enrollee has incurred cost- sharing expenses in an amount equal to the annual limitation on cost sharing, except for at least three primary care visits and “except as provided for in section 2713” of the PHS Act. The statute cross references section 2713 in its entirety, not solely subsection (a). Accordingly, section 1302(e) of the Affordable Care Act incorporates both the mandatory coverage requirements set forth in section 2713(a) of the PHS Act and the Secretary's authority under section 2713(c) of the PHS Act to permit VBID. Reading these provisions together, catastrophic plans may provide pre-deductible coverage for benefits furnished under VBID guidelines issued under section 2713(c) of the PHS Act.

Prior sub-regulatory guidance issued by the Departments has generally described VBID as health plan designs that provide incentives for enrollees to utilize higher-value and/or higher-

quality services or venues of care.\259\ While we acknowledge the Departments have made other statements associating VBID with preventive health services, those statements were made in the context of rulemaking regarding coverage of recommended preventive services and should not be construed to limit the VBID construct to recommended preventive services enumerated in section 2713(a) of the PHS Act.\260\ Having reexamined the statutory delegation in section 2713(c) of the PHS Act, we conclude that the plain text of the statute contains no language restricting the guidelines developed for VBID to the specific categories of preventive services enumerated in section 2713(a). The approach finalized in this rule is consistent with that understanding and with prior HHS rulemakings \261\ encouraging issuers within the individual and small group market to design plans that empower consumers to receive high-value services at lower cost.

\259\ U.S. DOL. (2010). FAQs about Affordable Care Act Implementation Part V and Mental Health Parity Implementation. https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-5 and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/aca_implementation_faqs5.

\260\ See 75 FR 41726, 41729 (July 19, 2010).

\261\ 83 FR 16930 (Apr. 17, 2018) and 85 FR 29164 (May 14, 2020).

The Departments believe that incentivizing high-value care, including utilization of services related to wellness and prevention, has the potential to improve health outcomes and therefore reduce utilization and plan expenditures over time, in a number of ways. Issuers of multi-year plans would be uniquely suited to reap the benefits of a healthier population that remains in the plan over several years. One way of achieving this is through an adjustment to the out-of-pocket cost of services if furnished by certain providers, to encourage enrollees to seek services from lower-cost providers. For example, the preventive service regulations at 26 CFR 54.9815- 2713(a)(3), 29 CFR 1590.715-2713(a)(3), and 45 CFR 147.130(a)(3) generally permit group health plans and group and individual health insurance coverage that have a network of providers to impose cost- sharing requirements on recommended preventive services delivered by an out-of-network provider. Another such potential way is by promoting, via cost saving incentives, services linked to emerging technologies, or services that have been identified as reducing morbidity or severity of illness, including services for which new evidence demonstrates that the health benefits outweigh their cost. We believe that for all these reasons, VBID might have positive, valuable implications for issuers of multi-year plans, and for their enrollees.

For these reasons, consistent with the delegation of authority in section 2713(c) of the PHS Act, we are finalizing the proposed provision at Sec. 156.155(a)(6) with modifications to state that multi-year catastrophic plans may utilize VBID to provide benefits before reaching the deductible, pursuant to guidelines issued by the Departments under section 2713(c) of the PHS Act. Accordingly, the Departments intend to issue guidelines on how plans and issuers may implement VBIDs, including the scope of services that may be offered with reduced or no cost sharing in a manner designed to promote high- value care. The Departments intend to issue these guidelines in the near future. Until the guidelines are issued and applicable, multi-year catastrophic plans may provide pre-deductible coverage only for preventive services described in section 2713(a) of the PHS Act and benefits for at least three primary care visits per year.\262\ We are also finalizing a conforming amendment at Sec. 156.155(a)(3), providing that catastrophic plans provide no benefits before the annual limitation on cost sharing is reached, except as provided in paragraph (a)(6).

\262\ CMS has consulted with the Treasury Department and the IRS and they have similarly advised that until further tax guidance is issued in connection with the Departments' VBID guidelines, catastrophic plans will only be treated as high deductible health plans that are HSA-compatible under Code section 223(c)(2)(H) if pre-deductible coverage is limited to preventive services described in section 2713(a) of the PHS Act and at least three primary care visits.

Comment: Several commenters stated concern that enrollees could be “locked into” multi-year catastrophic plans.

Response: Enrollees may terminate coverage in multi-year catastrophic plans at any time without penalty. They may also enroll in other coverage during the annual open enrollment period or special enrollment periods, if otherwise eligible.\263\ Therefore, they will not be locked into multi-year catastrophic plans. We acknowledge that certain benefit designs may create incentives to remain enrolled, and we expect issuers to disclose those features. To the extent those benefit designs cause individuals to remain enrolled, they would be doing so by choice, not because they are “locked into” their plan.

\263\ Failure to pay premiums on a timely basis is not considered a loss of coverage that triggers a special enrollment period. See 45 CFR 155.420(e). Therefore, individuals who voluntarily terminate coverage may not be able to enroll in other individual market coverage until the next annual open enrollment period.

Comment: Some commenters stated that multi-year plans would not reduce the churn and disputed that coverage in a multi-year plan is materially different than 1-year contracts for health insurance coverage.

Response: We do not expect multi-year plans to eliminate churn. However, we believe the extended contract term of these plans has the potential to reduce churn for some enrollees, particularly where plan features make continued enrollment attractive. As previously stated, issuers of multi-year catastrophic plans would have more incentive to promote preventive and wellness benefits for their enrollees. In so doing, this could lead to a healthier enrolled population, resulting in moderated premiums, which is a major factor for consumers when choosing to remain in coverage. We also disagree that multi-year catastrophic plans could not be materially different from plans with a standard 1- year contract term. For example, as described above, we are finalizing that multi-year catastrophic plans could implement VBID, under guidelines issued by the Departments under section 2713(c) of the PHS Act. Such a design could potentially offer valuable benefits that are typically not offered by 1-year plans. We also note that Germany offers an example of how the availability of plans with terms that exceed 1 year has potential to reduce churn. Although many different public health insurance plans are offered with indefinite term lengths in Germany, and even though enrollees can switch plans annually, 39 percent never switch plans in their lifetime.\264\

\264\ Pugh, Tom. “How to Switch German Health Insurance and Save Money.” The Local Germany. 2 Jan. 2026

Comments: Some commenters expressed concern that enrollees in multi-year plans may not reassess coverage annually.

Response: The high level of churn in the individual health insurance market among individuals who are not automatically re- enrolled in coverage through an Exchange suggests that a significant number of consumers reassess their coverage annually, and there is no reason to believe that consumers enrolled in multi-year catastrophic plans will not do so, although as stated above, it is our view that many consumers in such plans, even after reassessing their coverage options, may decide to remain in their multi-year plan, given the potential

advantages outlined above for doing so, such as the positive impact of VBID programs.

Comment: One commenter stated that multi-year plans would limit enrollment in later years, which would violate guaranteed availability.

Response: Multi-year catastrophic plans must comply with all applicable requirements for health insurance coverage in the individual market, including the guaranteed availability requirements under section 2702 of the PHS Act. Individuals who qualify for catastrophic coverage may enroll in a multi-year catastrophic plan during open enrollment or a special enrollment period, if otherwise eligible, regardless of when the plan was first offered to other policyholders. For example, if an issuer offers a multi-year plan with a contract term of 10 consecutive plan years, and an eligible individual wishes to newly enroll in the plan, the issuer would be required under guaranteed availability to accept that individual for a coverage term that starts in the calendar year in which the individual first enrolled, and ends on December 31 of the calendar year that is 9 years after the calendar year in which the individual first enrolled. This is true, regardless of how many years the issuer had been offering that plan prior to the plan year for which the applicant first seeks coverage under the plan.

Comment: One commenter stated that issuers should not be required to offer multi-year catastrophic plans and that States should be able to restrict or prohibit these plans.

Response: We agree. This final rule establishes a regulatory framework for multi-year catastrophic plans. It does not require issuers to offer multi-year catastrophic plans nor limit the ability of States to restrict or prohibit them.

Comment: Commenters stated mixed views on extending multi-year plan standards to metal-level plans. One commenter supported applying the standards across all metal tiers to maintain competitive balance. Other commenters opposed or recommended delaying any extension until impacts are better understood. Several commenters cited insufficient detail to evaluate the proposal and its extension to other plans. One commenter noted that lower cost sharing in metal-level plans compared with catastrophic plans increases issuer risk and may discourage multi-year plan offerings at other metal levels without greater rating flexibility. Some commenters also raised potential legal barriers related to pre-verification requirements for PTC-eligible coverage under section 71303 of the WFTC legislation.

Response: Given the newness of this concept to health insurance in the United States, we are not extending multi-year standards to metal- level plans in this final rule. We will evaluate experience with multi- year catastrophic plans and engage in dialogue with States, issuers and others to inform potential future policy proposals related to multi- year plans.

Comment: Many commenters stated that the MLR considerations in the context of multi-year plans that were outlined in the proposed rule are important and urged HHS to clarify how such plans would be treated for MLR purposes before implementing the proposal. One commenter suggested that multi-year plans continue to be subject to the existing MLR standards. Another commenter suggested that a multi-year aggregation method for MLR purposes could be more appropriate to account for potentially lower claims in the early years of the policy.

Response: We appreciate these comments and appreciate the two commenters that offered substantive suggestions related to the MLR standards and methods applicable to multi-year catastrophic plans. We note that section 2718(b)(1)(B)(ii) of the PHS Act already requires the MLR to be calculated annually based on the average of 3 years of experience. In addition, issuers will be issuing new cohorts of multi- year policies each year, and multi-year plans will be aggregated with other individual market plans in the MLR calculation. Therefore, over time, we do not expect the timing of multi-year plan claims to significantly impact MLRs. Given the absence of other specific recommendations, we are not making any changes to the treatment of multi-year plans for purposes of MLR and rebate calculation and reporting requirements under part 158 in this rulemaking. 7. Cost Sharing for Bronze and Catastrophic Plans (Sec. Sec. 156.136 and 156.155)

To address an issue that has arisen in the implementation of section 1302(c) through (e) of the Affordable Care Act, in the 2027 Payment Notice proposed rule (91 FR 6373), we proposed changes to the permissible cost-sharing parameters for individual market bronze plans through new proposed Sec. 156.136 and to the required cost-sharing parameters for catastrophic plans through revisions to Sec. 156.155(a)(3).

Section 1301(a)(1)(B) of the Affordable Care Act directs all issuers of QHPs to cover the EHB package described in section 1302(a) of the Affordable Care Act, which includes coverage of the benefits described in section 1302(b) of the Affordable Care Act, adherence to the cost-sharing limits described in section 1302(c) of the Affordable Care Act, and meeting the AV levels established in section 1302(d) of the Affordable Care Act.

Section 2707(a) of the PHS Act, which is effective for plan or policy years beginning on or after January 1, 2014, extends the requirement to cover the EHB package to non-grandfathered individual and small group health coverage, irrespective of whether such coverage is offered through an Exchange. In addition, section 2707(b) of the PHS Act directs non-grandfathered group health plans to ensure that cost sharing under the plan does not exceed the limitations described in section 1302(c)(1) of the Affordable Care Act.

Section 2707(a) of the PHS Act and section 1302 of the Affordable Care Act direct issuers of non-grandfathered individual and small group health insurance plans (including QHPs) to ensure that these plans adhere to the levels of coverage specified in section 1302(d)(1) of the Affordable Care Act (except for catastrophic plans described in section 1302(e) of the Affordable Care Act). Section 1302(c) of the Affordable Care Act limits the annual cost sharing incurred under a health plan to the maximum annual limitation on cost sharing. Section 1302(d)(2) of the Affordable Care Act provides that a level of coverage of a plan, or its AV, is determined based on its coverage of the EHB for a standard population. Section 1302(d)(1)(A) through (D) of the Affordable Care Act requires a bronze plan to have an AV of 60 percent, a silver plan to have an AV of 70 percent, a gold plan to have an AV of 80 percent, and a platinum plan to have an AV of 90 percent. Section 1302(d)(2) of the Affordable Care Act directs the Secretary to issue regulations on the calculation of AV and its application to the levels of coverage. Section 1302(d)(3) of the Affordable Care Act requires the Secretary to develop de minimis variations in AV calculations.

Section 1302(e) of the Affordable Care Act permits an individual market health plan not providing a bronze, silver, gold, or platinum level of coverage to be a catastrophic health plan that is treated as meeting the levels of coverage specified in section 1302(d)(1) of the Affordable Care Act for a plan year. A catastrophic plan may be offered only in the individual market and only to qualified individuals who have not attained age 30 before the beginning of the plan year, or to qualified individuals who are exempt from the requirement to

maintain minimum essential coverage under section 5000A of the Internal Revenue Code by reason of a hardship exemption or an exemption described in section 5000A(e) of the Internal Revenue Code relating to the affordability of coverage. Catastrophic coverage must provide coverage for the EHB and must meet the statutory requirement to cover at least three primary care visits before the plan deductible is applied. In addition, catastrophic plans must comply with all other requirements applicable to QHPs except those specifically modified by section 1302(e) of the Affordable Care Act, and they must be offered through the Exchange in the same manner as other qualified health plans. We codified the requirements for catastrophic plans at Sec. 156.155 in the Exchange Establishment Rule.

In the proposed rule, we provided an overview of how HHS has implemented the AV requirements of the Affordable Care Act, including a discussion of the major components of AV calculation. We reiterate this overview in the sections that follow. In the proposed rule, we went on to explain that we have discovered an inherent and unavoidable issue for implementation of the cost-sharing provisions of the EHB package in section 1302(c) through (e) of the Affordable Care Act that will eventually make issuer compliance with all these provisions mathematically impossible. We noted that this issue has first become evident for bronze and catastrophic plans, though without further changes, it will eventually impact silver plans and plans at higher metal tiers. To mitigate the worsening issue, in the proposed rule, we proposed to create new optional cost-sharing parameters for bronze plans and to revise the cost-sharing requirements for catastrophic plans in the individual market only. a. The Three Major Components of AV Calculation

AV is the anticipated covered medical spending for coverage of EHB \265\ paid by a health plan (1) for a standard population, (2) computed in accordance with the plan's cost sharing (that is capped by the maximum annual limitation on cost sharing), and (3) divided by the total anticipated allowed charges for EHB coverage provided to the standard population. The denominator of this calculation is the average allowed cost of all services for the standard population in the year for a specified metal tier; the numerator is the share of average allowed cost covered by the health plan, using the cost-sharing parameters specified. These are the three major components of AV calculation, and year-over-year changes in each of them influence how AV calculation changes year-over-year.

\265\ As defined in 45 CFR 156.110(a).

AV Component #1: The Standard Population. In accordance with section 1302(d)(2)(A) of the Affordable Care Act, HHS develops and provides a standard population for the AV Calculator that resemble enrollees who are likely to be covered by individual and small group market health insurance in a particular year. The costs and utilization of this population are currently derived from the enrollee-level EDGE data. As the AV Calculator Methodology that HHS releases each year in connection with the AV Calculator describes in detail,\266\ we apply adjustments to the claims and enrollment data of the standard population, including weighting to account for the expected demographic distribution across individual and small group plans, and use it to create a series of continuance tables that underlie the AV Calculator. Our annual updates to the AV Calculator's standard population ensure accordance with generally accepted actuarial principles and methodologies. Generally, the claims and enrollment data indicate that the standard population is costlier to cover each year, which leads to a corresponding rise in AV each year. If we did not update the AV Calculator to account for changes in the standard population, the AV Calculator would not accurately account for the enrollees who are likely to be covered by individual and small group market health insurance in a particular year, and would be increasingly nonrepresentative of the people who enroll in metal-tier plans.

\266\ For an example of the methodology, see https://www.cms.gov/files/document/updated-revised-final-2026-av-calculator-methodology-september-2025.pdf.

AV Component #2: The Maximum Annual Limitation on Cost Sharing. Section 1302(c) of the Affordable Care Act sets the maximum annual limitation on cost sharing \267\ which limits an enrollee's overall financial responsibility by restricting the maximum out-of-pocket (MOOP) limit for a plan. For PY 2014, section 1302(c)(1)(A) of the Affordable Care Act sets this limit at the maximum cost-sharing limit for high-deductible health plans (HDHPs) under section 223(c)(2)(A)(ii) of the Internal Revenue Code of 1986--that is, $6,350 for a self-only plan. Section 1302(c)(1)(B) of the Affordable Care Act requires HHS to update the maximum annual limitation on cost sharing annually. For plan years after 2014, section 1302(c)(1)(B)(i) of the Affordable Care Act sets the limit for a self-only plan at the product of the 2014 value and the PAPI, the percentage (if any) by which the average per capita premium for health insurance coverage for the preceding calendar year exceeds such average per capita premium for health insurance coverage for 2013.\268\ Under section 1302(c)(1)(B)(ii) of the Affordable Care Act, the maximum annual limitation on cost sharing for other plans, like coverage other than self-only, is twice the limit of a self-only plan. In accordance with Sec. 156.130(e), in years where HHS is not making methodological changes, HHS will release the PAPI in guidance that will include the maximum annual limitation on cost sharing amount for the applicable benefit year.\269\ Using PAPI, the maximum annual limitation on cost sharing for self-only coverage has risen from $6,350 in PY 2014 to $12,000 in PY 2027 (see Table 9).

\267\ Cost sharing is defined at Sec. 156.20 as any expenditure required by or on behalf of an enrollee with respect to EHB; the term includes deductibles, coinsurance, copayments, or similar charges, but excludes premiums, balance billing amounts for non- network providers that are not prohibited by the No Surprises Act, and spending for non-covered services.

\268\ See section 1302(c)(4) of the Affordable Care Act.

\269\ In the 2025 Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability final rule (90 FR 27074, 27166 through 27168 (June 25, 2025)), HHS finalized a change to the methodology for calculating the premium adjustment percentage such that the average per capita premium will be based on the National Health Expenditure Accounts (NHEA) estimates of private health insurance (PHI) premiums (excluding Medigap and the medical portion of property and casualty insurance) for the 2026 benefit year and beyond. As discussed in the proposed rule, for the 2027 benefit year, HHS did not propose changes to the methodology to calculate the premium adjustment percentage or related parameters. As such, for the 2027 benefit year, we released these parameters in guidance entitled “Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage for the 2027 Benefit Year.” Available at https://www.cms.gov/files/document/2027-papi-parameters-guidance-2026-01-29.pdf.

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The maximum annual limitation on cost sharing impacts AV calculation since it changes the maximum amount that an enrollee may have to pay out-of-pocket each year. When the maximum annual limitation on cost sharing increases from year-to-year (which it typically does), it has the effect of decreasing year-over-year AVs. This is because plans can increase their MOOPs with a higher maximum annual limitation on cost sharing, which means enrollees typically need to pay more out- of-pocket for the EHB than they did in previous years, which would lower AV.

AV Component #3: EHB Costs. We also adjust the AV Calculator each year with an update to the cost of EHB that is provided to the AV Calculator's standard population, again to ensure accordance with generally accepted actuarial principles and methodologies and section 1302(d)(2)(A) of the Affordable Care Act. We project historical claims data for medical items and services and prescription drugs covered as EHB for the standard population for the next plan year. We often refer to this projection as the “trend factor.” For years that we used a trend factor in the AV Calculator, we have set it for an increase of between 3.25 percent and 6.50 percent for medical costs and between 6.50 percent and 11.50 percent for prescription drug costs.\270\ Table 10 sets forth the AV Calculator trend factors from 2014 to 2026.

\270\ For PYs 2014-2017, we applied a single trend factor for medical and prescription drug costs combined. We began applying different trend factors for medical and prescription drug costs in 2018.

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We review a variety of data sources on medical services and prescription drug claims costs, including rate data from the Unified Rate Review Templates (URRTs) and National Health Expenditure data from the HHS Office of the Actuary, to develop and select the proposed adjustment to health care costs. This health care cost update also impacts AV calculation; as health care becomes more expensive, the generosity of a plan's AV increases as an enrollee needs to receive less medical care than in previous years to reach the maximum annual limitation on cost-sharing. If we did not apply this trend factor, the AV Calculator would not account for changes in the cost of health care and would be less and less accurate each year, inconsistent with section 1302(d)(1)(A)'s instruction to calculate AV based on the “actuarial value of the benefits provided under the plan.” b. The Rates of Change for the Three Major AV Components

As we stated in the proposed rule, together, these three major components of AV calculation affect AV differently each year, depending on how the health of the standard population, the maximum annual limitation on cost sharing, and EHB costs all change, and at different rates. We noted that, ideally, the effect of a higher statutory maximum annual limitation on cost sharing each year would allow plans to exactly offset the year-over-year increase on AV created by the more expensive standard population and increased EHB costs required by the statute. We stated that would mean that the net impact of the three major factors on AV would be zero each year, and in turn any particular plan with the same cost-sharing structure would have the same AV year- over-year. We further stated that we believe this is the actuarially preferred approach, because it would allow for relatively consistent cost sharing and benefits design year-over-year, which promotes consumer understanding. We noted, however, plans do not have the same AVs each year because the three factors change at different rates.

We stated in the proposed rule that for nearly every year since 2014, the effect of updating the AV Calculator with the most recent data on the standard population and health care costs has led to a faster rise in AV with the same cost sharing structure than can be mitigated by the effect that a higher maximum annual limitation on cost sharing has on decreasing AV.\271\ We stated that, in other words, the effects of updating the standard population and health care costs every year to maintain the accuracy of AV calculations typically results in AVs increasing year-over-year, and the effects of an increased maximum annual limitation on cost sharing make AVs decrease year-over-year, but not enough to offset health care costs in the standard population. We noted that this is the outcome of the PAPI--calculated from the percentage difference between the average per capita premium for health coverage for the preceding calendar year and the average per capita premium for health coverage for 2013--being outpaced by the increasing costs of the health care for the population enrolling in metal-tier plans. We stated that this means we expect that a particular plan with the same cost-sharing structure has a higher AV year-over-year, even if

nothing about the plan changes. We noted that we discussed this previously as long ago as 2016 in the 2018 Payment Notice proposed rule \272\ and most recently in the Marketplace Integrity and Affordability final rule.\273\

\271\ There is one year that is an exception. The maximum annual limitation on cost sharing decreased for PY 2025 due to updated NHEA data from the CMS Office of the Actuary. In the NHEA Projections 2021-2030 data set available at the time of calculation of the PY 2024 maximum annual limitation on cost sharing, the estimated 2023 per capita employer-sponsored insurance (ESI) premiums value used in the premium adjustment percentage index calculation was $7,292. In the NHEA Projections 2022-2031 data set available at the time of the calculation of the PY 2025 maximum annual limitation on cost sharing, the estimated 2024 per capita ESI premiums value used in the premium adjustment percentage index calculation was $7,110, which was lower than the previously projected 2023 per capita ESI premiums from the previous data set. See Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage for the 2025 Benefit Year (November 15, 2023) available at https://www.cms.gov/files/document/2025-papi-parameters-guidance-2023-11-15.pdf. See also, the Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage for the 2024 Benefit Year (December 12, 2022) available at https://www.cms.gov/files/document/2024-papi-parameters-guidance-2022-12-12.pdf. The current NHEA projections are available at https://www.cms.gov/data-research/statistics-trends-and-reports/national-health-expenditure-data/projected.

\272\ Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2018; Proposed Rule, 81 FR 61456, 61510 (September 6, 2016).

\273\ Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability, 90 FR 27075, 27175 (June 25, 2025).

We noted in the proposed rule that this shift often forces issuers to change other parts of a plan's cost-sharing structure (to make the plan less generous) to conform to the relevant de minimis ranges that we permit for plans at Sec. 156.140 in accordance with section 1302(d)(3) of the Affordable Care Act. We stated that such changes are not actuarially sound, because the same plan, with the same cost- sharing structure, should have generally the same AV year-over-year. Over the years, as stated below, we have also modified the methodology by which issuers calculate AV, in an effort to mitigate some of these challenges. However, we stated that modifications made to ensure that plans at a certain metal tier can continue to exist do not carry the level of fidelity to AV calculation that may be justified by generally accepted actuarial principles and methodologies, and we stated that we believe we have reached a point at which further modifications would undermine the integrity of AV calculation and threaten our ability to implement section 1302(d) of the Affordable Care Act in such a compliant manner.

We stated in the proposed rule that the discrepancy in the rates of change of the three components have a magnified effect on the ability of issuers to design plans that conform to the de minimis ranges or that offer what issuers consider desirable; thus, issuers have narrower options to adjust cost sharing in their plan offerings each year. We further stated that if current trends persist, eventually the maximum annual limitation on cost sharing will be too low to allow for an AV calculation for the most basic bronze plan design, with a deductible set to the maximum annual limitation on cost sharing, that is within widened de minimis ranges, even with the use of an AV Calculator that caps claims. Thus, we stated that an actuarial issue exists in the implementation of the statutory text of section 1302(c) through (e) of the Affordable Care Act and the observed differences in the trend rates of the competing factors: PAPI (setting the maximum annual limitation on cost sharing and therefore plans' MOOP limit) and AV (which rises with increasing claims costs), discussed in greater detail in later lettered subsections.

We also stated that since we expanded the bronze de minimis range in 2018, we have seen a clear increase in the percentage of bronze plans at the upper end of the permissible de minimis range (+5 percent). In 2025, approximately 18 percent of FFE bronze plans were not in the expanded de minimis range, down from approximately 81 percent in 2018. [GRAPHIC] [TIFF OMITTED] TR20MY26.023

We further stated that, today, bronze plans appear increasingly more as silver plans than bronze plans. As previously noted, over the years we have changed the methodology underlying the AV Calculator (for example, by imposing a spending cap) and expanded the de minimis ranges (for example, by creating expanded bronze plans) to allow bronze

plan viability. However, we stated that we believe further changes to the AV Calculator methodology and de minimis ranges for the purpose of preserving bronze plans would near the outer boundary of our statutory authority to address this issue under section 1302(d)(3) of the Affordable Care Act. We noted that when bronze plans have an AV between 62 and 65 percent, they are closer to the bottom of the silver de minimis range (66 percent) than they are to the bottom of the bronze de minimis range (56 percent or 58 percent, depending on the year). We stated that this clearly undermines the integrity of silver plan cost- sharing designs and makes it more difficult for consumers to distinguish between the two metal tiers.

\274\ After the 2023 Payment Notice raised the lower bound of the permitted AV de minimis range from -4% to -2%, no bronze plans could be certified as a QHP with an AV below 58 percent. In Table 11, where bronze plans' AVs are not permitted, they are marked “N/ A”. The asterisks are used to indicate when that AV percentage is nearly impossible to reach for a bronze plan through its cost sharing design. The non-zero numbers marked with an asterisk represent actual bronze plans that had an even lower AV calculated for them than for a theoretical bronze plan that only provides non- preventative benefit coverage after an enrollee has reached their MOOP limit when it is set at the given plan year's annual limitation on cost sharing, with the MOOP set as equal to the given plan year's annual limitation on cost sharing. Bronze plans with AVs calculated as lower than this minimum-generosity design are no longer possible after an algorithm improvement in the 2021 AV Calculator, which ensured that plans using “copay with deductible” would no longer have an underestimated AV (due to previous AV Calculators overestimating enrollee spending during the plan's deductible phase).

However, we noted that the maximum annual limitation on cost sharing limits issuers' options in bronze plan design. We stated that we believe issuers may have designed competitive plans that would be attractive for bronze plan consumers but that are ineligible for sale because they need to have a higher MOOP than is permissible under the maximum annual limitation on cost sharing. Specifically, we stated that the existing permissible MOOP leads to issuers offering higher deductible bronze plans over time because costs have risen faster than the permissible MOOP, requiring plans to raise cost-sharing below the permissible MOOP to meet the AV range for bronze plans. We noted that by 2024, the average deductible for bronze plans exceeded $7,000. We further noted that with a $9,450 maximum annual limitation on cost sharing that year, these plans look increasingly like catastrophic plans with a deductible that is almost set to the maximum annual limitation on cost sharing, and this includes expanded bronze plans that have an AV of up to 65 percent. We stated that the convergence of non-expanded bronze plans with catastrophic plan design is even more stark when viewing the median (or midpoint) of the deductibles and MOOPs of all the bronze plans offered on the FFEs alongside the maximum annual limitation on cost sharing over the last few years (Table 12). [GRAPHIC] [TIFF OMITTED] TR20MY26.024

We noted in the proposed rule that this convergence in the deductible and MOOP in these plan designs with the maximum annual limitation on cost sharing occurred at the same time the AV of bronze plans increased (Table 11). We stated that if issuers lowered deductibles in existing bronze plans but held their MOOP and average copayment rate between the deductible and MOOP constant, those plans would have higher AVs and risk appearing more like silver plans than bronze plans, or having to meet the requirements described at Sec. 156.140(c) to be an expanded bronze plan. We further noted that issuers could feasibly lower the AV of their bronze plans by raising the deductible in those plans, but few offer such plans (Table 11).

We also stated in the proposed rule that plans could increase their MOOP to offer plans with lower deductibles and copayment rates. We noted that variation in MOOPs and deductibles across bronze plans in 2024 reveals that, for the median bronze plan a $1 higher MOOP is associated with a 58 cent lower deductible. We also noted that there is less response to the MOOP in higher metal tiers, consistent with the idea that the MOOP affects deductibles more at lower AV levels. We stated, however, as claims continue to rise at a rate greater than the growth in the statutory maximum annual limitation on cost sharing (due to rising faster than the index calculated based on how much premiums have increased), a higher MOOP may eventually be warranted to tamp down deductibles for plans seeking to maintain their AV compliance with higher metal tiers than bronze, as well. We noted, however, the deductible and MOOP of most plan designs at the other metal tiers have not converged with the maximum annual limitation on cost sharing; in other words, silver plans and higher metal tier plans appear to still have appropriate flexibility in their cost sharing design, as observed by their wider ranges of deductibles, pre-deductible coverage, and MOOPs compared to non-expanded bronze plans (see Table 12).

We stated that, of the metal plans, bronze plans are most susceptible to increases in AV because they have the lowest AV (60 percent), and the highest allowable maximum annual limitation on cost sharing typically requires issuers to cover more than 60 percent of allowed claims. We further noted that issuers have fewer options to adjust the cost sharing for bronze plans compared to other metal level plans and, as noted previously, are increasingly designing them to have a deductible near or equal to the maximum annual limitation on cost sharing. To address this increase in AV for bronze plans in the short- term, we stated that we have already utilized the authority at section 1302(d)(3) of the Affordable Care Act to revise Sec. 156.140(c) to expand the allowable de minimis range for bronze plans to a maximum of 65 percent AV, and refer to these plans as “expanded bronze” plans.\275\

\275\ Expanded bronze plans are bronze plans currently referenced in Sec. 156.140(c) that cover and pay for at least one major service, other than preventive services, before the deductible or meet the requirements to be a high deductible health plan within the meaning of section 223(c)(2) of the Code. (81 FR 94058).

As we stated in the proposed rule, we began to reduce the distortion created by outliers with very high spending in the AV Calculator's standard population beginning in 2021 by implementing a cap on enrollee spending at $1,000,000. In later years, we capped enrollee spending at the 99.50th percentile of annual allowed amounts for all enrollees in the claims data. We noted in the proposed rule that without this cap, many, if not all, bronze plan designs would already be non-viable. We stated, for example, that utilizing the 2027 version of the AV Calculator without the enrollment cap, we estimate that all bronze plan AVs would be 5 to 6 percentage points higher than with it. We also stated that based on internal analysis, all existing non-expanded bronze plans offered in the FFEs in PY 2026 would have an average AV of 65.1 percent if calculated using an AV

Calculator that did not apply the enrollment cap. The simulated AV results ranged from 64.5 percent to 68.0 percent, which is much higher than the currently permitted maximum of 62 percent. We further estimated the effect on the other metal levels without the cap and found standard silver AVs would be 4 to 5 percentage points higher; gold plan AVs would be 1 to 2 percentage points higher; and platinum plan AVs would be up to 1 percent higher.

We stated in the proposed rule that as AVs increase year-over-year, absent some other administrable regulatory solution, we may need to consider continuously expanding the cap on enrollee spending beyond the 99.50th percentile to preserve plan design viability, particularly for bronze plans. We stated that we know expanding this cap is not a permanent solution. We noted that the AV Calculator becomes less accurate, and less representative of the standard population as more and more enrollees are excluded from it. Moreover, we noted that the continued cap expansion does not align with the statutory requirements for determining the AV. We stated that while the initial cap may have reasonably been set from the Secretary's discretion to define a standard population, the continued expansion of the cap clearly serves a separate purpose. We stated, however, without it, bronze plans will eventually become entirely non-viable, which is not a result that Congress could have intended. Thus, we stated that an issue exists in the implementation of sections 1302(c) through (e) of the Affordable Care Act and, to date, we have chosen to address it by applying flexibility in the determination of the AV. However, we stated that if current trends persist (and we have no reason to believe they will not), eventually the maximum annual limitation on cost sharing will be too low to allow for an AV calculation for a bronze plan design with a deductible set to the maximum annual limitation on cost sharing that is within widened de minimis ranges, even with an AV Calculator that uses a spending cap.

We stated in the proposed rule that we are not aware of any administrable, actuarially sound regulatory alternatives that we might propose that could address these issues to preserve the integrity of AV calculations and the comparability between the levels of coverage. As discussed above, we stated in the proposed rule that we can continue to expand the cap on enrollee spending beyond the 99.50th percentile as a temporary solution, but we hesitate to do so to preserve the integrity of AV calculations, as section 1302(d)(1)(A) of the Affordable Care Act directs the calculation of AV based on the “actuarial value of the benefits provided under the plan.” We noted in the proposed rule that we have also considered not trending the AV Calculator to account for changes in the standard population or for changes in EHB costs. We noted that this would make AV rise less quickly year-over-year. However, we stated that we believe doing so would render the AV Calculator wholly inaccurate actuarially. We also stated in the proposed rule that we have also considered proposing changes to EHB policy to reduce the scope of benefits that are covered as EHB to address this issue, but the calculation of AV does not so readily factor in the scope of covered benefits under the plan. We stated that we believe changing the current EHB benchmark framework and potentially making significant changes to covered benefits is an extreme approach that would yield minor benefits, if any because AV is a measurement of the cost sharing imposed by an issuer on whatever benefits the plan covers as EHB, and not a measurement of the EHB themselves. Additionally, as we noted in the proposed rule, section 1302(b)(2)(A) of the Affordable Care Act requires HHS to define the EHB to cover items and services covered within 10 specific categories of benefits such that their scope is equal to the scope of benefits provided under a typical employer plan; the statute does not create ability to define the EHB to accommodate AV calculations. In addition, we stated that we believe there are no changes to the PAPI methodology that would raise the annual limitation on cost sharing enough to preserve the viability of AV calculations, even in the short-term, though we solicited comment on whether there are any regulatory changes we might make to the PAPI that would address this AV issue.

We sought comment on other administrable regulatory alternatives that we might consider that could address these issues to preserve the integrity of AV calculations and the comparability between the levels of coverage long-term. However, we stated at the time of the proposed rule that we believed no administrable alternatives exist because the issue is one of innate mathematical incongruence, not methodological decisions. In the end, we stated that we believe the differing rates of changes between the three major factors of AV calculation pose an insurmountable regulatory problem created by the cost-sharing provisions of section 1302 of the Affordable Care Act. c. Statutory Adherence

As discussed in the proposed rule (91 FR 6379), we proposed to revise the cost-sharing parameters for bronze plans and to revise the cost-sharing requirements for catastrophic plans, respectively, to adhere to the cost-sharing provisions of section 1302 of the Affordable Care Act, given this regulatory issue.

Consistent with longstanding principles of statutory interpretation, we sought to give effect to all provisions of the Affordable Care Act so that they operate together in a coherent structure.\276\ We stated in the proposed rule that the Supreme Court has recognized that agencies should adopt statutory interpretations that harmonize related provisions wherever possible and should implement statutes in a manner that advances the overall statutory scheme.\277\ However, where two statutory requirements cannot reasonably be satisfied simultaneously, an agency must act in a manner that best effectuates congressional intent and preserves the operability of the relevant statutory framework.\278\

\276\ See FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000) (explaining that statutes should be interpreted as a “symmetrical and coherent regulatory scheme”); Gustafson v. Alloyd Co., 513 U.S. 561, 570 (1995) (statutory provisions should not be interpreted in a manner that renders any part “superfluous”).

\277\ See King v. Burwell, 576 U.S. 473, 492 (2015) (recognizing that reviewing courts will exercise independent judgment in evaluating whether the agency has acted within its statutory authority and noting that the Affordable Care Act's statutory language must be read in context and in light of the statute's structure and purpose).

\278\ See Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024).

We stated in the proposed rule that we believe that maintaining the AV requirement for metal-level plans is the more specific and operational statutory instruction, and adherence to it best serves Congress' intent. We stated that the AV requirement applies only to a defined subset of plans offered in the individual and small group markets, and establishes precise quantitative benchmarks that define the statutory coverage tiers themselves. We further stated that, by contrast, the maximum annual limitation on cost sharing applies broadly across all plan types and markets and functions as a general consumer protection ceiling rather than a plan-defining metric. In addition, we noted that compliance with the AV requirements necessitates detailed, plan-level calibration of cost-sharing parameters and is central to preserving Congress' deliberate creation of distinct

metal-level coverage categories, whereas the maximum annual limitation on cost sharing operates as a uniform backstop that does not distinguish among plan types. Thus, we stated in the proposed rule that we are prioritizing the highly specific statutory AV requirement over the generally applicable maximum annual limitation on cost-sharing.

We stated in the proposed rule that interpreting the AV requirement as the more specific statutory directive is consistent with how the Affordable Care Act, as originally passed, treated another conflict between cost-sharing limits and AV calculations. As originally passed, the Affordable Care Act included an annual limitation on deductibles for employer-sponsored plans under section 1302(c)(2) of the Affordable Care Act.\279\ Recognizing that this limitation would conflict with the AV, the statute provided that the limitation “shall be applied in such a manner so as to not affect the actuarial value of any health plan, including a plan in the bronze level.” \280\ Congress ultimately entirely abandoned any limitation on deductibles for employer-sponsored plans in 2014, while leaving in place the relevant AV requirements.\281\ We stated that this statutory history suggests that Congress did not intend maximum annual cost-sharing requirements for employer-sponsored plans to disrupt the AV calculation requirements.

\279\ See Patient Protection and Affordable Care Act, Public Law 111-148 Sec. 1302(c)(2), 124 Stat. 119, 166 (Mar. 23, 2010).

\280\ Id. Section 1302(c)(2)(C) of the Affordable Care Act.

\281\ See Protecting Access to Medicare Act of 2014, Public Law 113-93 Sec. 213, 128 Stat. 1040, 1047 (April 1, 2014).

For these reasons, we concluded in the proposed rule that the proposals that followed represented a reasonable and legally permissible approach to implementing section 1302 of the Affordable Care Act that gives effect to Congress' core design of distinct coverage tiers while preserving the overall operability of the statutory framework. Accordingly, we stated that the proposals reflect our obligation to implement section 1302's interrelated provisions in a manner that is understandable and workable. d. An Incremental Approach

In the proposed rule, we noted that any regulatory framework that permits plans to exceed the maximum annual limitation on cost sharing should be as limited as possible to still implement section 1302(c) through (e) of the Affordable Care Act so that these paragraphs operate together in as coherent a structure as Congress could have intended. We stated that since the issue becomes more pronounced each year due to the growing disparity in the rates of change among the three major components of AV calculation, absent a statutory change, we believe we should implement regulatory solutions in a gradual, proportional manner.

To that end, we stated that we view the set of proposals that followed as only the beginning of necessary regulatory changes to the cost-sharing parameters for metal-tier and catastrophic plans. Catastrophic and bronze plans are the two plans most demonstrably and presently affected by this issue, and so we proposed changes to the cost-sharing parameters for these plans first in the hopes of giving enrollees more PY 2027 options at lower premiums and with more attractive plan designs. Because we seek to minimize the extent that these plans may exceed the maximum annual limitation on cost sharing, we stated in the proposed rule that we anticipate proposing future amendments to the applicable regulations through notice and comment rulemaking to address other metal tiers--at the point that the growing disparity in the rates of change among the three major components of AV begins to affect these higher tiers, and after sufficient research into how to prevent unintended effects on the calculation of premium tax credits.

We stated in the proposed rule that, as demonstrated above, standard silver plans would already be non-viable if we had not already adjusted the standard population by capping enrollee spending at the 99.50th percentile of annual allowed amounts for all enrollees in the claims data. We stated that we considered proposing changes to the permissible cost-sharing parameters for silver plans in the proposed rule but chose not to at that time. Rather, we stated that our intent in the future would be to propose changes to the cost-sharing parameters for silver plans, when necessary, through future notice and comment rulemaking. Second-lowest cost silver plans are used as the benchmark to determine premium tax credit amounts. We stated that seeking changes to the permissible cost-sharing parameters for silver plans could have an outsized impact on the overall affordability of plans for subsidized enrollees, and we stated that we sought to minimize any destabilizing effects of the proposed policy by assuming such an incremental regulatory approach. We stated that for now, we would monitor and consider future incremental action we may take to change the cost-sharing parameters for the other metal tiers, and we invited comments about how we might calculate an appropriate threshold for flagging that the cost sharing incongruence is severely limiting silver plan design. We also sought comment on other implications that may exist for silver plans that do not exist for bronze and catastrophic plans. e. Bronze Plan Cost-Sharing Parameters

To ensure that plans designated at the bronze metal level can continue to exist in the future and to also preserve a meaningful difference between the AVs of bronze and silver plans, which we believe was part of the congressional intent of having metal tiers, in the 2027 Payment Notice proposed rule (91 FR 6380), we proposed to add new Sec. 156.136 that states, for plan years beginning on or after January 1, 2027, if an issuer offers a bronze plan (as defined at Sec. 156.140(b)(1)) in the individual market that complies with the cost- sharing requirements at Sec. 156.130 and the levels of coverage requirements at Sec. 156.140, it may also offer, within the same service area, bronze plans that utilize a cost-sharing design that exceeds the maximum annual limitation on cost sharing at Sec. 156.130 by amounts in increments of 50 dollars to achieve an AV within the standard bronze de minimis variation at Sec. 156.140(c), calculated as described in Sec. 156.135.

We further proposed, that, in order for an issuer to avail itself of the ability to offer individual market bronze plans that utilize a cost-sharing design that exceeds the maximum annual limitation on cost sharing, the issuer must also offer at least one individual market bronze plan in the same service area that utilizes a cost-sharing design that does not exceed the maximum annual limitation on cost sharing at Sec. 156.130 and complies with the levels of coverage requirements at Sec. 156.140. We stated that this proposed flexibility is necessary to support the design and offering of bronze plans with AVs closer to the 60 percent intended by the Affordable Care Act. We stated that the MOOP for such individual market bronze plans must be in increments of 50 dollars. Under the proposal, we stated that we would not specify a strict dollar amount as the upper bound by which issuers could exceed the maximum annual limitation on cost sharing; rather, issuers would calculate this amount so that it fits within the narrower bronze de minimis range at Sec. 156.140(c). We stated that we do not believe it is necessary to set such an upper bound because plan MOOPs would still be restricted by the

requirement that the plan's AV comply with the levels of coverage requirements at Sec. 156.140. However, we sought comment on whether we should set a strict dollar amount as the upper bound by which issuers could exceed the maximum annual limitation on cost sharing upon finalization of this final rule, and if so, what the upper bound should be.

In addition, we noted in the proposed rule that limiting this additional flexibility for bronze plans to issuers that also offer a bronze plan that complies with the existing cost-sharing requirements in the same service area ensures that, to the extent a bronze plan is available, there would be at least one in the service area that meets the maximum annual limitation on cost sharing. We stated that by allowing a wider range of possible cost-sharing designs at the bronze metal tier in the individual market, we would create opportunities for issuers to offer plans that are appealing to more consumers with lower premiums and more pre-deductible coverage than would have been possible without this proposal.

In the proposed rule, we considered imposing no precondition that issuers offer a bronze plan within the same service area that utilizes a cost-sharing design that does not exceed the maximum annual limitation on cost sharing at Sec. 156.130 to offer bronze plans that utilize a cost-sharing design that exceeds the statutory maximum annual limitation on cost sharing. However, we stated that we believe the precondition is necessary at this time because bronze plans are barely still viable in 2027 without the 99.50th percentile cap (a bronze plan with a deductible equal to maximum annual limitation on cost sharing has an AV of 63.91 percent in 2027) and we believe consumers must retain access to bronze plans that do not exceed the maximum annual limitation on cost sharing so that we can best signal our good faith efforts to adhere to the statute.

We stated in the proposed rule that if it is no longer possible to design a bronze plan with a MOOP set at or below the maximum annual limitation on cost sharing and a permissible bronze AV, then it would also no longer be possible to take advantage of the new proposed flexibility in bronze plans' allowed MOOP limit: as in, it would no longer be possible to additionally offer a non-expanded (standard) bronze plan with a higher MOOP limit. We stated that the proposed flexibility relies on the issuer already offering a bronze plan in the same service area which has a permissible bronze AV and complies with that plan year's maximum annual limitation on cost sharing as a prerequisite to setting a higher MOOP for additional bronze plans. If the market reaches this point, as we warned in the proposed rule--that a bronze plan with a MOOP set at the maximum annual limitation on cost sharing will be unable to fit within the bronze AV de minimis range according to that year's AV Calculator--we stated that we would need to propose a new approach to maintaining bronze plans' viability through future notice-and-comment rulemaking.

Thus, we stated in the proposed rule that we intend to require such plans for as long as these bronze plans remain actuarially viable; however, under the overall incremental approach described earlier, we stated that we may revisit this precondition in future rulemaking as AVs continue to rise. Given these circumstances, we considered and requested comment on whether we should allow an adjustment to the result of the AV Calculator (which uses the 99.50th percentile cap) that approximates an AV calculation based on a standard population which includes those highest-cost enrollees (that is, approximates what the AV output would be from an AV Calculator which includes claims from the 0.50th highest percentile). We sought comment on how to better align with standard actuarial practice in our interpretation of the AV Calculator's outputs in light of the statutory incongruence described in this section, and how future AV Calculators might appropriately include more of these high-cost enrollees in its standard population without causing unnecessary disruption to existing plans that seek to remain in the same metal tier in the following plan year. Alternatively, we sought comment on whether an issuer should be permitted to offer bronze plans which exceed the maximum annual limitation on cost sharing to achieve an AV between 58 and 62 percent only after a default adjustment to the 2027 AV Calculator's output for that plan design which approximates what the plan's AV would be if measured by an AV Calculator without a spending cap, and on whether a future release of the AV Calculator, such as the PY 2028 AV Calculator, could reduce or remove the spending cap.

We further proposed that this flexibility would apply only in the individual market, and rounded down to the next lowest multiple of 50 dollars. Specifically, we stated that we believe individual market consumers in particular would be interested in more plan choices offering lower deductibles and lower premiums. We further stated that we believe prospective consumers who do not qualify for APTCs may be deterred from enrolling in individual market plans due to the benefit design of current bronze plans. We stated that providing additional plan design flexibility may encourage individual market enrollment and in turn promote a healthier risk pool by capturing currently uninsured people.

We stated that, as already is the case, States that are the primary enforcers of AV standards would be responsible for ensuring that issuers that design bronze plans that exceed the maximum annual limitation on cost sharing do so to achieve an AV within the standard (non-expanded) bronze de minimis ranges at Sec. 156.140(c). Title XXVII of the PHS Act contemplates that States will exercise primary enforcement authority over health insurance issuers in the group and individual markets to ensure compliance with health insurance market reforms, which include the EHB requirements in 45 CFR subpart B. Under the proposal, we stated that States that enforce Affordable Care Act insurance market requirements would retain their primary enforcement authority over the EHB, and may determine that a particular bronze plan design unnecessarily exceeds the maximum annual limitation on cost sharing. We further stated that HHS would conduct such reviews of bronze plans offered in States where HHS directly enforces Affordable Care Act insurance market reform requirements.\282\ We invited comments about the enforcement of this proposed flexibility.

\282\ Pursuant to Sec. 150.203, in the event that a State notifies HHS that it does not have statutory authority to enforce or that it is not otherwise enforcing one or more of the provisions of title XXVII of the PHS Act, or if HHS determines that the State is not substantially enforcing the requirements, HHS has the responsibility to enforce these provisions in the State. As of the date of the proposed rule, the following States have notified HHS that they do not have the authority to enforce or are not otherwise enforcing the Affordable Care Act market reform provisions, including the EHB: Missouri, Oklahoma, Tennessee, Texas, and Wyoming.

We sought comment on the proposal. Specifically, we sought comment on what, if any, additional requirements we should consider in order for issuers to avail themselves of the flexibility to exceed the maximum annual limitation on cost sharing. For example, we also considered whether to propose allowing bronze plans to exceed the maximum annual limitation on cost sharing only when bronze plans would otherwise be non-viable (that is, impossible to design). In addition, we noted that we were interested in comments discussing

what additional consumer protections we can consider implementing to educate and notify consumers about individual market bronze plans that have a MOOP that does not exceed the maximum annual limitation on cost sharing. For example, we welcomed comments on imposing disclosure requirements on any such bronze plan to explain the plan's higher MOOP in the Summary of Benefits and Coverage (SBC) and on an Exchange website, though we noted that any such changes would be unlikely for PY 2027 due to time constraints preventing appropriate time to discuss and make a formal proposal in consultation with other Executive agencies including the Department of Treasury and Department of Labor. We sought comment on whether this policy should also apply to the small group market. We also sought comment on whether we should annually set a precise amount by which an issuer could utilize a plan design with cost sharing that exceeds the maximum annual limitation on cost sharing, or whether the proposed regulatory language is precise enough to limit the instances in which an issuer could offer such a plan. We sought comment on operational effects of this policy, such as whether these plans would be considered the same plan under Sec. 157.106(e)(3)(iv), and what impact this would have on plan crosswalking. We sought comment on these additional requirements related to permitting a high MOOP for some bronze plans, or any others commenters may identify, that we might finalize in this rule.

In the proposed rule, we noted that as we contemplate how this policy could apply to plans at higher metal levels, we were seeking comment on what special considerations may exist for those plans, and particularly for silver plans in determining the second lowest cost silver plan. We also sought comment on whether this flexibility should also apply to cost-sharing variants. Finally, we sought comment on whether we should propose changes to the bronze de minimis range and expanded bronze policy at Sec. 156.140(c)(1).

After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing the addition of Sec. 156.136 with the following modification: we are narrowing the flexibility proposed for individual market bronze plans such that these bronze plans are permitted to exceed the standard annual limitation on cost sharing by up to 130 percent of the standard annual limitation on cost sharing, rounded down to the nearest $50 increment. For PY 2027, that is $15,600 for self- only coverage and $31,200 for other than self-only coverage, based on multiplying the market-wide individual annual limitation on cost sharing by 1.3, that is, $12,000 x 1.3 = $15,600. We reiterate that the policy being finalized applies to individual market bronze plans only. We summarize and respond to public comments received on the proposal below.

Comment: Many commenters stated concerns that allowing bronze plans to exceed the standard annual limitation on cost sharing at Sec. 156.130 would increase out-of-pocket costs for consumers. These commenters cited that high deductibles are already required for bronze plans and warned of the proposal's potential cascading negative outcomes related to affordability generally, including unexpected higher out-of-pocket spending, increased medical debt, consumers dropping coverage upon understanding the effects of the plan's annual limitations on cost sharing, increased uncompensated care (particularly for rural and safety-net providers), and negative health outcomes due to delayed or foregone care. Several commenters raised affordability concerns specific to people with diabetes. Several commenters cited peer-reviewed studies and other publications \283\ demonstrating that enrollment in high-deductible health plans is associated with reduced adherence to care compared to enrollment in more affordable plans. A few commenters stated that the proposed change would effectively void the maximum annual limitation on cost sharing requirement by not specifying any ceiling on the MOOP limit that could be permitted for individual market bronze plans, and suggested specifying a strict dollar amount for the allowed upper bound. One of these commenters generally opposed changes that would increase out-of-pocket costs for consumers while citing particular concern with the lack of a strict dollar amount capping the annual limitation on cost sharing, which HHS had suggested in the proposed rule (91 FR 6380) as an alternative. In contrast, another one of these commenters generally approved of greater flexibility in plan designs, including for bronze plans, but they still approved of setting a specific maximum limit so as to increase the likelihood that a plan would use the proposed flexibility.

\283\ See Sara R. Collins and Avni Gupta, Commonwealth Fund, The State of Health Insurance in the U.S.: 2024 Biennial Survey (Nov. 21, 2024), https://www.commonwealthfund.org/publications/surveys/2024/nov/state-health-insurance-coverage-us-2024-biennial-survey; and AA Galbraith, A Sinaiko, M Gilkey, et al, Patient-Centered Outcomes Research Institute (PCORI), Effect of High-Deductible Health Plans and Preventive Drug Lists on Asthma Attacks, Medicine Use, and Out-of-Pocket Costs--The AFFORD Study (Apr. 2023), https://www.ncbi.nlm.nih.gov/books/NBK617067/.

Response: We appreciate the concerns raised by commenters regarding the affordability of plans with higher annual limitations on cost sharing. We acknowledge that higher out-of-pocket maximums can present financial challenges for some enrollees, particularly those with significant health care needs such as those with diabetes. We understand broadly that financial challenges can lead to forgone care, medical debt, and dropping coverage. We are aware of the body of research suggesting that high cost sharing can affect health care utilization and adherence, and we take these findings seriously. We understand that this proposal could shift more of the increasing costs of health care and potentially result in more enrollees who are unable to pay for their share of the cost. Still, we note that neither the proposed policy nor the policy finalized in this final rule require any issuer to offer an individual market bronze plan with a plan design that exceeds the standard annual limitation on cost sharing at Sec. 156.130. Issuers retain full discretion over whether to offer such plans, and States may prohibit issuers from offering bronze plans that exceed the standard annual limitation on cost sharing at Sec. 156.130 in their markets. As issuers that offer bronze plans with a design that exceeds the standard annual limitation on cost sharing will be required to offer at least one bronze plan in the same service area that does not exceed the maximum annual limitation on cost sharing under this policy as finalized, consumers shopping in the individual market will continue to have access to bronze plans with the standard annual limitation on cost sharing, as well as plans at other metal tiers. For the consumers who select one of the bronze plans that uses this new flexibility to set a higher MOOP limit, although they would have a higher MOOP, they would likely have lower premiums and potentially more plan designs from which to choose, including with varying cost sharing. Some commenters seemed to expect that some bronze plans having a higher MOOP limit would cause rural and safety-net providers financial harm by increasing uncompensated care; however, increasing consumer concern around affordability could also drive enrollees

to seek more cost-effective care and skip unnecessary visits. Therefore, while we understand concerns about affordability and the consequence of lack of affordability, we are not persuaded that the policy we are finalizing in this rule will lead to such adverse results that providers would be subject to higher financial losses from providing uncompensated care. In fact, we believe that people with significant health care needs will be much less likely to enroll in bronze plans in general, and even less likely to enroll in bronze plans with increased annual limitations on cost sharing.

We believe that this policy has several potential benefits. A higher annual limitation on cost sharing will provide issuers with greater benefit design flexibility in their QHP offerings. This in turn could encourage currently unsubsidized, uninsured consumers to enroll. These consumers who have forgone coverage due to cost are often healthier, and the addition of individual market bronze plans using this flexibility will improve the overall risk pool, which can bring down premiums for all enrolled in these plans. We believe that these potential benefits outweigh the potential risks related to affordability, particularly when the potential risks that commenters raised (such as increases to uncompensated care and delayed care) can be mitigated by a consumer selecting a bronze plan with a standard annual limitation on cost sharing or a plan offered at a different metal level, in which they would receive more covered care.

In response to comments requesting that we set a specific ceiling on the MOOP limit for individual market bronze plans, we are finalizing our proposed addition of Sec. 156.136 with a modification to add a ceiling on an individual market bronze plan's highest permissible MOOP limit. We believe setting this upper limit appropriately constrains the flexibility provided to issuers while preserving the policy's purpose of ensuring the continued availability of individual market bronze plans with plan designs that are attractive to consumers. We specifically selected the upper bound of 130 percent of the annual limitation on cost sharing for several reasons. First, this percentage is consistent with the multiplication factor we are finalizing for the catastrophic plan annual limitation on cost sharing starting with PY 2028, which provides a consistent framework. Second, a 130 percent ceiling preserves the core consumer protection function of the annual limitation on cost sharing, ensuring no bronze plan enrollees are subject to out-of-pocket costs that are disproportionate to the plan's bronze-tier design. At the same time, it provides issuers with sufficient flexibility to offer these additional bronze plan designs that are meaningfully distinct from standard bronze plans and catastrophic plans. Third, we considered whether a lower multiplier (such as 110 or 120 percent) would be sufficient to address the plan design viability problem identified in the proposed rule and concluded that a lower ceiling would not provide issuers with adequate flexibility to design bronze plans with meaningfully lower deductibles and more pre-deductible coverage. A 130 percent ceiling allows issuers to shift cost-sharing structure in a way that is actuarially meaningful, to enable lower deductibles offset by a higher MOOP among other plan designs, without exposing consumers to unlimited or unconstrained out-of-pocket liability. The 130 percent ceiling therefore functions as a consumer protection constraint on the outer boundary of issuer flexibility, not as an incentive to maximize cost sharing (that is, we do not expect every additional bronze plan to set the highest MOOP limit possible). For PY 2027, the 130 percent ceiling corresponds to $15,600 for self-only coverage and $31,200 for other than self-only coverage.

We are finalizing a ceiling of 130 percent of the annual limitation on cost sharing in this final rule for these reasons and in response to comments, as we agree that issuers would be more likely to offer such plans in the future if we provided greater clarity on the upper bound of what would be permissible for these additional bronze plans. We also agree that having a nationally established upper limit is an important consumer protection. We are considering whether to propose in future rulemaking a methodology by which we could annually establish a percentage, or another factor by which this upper bound is calculated from the annual limitation on cost sharing, in the annual guidance in which CMS releases the premium adjustment percentage, maximum annual limitation on cost sharing, reduced maximum annual limitation on cost sharing, and required contribution percentage for a given benefit year.

Comment: Many commenters stated concern about the potential impact of the higher proposed MOOP limits for catastrophic plans and bronze plans on market risk and premiums for metal tier plans. Some commenters specifically warned that a shift in enrollment between higher-MOOP catastrophic plans and APTC-eligible metal tier plans could result in significant, unintended changes to APTC amounts. Several of these commenters stated concern about shifting risk and enrollment and warned of a possible bifurcation of the market between higher-MOOP catastrophic plans and APTC-eligible metal tier plans, fearing it could distort risk pools and increase premiums for subsidized enrollees. One commenter suggested that creating a clearer AV separation between bronze plans and silver plans would help restore rate separation between the two plan types. Several commenters requested that CMS provide more detailed estimates of the combined impact of the proposed bronze MOOP flexibility and catastrophic plan MOOP increase on enrollment, risk, and premiums before finalizing either proposal. Several commenters supported our efforts to find ways to bring lower premium plans to the Exchange that could entice healthy (unsubsidized, but unable to afford full-cost metal tier coverage) enrollees to maintain their enrollment in an individual market health insurance plan, while expressing disagreement with our projected net impact of these plan design policies.

Response: We agree with commenters who recognized the importance of expanding access to lower-premium plan options for price-sensitive, unsubsidized enrollees. We also appreciate the concerns raised about potential risk pool and premium impacts and acknowledge that changes to plan design flexibility can affect enrollment patterns and, consequently, risk pool composition and premiums. In response to commenters who did not agree with our projected net impact, we acknowledge that projections of enrollment response to plan design changes involve inherent uncertainty. We note that the policy is optional for issuers and does not displace existing bronze plan offerings; accordingly, the downside risk of an adverse enrollment shift is constrained by the continued availability of standard bronze plans and plans at other metal tiers.

We further note that the flexibility in setting a MOOP limit no higher than 130 percent of the standard annual limitation on cost sharing for some bronze plans is designed to expand, not contract, the range of bronze plan designs available to consumers. We agree that encouraging more offerings of lower costing bronze plans--such as less generous bronze plans within the non-expanded AV de minimis range--will aid in differentiating bronze plans from silver plans, resulting in the benefit of more variation in plan design available to enrollees. By allowing issuers to offer bronze plans with lower

deductibles and more pre-deductible coverage (made possible by a higher MOOP limit), we believe this policy would attract currently uninsured individuals who are deterred by the high deductibles of bronze plans and not eligible for subsidies, which could improve the overall risk pool. We expect issuers to design plans that are more appealing to enrollees, as this flexibility enables offering more pre-deductible coverage that quickly raises a plan's calculated AV, as opposed to coverage that is not provided on a pre-deductible basis. When a benefit is provided pre-deductible, it has a greater impact on AV, because the plan bears the cost of those services prior to the consumer meeting any deductible, thus increasing the plan's expected expenditures relative to a standard population. In contrast, when the same benefit is subject to a deductible, a greater portion of the cost is shifted to the enrollee, reducing the plan's share of total allowed costs and, consequently, its AV, and fewer people are expected to use the benefit.

We do not expect a significant APTC spending impact from this flexibility afforded to additional bronze plans, as we are not extending the flexibility to silver plans, nor do we expect such significant offerings of and enrollment into these bronze plans with higher MOOP limits such that it would skew the market's risk. We will monitor the impact of this policy on enrollment, risk pool composition, and premiums and will consider whether additional action is warranted in future rulemaking. We do not expect any unique compounding effects in PY 2028 and future plan years when catastrophic plans are newly required to adhere to a higher annual limitation on cost sharing, including in plan years when some of those catastrophic plans utilize the flexibilities afforded to multi-year plans discussed in section III.E.6. of this final rule. We disagree with commenters who viewed the combined effect of these two proposed policies as requiring a unified impact analysis prior to finalization. We have analyzed enrollment and premium effects of current plan policy decisions on bronze plans and catastrophic plans, as described in the preceding sections. We are not convinced that attempting to project the combined enrollment effects of these two policies would yield instructive results given the range of issuer design choices, State market conditions, and consumer behavior variables that will determine actual uptake. We have relied on available data--including enrollment trends in catastrophic and bronze plan tiers, AV modeling, and the risk adjustment framework applicable to catastrophic plans--to inform our assessment of likely market effects. We believe they represent a reasonable basis for the policy as finalized. Our view is that this policy will attract currently uninsured, price-sensitive consumers without materially disrupting the risk pool for subsidized metal tier enrollees, which is supported by available enrollment data, actuarial modeling, and the optional, issuer-discretionary nature of the policy.

Comment: Several commenters noted their belief that CMS lacks statutory authority to finalize a policy with an increased annual limitation on cost sharing for catastrophic plans and bronze plans. Several commenters stated that the proposed policy would allow issuers to exceed the annual limitation on cost sharing for catastrophic plans and some bronze plans, which commenters stated is not reflective of Congress' intent when passing the Affordable Care Act. Although some commenters agreed with CMS that the increasing difficulty in creating bronze plans is problematic and a few commenters agreed with CMS about the value in differentiating catastrophic plans and bronze plans, they opined that only Congress can fix this problem.

Some commenters stated that the proffered justification for the policy--the impossibility of creating a bronze plan within the current de minimis range--is a policy justification and not an actual statutory conflict, since it is still possible to create a bronze plan. They stated that mathematical difficulty is not the same as mathematical impossibility. Therefore, some commenters suggested that CMS' reliance in the proposed rule on Gustafson v. Alloyd Co., 513 U.S. 561, 570 (1995), is misplaced. Other commenters noted that even if it were impossible to create bronze plans within the AV de minimis range, this does not permit CMS to disregard the statute. Some commenters noted that nothing requires issuers to offer bronze plans.

Some commenters stated that because CMS has modified the AV Calculator in the past to ensure that issuers can continue to create bronze plans, CMS could continue to use this approach, and the statutory impossibility noted in the proposed rule does not actually exist. Those commenters stated that CMS has an obligation to first consider less harmful alternatives and that to do otherwise would be arbitrary and capricious.

Response: We do not agree with commenters that we lack statutory authority to adopt the proposed flexibility to allow issuers to offer individual market bronze coverage with a non-standard annual limit on cost sharing. As noted above, the policy finalized in this final rule does not require any issuer to offer such a bronze plan, and consumers will continue to be able to purchase bronze plans with the standard annual limitation on cost sharing, as well as plans at other metal tiers. Issuers also retain full discretion over whether to offer such plans, and States may prohibit issuers from offering bronze plans with non-standard annual limitations on cost sharing in their respective individual markets. This flexibility will expand access to affordable, comprehensive coverage in the private market, which aligns with the Congress' intent when passing the Affordable Care Act's private market reforms and consumer protections.\284\ It will provide an additional, affordable coverage option to Americans.

\284\ See 90 FR 27174 through 27178 for previous policy changes prioritizing affordable coverage.

While we believe that there are policy benefits to allowing issuers greater flexibility in plan design, which should in turn give consumers additional choice, the ultimate purpose of this policy is to ameliorate a statutorily created problem. Section 1302 of the Affordable Care Act establishes parameters for the AV and annual limitation on cost sharing policies. We have modified these policies over the years, within the confines of section 1302 of the Affordable Care Act. Some policies have changed how the annual limitation on cost sharing is calculated, which has resulted in an increased annual limitation on cost sharing (90 FR 27166 through 27168). Other policies, such as changing the standard population, have modified how AV is calculated, which has generally resulted in issuers being able to continue to design bronze plans. However, we believe that we have exhausted reasonable methodological changes to calculation of AV and the annual limitation on cost sharing. Although we could attempt to finalize additional changes to the AV Calculator methodology or underlying data sources to preserve bronze plans, we are not convinced that such changes would comply with section 1302(d) of the Affordable Care Act and risks rendering the AV Calculator meaningless. Specifically, as we stated earlier in this rule and in the proposed rule, we are not aware of any administrable, actuarially sound regulatory alternatives that could mitigate this problem. We provided examples of alternatives that we considered but did not implement,

such as trending the AV Calculator to account for changes in the standard population. However, we believe mathematical adjustments made for the sole purpose of guaranteeing certain AV outputs would make the AV Calculator meaningless, and such adjustments to lower the AV results for bronze plans may not be enough to maintain compliance with section 1302(d)(1)(A) of the Affordable Care Act (that is, that a qualified health plan offered at the bronze level of coverage would be designed such that it provides benefits “that are actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the plan”). Therefore, we continue to believe that a real statutory conflict exists, and that the best way to solve the conflict is to give issuers the flexibility, at their option, to offer plans exceeding the standard annual limitation on cost sharing as long as they offer a plan that meets the standard annual limitation on cost sharing. This resolution both ensures that plans meeting the standard annual limitation on cost sharing will be available and that all plans will meet the statutorily-created AV requirements.

We do not agree with commenters that this approach deviates from congressional intent. The Congress included requirements for AV and the annual limitation on cost sharing as consumer protections that must by their nature function together. Specifically, the annual limitation on cost sharing is an important input when calculating AV. We believe that allowing issuers to optionally offer plans with a non-standard annual limitation on cost sharing if they also offer at least one plan with the standard annual limitation on cost sharing is the most reasonable option, given that it preserves what commenters believe to be congressional intent regarding AV (that is, issuers can create bronze plans within the bronze de minimis range) and the annual limitation on cost sharing (that is, consumers will still have access to plans that meet with the standard annual limitation on cost sharing). We considered other options, such as making further changes to the AV policy, which would likely violate section 1302(d) of the Affordable Care Act and most likely need to apply to plans at all metal levels (and certainly all plans at the bronze level, thus not giving consumers any plans that meet statutory AV requirements). We further considered whether to do nothing and let bronze plans become non-viable altogether. Although there is no requirement for issuers to offer bronze plans, as noted previously, we believe that congressional intent was, at a minimum, for bronze plans to be able to exist. We noted in the proposed rule that there are several factors that influenced our decision to propose this policy; namely, the fact that without further changes, it will soon become impossible to create a bronze plan, and the need for the AV Calculator, policy, and underlying methodology to the AV Calculator to reflect an accurate representation of AV and the components of AV such as the standard population and not something shoehorned due to a mathematical problem. Thus, of the various options we identified, the policy we finalize in this rule is one that meets the statutory requirements, because it allows the existence of plans that meet AV, with an underlying sound AV methodology, and that meet the annual limitation on cost sharing. The other options we identified would put us clearly out of compliance with AV requirements or cause bronze plans to become non-viable. Although issuers are not required to offer bronze plans, a plain reading of section 1302(d) of the Affordable Care Act, which creates the bronze metal tier, would assume Congress created the bronze tier with the assumption that there is a viable, long-term market for such plans and that at least some issuers would offer them. This assumption that bronze plans are meant to remain viable is borne out by the consistent availability of bronze plans on the Exchanges since PY 2014, as described earlier in this section. In PY 2025 alone, there were 101 bronze plan options offered on-Exchange in the FFE which had approximately 5.4 million enrollees combined (see Table 11: Percentage of FFE Bronze Plans by AV Percentage, 2018 through 2025). But the problem is not solely limited to bronze plans: as noted in the proposed rule, without further action, this problem will eventually extend to the silver metal tier as well, and issuers are required to offer plans at the silver metal level. The unpredictable progression of plan design viability underscores why additional efforts to rectify this statutory incongruence by changing the AV methodology could not fully resolve this issue while simultaneously introducing more uncertainty into the QHP market. We commit not to deviate from generally accepted actuarial principles, despite commenters supporting further alterations to the AV methodology aimed at ensuring that appealing plan designs are still possible. We emphasize again that we will monitor the viability of silver plans, gold plans, platinum plans, and the reduced cost sharing plan variations but have not observed the same immediate negative impacts we have discussed as particularly impacting catastrophic plans and bronze plans. While these pressures are most visible at these lowest tiers now, accepting further AV methodological changes to maintain the viability of bronze plans would imply that we believe such changes to maintain other metal tiers are similarly acceptable. Yet such a result would be noncompliant with section 1302(d) of the Affordable Care Act. We note that finalization of this policy in no way precludes further congressional action.

We disagree with commenters that our reliance on Gustafson is misplaced on the grounds that it is still feasible to create bronze plans and that we could have made further changes to the AV Calculator to ensure that bronze plans can continue to exist in future plan years. We are finalizing a policy designed to ensure consumer access to bronze plans with the standard annual limitation on cost sharing--it is not an acknowledgment that the underlying conflict does not exist. It is well established that we already made methodological changes to the AV Calculator as a result of the increasing difficulty creating bronze plans. As we stated in the proposed rule and in this final rule, the AV of a bronze plan with a deductible set to the standard annual limitation on cost sharing is already 63.91 percent in PY 2027, which exceeds the standard bronze de minimis range, and we have no reason to believe this trend will reverse. We also discussed that although we are contemplating future changes, as we do every year before releasing the AV Calculator, we also believe that our policy must also reflect Congress' intent establishing AV and metal tier requirements and only allowing issuers to use a de minimis variation. While we will continue to explore changes to the AV Calculator, we believe that further AV Calculator changes to preserve the existence of bronze plans would jeopardize our compliance with section 1302(d) of the Affordable Care Act. As held in Gustafson, the solution here is to ensure that neither section of the statute is superfluous. We believe that the final policy and approach adopted in this final rule preserves the two statutory sections being able to be read in tandem.

Comment: A few commenters supported our existing interpretation of and approach to the AV Calculator's methodology and results, as reflected in the 2027 AV Calculator, such as including a spending cap for the highest cost enrollees. No commenters

supported adjusting the 2027 AV Calculator or future AV Calculators to remove the spending cap or its impact on AV Calculator calculations.

Response: While these comments are out of scope for this final rule because they are not specifically about the proposed changes to the cost sharing of catastrophic plans and individual market bronze plans, we appreciate the commenters' attention and feedback.

Comment: Several commenters urged CMS to decline to finalize the proposal entirely, or at the very least to provide more detailed estimates of the impact of the change to the annual limitation on cost sharing applicable to bronze plans, both in isolation and in combination with other proposed changes to catastrophic plans, before finalization. Another commenter stated that the policy was premature and that CMS should conduct additional data modeling and research before finalizing the proposal. Some commenters stated concerns about finalizing this policy for PY 2027. Several commenters noted that QHP certification and rate and form filings for PY 2027 have already commenced, making timely implementation difficult. In particular, some commenters noted that the timing would be overly burdensome for States with a State Exchange. Some commenters also noted potential litigation related to this proposal as a reason to delay implementation.

Response: We appreciate the timing concerns raised by commenters and acknowledge that QHP certification and rate and form filings for PY 2027 have already commenced. We note, however, that nothing in this final rule requires issuers to offer a bronze plan with a plan design that exceeds the standard annual limitation on cost sharing at Sec. 156.130; issuers that have already filed bronze plan designs are not required to modify those designs to increase the plans' MOOP limit for PY 2027. Additionally, States, including those with a State Exchange, could prohibit issuers from offering bronze plans that exceed the standard annual limitation on cost sharing at Sec. 156.130. Therefore, we believe that this flexibility for both issuers and States sufficiently mitigates the timing concerns raised. Nothing in this final rule requires issuers to refile bronze plans for PY 2027. If an issuer wishes to amend its rate and form filing and QHP application materials and believes that it has time to do so, this final rule permits that, subject to any State requirements.

We disagree with comments that this policy should be more fully researched prior to finalization. We conducted robust research and analyses prior to proposing this policy. In fact, prior to proposing this policy, we spoke with States about the difficulty in creating bronze plans and have also made changes to the AV Calculator to ameliorate this difficulty, as stated in the AV Calculator methodology documents that we issue annually.\285\ The difficulty in creating a bronze plan is not a new problem; indeed, we spoke of this problem in the 2017 Market Stabilization Rule (82 FR 18369) when we created the expanded bronze de minimis range. For enrollment and premium impact estimates, we note that this policy is optional for issuers and does not require any issuer to offer a bronze plan with a non-standard MOOP. The range of potential enrollment effects is therefore bound by issuer discretion, State authority to prohibit such plans, and the continued availability of standard bronze plans and other metal tier options. We do not believe that projecting enrollment effects with a degree of precision that could inform policymaking is presently feasible given the range of issuer design choices, State market conditions, and consumer behavior variables that will determine actual uptake. We believe that the policy we are finalizing in this rule represents the best possible outcome since it ensures that bronze plans that meet the standard annual limitation on cost sharing at Sec. 156.130 continue to exist and also preserves the integrity of the AV Calculator, such that there still is a meaningful differentiation between metal tiers. We also do not believe that commenters' perceived litigation risk is a justification to delay implementation. Nothing requires issuers to offer these plans, nor States to certify or approve them. In addition, nothing prevents issuers from conducting a risk assessment when deciding whether to offer these plans for PY 2027. We reiterate that we will monitor the impact of this policy and will consider whether additional action is warranted in future rulemaking.

\285\ These documents are available here: https://www.cms.gov/marketplace/resources/regulations-guidance.

Comment: Several comments stated that consumers would need robust education about bronze plans with expanded MOOPs to ensure they understand what they are purchasing. One commenter requested that CMS propose this policy through a Tri-Department rule with the Departments of Labor and Treasury, and propose corresponding updates to the SBC to inform consumers if their bronze plan exceeds the annual limitation on cost sharing at Sec. 156.130. A few commenters noted that there should be required consumer disclosures when a bronze plan has an annual limitation on cost sharing that exceeds that at Sec. 156.130. A few other commenters cited the need for a robust consumer education campaign prior to any issuer offering such plans. Many commenters stated that people who help consumers select coverage, such as assisters, agents, brokers, and web-brokers, should be required to undergo training on these changes. One commenter cited a study noting that a large percentage of adults have difficulty understanding cost sharing.

Response: We agree that consumer education is of the utmost importance and that individuals such as assisters, agents, brokers, and web-brokers who help consumers select and enroll in coverage have a special role in this. We appreciate the specific suggestion that such individuals helping consumers be required to undergo training on these changes so that they can help consumers make informed decisions. We often provide training and information to such individuals and will consider ways to facilitate this in the future. The annual limitation on cost sharing for any plan offered on an Exchange is already displayed to consumers during the plan selection process on HealthCare.gov and State Exchange websites, regardless of whether the plan's MOOP limit exceeds the standard annual limitation on cost sharing defined by Sec. 156.130. Consumers can compare plans' MOOP limits, including plans with higher MOOP limits offered under this policy, alongside the premiums, deductibles, and other cost-sharing information. This existing display infrastructure provides a meaningful baseline of consumer transparency, and we encourage State Exchanges to ensure that their plan display similarly makes the MOOP limit of each plan prominent and accessible to consumers. To the extent that consumers may find cost sharing confusing, we are confident that the resources we have mentioned will mitigate such confusion. We take consumer education seriously, and for that reason we regularly review changes to HealthCare.gov, educational materials, and CMS-created training for those who help consumers.

Given that issuers, Exchanges, and the SBC currently provide information about the annual limitation on cost sharing and plans' MOOP limits, we do not believe that the SBC requires an amendment to specifically note when a given plan's MOOP limit exceeds the standard annual limitation on cost sharing set by Sec. 156.130. As such, because we are not proposing any

amendments to the SBC, we also do not believe that Tri-Department rulemaking is required in this instance. Further, we believe that consumers want to know the specific dollar amount of their plan's MOOP limit, and are less concerned by the conceptual definition of the standard annual limitation on cost sharing or by how much their plan's MOOP limit exceeds it. For example, nothing prohibits an issuer from offering a bronze plan with a MOOP limit lower than the standard annual limitation on cost sharing set forth at Sec. 156.130. However, HealthCare.gov does not flag these plans' MOOP limits as being under the statutory maximum, relative to the standard annual limitation on cost sharing.

Comment: Some commenters raised questions about the operational effects of this policy. One commenter requested confirmation of whether bronze plans with a higher permitted MOOP limit would be considered the same plan under Sec. 157.106(e)(3)(iv), for the purposes of crosswalk, as the bronze plan with a standard MOOP offered by the issuer in the same area.

Several commenters opposed the extension of the flexibility to silver plans, and specifically warned about the mixed impact of the proposed requirements on catastrophic plans alone as shifting overall risk and premium shifts for the wider QHP and insured market (see the next subsection for in-depth discussion). One commenter stated concern about the possibility of market disruption and subsequent negative impact to American Indian and Alaska Native (AI/AN) plan variations.

Response: Issuers and States may request additional operational guidance to assist with PY 2027 operations, such as for the purposes of determining the automatic plan crosswalk hierarchy and its treatment of bronze plans with higher MOOP limits. Auto-enrollment into and out of these bronze plans will follow the existing hierarchy under Sec. 156.335(j), including the bronze plans that have a MOOP limit set higher than the standard annual limitation on cost sharing as permitted by this new plan design flexibility.

Given that we did not receive comments that supported extending the flexibility in the annual limitation on cost sharing to the small group market, higher metal tiers including silver plans, or plan variants, we are finalizing this policy as applicable to the individual market only and are not extending this flexibility to the small group market at this time. We appreciate the concerns raised about potential effects for those enrolled in AI/AN plan variations and other metal tiers, and are also finalizing this policy without applying it to the on-Exchange cost sharing plan variations (including plan variations only available to AI/AN enrollees) or any other metal tiers (that is, to the silver, gold, and platinum plans). As stated in the proposed rule, we intend to continue researching what might be an appropriate threshold for determining that a silver plan (or higher metal tier plan) has become too difficult or impossible to create, and any potential unanticipated or negative effects related to AI/AN plan variations. We will continue to monitor whether similar challenges arise in the small group market or in the cost-sharing plan variations, as well as operational implications of the combined plan policy changes, and we will consider whether further action through future rulemaking is warranted. f. Catastrophic Plan Cost-Sharing Requirements

To best preserve a meaningful difference between the AVs of bronze and catastrophic plans, in the 2027 Payment Notice proposed rule (91 FR 6382), we proposed to amend Sec. 156.155(a)(3) to require catastrophic plans to provide no benefits for any plan year (except as provided in Sec. 156.155(a)(4), (b), and (c)) until an amount equal to 130 percent of the maximum annual limitation on cost sharing, rounded down to the next lowest multiple of 50 dollars, is reached.

We stated in the proposed rule that the issue regarding the implementation of the maximum annual limitation on cost sharing and AV also impacts catastrophic plans. We noted that issuers do not have flexibility in varying the cost sharing for catastrophic plans; the Affordable Care Act requires catastrophic plans to have a deductible and MOOP set to the maximum annual limitation on cost sharing and provide few specific benefits pre-deductible at section 1302(e)(1)(B). We stated that because of this rigidity, catastrophic plans do not have prescribed AV requirements. Nevertheless, we stated that the perceived value of catastrophic plans is still affected by the conflict. We estimated that the year-over-year AVs for catastrophic plans are gradually rising, just like metal-tier plans. However, we noted that they are rising at an even faster rate than bronze plans.

We noted that an eligible consumer might prefer to select a bronze plan over a catastrophic plan if the catastrophic plan has a similar premium to the bronze plan and has a comparable AV to a bronze plan, but the bronze plan is able to provide more pre-deductible benefits and lower deductibles and MOOPs. We stated that this obvious choice is evident in enrollment data; enrollment in catastrophic plans on the FFEs has decreased every year since 2016 while bronze plan enrollment has increased. In 2016, nearly 100,000 people enrolled in catastrophic plans, but only about 20,000 people enrolled in catastrophic plans in 2025. Since we expanded the bronze de minimis ranges in 2018, enrollment in bronze plans has more than doubled from about 2.5 million to about 5.4 million in 2025. We stated that we believe the continuous rise in AVs for bronze plans and the decrease in enrollment for catastrophic plans may be causally connected, though we sought comment on other potential reasons to explain this phenomenon.\286\

\286\ For example, section 1302(c)(1) of the Affordable Care Act requires HHS to index the maximum annual limitation on cost sharing forward in accordance with the premium adjustment percentage, while the IRS indexes the maximum allowable MOOP for HDHPs forward to account for inflation (see section 223(c)(2)(A)(ii)(I) of the Code). This creates a discrepancy between the Affordable Care Act's maximum annual limitation on cost sharing and the maximum allowable HDHP MOOP, which could also explain the recent shift in bronze plans at the upper end of the permissible +5 range.

We stated in the proposed rule that we believe that catastrophic plans only appeal to consumers when there is a clear difference in the perceived value between catastrophic and bronze plans. We stated that when there is such a clear difference, the healthier consumers that are generally eligible and best suited to enroll in catastrophic plans are more motivated to select a catastrophic plan in lieu of a bronze plan. We stated that this is plainly what Congress intended.

Accordingly, we proposed a revision to Sec. 156.155 that would more clearly distinguish catastrophic plans from bronze plans. We proposed to require catastrophic plans to provide no benefits for any plan year (except as provided in Sec. 156.155(a)(4), (b), and (c)) until an amount equal to 130 percent of the standard annual limitation on cost sharing, rounded down to the next lowest multiple of 50 dollars, is reached, beginning in 2027. We stated that for PY 2027, this amount would be $15,400. We stated that we chose to propose multiplying the standard annual limitation on cost sharing by a factor of 130 percent because we estimated this would lower the estimated AV for these catastrophic plans to 55 percent; we stated that by definition, increasing the cost sharing

for which consumers are responsible in a plan design reduces some of the market pressure that drive increasing premiums. We stated that we believe this is a reasonable estimate for a theoretical AV of catastrophic plans, as it strikes a balance between comprehensiveness of coverage and premium affordability for healthier enrollees.

We stated that this higher cost-sharing limit for catastrophic plans would allow for a more meaningful difference between the cost sharing typically expected for catastrophic and bronze plans and would allow issuers to more aggressively price catastrophic rates lower so that cheaper catastrophic plans would appeal to the kinds of consumers that we believe should tend to be enrolled in catastrophic plans especially the healthy, non-subsidized enrollees who may be disincentivized from enrolling in a QHP due to the rise in costs. However, we sought comment on whether we should strive for a theoretical AV for catastrophic plans that is higher or lower than 55 percent, including whether we should phase in this multiplication factor over a number of plan years to ease the impact on catastrophic plan cost sharing, and how the availability of catastrophic plans at 130 percent of the maximum annual limitation on cost sharing would affect the landscape of plans available to consumers. We reserved the ability to finalize a different factor than 130 percent in the final rule after reviewing public comments. In addition, we solicited comments that address whether, in potentially finalizing this proposal, we should not require catastrophic plans to provide no benefits for any plan year (except as provided in Sec. 156.155(a)(4), (b), and (c)) until an amount equal to 130 percent of the maximum annual limitation on cost sharing. Alternatively, we solicited comments that address whether we should, in potentially finalizing this proposal, require issuers to offer, in the same service area, at least one catastrophic plan that provides no benefits for any plan year (except as provided in Sec. 156.155(a)(4), (b), and (c)) until an amount equal to 100 percent of the maximum annual limitation on cost sharing, as a precondition to being able to offer catastrophic plans that provide no benefits for any plan year (except as provided in Sec. 156.155(a)(4), (b), and (c)) until an amount equal to 130 percent of the maximum annual limitation on cost sharing. We also solicited comment on whether we should, in potentially finalizing this proposal, alternatively allow catastrophic plans to provide no benefits for any plan year (except as provided in Sec. 156.155(a)(4), (b), and (c)) until an amount that could be less than 130 percent of the maximum annual limitation on cost sharing (but not less than 100 percent). We stated in the proposed rule that this proposed approach for catastrophic plans harmonizes plan and market outcomes with section 1302(c) through (e) of the Affordable Care Act to the greatest extent possible to preserve meaningful catastrophic plan availability without jeopardizing the integrity of the metal-tier framework that Congress envisioned. And, we stated that while raising the maximum annual limitation for catastrophic plans beyond what Congress specified is not an action we take lightly, we believe that, due to the mathematical irreconcilability created by current section 1302(c) through (e) of the Affordable Care Act, this proposal is necessary and most narrowly-tailored to ensure the coherent implementation of the Affordable Care Act's overall statutory scheme with as minimal disruption to consumers as possible. Per the previous section, we also proposed to allow issuers to offer catastrophic plans with a multi-year term: all catastrophic plans that an issuer wishes to offer for PY 2027 would be required to use the higher annual limitation on cost sharing.

We also sought comment on whether there would be impacts to HHS risk adjustment as a result of requiring catastrophic plans to provide no benefits for any plan year (except as provided in Sec. 156.155(a)(4), (b), and (c)) until an amount equal to 130 percent of the standard annual limitation on cost sharing, rounded down to the next lowest multiple of 50 dollars, is reached--or as we are referring to it in this final rule, the catastrophic plan annual limitation on cost sharing. Finally, we considered whether the guidance document on the “Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage,” or another regulatory vehicle, might be more appropriate for annually releasing this additional flexibility for defining plans' annual limitation on cost sharing, and invited comment on where to release and seek comment on the updated annual limitations on cost sharing ahead of each plan year.

We sought comment on all aspects of this proposal.

After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing the amendment to Sec. 156.155(a)(3) as proposed, with the following modifications: we are delaying implementation of the policy until PY 2028 and modifying the dollar amount calculation provided in the proposed rule to correct an inadvertent mathematical computation error in the proposed rule's calculation of 130 percent of the maximum annual limitation on cost sharing. We summarize and respond to public comments received on the proposal below.

Comment: Some commenters noted that the proposed rule's calculation of 130 percent of the standard annual limitation on cost sharing for PY 2027 appeared to contain a mathematical error. Specifically, commenters noted that 130 percent of $12,000 equals $15,600, not $15,400 as stated in the proposed rule.

Response: We appreciate commenters identifying this error. The proposed rule inadvertently stated that 130 percent of $12,000 equals $15,400, which is incorrect. Because we are not finalizing this policy for PY 2027, this matter is moot for catastrophic plans but remains relevant to bronze plans as discussed in the previous subsection. We will consider finalizing the annual limitation on cost sharing applicable to catastrophic plans for a given plan year in the annual PAPI guidance entitled, “Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage”, except when we propose methodology changes through notice-and-comment rulemaking. We are finalizing the annual limitation on cost sharing for catastrophic plans as 130 percent of the standard annual limitation on cost sharing, rounded down to the next lowest multiple of $50, to be effective in PY 2028.

Comment: Some commenters supported the proposal and noted that if finalized, it would spur innovation and improved plan designs.

Response: We agree with these commenters. It is our hope that this final policy will give issuers additional flexibility to innovate and create new plan designs.

Comment: Many comments stated concern that requiring catastrophic plans to use an annual limitation on cost sharing equal to 130 percent of the standard annual limitation on cost sharing would significantly increase out-of-pocket costs for catastrophic plan enrollees. Commenters noted that catastrophic plans already require enrollees to pay most costs until

reaching high out-of-pocket limits, and that increasing the MOOP for these plans would expose enrollees to substantial financial risk. Several commenters cited studies demonstrating that high cost-sharing is associated with reduced adherence to care, delayed treatment, and worse health outcomes. Commenters representing patients with chronic conditions, including diabetes, stated particular concern that high deductibles would discourage early treatment and worsen outcomes for individuals who need ongoing care. Some commenters stated that the 130 percent factor is too high and would expose enrollees to unacceptably high out-of-pocket costs. A few commenters emphasized that protecting people from bankruptcy was a core part of the Affordable Care Act. Other commenters suggested that CMS should phase in the multiplication factor over a number of plan years to ease the impact on catastrophic plan cost sharing. A few commenters were critical of using a theoretical AV for catastrophic plans as a design target, noting that the statute does not require AV for catastrophic plans, and stated that this did not provide a sufficient legal basis for exceeding the statutory MOOP. Some commenters suggested using a sliding income-based scale for the annual limitation on cost sharing. Some commenters supported the proposal broadly, but noted their belief that current premiums for catastrophic plans are too high and would need to be substantially lower to see substantial enrollment growth.

Response: We appreciate the concerns raised by commenters regarding the affordability of catastrophic plans under this proposed policy. We acknowledge that higher out-of-pocket maximums can present financial challenges for some enrollees, particularly those with significant health care needs. We are aware of the body of research suggesting that high cost sharing can affect health care utilization and adherence, and we take these findings seriously.

However, we note that the purpose of this policy is to restore a meaningful distinction between catastrophic plans and bronze plans--a distinction that Congress plainly intended and that has been eroded by the gradual rise in the AV of catastrophic plans. As enrollment data demonstrates, catastrophic plan enrollment on the FFEs has decreased every year since 2016, from nearly 100,000 enrollees in 2016 to approximately 20,000 enrollees in 2025. We believe this decline is attributable in part to the convergence of catastrophic and bronze plan AVs, which has made catastrophic plans less attractive to the healthy, non-subsidized enrollees for whom they were designed. Commenters recognized current catastrophic plan premiums are too high to drive enrollment growth, a fact that supports the policy's rationale: the current convergence of catastrophic and bronze plan AVs has eliminated the premium differential that makes catastrophic plans attractive. By restoring a meaningful AV distinction, we believe this policy will make catastrophic plans more attractive to these consumers, potentially lowering catastrophic plan premiums and improving the overall risk pool for catastrophic plans, and increasing catastrophic plan growth.

We do not refute the studies cited by commenters about the impact of the financial burden of high cost-sharing on chronically ill and low-income individuals. Consumers who are aware of their chronic illness and use health insurance coverage to manage it would not be likely to select catastrophic coverage, even when they qualify for it. The net impact we anticipate on low-income consumers who are eligible for catastrophic plans will hopefully attract the enrollment of price- sensitive consumers, ideally capturing younger, healthy individuals who would otherwise go uninsured. An uninsured individual has no bankruptcy protection against health costs, let alone a required limitation on any of their out-of-pocket health spending. A catastrophic plan enrollee with a 130 percent MOOP has a defined, capped out-of-pocket maximum. The policy therefore improves financial protection relative to the alternative of no coverage, even if it does not provide the same protection as a metal tier plan.

After consideration of comments, we are finalizing a multiplication factor of 130 percent of the maximum annual limitation on cost sharing for catastrophic plans, as proposed. We believe this factor appropriately balances the need to restore a meaningful AV distinction between catastrophic and bronze plans with the need to minimize disruption to catastrophic plan enrollees. We estimate that this factor will generally result in an AV of approximately 55 percent for catastrophic plans, which we believe is a reasonable estimate that strikes a balance between comprehensiveness of coverage and premium affordability for healthier enrollees.

We acknowledge that catastrophic plans are not subject to the AV requirements established in section 1302(d) of the Affordable Care Act. However, we believe that using an estimated AV as a reference point for calibrating the catastrophic plan annual limitation on cost sharing is a reasonable and transparent approach to achieving the policy's goal: restoring a meaningful distinction between catastrophic plans and bronze plans. The 55 percent estimated AV is not a binding requirement imposed on catastrophic plans; rather, it is an analytical tool that allows us to estimate the relative value of catastrophic plan coverage and to set the 130 percent multiplication factor in a principled, quantifiable manner.

We appreciate the comment about a sliding scale annual limitation on cost sharing. Currently, people in cost sharing variant plans at the silver metal tier have reduced cost sharing and a corresponding reduced annual limitation on cost sharing. A phase-in across plan years would defer the correction while the underlying problem continues to compound; a linear percentage-based calculation limiting cost sharing proportionally to the generosity of the metal tier or reduced cost- sharing plans goes beyond the scope of what we considered for finalization: there is no evidence of negative plan outcomes from incongruent policies at the higher metal tiers, and we are not finalizing any cost sharing changes to silver, gold, or platinum tiers, or cost sharing reduction variations. As previously stated, we anticipate that plans with a higher annual limitation on cost sharing will have lower premiums.

We agree that protection against bankruptcy was a key reason the Affordable Care Act was enacted in law, and we discuss congressional intent further in the next response to comments. These final rules provide greater flexibility for States and plans to determine what QHPs are best tailored to their markets; it does not prohibit future enrollees from selecting a metal-tier plan with a MOOP limit set at or below the standard annual limitation on cost sharing as an option for protecting themselves from higher out-of-pocket medical costs. This policy will give enrollees access to more affordable (and quantifiably more) QHP choices.

Although we believe that the actuarial problem driving this proposal--the gradual convergence of catastrophic and bronze plan AVs-- warrants immediate action, we are delaying the implementation (but not approach) of the multiplication factor for calculating the catastrophic plan annual limitation on cost sharing to PY 2028. A phased approach delays the restoration of a meaningful distinction between the two plan types but minimizes the impact on Exchanges, plans, and enrollees for PY 2027, giving Exchanges and plans time

to plan. The delay will prevent issuers from having to refile plans, which would be required if this policy were finalized for PY 2027. Although a phased approach would also prevent this, we believe that this could cause confusion for issuers and consumers that would need to adapt annually to a new percentage.

Comment: Several commenters stated that the proposal to require catastrophic plans to have an annual limitation on cost sharing that is 130 percent of the statutory annual limitation is not contemplated by the statute. Others stated that there is no requirement in the Affordable Care Act for bronze plans to be differentiated from catastrophic plans.

Response: We disagree. As stated in the proposed rule and earlier in this final rule, we believe that Congress did intend for differentiation between bronze plans and catastrophic plans to exist. For the reasons set forth below, we are finalizing this policy as proposed, but with a 1-year delay in effective date. Section 1302(e) of the Affordable Care Act establishes the catastrophic plan as a distinct coverage category, separate from the metal tier plans (bronze, silver, gold, and platinum) established under section 1302(d) of the Affordable Care Act. Congress' decision to create catastrophic plans as a separate statutory category--with their own eligibility criteria, benefit design requirements, and enrollment restrictions--reflects a deliberate legislative choice to maintain a distinct coverage option for eligible individuals.

Section 1302(c)(1) of the Affordable Care Act establishes the annual limitation on cost sharing and directs the Secretary to update this limit annually. Critically, the statute does not expressly prohibit the Secretary from establishing a differentiated cost-sharing limit for catastrophic plans, nor does it mandate that the same numerical limit apply uniformly across all plan types. As noted previously, our intent is for different statutory sections to operate together coherently and harmoniously. We also understand our charge to apply the best reading of the statute, under the principles of statutory construction affirmed in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024) (directing courts and agencies to apply the best reading of the statute). We believe the best reading of section 1302 of the Affordable Care Act, taken as a whole, supports the Secretary's authority to calibrate cost-sharing parameters in a manner that gives meaningful effect to the distinct statutory category Congress created.

In response to the commenters that stated that the statute does not require differentiation between bronze and catastrophic plans, we agree that the statute does not mandate a specific numerical differential. However, the absence of an express mandate does not preclude the agency from exercising its rulemaking authority to implement a policy that is consistent with the statute's structure and purpose. The Affordable Care Act's creation of a separate catastrophic plan category would be rendered largely meaningless if catastrophic plans were, in practice, indistinguishable from bronze plans in their cost-sharing design. As we stated in the proposed rule, catastrophic plans are subject to mandatory benefit design parameters--including the requirement to cover three primary care visits prior to the deductible--that do not apply to bronze plans. These requirements increase the actuarial cost of catastrophic plans relative to bronze plans without a corresponding adjustment to the cost-sharing structure, resulting in catastrophic plans that are less attractive to eligible consumers and, in many markets, functionally equivalent to or less favorable than bronze plans. This outcome is inconsistent with Congress' evident intent to preserve catastrophic coverage as a meaningful, lower-cost option for eligible individuals.

By setting the annual limitation on cost sharing for catastrophic plans at 130 percent of the standard limit, we are exercising our regulatory authority to ensure that the catastrophic plan category remains a viable and distinct option in the market--one that reflects the higher cost-sharing structure Congress contemplated when it created this separate coverage tier. This approach is a reasonable and permissible exercise of the Secretary's authority under section 1302 of the Affordable Care Act and is consistent with the overall structure of the Affordable Care Act.

Comment: A few commenters addressed the methodology for estimating the PAPI. These commenters recommended that we revise the PAPI methodology to better reflect per capita claims cost growth in the individual health insurance market, so that the annual adjustment to the maximum annual limitation on cost sharing better tracks the claims experience of the population in the individual market. In regard to whether the PAPI methodology should only reflect individual market claims, one commenter recommended that any future methodology adjustments should consider financial protection and affordability, which may include interactions with AV calculations, premium tax credit changes, and the long-term impacts of cost-sharing limits. Several commenters addressed whether the PAPI guidance document entitled “Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage,” or a regulatory vehicle, would be the appropriate vehicle for releasing updated catastrophic plan MOOP limitations annually. Some commenters stated a preference for notice- and-comment rulemaking for any annual updates to the catastrophic plan MOOP, to ensure public input on the multiplication factor and resulting dollar amounts.

Response: We believe that this annual rulemaking is the appropriate vehicle for releasing updated catastrophic plan MOOP limitations annually, as it provides the opportunity for notice and comment. While the other comments about the PAPI methodology are out of scope for this final rule because they do not relate to the specific cost sharing proposal included in the proposed rule, we appreciate commenters' attention and feedback.

Comment: Several commenters, including representatives from many State insurance authorities and Exchanges, recommended that CMS delay the effective date of the requirement that catastrophic plans use a catastrophic plan annual limitation on cost sharing defined as a percentage higher than the standard annual limitation on cost sharing. These commenters stated that CMS had not provided sufficient time for States, issuers, and other interested parties to assess the combined impact of the cost sharing changes to catastrophic plans and bronze plans, as well as the multi-year catastrophic plans that will be permitted under the policy being finalized elsewhere in this final rule. Many commenters urged CMS to decline to finalize the proposal entirely, citing concerns about consumer harm and the adequacy of CMS' impact analysis. Several commenters noted that QHP certification and rate and form filings for PY 2027 have already commenced. One State indicated it would consider setting its own MOOP limits applicable within its State alone. Several commenters warned of possible unintended impacts to plan selection, risk pool composition, and premiums--including a potential bifurcation of the market between catastrophic plans and APTC-eligible metal tier plans--and stated that these impacts had not been

adequately modeled before the proposal was made. Several commenters recommended delaying the implementation of the proposed cost sharing changes until further research is conducted into forecasting the combined impact of the plan design changes.

Response: We appreciate these comments regarding implementation of the requirement that catastrophic plans use a catastrophic plan annual limitation on cost sharing defined as a percentage higher than the standard annual limitation on cost sharing. Unlike the flexibility for MOOP limits for bronze plans, which is optional for issuers, all catastrophic plans must set their plans' MOOP limit to the catastrophic plan annual limitation on cost sharing under this policy, as finalized, which does not provide issuers with the same degree of discretion to delay or decline implementation. We acknowledge that this distinction makes the timing concerns raised by commenters particularly salient for the catastrophic plan proposal.

In response to comments requesting delayed implementation, we are finalizing this requirement with an effective date starting in PY 2028 to allow issuers, States, and Exchanges additional time to prepare. We believe this approach appropriately balances the need to address the underlying actuarial challenge with the operational concerns raised by commenters, particularly since PY 2027 QHP certification has already commenced, and rate and form filings have largely been submitted.

We note, however, that the underlying actuarial problem driving this proposal--as in, the gradual convergence of catastrophic and bronze plan AVs--has been developing for several years, and that we have been monitoring and discussing this issue since at least the 2017 Market Stabilization Rule. We do not believe that further delay would meaningfully change the actuarial trajectory or the need for regulatory action, but have chosen to delay implementation by 1 year to ease the impact on issuers, States, and Exchanges.

States do not have the authority to set separate, unique annual limitations for catastrophic plans offered in their markets, and if offered in their Exchange, these plans must meet the Federal requirements. States that wish to limit the impact of this policy on their markets may exercise their Exchange authority under Sec. 155.1000(e) to decline to certify any catastrophic plans from being offered in PY 2028 and future years.

As addressed in the in the preceding section, we believe we have conducted sufficient forecasting before finalizing this policy. We acknowledge that projections of enrollment response to plan design changes involve inherent uncertainty. We believe that the policy we are finalizing in this rule represents the best possible outcome since it ensures that meaningful difference be restored between catastrophic plans and bronze plans. We believe this policy would attract currently uninsured individuals who are not eligible for subsidies but deterred by the high premiums of metal tier plans, which could improve the overall risk pool. We note that offering catastrophic plans is optional for issuers. Nothing prevents issuers from conducting a risk assessment when deciding whether to offer these plans for PY 2028 and future plan years that are subject to the cost-sharing changes. We will continue to monitor the impact of this policy on catastrophic plan availability, enrollment, premiums, and risk pool composition, and will consider whether additional action is warranted in future rulemaking.

Further, we do not expect any unique compounding effects in PY 2028 and future plan years when catastrophic plans are newly required to adhere to a higher annual limitation on cost sharing, including in plan years when some of those catastrophic plans utilize the flexibilities afforded to multi-year plans discussed in section III.E.6. of this final rule. We do not agree with commenters who viewed the combined effect of these two policies as requiring a unified impact analysis prior to finalization. We have analyzed enrollment and premium effects of current plan policy decisions on bronze plans and catastrophic plans, as described in the preceding sections. We are not convinced that attempting to project the combined enrollment effects of these two policies would yield instructive results, given the range of issuer design choices, State market conditions, and consumer behavior variables that will determine actual uptake. We have relied on available data--including enrollment trends in catastrophic and bronze plan tiers, AV modeling, and the risk adjustment framework applicable to catastrophic plans--to inform our assessment of likely market effects. We believe they represent a reasonable basis for the policy as finalized. Our view is that this policy will attract currently uninsured, price-sensitive consumers without materially disrupting the risk pool for subsidized metal tier enrollees, which is supported by available enrollment data, actuarial modeling, and the optional, issuer-discretionary nature of the policy. 8. Standardized Plan Options (Sec. Sec. 155.20, 155.205(b)(1), 155.220(c)(3)(i)(H), 156.201, and 156.265(b)(3)(iv)) a. Introduction

In the 2027 Payment Notice proposed rule (91 FR 6383), we proposed to exercise our authority under sections 1311(c)(1) and 1321(a)(1)(B) of the Affordable Care Act to discontinue the full suite of standardized plan option policies effective beginning in PY 2027. Specifically, we proposed to remove the following from our regulations: the definition of “standardized option” at Sec. 155.20; all requirements pertaining to standardized plan options at Sec. 156.201 (the requirements for FFE and SBE-FP QHP issuers in the individual market to offer these plans at paragraphs (a) and (b), as well as the requirement for these plans to meaningfully differ from one another at paragraph (c)); the differential display of standardized plan options on HealthCare.gov at Sec. 155.205(b)(1); and the corresponding standardized plan option differential display requirements for approved web-broker and QHP issuer enrollment partners using a DE pathway to facilitate consumer enrollment through an FFE or SBE-FP at Sec. Sec. 155.220(c)(3)(i)(H) and 156.265(b)(3)(iv). Finally, we proposed to cease the annual design and publication of these plans in the applicable Payment Notice rulemaking for each plan year. b. Regulatory History

Standardized options were first introduced in the 2017 Payment Notice and codified at Sec. 155.20 (81 FR 12289 through 12293). These standardized option plan designs were subsequently updated in the 2018 Payment Notice (81 FR 94107 through 94112). The 2018 Payment Notice (81 FR 94118) also introduced the authority for HHS to differentially display standardized options on HealthCare.gov at Sec. 155.205(b)(1), which allowed consumers to filter all available plan options to view only standardized options and receive an accompanying message explaining how standardized options differed from non-standardized options. The 2018 Payment Notice (81 FR 94118) also introduced standardized option differential display requirements for approved web- broker and QHP issuer enrollment partners using a DE pathway to facilitate consumer enrollment through an FFE or SBE-FP

at Sec. Sec. 155.220(c)(3)(i)(H) and 156.265(b)(3)(iv).\287\

\287\ Under these requirements, when an internet website of a web-broker or issuer is used to complete the QHP selection, at a minimum the internet website must differentially display all standardized options prominently and in accordance with the requirements under Sec. 155.205(b)(1) in a manner consistent with that adopted by HHS for display on the FFE website and with standards defined by HHS, unless HHS approves a deviation.

Standardized options were then discontinued in the 2019 Payment Notice (83 FR 16974 through 16975). However, the discontinuance was challenged in the United States District Court for the District of Maryland. On March 4, 2021, the court decided City of Columbus, et al. v. Cochran.\288\ The court reviewed nine separate policies HHS had issued in the 2019 Payment Notice, vacating four of them. The court vacated the policy finalized in the 2019 Payment Notice that ceased HHS' practice of designating some plans in the FFEs and SBE-FPs as “standardized options,” a policy that we, in the 2019 Payment Notice (83 FR 16974 through 16975), stated was intended to maximize innovation by issuers in designing and offering a wide range of plans to consumers.

\288\ City of Columbus v. Cochran, 523 F. Supp. 3d 731 (D. Md. 2021).

As a result, in part 2 of the 2022 Payment Notice (86 FR 24264 through 24265), we announced our intent to engage in rulemaking under which we would propose to resume designation of standardized options and propose specific designs in more detail in PY 2023. Thus, in the 2023 Payment Notice (87 FR 27310 through 27322), we reintroduced standardized plan options to enhance the consumer experience, increase consumer understanding, simplify the plan selection process, and combat discriminatory benefit designs.\289\ We required FFE and SBE-FP issuers offering QHPs in the individual market to offer these plans, but we exempted FFE and SBE-FP issuers offering QHPs in the small group market as well as issuers in State Exchanges from these requirements. We also exempted issuers of QHPs in FFEs and SBE-FPs that were already required to offer standardized plan options under State action taking place on or before January 1, 2020, such as issuers in the State of Oregon,\290\ from the requirement to offer the particular standardized plan option plan designs specified by HHS in rulemaking.

\289\ Although the official nomenclature for these plans was “standardized options” in the 2017 through 2019 Payment Notices, when we resumed this policy in the 2023 Payment Notice and in all subsequent Payment Notices, the official nomenclature became “standardized plan options.”

\290\ See Or. Admin. R. 836-053-0009.

In the 2023 Payment Notice (87 FR 27312), we finalized standardized plan options at the following metal levels: one bronze plan, one bronze plan that meets the requirement to have an AV up to 5 points above the 60 percent standard, as specified in Sec. 156.140(c) (known as an expanded bronze plan), one standard silver plan, one version of each of the three income-based silver CSR plan variations, one gold plan, and one platinum plan. We did not finalize standardized plan options for the AI/AN CSR plan variations as provided for at Sec. 156.420(b) given that the cost sharing parameters for these plan variations are already largely specified.

In the 2023 Payment Notice (87 FR 27312), we finalized two sets of standardized plan options to accommodate different States' cost sharing laws. Specifically, the first set of standardized plan options applied to all FFE and SBE-FP issuers, except issuers in Delaware, Louisiana, and Oregon. The second set of standardized plan options applied only to issuers in Delaware and Louisiana to accommodate these two States' specialty prescription drug cost sharing laws.

We designed these standardized plan options to resemble the most popular QHP offerings that millions of consumers were already enrolled in by taking the following steps: selecting the most popular cost sharing type for each benefit category; selecting enrollee-weighted median cost sharing values for each of these benefit categories based on PY 2022 cost sharing and enrollment data; modifying these plans to ensure they were able to comply with applicable State cost sharing laws; and decreasing the AVs for these plan designs to be at the floor of each AV de minimis range, primarily by increasing deductibles.

In the 2023 Payment Notice (87 FR 27313), we also resumed the differential display of standardized plan options on HealthCare.gov under the authority at Sec. 155.205(b)(1), including those standardized plan options required under State action taking place on or before January 1, 2020. In addition, we resumed enforcing the standardized plan option differential display requirements for approved web-brokers and QHP issuers using a DE pathway to facilitate enrollment through an FFE or SBE-FP at Sec. Sec. 155.220(c)(3)(i)(H) and 156.265(b)(3)(iv).

As such, web brokers and QHP issuers were once more required to differentially display standardized plan options in accordance with Sec. 155.205(b)(1) in a manner consistent with how standardized plan options are displayed on HealthCare.gov, unless we approve a deviation. Any requests from web brokers and QHP issuers seeking approval of an alternate differentiation format are reviewed based on whether the same or a similar level of differentiation and clarity is provided under the requested deviation as is provided on HealthCare.gov.

In the 2024 Payment Notice (88 FR 25847 through 25855), we maintained a high degree of continuity with our approach to standardized plan options finalized in the 2023 Payment Notice. However, in contrast to the policy finalized in the 2023 Payment Notice, at Sec. 156.201(b), we finalized for PY 2024 and subsequent plan years to no longer include a standardized plan option for the non- expanded bronze metal level--primarily due to AV constraints and the infeasibility of designing such a plan.

In the 2025 Payment Notice (89 FR 26357 through 26362) and in the 2026 Payment Notice (90 FR 4493 through 4500), we continued to maintain a high degree of continuity with the approach to standardized plan options finalized in the immediately preceding Payment Notices (that is, the 2024 and 2025 Payment Notices). In each rulemaking, we made only minor modifications to the plan designs to ensure they continued to have AVs within the permissible de minimis range for each metal level. Additionally, in the 2026 Payment Notice, we finalized a requirement for FFE and SBE-FP QHP issuers in the individual market offering multiple standardized plan options within the same product network type, metal level, and service area to meaningfully differentiate these plans from one another in terms of included benefits, provider networks, included prescription drugs, or a combination of some or all these factors at Sec. 156.201(c).

We explained that this requirement was based in part on our experience with the meaningful difference standard, which was previously codified at Sec. 156.298. The meaningful difference standard was introduced in the 2015 Payment Notice (79 FR 13813 through 13814), revised in the 2017 Payment Notice (81 FR 12312 and 12331), and subsequently discontinued and removed from our regulations in the 2019 Payment Notice (83 FR 17027). The meaningful difference standard was originally intended to enhance the consumer experience on HealthCare.gov by preventing duplicative plan offerings and limiting plan proliferation.

We refer readers to the preambles to the 2023, 2024, 2025, and 2026 Payment Notices discussing Sec. 156.201 (87 FR 27310 through 27322, 88 FR 25847

through 25855, 89 FR 26357 through 26362, and 90 FR 4493 through 4500, respectively) for more detailed discussions regarding our approaches to standardized plan options in previous plan years. We also refer readers to the preambles to the 2015, 2017, and 2019 Payment Notices discussing Sec. 156.298 (79 FR 13813 through 13814, 81 FR 12312 and 12331, and 83 FR 17027, respectively) for more detailed discussions regarding our approaches to the meaningful difference standard in previous plan years. c. Current Proposal

In the 2027 Payment Notice proposed rule (91 FR 6384), we proposed, effective beginning in PY 2027, that FFE and SBE-FP QHP issuers in the individual market would no longer be required to offer standardized plan options. Further, we stated in the proposed rule that we would remove the following from our regulations: the definition of “standardized options” at Sec. 155.20; all requirements pertaining to standardized plan options at Sec. 156.201 (the requirements for FFE and SBE-FP QHP issuers in the individual market to offer these plans at paragraphs (a) and (b), as well as the requirement for these plans to meaningfully differ from one another at paragraph (c)); the authority to differentially display standardized plan options on HealthCare.gov at Sec. 155.205(b)(1); and the corresponding standardized plan option differential display requirements for approved web-broker and QHP issuer enrollment partners using a DE pathway to facilitate consumer enrollment through an FFE or SBE-FP at Sec. Sec. 155.220(c)(3)(i)(H) and 156.265(b)(3)(iv). Finally, we stated we would cease the annual design and publication of these plans in the applicable Payment Notice for each plan year.

In the proposed rule (91 FR 6384), we stated that nothing under the proposal would impact or preclude State-enacted standardized plan option requirements, including the requirement for issuers in the State of Oregon to offer such plans.\291\ Thus, we stated that under the proposal, Oregon issuers would continue to be subject to State requirements. However, standardized plan options offered under those State requirements would no longer be differentially displayed on HealthCare.gov, and approved web-broker and QHP issuer enrollment partners using a DE pathway to facilitate consumer enrollment through an FFE or SBE-FP would no longer be required to differentially display standardized plan options offered under those State requirements (such as the requirement in the State of Oregon). We also noted that nothing under the proposal would preclude State Exchanges from requiring their respective issuers to offer standardized plan options or from differentially displaying such plans on their respective enrollment platforms.

\291\ See Or. Admin. R. 836-053-0009.

We also clarified (91 FR 6385) that while we proposed to discontinue the requirement for issuers to offer standardized plan options, the annual design and publication of these plans in the applicable Payment Notice each plan year, and the differential display of these plans on HealthCare.gov and DE pathways, we were not proposing to require issuers to discontinue their existing standardized plan option offerings altogether. Instead, we stated that under the proposal, issuers would be permitted to choose whether to discontinue their existing standardized plan option offerings altogether or continue offering them with either the same or modified cost sharing, while we simultaneously discontinue the differential display of these plans and designation of these plans as standardized plan options.

We further stated (91 FR 6385) that under the proposed approach, if issuers wished to discontinue their existing standardized plan option offerings altogether, they would be permitted to do so, and enrollees in these plans would be crosswalked to a different plan in accordance with the crosswalk hierarchy at Sec. 155.335(j). Additionally, we stated that if issuers wished to continue offering these existing standardized plan options with the same cost sharing, they would also be permitted to do so, and enrollees in these plans would continue to be auto-reenrolled in these plans from one plan year to the next, absent selecting a different plan or discontinuing coverage. However, we stated that these plans would no longer be visually distinguished as standardized plan options on HealthCare.gov or the DE pathways. Finally, we stated that if issuers wished to continue offering these existing standardized plan options but also wished to modify these plans' cost sharing structures, they would be permitted to do so, but these issuers would continue to be subject to the requirements under the definition of “plan” at Sec. 144.103 and to the uniform modification requirements at Sec. 147.106. d. Rationale for Proposal

We proposed this approach for several reasons. To begin, when we reintroduced standardized plan options in the 2023 Payment Notice (87 FR 27316 through 27317), we noted that City of Columbus vacated the discontinuation of standardized plan options in the 2019 Payment Notice. We then stated that several commenters stated that HHS was not legally obligated to resume standardized plan options under this ruling. These commenters stated that the previous Administration simply provided insufficient justification for discontinuing standardized plan options, but that discontinuing them was not unlawful. These commenters suggested that instead of resuming standardized plan options, HHS should issue a new rule with a more thorough explanation than what was provided in the 2019 Payment Notice explaining why standardized plan options should remain discontinued.

In response to these comments, in the 2023 Payment Notice (87 FR 27316 through 27317), we acknowledged and agreed that City of Columbus did not require HHS to resume standardized plan options. However, we stated that this ruling caused us to reevaluate our previous decision to discontinue standardized plan options in the 2019 Payment Notice. We also stated that we believed it was appropriate to resume standardized plan options at that time since the contemporary market conditions differed significantly from the market conditions present when standardized plan options were discontinued in the 2019 Payment Notice--namely, the individual market was no longer considered to be at risk of destabilization.

In the 2023 Payment Notice (87 FR 27316 through 27317), we further stated that the stabilization of the individual market was demonstrated by the proliferation of plan offerings, increased issuer participation in the Exchanges, and record enrollment. We thus stated that resuming standardized plan options at that time could play a constructive role in enhancing the consumer experience, increasing consumer understanding, and simplifying the decision-making process for consumers on the Exchanges, despite the fact that City of Columbus did not legally obligate HHS to do so.

In the 2023 Payment Notice (87 FR 27316), we further stated that we believed standardized plan options could play an important role in that simplification by allowing consumers to compare offerings based on other meaningful features outside of cost sharing structures, such as premiums, networks, formularies, and quality ratings. We then stated that employing standardized plan option requirements at that time would allow consumers to

more easily and more meaningfully differentiate between choices and select a plan that meets their unique health care needs.

Thus, issuers that offer QHPs through the FFEs and SBE-FPs have been required to offer standardized plan options at every product network type, at every metal level (with the exception of the non- expanded bronze metal level since PY 2024), and throughout every service area they offer non-standardized plan options since PY 2023. As such, we stated in the proposed rule (91 FR 6385) that we have accumulated 4 plan years of experience (PY 2023 through PY 2026) administering these standardized plan option policies. We stated that this cumulative experience provides us with a comprehensive and nuanced perspective regarding weighing both the advantages and disadvantages of requiring FFE and SBE-FP QHP issuers to offer standardized plan options, whether this strategy aligns with our originally articulated objectives with standardized plan option policies, and whether this strategy has yielded the intended results.

We stated (91 FR 6385) that based on this experience, we concluded that requiring FFE and SBE-FP QHP issuers to offer standardized plan options is an ineffective strategy in enhancing the consumer experience, increasing consumer understanding, and simplifying the plan selection process--the originally articulated objectives of employing our standardized plan option policies. We stated that this is primarily because requiring issuers to offer standardized plan options at every product network type, at every metal level, and throughout every service area that they offer non-standardized plan options led to an increase in the total number of QHPs that issuers offer through the FFEs and SBE-FPs in PY 2023 (the first year in which the requirement to offer these plans was introduced), which exacerbated plan proliferation--directly counteracting our originally articulated objectives.

In fact, we stated (91 FR 6385) that the resumption of standardized plan options and the introduction of the requirement for FFE and SBE-FP QHP issuers to offer standardized plan options coincided with an increase in the weighted average number of total plans available per enrollee from 108 in PY 2022, the year before the introduction of the requirement to offer standardized plan options, to 114 in PY 2023, the year in which this requirement was introduced, with most of this increase in plan offerings being comprised of standardized plan options. Furthermore, we noted that plan proliferation as measured by the weighted average number of total plans offered per issuer (which is derived by dividing the weighted average number of total plans available per enrollee by the weighted average number of total issuers per enrollee) increased from 16.9 in PY 2022 to 17.3 in PY 2023-- meaning each issuer on average tended to offer a higher number of plans after the imposition of the requirement to offer standardized plan options than the year before this requirement was made effective.\292\

\292\ “Plan Year 2025 Qualified Health Plan Choice and Premiums in HealthCare.gov Marketplaces.” October 25, 2024. https://www.cms.gov/files/document/2025-qhp-premiums-choice-report.pdf.

Furthermore, we noted (91 FR 6386) that even with the introduction of the non-standardized plan option limit of four in PY 2024 and its reduction to two as well as the introduction of the exceptions process in PY 2025, the net impact of both the requirement to offer standardized plan options as well as the subsequent imposition of non- standardized plan option limits and exceptions on the weighted average number of total plans available per enrollee and the weighted average number of total plans offered per issuer (including both standardized and non-standardized plan options) was marginal--despite the substantially increased regulatory complexity and the associated burden of creating and submitting certification applications for new plans (standardized plan options) and correspondingly adjusting existing portfolios of plan offerings (non-standardized plan options).

Specifically, we noted that the weighted average number of total plans available per enrollee decreased from 114 in PY 2023 to 100 in PY 2024 and remained consistent at 100 in PY 2025. We further noted that the weighted average number of total plans offered per issuer decreased from 17.3 in PY 2023 to 14.7 in PY 2024 and 13.7 in PY 2025. Thus, we noted that from PY 2022, before this suite of standardized plan option policies was introduced, there was a weighted average number of 108 total plans available per enrollee and a weighted average number of 16.9 total plans offered per issuer, whereas in PY 2025 (after several consecutive years imposing novel layers of requirements), these same measures were 100 and 13.7, respectively.

We stated (91 FR 6386) that we do not believe the marginal net reductions in the weighted average number of total plans available per enrollee and the weighted average number of total plans offered per issuer achieved by introducing this suite of standardized plan option and non-standardized plan option limit requirements warrant imposing additional burden on issuers or impeding issuer innovation in plan design choice. We stated that this is especially true given that these metrics continue to remain significantly elevated compared to only several plan years ago. We noted, for example, that in PY 2020, the weighted average number of total plans available per enrollee was 39, and the weighted average number of total plans offered per issuer was 11.1. We noted that the impact of our non-standardized plan option limits and exceptions process policies on these metrics and plan proliferation were discussed in greater detail in section III.E.9. of the proposed rule.

We stated (91 FR 6386) that the increase in the weighted average number of total plans available per enrollee from PY 2022 to PY 2023 (which arose primarily from the introduction of the requirement for issuers to offer standardized plan options), even taken altogether with the subsequent marginal net reductions in PY 2024 and PY 2025 (which arose primarily from the introduction of the non-standardized plan option limit of four in PY 2024 and the reduction of this limit to two as well as the introduction of the exceptions process in PY 2025), is particularly important.

We noted (91 FR 6386) that we have utilized this metric, the weighted average number of total plans per enrollee, as opposed to the unweighted average number of total plans per enrollee, as the primary metric by which to evaluate plan choice overload because utilizing weighted averages takes into consideration the number of enrollees in a particular service area when calculating the average number of plans available to enrollees. We stated that as a result of weighting averages by enrollment, service areas with a higher number of enrollees have a greater impact on the overall average than service areas with a lower number of enrollees. Thus, we stated that weighting averages by enrollment allows a more representative metric to be calculated that more closely resembles the actual experience of enrollees.

Therefore, we stated (91 FR 6386) that, as measured by this metric, the weighted average number of total plans per enrollee, the plan proliferation that occurred subsequent to the introduction of the requirement for FFE and SBE-FP QHP issuers to offer standardized plan options in PY 2023 is inconsistent with our originally articulated objectives of

enhancing the consumer experience, increasing consumer understanding, and simplifying the plan selection process for consumers on HealthCare.gov--even with the marginal net reductions that occurred subsequent to the introduction of non-standardized plan option limits and its reduction from four to two in PY 2024 and PY 2025, respectively. As we stated in the comment solicitation on choice architecture and preventing plan choice overload in the 2023 Payment Notice (87 FR 27345 through 27347), we noted that this is because increasing the total number of plans that consumers must compare and evaluate increases the risk of plan choice overload, suboptimal plan selection, and unexpected financial harm.

We stated (91 FR 6386) that based on our 4 plan years of experience (PY 2023 through PY 2026) administering this suite of standardized plan option and non-standardized plan option limits and exceptions policies, we have concluded that a marginal net reduction in the number of plan choices in the FFEs and SBE-FPs created by the approach of imposing requirements to offer standardized plan option and imposing non- standardized plan option limits and exceptions has significant disadvantages--namely, imposing additional burden and constraining issuer innovation and consumer choice.

We further noted (91 FR 6386) that the FFEs operate under constraints that differ substantially from other contexts in which standardized plan options have been implemented, such as in States with a State Exchange model type. In particular, we stated that there is a significant degree of heterogeneity on the FFEs (for example, in terms of consumer demographics, health care needs, and preferences) given that there are currently 28 States with an FFE model type, and it is impractical to design a standardized plan option offering that issuers must conform to regardless of the market dynamics in a given location. We further stated that we do not believe that it is feasible for HHS to more precisely tailor specific plan designs and requirements to the unique circumstances and market conditions in each State and update these plan designs on an annual basis. Finally, we stated that we do not believe that such an approach would be warranted in the first place given the limited efficacy that these policies have demonstrated in the last several years.

Relatedly, we stated (91 FR 6386) that the strategy of requiring issuers to offer standardized plan options as well as differentially displaying these plans on HealthCare.gov and the DE pathways (which is discussed in greater detail later in this section) was intended to enhance plan comparability for consumers navigating the plan selection process. We stated that, theoretically, requiring issuers to offer plans with standardized cost sharing parameters would facilitate the plan selection process by reducing the number of factors that consumers must consider when evaluating all available plan options--since a certain subset of plans would have the same cost sharing parameters. We stated that as a result of having access to plans with standardized cost sharing parameters, consumers would theoretically have the ability to shift their focus to other important plan attributes, such as premiums, benefit coverage, provider networks, formularies, and quality ratings, during the plan selection process.

However, we stated (91 FR 6387) that based on our 4 plan years of experience (PY 2023 through PY 2026) administering these standardized and non-standardized plan option policies, we have found that in practice, given that standardized plan options continue to be offered alongside non-standardized plan options, whether a particular plan offering was a standardized or non-standardized plan option served as yet another variable that consumers must consider during the plan selection process, adding an additional layer of complication. Furthermore, we noted that in our experience, we have found when consumers are faced with a large number of heterogeneous plan options, they continue to rely primarily on premiums, networks, and issuer brand--meaning that standardizing cost sharing parameters by itself (especially when doing so only for a subset of all available plan options) fails to meaningfully reduce decision complexity for consumers.

In the proposed rule (91 FR 6387), we also considered more recent literature examining the effects of offering standardized plan options alongside non-standardized plan options. We highlighted a 2024 study demonstrating that the introduction of “Simple Choice” plans in PY 2017 and PY 2018 was associated with a reduction in gross premiums.\293\ Although we acknowledged that these findings contribute to a broader understanding of how plan standardization may influence issuer pricing behavior under certain market conditions, we emphasized that the authors caution against extrapolating these effects beyond the specific context in which they arose. In particular, we noted that the study period coincided with a period of pronounced market instability, characterized by significant issuer exits, rapidly increasing market concentration, and the defunding of cost-sharing reduction payments. The authors concluded that observed premium effects were likely attributable, in part, to issuer uncertainty during this volatile period and stated that similar policies implemented in more stable environments would have likely yielded smaller effects.

\293\ Hopkins, B., and Lyons, S. (2024, December 13). “The Effect of Offering `Simple Choice' Plans on Premiums in the Federally Facilitated ACA Marketplaces.” https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5084737.

We also noted (91 FR 6387) that the study further documented that premium impacts dissipated following the discontinuation of the policy after PY 2018, with no evidence of persistent effects in subsequent years--suggesting that plan standardization, absent continued market disruption or policy-induced uncertainty, did not result in durable structural changes to issuer pricing behavior. We considered this lack of persistence particularly relevant when evaluating the continued necessity of standardized plan option requirements and associated non- standardized plan option limits within the current market context-- especially with the increased burden, inhibition of issuer innovation, and constrained consumer choice associated with these policies.

Beyond this more recent literature, we noted (91 FR 6387) that for each plan year since these requirements were introduced in PY 2023, there has consistently been a comparatively low uptake of standardized plan options relative to corresponding non-standardized plan options. In fact, we noted that only 20 percent of total enrollment in the FFEs and SBE-FPs was in standardized plan options in PY 2023, 33 percent in PY 2024, and 33 percent in PY 2025, even with the reduction in non- standardized plan option offerings due to the introduction of the non- standardized plan option limit of four in PY 2024 and its reduction to two in PY 2025.\294\

\294\ “Marketplace Open Enrollment Period Public Use Files.” https://www.cms.gov/data-research/statistics-trends-and-reports/marketplace-products.

Relatedly, we noted (91 FR 6387) that 25 percent of total plan offerings were standardized plan options in PY 2023, 28 percent in PY 2024, and 31 percent in PY 2025.\295\ Thus, we stated that total

enrollment in standardized plan options was lower compared to what would be expected based on the total proportion of plans that are standardized plan options in PY 2023 and only increased to be approximately equal with what would be expected as the non-standardized plan option limit was introduced in PY 2024 and reduced in PY 2025. We stated that the consistently low proportion of consumers enrolled in standardized plan options over the years suggests that these plans fail to appeal to consumers compared to corresponding non-standardized plan options--or at the very least that consumers are unable to perceive a meaningful difference between standardized and non-standardized plan options.

\295\ “Plan Year 2025 Qualified Health Plan Choice and Premiums in HealthCare.gov Marketplaces.” October 25, 2024. https://www.cms.gov/files/document/2025-qhp-premiums-choice-report.pdf.

Moreover, we noted (91 FR 6387) that even among active plan selections (which includes both consumers currently enrolled in a QHP that are making a new plan selection as well as consumers who are enrolling in any QHP offered through an FFE or SBE-FP for the first time, but excludes consumers who are auto-reenrolled in their current QHP from one year to the next), only 18 percent of consumers in the FFEs and SBE-FPs actively selected standardized plan options in PY 2023, 26 percent in PY 2024, and 18 percent in PY 2025.\296\ We stated that this comparatively lower than expected rate of active plan selections for standardized plan options further suggests that these plans have consistently failed to appeal to consumers--or at the very least that it is difficult for consumers to meaningfully distinguish standardized from non-standardized plan options or ascertain the benefits of enrolling in such plans.

\296\ “Marketplace Open Enrollment Period Public Use Files.” https://www.cms.gov/data-research/statistics-trends-and-reports/marketplace-products.

We noted (91 FR 6387) that this consistently low uptake of standardized plan options by FFE and SBE-FP consumers for the last several plan years, as measured by both the proportion of total enrollment in as well as active selections of these plans, has occurred despite the fact that a full suite of differential display features visually distinguishes these plans from corresponding non-standardized plan options on both HealthCare.gov and the DE pathways, in accordance with the differential display requirements at Sec. Sec. 155.205(b)(1), 155.220(c)(3)(i)(H), and 156.265(b)(3)(iv).

We stated (91 FR 6387) that under the present form of differential display on HealthCare.gov (and the corresponding forms of differential display on the DE pathways), standardized plan options are labelled “easy pricing” plans, and an accompanying icon visually distinguishes these plans from non-standardized plan options. We noted that accompanying hover text also explains both the benefits and distinctive features of these plans and how these plans differ from non- standardized plan options. We also noted that an additional “quick tip” feature provides greater detail regarding the benefits of standardized plan options--including that these plans contain pre- deductible coverage and that they are easier to compare because they have the same MOOP values, deductibles, and cost sharing within their respective health plan categories. Finally, we noted that consumers have the option to select a filter to view only standardized plan options among all available plan options--which excludes non- standardized plan options from the list of search results.

We stated (91 FR 6388) that even with this full suite of differential display features that visually distinguishes standardized plan options from non-standardized plan options on HealthCare.gov and the DE pathways, non-standardized plan options are consistently the more popular option for consumers, with a greater proportion of total enrollment in and active plan selections of non-standardized plan options each plan year since these requirements were introduced in PY 2023. We noted that without this full suite of differential display features that visually distinguishes standardized plan options from non-standardized plan options, standardized plan options would likely constitute an even lower proportion of both total enrollment and active plan selections, further suggesting that these plans have consistently failed to appeal to consumers compared to non-standardized plan options.

Furthermore, we stated (91 FR 6388) that total enrollment in and active selections of standardized plan options would be conceivably lower without the progressively more stringent non-standardized plan option limits (since there would have been a greater number of non- standardized plan options for consumers to select from). We stated that given the consistently low proportion of total enrollment in and active selections of standardized plan options each plan year since these requirements were introduced in PY 2023, we no longer believe that the benefits of requiring issuers to offer these plans outweighs the burden of requiring them doing so--especially since employing this strategy has failed to achieve our originally articulated objectives.

Specifically, we stated (91 FR 6388) that the burden of requiring issuers to offer these plans includes creating new plans that have cost sharing parameters that conform with the designs specified by HHS in annual rulemaking, the burden for both issuers and HHS in certifying a greater number of plans during QHP certification each year (standardized plan options as well as non-standardized plan option limit exceptions process plans), and the burden on issuers correspondingly adjusting portfolios of plan offerings (non- standardized plan options).

We noted (91 FR 6388) that in addition to enhancing the consumer experience, increasing consumer understanding, and simplifying the decision-making process for consumers purchasing coverage through the Exchanges, as we stated in the 2023 Payment Notice (87 FR 27311), another original objective of requiring FFE and SBE-FP QHP issuers to offer these standardized plan options was combatting discriminatory benefit designs. We stated that we attempted to achieve this objective in our approach to the design of these plans.

In particular, we noted (91 FR 6388) that each plan year since we introduced standardized plan options in PY 2023, in our design of these plans, we exempted the following frequently utilized benefit categories from the deductible at every metal level: primary care visits, specialist visits, mental health and substance use outpatient office visits, speech therapy, physical and occupational therapy, and generic drugs--with an increasing number of benefit categories being exempted from the deductible at higher metal levels. We stated that we adopted this approach since exempting benefits from the deductible reduces barriers to access for these services and makes it easier (that is, less expensive) for consumers to obtain these health care services. We noted that we also attempted to combat discriminatory designs by requiring flat copayments as the form of cost sharing instead of coinsurance rates for a greater number of benefit categories. We stated that we incorporated this plan design feature to enhance consumer certainty and reduce the risk of unexpected financial costs when obtaining health care.

We stated (91 FR 6388) that we continue to recognize that subjecting additional benefit categories to the deductible and including coinsurance rates as the form of cost sharing instead of flat copayments may make it more difficult for consumers to obtain the

corresponding health care services. However, we acknowledged that these design features (specifically, pre-deductible benefit coverage and flat copayments for the aforementioned benefit categories) are routinely included for the corresponding benefit categories in many non- standardized plan option offerings, and with similar cost sharing amounts. We stated that this is because, as we stated in the 2023 Payment Notice (87 FR 27319), we design these standardized plan options to mirror the most popular plan design features of QHPs offered through the FFEs and SBE-FPs in previous plan years.

More specifically, regarding the methodology we employ to design these plans, we noted (91 FR 6388) that in the 2024 Payment Notice (88 FR 25848), we stated that we design these standardized plan options by selecting the most popular cost sharing type for each benefit category (which is a copayment or coinsurance rate that is either subject to or exempt from the deductible); selecting enrollee-weighted median cost sharing values for each of these benefit categories (as well as for the annual limitation on cost sharing and deductible values) based on refreshed cost sharing and enrollment data; modifying these plans to be able to accommodate State cost sharing laws; and decreasing the AVs for these plan designs to be at the floor of each AV de minimis range, primarily by increasing deductibles.

We stated (91 FR 6388) that employing this methodology in the annual design of these standardized plan options has resulted in these plans being comparable in many respects to corresponding non- standardized plan options that millions of consumers are already enrolled in. We noted that this further means that pre-deductible benefit coverage and flat copayments as the form of cost sharing instead of coinsurance rates are design features that are not exclusive to standardized plan options. We stated that, instead, these plan design features largely reflect market consensus and do not substantially deviate from this consensus. We also stated that the fact that these plan design features are already routinely included in many non-standardized plan options means that we could combat discriminatory plan designs (another originally articulated objective for reintroducing the requirement for issuers to offer standardized plan options) without subjecting both issuers and HHS to the increased burden of requiring issuers to offer and submit certification applications for these plans that largely reflect market consensus and existing offerings.

Furthermore, we stated (91 FR 6388) that we believe incorporating coinsurance rates as the form of cost sharing for particular benefits instead of flat copayments can serve an important role in plan design-- by promoting greater engagement on behalf of consumers in evaluating health care options and by providing issuers additional levers to control costs, thereby helping to manage rising premiums. We further stated that we believe incorporating coinsurance rates as the form of cost sharing promotes greater engagement on behalf of consumers by encouraging consumers to more comprehensively research the full costs for particular services from different providers. We thus stated that we believe employing coinsurance rates instead of flat copayments as the form of cost sharing for particular benefits is not in itself necessarily discriminatory in nature and is an important factor in controlling costs and by extension counteracting increasing premiums.

Additionally, we stated (91 FR 6388) that the combination of standardized plan option requirements as well as non-standardized plan option limits has increasingly constrained issuers' ability to offer a sufficiently broad range of plans for several plan years. We stated that this includes plans with tiered provider networks, plans with separate medical and drug deductibles (as opposed to integrated medical and drug deductibles), plans with separate medical and drug MOOPs (as opposed to integrated medical and drug MOOPs), HSA-eligible high- deductible health plans (HDHPs), and plans with more than four tiers of prescription drug coverage. We noted that issuers have not been able to offer plans with these design features as standardized plan options since doing so would deviate from the required cost sharing parameters specified by HHS in rulemaking. Thus, we stated that removing this suite of requirements would grant issuers additional flexibility to once more vary plans along these parameters, which would enhance issuer innovation in plan design and consumer choice. e. Plan Discontinuations

However, we stated in the proposed rule (91 FR 6389) that we recognize that some issuers and consumers may still find certain features of these plan designs valuable. We stated that this is why we were not proposing to require issuers to discontinue their standardized plan option offerings altogether. Instead, we stated that under the proposed approach, FFE and SBE-FP QHP issuers would be permitted to choose whether to discontinue these offerings altogether or to continue offering them with either the same or modified cost sharing, while we simultaneously discontinue the differential display of these plans on HealthCare.gov and the DE pathways.

We stated (91 FR 6389) that under our proposed approach, if issuers wished to discontinue their standardized plan option offerings altogether, they would be permitted to do so, and enrollees in these plans would be crosswalked to a different plan in accordance with the crosswalk hierarchy at Sec. 155.335(j). Additionally, we stated that if issuers wished to continue offering these standardized plan options with the same cost sharing, they would also be permitted to do so, and enrollees in these plans would continue to be auto-reenrolled in these plans from one plan year to the next. However, we noted that these plans would no longer be visually distinguished as standardized plan options on HealthCare.gov or the DE pathways. Finally, we stated that if issuers wished to continue offering these standardized plan options but also wished to modify these plans' cost sharing structures, they would be permitted to do so, but these issuers would continue to be subject to the requirements under the definition of “plan” at Sec. 144.103 and to the uniform modification requirements at Sec. 147.106.

We noted (91 FR 6389) that in most scenarios where an issuer modifies the cost sharing structure of one of its standardized plan option offerings, the newly modified plan that was formerly the standardized plan option would be considered a new plan and would therefore require a new plan ID. We stated that in this scenario, enrollees would be crosswalked from the discontinued plan to another plan in accordance with the crosswalk hierarchy at Sec. 155.335(j). We stated that these enrollees could be crosswalked into the newly modified plan that was formerly the standardized plan option, or an entirely different plan altogether, depending on the unique circumstances in each county.

However, we stated (91 FR 6389) that under the definition of “plan” at Sec. 144.103, a State may permit issuers to make greater changes to a plan's cost sharing while still permitting that plan to be considered the same plan--thus maintaining the same plan ID. Furthermore, we stated that under Sec. 147.106(e)(3)(iv), as long as the variation in cost sharing is solely related to changes in cost and utilization of medical care, or to maintain the same

metal tier level (and other applicable requirements under Sec. 147.106(e) are met), the modifications could be considered uniform (thus, a viable exception to guaranteed renewability).

We stated (91 FR 6389) that in the scenario where an issuer modifies what was formerly a standardized plan option's cost sharing structure while maintaining the same plan ID, enrollees in the plan would be auto-reenrolled from one plan year to the next. We stated that in either case, whether the modification of a former standardized plan option's cost sharing results in that plan being considered the same or a different plan, enrollees would be crosswalked in accordance with the crosswalk hierarchy at Sec. 155.335(j), and that plan would no longer be differentially displayed as a standardized plan option on HealthCare.gov or the DE pathways. We stated that adopting this approach would effectively remove the standardization component of this suite of policies while minimizing the risk of disruption for consumers enrolled in and issuers of these plans.

We stated (91 FR 6389) that, altogether, we believe that employing this suite of policies for the last several plan years has failed to achieve the originally articulated objectives of enhancing the consumer experience, increasing consumer understanding, and combatting discriminatory benefit designs. We stated that this failure is demonstrated by exacerbated plan proliferation in PY 2023 and the comparatively low uptake of these standardized plan options despite the full suite of differential display features that visually distinguishes these plans from corresponding non-standardized plan options. Finally, we noted that these standardized plan options reflect market consensus and incorporate the most popular plan design features of many existing non-standardized plan option offerings, meaning these plan design features are not exclusive to standardized plan options.

We stated (91 FR 6389) that given that imposing these requirements has increased burden for both issuers and HHS (for example, by requiring issuers to create and submit certification applications for additional plans) and unnecessarily constrained issuers in plan design while failing to achieve our originally articulated objectives, we no longer believe that the advantages of employing this strategy outweigh the disadvantages of doing so. We stated that we therefore believe that discontinuing the full suite of standardized plan options policies (in conjunction with discontinuing non-standardized plan option limits and exceptions, discussed in section III.E.9. of the proposed rule) would reduce issuer and HHS burden and provide more flexibility for issuers to innovate in plan design.

Accordingly, we stated (91 FR 6389) that the proposal would remove the following from our regulations effective beginning PY 2027: the definition of “standardized option” at Sec. 155.20; all requirements pertaining to standardized plan options at Sec. 156.201 (the requirements for FFE and SBE-FP QHP issuers in the individual market to offer these plans at paragraphs (a) and (b), as well as the requirement for these plans to meaningfully differ from one another at paragraph (c)); the differential display of standardized plan options on HealthCare.gov at Sec. 155.205(b)(1); and the corresponding standardized plan option differential display requirements for approved web-broker and QHP issuer enrollment partners using a DE pathway to facilitate consumer enrollment through an FFE or SBE-FP at Sec. Sec. 155.220(c)(3)(i)(H) and 156.265(b)(3)(iv). We stated that the proposal would also entail the cessation of the annual design and publication of these plans in the applicable Payment Notice rulemaking for each plan year.

We sought comment (91 FR 6389) on this proposal. We also sought comment on potential regulatory alternatives that would allow us to achieve the same goals of simplifying the plan selection process and reducing burden without discontinuing this suite of policies in its entirety. In particular, we sought comment on continuing to require issuers to offer standardized plan options only at particular metal levels, such as the bronze and silver metal levels (instead of at every metal level at which they offer non-standardized plan options). We also sought comment on requiring issuers to offer standardized plan options only in certain service areas in which they offer a certain number of non-standardized plan options. We also sought comment on transitioning from requiring issuers to offer these standardized plan options to once more allowing issuers to voluntarily offer them--as was the approach with the previous iteration of the policy--while we continue to maintain the differential display of these plans on HealthCare.gov and the DE pathways.

After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposal to discontinue the full suite of standardized plan option policies below.

Comment: Many commenters supported the proposal to discontinue these standardized plan option policies. These commenters stated that requiring issuers to offer standardized plan options (especially while simultaneously limiting the number of non-standardized plan options they can offer) has increasingly constrained issuers' ability to design and offer plans that reflect evolving market conditions and consumer preferences. These commenters cited plans with tiered provider networks, HSA-eligible HDHPs, plans with separate medical and drug MOOPs and deductibles (compared to integrated medical and drug MOOPs and deductibles), plans with more than four formulary tiers, plans that reduce cost sharing for virtual visits, and individual coverage health reimbursement arrangements (ICHRAs) as examples of benefit designs that have been increasingly constrained by these standardized plan option policies. These commenters thus stated that discontinuing these standardized plan option policies would greatly enhance the degree of consumer choice.

Commenters who supported discontinuing the requirement to offer standardized plan options also emphasized that plans with standardized cost sharing can still differ significantly in other important dimensions, such as in terms of benefit coverage, cost sharing for benefit categories outside those specified by HHS in annual rulemaking, provider networks, formularies, and utilization management practices. These commenters subsequently stated that formally designating plans that conform with the required cost sharing parameters specified by HHS in rulemaking as standardized plan options (along with differentially displaying these plans on HealthCare.gov and DE platforms) could therefore be considered misleading and can be confusing for consumers who are led to believe that these plans are completely standardized in all regards.

Commenters who supported discontinuing the requirement for issuers to offer standardized plan options further agreed that standardized plan options have failed to meaningfully simplify consumer choice as was originally intended--especially since standardized plan options continue to exist alongside non-standardized plan options. These commenters stated that contrary to the original intention of employing these standardized plan option policies--simplifying the plan

selection process--whether a particular plan offering is a standardized or non-standardized plan option in practice serves as yet another variable that consumers must consider during the plan selection process, introducing an additional layer of complexity.

Commenters further stated that the failure of these standardized plan option policies to meaningfully simplify the plan selection process is evinced by the fact that the total number of plan offerings remains similar to the total number of plan offerings before the imposition of these requirements. Specifically, these commenters highlighted that the weighted average total number of plans available per enrollee was only reduced from 108 in PY 2022 to 100 in PY 2025-- despite imposing multiple layers of novel requirements for several consecutive years, which substantially increased issuer burden and caused considerable market disruption in the form of plan discontinuations.

In contrast, several commenters opposed the proposal to discontinue the requirement to offer standardized plan options. These commenters stated that standardized plan options improve consumers' ability to make informed plan selections by facilitating more meaningful comparisons across plans. These commenters stated that standardizing cost sharing enhances transparency and allows consumers to more meaningfully evaluate other important plan attributes, such as provider networks, formularies, and quality ratings rather than relying on premium differences alone. Several commenters thus stated concern that removing standardized plan options would increase complexity for consumers and make plan selection more difficult, particularly for individuals with limited health insurance literacy.

Commenters further stated that standardized plan options promote more predictable and consumer-friendly cost sharing, including the use of copayments in place of coinsurance rates and the coverage of certain services before the deductible. Relatedly, several commenters emphasized that standardized plan options help mitigate the risk of potentially discriminatory benefit designs by reducing issuers' ability to structure benefits or formularies in ways that discourage enrollment by individuals with chronic and high-cost conditions. Several commenters stated concern that eliminating standardized plan options could increase opportunities for risk segmentation (for example, by allowing issuers greater leeway in designing plans in such a manner to encourage the enrollment of healthier and lower risk consumers while simultaneously discouraging the enrollment of less healthy and higher risk consumers), potentially leading to less stable risk pools and greater premium volatility.

Commenters who supported continuing requiring issuers to offer standardized plan options also highlighted that enrollment in and active selection of standardized plan options has increased in recent years and now represents a substantial share of total enrollment in the FFEs and SBE-FPs. Some commenters further pointed to the experience of State Exchanges that have adopted standardized plan option requirements, stating that these approaches have improved affordability, access, and consumer understanding. Finally, several commenters raised concerns about potential disruption to current enrollees, stating that discontinuing standardized plan options could force consumers to transition to new plans that may not meet their existing health care needs, potentially resulting in changes to provider networks, covered benefits, or prescription drug coverage.

Response: For the reasons stated earlier in this section of this final rule, we agree with commenters who stated that requiring issuers to offer standardized plan options has constrained issuers' ability to design plans that reflect evolving market conditions and consumer preferences. For the reasons stated earlier in this section of this final rule, we also agree that these standardized plan option policies have constrained issuers' flexibility to develop innovative benefit designs. This includes plans with tiered provider networks, HSA- eligible HDHPs, plans with separate medical and drug MOOPs and deductibles (compared to integrated medical and drug MOOPs and deductibles), plans with more than four formulary tiers, plans that reduce cost sharing for virtual visits, and ICHRAs. Accordingly, we believe that discontinuing the requirement for issuers to offer standardized plan options will foster innovation, permit issuers to more readily adapt to evolving market dynamics, and ensure that consumers continue to retain a sufficient degree of choice in plan selection.

We also agree with commenters that standardized plan options may still differ across other important dimensions, such as in terms of benefit coverage, cost sharing for benefit categories not specified by HHS in rulemaking, provider networks, formularies, and utilization management practices. We therefore agree that designating these plans as standardized plan options despite these significant differences can be potentially misleading and confusing for consumers.

We also agree that contrary to the original intention of our standardized plan option policies--simplifying the plan selection process--whether a particular plan offering is a standardized or non- standardized plan option in practice serves as yet another variable that consumers must consider during the plan selection process, introducing an additional layer of complexity. This additional variable that consumers must consider in turn complicates the plan selection process and subsequently increases the risk of suboptimal plan selection.

We also agree that the total number of plan offerings remaining similar to the total number of plan offerings before the imposition of these requirements demonstrates that these standardized plan options failed to achieve our intended result. Specifically, we note that that the weighted average total number of plans available per enrollee was only reduced from 108 in PY 2022 to 100 in PY 2025. This is despite imposing multiple layers of novel requirements for several consecutive years, which substantially increased issuer burden and caused considerable market disruption in the form of plan discontinuations. The market disruption and plan discontinuations that occurred subsequent to the imposition of these requirements is discussed in greater detail in section III.E.9. of this final rule.

We acknowledge that standardized cost sharing may facilitate more direct comparisons between some subset of all available plan offerings, especially when supplemented with the differential display features for these plans on HealthCare.gov and DE platforms (such as by filtering to view only standardized plan options), which may benefit consumers with limited health insurance literacy, but we do not believe that this limited benefit warrants imposing substantial burden, inhibiting issuer innovation, constraining consumer choice, and causing considerable market disruption in the form of plan discontinuations. We further believe that consumers consider multiple factors beyond cost sharing, including premiums, provider networks, formularies, and total expected out-of-pocket costs. Standardizing cost sharing alone (especially if only for a subset of all benefit categories and for a subset of all plan offerings) does not ensure meaningful comparability for all

available plan options for consumers--and contrary to the original intention of enacting these standardized plan option policies, complicates the plan selection process by introducing another variable that consumers must consider.

Furthermore, we believe that there are more effective and less burdensome alternatives for simplifying the plan selection process than continuing to require issuers to offer standardized plan options. In particular, we believe that making enhancements to plan display, choice architecture, decision-support tools, and other forms of consumer assistance on HealthCare.gov and DE platforms, rather than relying on restrictive plan design requirements, is an approach better suited to supporting informed consumer choice--and that such an approach avoids the negative consequences associated with standardized plan options, such as increased burden, inhibited issuer innovation, constrained consumer choice, and continued market disruption in the form of plan discontinuations. We therefore note that we will continue to research enhancements to plan display, choice architecture, decision-support tools, and other forms of consumer assistance on HealthCare.gov and encourage issuers and other DE partners to do the same.

We further considered comments stating that standardized plan options promote more predictable cost sharing, including the use of copayments and pre-deductible coverage. We do not believe it is necessary to require issuers to offer standardized plan options to achieve these outcomes. This is because issuers continue to retain the flexibility to incorporate these features into plan designs absent standardization requirements and frequently do so. As we stated in the proposed rule, we designed these plans to incorporate the most popular plan design features of many existing non-standardized plan option offerings--meaning many of these plan design features largely reflect market consensus, are not exclusive to standardized plan options, and are already frequently included in many standardized plan options currently offered through the FFEs and SBE-FPs.

For example, since the reintroduction of these standardized plan option policies in PY 2023, we finalized every annual iteration of plan designs with pre-deductible copayments as the form of cost sharing for the primary care visit benefit category at every metal level. When we initially created the plan designs for PY 2023, we based these plan designs on FFE and SBE-FP cost-sharing and enrollment data from PY 2021, which was the most recent available data at that time. In PY 2021, 91 percent of FFE and SBE-FP consumers were enrolled in plan offerings with pre-deductible copayments as the form of cost sharing for the primary care visit benefit category at the standard silver metal level. Furthermore, in the FFEs and SBE-FPs in PY 2021, the weighted average pre-deductible copayment amount for the primary care visit benefit category at the standard silver metal level was $37, while the copayment amount for this benefit category in our plan design at the standard silver metal level for PY 2023 was $40--a difference of only $3. Taken altogether, this means that this plan design feature was not exclusive to standardized plan options and was already incorporated into the vast majority of non-standardized plan option offerings--as is true for many other plan design features.

We also considered comments stating that standardized plan options help mitigate discriminatory benefit designs and reduce opportunities for risk segmentation. We note that existing nondiscrimination requirements, including those at Sec. Sec. 156.125 and 156.200(e), as well as other FFE and SBE-FP QHP issuer monitoring and compliance mechanisms, continue to apply and prohibit discriminatory benefit designs. These requirements and mechanisms include, as part of Exchange QHP certification reviews, reviews for discriminatory language (which prohibit issuer marketing materials and benefit descriptions from containing language or content that discriminates against or discourages enrollment by individuals based on protected characteristics); cost-sharing outliers (which identify plans with unusually high or potentially discriminatory cost sharing relative to other plans to prevent the inclusion of plan attributes that could discourage enrollment by individuals with significant health needs); and various treatments under the treatment protocol calculator (which evaluate whether issuer utilization management policies (such as prior authorization and step therapy) are applied in a clinically appropriate and non-discriminatory manner to prevent practices that could inappropriately restrict access to medically necessary care or discourage enrollment by individuals with significant health needs). Due to their comprehensive scopes and well-established review processes, we believe that these existing protections are sufficient to address these concerns without requiring issuers to offer standardized plan options.

We further considered comments expressing concern that eliminating standardized plan options could negatively affect risk pool stability and increase premium volatility. We do not believe that continuing to require issuers to offer standardized plan options is necessary to maintain stable risk pools--especially since risk pools were relatively stable prior to the introduction of the requirement to offer these plans beginning in PY 2023. Additionally, since we designed standardized plan options to reflect and incorporate the most popular plan design features of QHPs offered in the FFEs and SBE-FPs, many non- standardized plan options that continued to be offered have these same plan design features. Thus, the discontinuation of the requirement for issuers to offer these plans would largely reflect a return to the status quo from several years ago with respect to risk pool stability and premium volatility.

Furthermore, other program features, including risk adjustment requirements (such as those under part 153) and rating rules (such as those at Sec. 147.102) will help ensure that this discontinuation does not destabilize risk pools and does not encourage adverse selection (namely, issuers designing plans in such a manner to encourage the enrollment of healthier and lower risk consumers and discourage the enrollment of less healthy and higher risk individuals).

We also considered comments citing increasing enrollment in standardized plan options and the experience of State Exchanges that have adopted standardized plan requirements. While we acknowledge that a significant number of consumers have actively selected and enrolled in standardized plan options, we do not believe that this fact alone justifies maintaining these requirements--especially since these standardized plan options reflect the most popular plan design attributes of existing offerings and are thus largely duplicative of non-standardized plan options.

We further note that active selection of and enrollment in standardized plan options would be substantially lower without differential displaying these plans on HealthCare.gov and DE platforms as well as concurrently limiting the number of non-standardized plan options that issuers can offer--both of which have had the effect of actively steering consumers into standardized plan options but, despite this, have not resulted in overwhelming enrollment in standardized plan options. We also

reiterate that these policies significantly constrained issuer innovation in plan design and the degree of consumer choice while simultaneously imposing substantial burden and causing a considerable degree of market disruption.

We also note that State Exchanges continue to retain the flexibility to adopt and implement State standardized plan option requirements, and this policy does not constrain their ability to do so. We further note that while requiring issuers to offer standardized plan options may be appropriate in those particular States, the nature of the markets in the FFEs and SBE-FPs differs substantially from the nature of the markets in those States (such as the markets in Connecticut, Massachusetts, and Vermont). Namely, the consumer populations (and by extension the unique health care needs) within the FFEs and SBE-FPs are significantly more heterogeneous in nature, and it is therefore difficult to impose an effective, uniform approach to plan design across all these States.

Finally, we acknowledge commenters' concerns regarding potential disruption to current enrollees, and we acknowledge that some enrollees may be required to transition to different plan offerings if issuers discontinue their existing standardized plan options. That said, as previously stated, standardized plan options were designed to largely reflect industry consensus on numerous fronts, and therefore we do not expect the discontinuation of standardized plan options to cause systematic disruption. Further, we expect that issuers will continue to offer a range of plans that meet consumer needs--including with plan design features previously incorporated into standardized plan options, since standardized plan options were designed to reflect the most popular plan design features in the FFEs and SBE-FPs.

In addition, as explained earlier in this section of this final rule, existing enrollment and crosswalk processes, such as those at Sec. 155.335(j), are designed to support consumers during transitions and minimize disruption. We further reiterate that we are not requiring issuers to discontinue their standardized plan options. Instead, we are simply discontinuing the requirement for issuers to offer these plans as well as the differential display of these plans on HealthCare.gov and DE platforms.

Comment: Several commenters stated that the proposal to discontinue these standardized plan option policies is arbitrary and capricious under the Administrative Procedure Act. These commenters cited prior rulemaking and City of Columbus, which included the vacatur of the 2019 policy to discontinue the designation of certain plans as “standardized options.”

These commenters stated that HHS failed to adequately justify its departure from longstanding findings in the 2017, 2018, and 2023 through 2025 Payment Notices, in which HHS concluded that standardized plan options enhance consumer understanding and simplify plan comparisons by reducing variation in cost sharing. These commenters further stated that HHS did not sufficiently explain why these previously identified benefits are now afforded less weight. These commenters stated that reliance on findings of only “marginal” reductions in plan counts is insufficient, particularly given evidence that even modest improvements in plan comparability can improve consumer outcomes.

Commenters also cited research indicating that excessive plan choice can lead to consumer confusion and suboptimal plan selection due to difficulty processing complex health insurance information and fatigue--which may lead to unnecessary spending and unexpected financial harm for consumers.297 298 These commenters further stated that HHS' conclusion that standardized plan options are ineffective in improving consumer experience is not adequately supported. Finally, these commenters stated that the proposal is internally inconsistent. They noted that, while HHS expresses concern regarding consumer experience and potential choice complexity, it simultaneously proposes to eliminate both standardized plan options and limits on non-standardized plan options. Commenters stated that this approach could increase the number of available plans and exacerbate consumer confusion, undermining the rationale for the policy change.

\297\ Taylor EA, Carman KG, Lopez A, Muchow AN, Roshan P, & Eibner C. (2016) Consumer Decision-making in the Health Care Marketplace. RAND Corporation.

\298\ Chao Zhou and Yuting Zhang, “The Vast Majority of Medicare Part D Beneficiaries Still Don't Choose the Cheapest Plans That Meet Their Medication Needs.” Health Affairs, 31, no.10 (2012): 2259-2265.

Response: We do not agree with commenters' points. In the proposed rule, we expressly acknowledged the history of standardized plan option policies and stated that, based on more recent experience administering and operationalizing these policies, we thoughtfully reassessed their efficacy and have concluded that adopting these standardized plan option policies was an ineffective approach for improving the plan selection process. We offered ample evidence for this shift.

For example, as we explained in the proposed rule (91 FR 6385 through 6389), the requirement to offer standardized plan options increased both the weighted average number of total plans available per enrollee and the weighted average number of total plans offered per issuer in PY 2023; introduced another variable that consumers must consider during the plan selection process; yielded comparatively low enrollment in and active selection of standardized plan options despite the differential display of these plans as well as concurrent limits on the number of non-standardized plan options; and duplicated the most popular plan design features of plans offered through the FFEs and SBE- FPs--while simultaneously inhibiting issuer innovation in plan design, constraining the degree of consumer choice, imposing substantial burden, and causing significant market disruption.

We also do not agree that the proposal failed to address prior findings regarding the potential benefits of standardized plan options. While prior rulemaking identified potential benefits related to consumer understanding and plan comparison, we stated in the proposed rule (91 FR 6385 through 6389) that these benefits have not materialized to a sufficient degree in practice to justify continuing to require issuers to offer standardized plan options and limiting the number of non-standardized plan options.

Specifically, we found that the marginal net reductions in the weighted average number of total plans available per enrollee and per issuer associated with these standardized plan option and non- standardized plan option limits and exceptions policies were modest and likely indiscernible to consumers during the plan selection process. In particular, in PY 2022, the year before introduction of the standardized plan option policies, there was a weighted average number of 108 total plans available per enrollee and a weighted average number of 16.9 total plans offered per issuer. Whereas in PY 2025 (after several consecutive years imposing novel layers of requirements), these same measures were 100 and 13.7, respectively. For the reasons stated in the proposed rule and earlier in this section of this final rule, we concluded that these marginal net reductions do not warrant the ongoing regulatory complexity, increased issuer burden, limitations on issuer flexibility

in plan design, and constraints on consumer choice associated with the current framework.

We further do not agree that the proposal fails to explain why prior findings are now afforded less weight, and we do not agree that prior findings are indeed “afforded less weight.” The proposed rule explains (91 FR 6387) that standardized plan options have operated alongside non-standardized plan options and, even when combined with limits on non-standardized plan options, have not meaningfully reduced overall plan complexity. Based on this experience, we concluded that standardized plan options are not an effective mechanism for achieving the intended goals of improving consumer experience and simplifying plan selection.

We acknowledge commenters' references to research on consumer decision-making and choice overload. However, we do not believe maintaining standardized plan option requirements is the most effective means of addressing concerns about improving consumer experience. We believe the standardized plan option policies inhibited issuer innovation in plan design, constrained the degree of consumer choice, and imposed substantial burden. As discussed earlier in this section, we believe that making improvements to choice architecture, transparency, and consumer decision-support tools are better suited to supporting informed plan selection without imposing prescriptive plan design constraints. We reiterate that we intend to continue researching such enhancements and that we encourage issuers and other DE partners to do the same.

Further, we do not agree that there is an internal inconsistency in discontinuing both standardized plan options and non-standardized plan option limits and exceptions. We determined that both the requirement to offer standardized plan options as well as imposing restrictive non- standardized plan option limits were ineffective tools for achieving their distinct intended objectives and simultaneously imposed unnecessary burden and constraints. Given that standardized plan options are offered alongside non-standardized plan options, whether a particular plan offering is a standardized or non-standardized plan option serves as yet another variable that consumers must consider during the plan selection process. This is contrary to the original intent of simplifying the plan selection process and introduces an additional layer of complexity.

Finally, the fact that eliminating these policies may result in marginal changes to the total number of available plan offerings per consumer and issuer does not render the policy arbitrary where, as here, HHS has reasonably stated its rationale for moving away from this regulatory approach and proposed, with evidence, a more effective approach for enhancing the consumer experience, increasing consumer understanding, and simplifying the decision-making process for consumers on the Exchanges.

Comment: Several commenters supported continuing the meaningful difference standard under Sec. 156.201(c) (which currently only applies to standardized plan options) and expanding it to apply to non- standardized plan options. These commenters stated concern that, absent a meaningful difference requirement, especially if standardized plan options and non-standardized plan option limits are discontinued, issuers would be permitted to offer numerous plans with only minor or difficult-to-discern differences in cost sharing, benefit designs, or plan marketing conventions.

These commenters stated that this could in turn increase plan proliferation and make it more challenging for consumers to identify coverage that best meets their unique health care and financial needs. These commenters thus suggested that differences in key plan design features, such as MOOPs, deductibles, benefit coverage, provider networks, or formularies should be required for plans to be considered meaningfully different from one another (and thus be permitted to be offered through the FFEs and SBE-FPs). In addition, these commenters recommended continuing monitoring plan offerings to ensure that any meaningful difference standard effectively prevents excessive plan proliferation and reduces consumer confusion.

Response: We do not agree with commenters' concerns that, absent a meaningful difference requirement, particularly in combination with the discontinuation of standardized plan options and non-standardized plan option limits and exceptions, issuers will offer plans with only minor or difficult-to-discern differences, which could potentially contribute to plan proliferation and make it more challenging for consumers to identify coverage that meets their unique health care needs. In large part, this is because there were only a handful of instances of such duplicate plans out of hundreds of total plan offerings in the FFEs and SBE-FPs in PY 2026 that issuers needed to modify to conform with the standard at Sec. 156.201(c). We expect the number of such duplicative plans to continue to be minimal in future plan years, even without such a standard being in place.

Further, we do not believe that maintaining or expanding a meaningful difference standard to apply to non-standardized plan option offerings (which we also did not propose to do) is the most appropriate or effective mechanism to address these concerns at this time. We believe that such requirements would impose additional operational burdens on issuers (such as by being forced to modify a plan's benefit coverage, cost sharing, MOOP, deductible, provider network, or formulary solely to conform to such a standard--which could also cause disruption to consumers enrolled in those plans).

We also believe that such requirements would fail to consistently yield differences that are meaningful or relevant from a consumer perspective--especially based on our experience administering the meaningful difference standard that was previously codified at Sec. 156.298 from PY 2015 through PY 2018. In fact, when we discontinued the previous version of the meaningful difference standard, we stated (83 FR 17027) that removing the meaningful difference standard would not substantially increase the number of materially similar plans from the same issuer. This is because with the standard--similar to our experience with the standard at Sec. 156.201(c)--there were only a handful of instances of such duplicate plans out of hundreds of total plan offerings in the FFEs and SBE-FPs that had to be modified to conform with the standard at Sec. 156.298.

We are further concerned that such imposing requirements could further constrain issuers' flexibility to design plan offerings that respond to local market conditions and consumer preferences, similar to our concern about the impact of non-standardized plan option limits, discussed in section III.E.9. of this final rule, which is contrary to our current approach. We further acknowledge commenters' recommendations that HHS continue monitoring plan offerings to prevent excessive plan proliferation and consumer confusion. We intend to continue to monitor plan offerings and consumer experience. We further note that improvements to plan display, consumer decision-support tools, and transparency on HealthCare.gov and DE platforms will more effectively address concerns related to consumer understanding and plan selection without the unnecessary burden and

constraints of an expanding meaningful difference standard.

Comment: Several commenters addressed the role of enhancing choice architecture on HealthCare.gov and the DE platforms to simplify the plan selection process. These commenters stated that HHS has existing and emerging tools that could be leveraged to better support consumers in navigating plan choices, particularly in the absence of standardized plan options, non-standardized plan option limits, an expanded meaningful difference standard, or other plan design constraints.

These commenters suggested improvements such as more robust filtering capabilities, side-by-side plan comparisons, utilization- based recommendations, and targeted educational prompts to help consumers differentiate among plan options. Some commenters also recommended enabling consumers to more easily identify and filter plans based on specific characteristics, such as disease-specific offerings. Several commenters noted that emerging technologies, including tools that allow consumers to describe their health care needs in natural language and receive personalized cost projections, may facilitate the plan selection process more meaningfully than the suite of standardized plan option policies--and without the disadvantages of this approach.

In addition, several commenters emphasized the importance of clear and accessible plan information, including transparent presentation of provider network participation and cost-sharing obligations for key services such as hospital care. Commenters stated that improving the clarity and usability of plan information would better enable consumers to make informed decisions.

Response: We agree with commenters that enhancing choice architecture on HealthCare.gov and DE platforms is an important component of improving the consumer experience, particularly as the landscape of plan offerings continues to evolve. We also agree that HHS has existing and emerging tools that can support consumers in navigating plan choices and making informed enrollment decisions. For example, HealthCare.gov already currently allows consumers to filter search results by a range of plan design features (such as monthly premium, metal level, maximum yearly deductible network type, insurance company, HSA eligibility, medical provider, and prescription drug) and compare up to three plans simultaneously.

We also appreciate commenters' specific recommendations to enhance consumer decision-support tools on HealthCare.gov and DE platforms, including through more robust filtering capabilities, improved side-by- side plan comparisons, utilization-based recommendations, and targeted educational prompts. We believe that these types of capabilities (several of which are already supported, including filtering capabilities, side-by-side comparisons, and targeted educational prompts) can help consumers better differentiate among plan options and select coverage that aligns with their needs. We will continue to consider opportunities to enhance these tools, and we encourage issuers and other DE partners to do the same.

We also agree that such tools have the potential to more meaningfully facilitate the plan selection process than employing these standardized plan option policies--and without the disadvantages of this approach. This is because consumers would have an enhanced degree of choice in terms of diverse plan offerings (with issuers no longer being constrained by these standardized plan option policies), and the search results of all available plan offerings on HealthCare.gov and DE platforms could then be tailored to unique consumer preferences and health care needs.

We further agree with commenters on the importance of clear, accurate, and accessible plan information, including transparent presentation of provider network participation and cost-sharing obligations for key services. This information is included on HealthCare.gov for every available plan option and is presented in a clear and understandable manner. In particular, details regarding each plan's premium, metal level, product network type, provider network, quality rating, estimated total yearly cost, deductible, MOOP, cost sharing, and prescription drug coverage are included in each plan's display card. This information is also accompanied by concise definitions of key terms. Ultimately, we agree that improving the clarity and usability of plan information is critical to enabling consumers to make informed decisions. We will continue to evaluate ways to enhance the presentation of this information, and we encourage issuers and other DE partners to do the same.

Comment: Several commenters requested clarification on whether plans that were previously designated as standardized plan options in PY 2026 that issuers voluntarily choose to continue offering with either the same or modified cost sharing in PY 2027 are required to adopt any particular plan marketing name and whether it is permissible to continue to use phrases such as “standardized” or any other such similar language in the plan marketing name for these plans.

Response: Issuers have not been subject to any specific plan marketing name requirements for standardized plan options since the introduction of the requirement to offer these plans in PY 2023, other than the requirements at Sec. 156.225. Instead, issuers have retained the discretion to adopt the plan marketing names that they desire for these plans since PY 2023, subject to the existing requirements at Sec. 156.225. Issuers continue to retain this discretion if they choose to continue offering plans that were previously designated as standardized plan options in PY 2026 with either the same or modified cost sharing in PY 2027. Issuers may also choose to continue including phrases such as “standardized” or any other such similar language in the plan marketing name for these plans, provided those plans names comport with the requirements at Sec. 156.225. 9. Non-Standardized Plan Option Limits (Sec. 156.202)

In the 2027 Payment Notice proposed rule (91 FR 6390), we proposed to exercise our authority under sections 1311(c)(1) and 1321(a)(1)(B) of the Affordable Care Act to discontinue non-standardized plan option limits and exceptions at Sec. 156.202 effective beginning in PY 2027. Section 1311(c)(1) of the Affordable Care Act directs the Secretary to establish criteria for the certification of health plans as QHPs. Section 1321(a)(1)(B) of the Affordable Care Act directs the Secretary to issue regulations that set standards for meeting the requirements of title I of the Affordable Care Act, which includes section 1311, for, among other matters, the offering of QHPs through such Exchanges.

In the 2023 Payment Notice proposed rule (87 FR 27345 through 27347), we solicited comment on choice architecture and preventing plan choice overload. In this comment solicitation, we noted that although we continued to prioritize competition and choice on the FFEs and SBE- FPs, we were concerned about plan choice overload, which can result when consumers have too many choices in plan options. We referred to a 2016 report by the RAND Corporation reviewing over 100 studies which concluded that having too many health plan choices can lead to poor enrollment decisions due to the difficulty consumers face in processing complex health insurance coverage

information.\299\ We also referred to a study of consumer behavior in Medicare Part D, Medicare Advantage, and Medigap that demonstrated that a choice of 15 or fewer plans was associated with higher enrollment rates, while a choice of 30 or more plans led to a decline in enrollment rates.\300\

\299\ Taylor EA, Carman KG, Lopez A, Muchow AN, Roshan P, and Eibner C. Consumer Decision-making in the Health Care Marketplace. RAND Corporation. 2016.

\300\ Chao Zhou and Yuting Zhang, “The Vast Majority of Medicare Part D Beneficiaries Still Don't Choose the Cheapest Plans That Meet Their Medication Needs.” Health Affairs, 31, no.10 (2012): 2259-2265.

With this concern in mind, in the 2023 Payment Notice proposed rule (87 FR 27345 through 27347), we stated that we were interested in exploring possible methods of improving choice architecture and preventing plan choice overload. We stated interest in exploring the feasibility and utility of limiting the number of non-standardized plan options that QHP issuers could offer through the FFEs and SBE-FPs as one option to reduce the risk of plan choice overload and to further streamline and optimize the plan selection process for consumers on the FFEs and SBE-FPs.

Accordingly, we sought comment on the impact of limiting the number of non-standardized plan options that issuers can offer through the FFEs and SBE-FPs, on effective methods to achieve the goal of reducing the risk of plan choice overload and to further streamline and optimize the plan selection process for consumers on the FFEs and SBE-FPs, the advantages and disadvantages of these methods, and if there were alternative methods not considered. We also sought comment on evidence- based approaches to enhancing choice architecture within the FFEs and SBE-FPs.

In response to this comment solicitation, in the 2023 Payment Notice (87 FR 27345 through 27347), we highlighted many commenters' specific recommendations regarding modifying choice architecture to enhance the consumer shopping experience. We also noted that several commenters supported limiting the number of QHPs that could be offered through the FFEs and SBE-FPs, explaining that adopting such an approach could lower costs for consumers, set standards for plan quality, and foster robust competition among issuers seeking entry into the FFEs and SBE-FPs. Conversely, we noted that several commenters opposed limiting the number of QHPs that could be offered through the FFEs and SBE-FPs, explaining that doing so would limit issuer flexibility to design plans based on consumer preferences and needs. We also noted that several commenters supported resuming an updated version of the meaningful difference standard, which was previously codified at Sec. 156.298.

In the 2024 Payment Notice (88 FR 25855 through 25865), at Sec. 156.202, we introduced limits on the number of non-standardized plan options that issuers of QHPs can offer through FFEs and SBE-FPs to four non-standardized plan options per product network type (as described in the definition of “product” at Sec. 144.103), metal level (excluding catastrophic plans), and inclusion of dental and/or vision benefit coverage, in any service area for PY 2024, and two for PY 2025 and subsequent plan years.

In the 2024 Payment Notice (88 FR 25856 through 25857), we stated that we introduced non-standardized plan option limits for several reasons. We stated that there had been a sizeable increase in the weighted average number of total QHPs on the FFEs and SBE-FPs available per enrollee and plans offered per issuer in recent years. We stated that with this continued plan proliferation, we believed that limiting the number of non-standardized plan options that FFE and SBE-FP issuers of QHPs could offer through the FFEs and SBE-FPs would greatly enhance the consumer experience on HealthCare.gov. We further stated that we made several enhancements to the consumer experience and choice architecture on HealthCare.gov in conjunction with introducing non- standardized plan option limits.

We stated that we believed that adopting both of these measures (in conjunction with requiring issuers to offer standardized plan options) would be the most effective method to streamline the plan selection process and to reduce the risk of plan choice overload for consumers on HealthCare.gov. We also stated that we believed that directly limiting the number of non-standardized plan options that issuers could offer through the FFEs and SBE-FPs was a more effective approach in reducing the risk of choice overload than reinstituting a revised version of the meaningful difference standard, which had previously demonstrated limited efficacy.

In the 2025 Payment Notice (89 FR 26362 through 26375), we introduced an exceptions process allowing issuers to offer additional non-standardized plan options exceeding the limit of two per product network type, metal level, inclusion of adult dental benefit coverage, pediatric dental benefit coverage, and adult vision benefit coverage, and service area for PY 2025 and subsequent plan years, if issuers demonstrate that these additional non-standardized plans have specific design features that would substantially benefit consumers with chronic and high-cost conditions. As part of this exceptions process, each issuer must demonstrate how cost sharing pertaining to the treatment of the chronic and high-cost condition would be reduced by 25 percent or more relative to that issuer's other non-standardized plan option offerings in the same product network type, metal level, inclusion of adult dental benefit coverage, pediatric dental benefit coverage, and adult vision benefit coverage, and service area.

In the 2025 Payment Notice (89 FR 26366), we stated that we introduced this exceptions process for several reasons. Specifically, we noted that several commenters stated that reducing the non- standardized plan option limit from four in PY 2024 to two in PY 2025 would cause FFE and SBE-FP issuers to discontinue non-standardized plans with lower enrollment, which would likely be plans with designs that are attractive to a smaller number of enrollees who have relatively less common and high-cost health care needs. Commenters further stated that many of the plans that would likely be discontinued would be those that benefit consumers with chronic and high-cost conditions. Commenters stated that permitting issuers to offer additional non-standardized plan options that would provide targeted coverage specifically for medically complex populations with chronic and high-cost conditions would allow for more targeted innovation by issuers while still achieving the reduction in plan proliferation HHS has sought.

In the proposed rule, we stated (91 FR 6391) that under our proposed approach, issuers would no longer be subject to the non- standardized plan option limit of two per product network type, metal level, inclusion of adult dental benefit coverage, pediatric dental benefit coverage, and adult vision benefit coverage, in any service area at Sec. 156.202(a) through (c), for PY 2027 and subsequent years. We also stated that issuers would similarly no longer be required to utilize the non-standardized plan option limit exceptions process at Sec. 156.202(d) through (e) to offer additional non-standardized plan options given that they would no longer be limited in the number of non-standardized plan options they may offer. We stated that we would correspondingly remove Sec. 156.202 from our regulations.

Similar to our proposal to discontinue the requirement for issuers to offer standardized plan options (as well as the differential display of these plans) but not to require issuers to discontinue these existing offerings altogether, in the proposed rule, we proposed to discontinue the non-standardized plan option limits and exceptions process but not require issuers to discontinue these existing offerings altogether (91 FR 6391). We stated that, instead, under the proposal, issuers would be permitted to choose whether to discontinue the chronic and high-cost condition plans originally offered through the non- standardized plan option limit exceptions process altogether or continue offering them with either the same or modified cost sharing.

We stated (91 FR 6391) that under this proposed approach, if issuers wished to discontinue the chronic and high-cost condition plans originally offered through the non-standardized plan option limit exceptions process altogether, they would be permitted to do so, and enrollees in these plans would be crosswalked to a different plan in accordance with the crosswalk hierarchy at Sec. 155.335(j). Additionally, we stated (91 FR 6391) that if issuers wished to continue offering the chronic and high-cost condition plans originally offered through the exceptions process with the same cost sharing structures, they would also be permitted to do so, and enrollees in these plans would continue to be auto-reenrolled in these plans from one plan year to the next. Finally, we stated that if issuers wished to continue offering the chronic and high-cost condition plans originally offered through the exceptions process but also wished to modify these plans' cost sharing structures, they would be permitted to do so, but these issuers would continue to be subject to the requirements under the definition of “plan” at Sec. 144.103 and to the uniform modification requirements at Sec. 147.106.

We also stated (91 FR 6391) that in most scenarios where an issuer modifies the cost sharing structure of one of its chronic and high-cost condition plans originally offered through the exceptions process, the newly modified plan that was formerly the exceptions process plan would be considered a new plan and would therefore require a new plan ID. In this scenario, enrollees would be crosswalked from the discontinued plan to another plan in accordance with the crosswalk hierarchy at Sec. 155.335(j). We stated that these enrollees could be crosswalked into the newly modified plan that was formerly the exceptions process plan, or an entirely different plan altogether, depending on the unique circumstances in each county.

However, we noted (91 FR 6391) that under the definition of “plan” at Sec. 144.103, a State may permit issuers to make greater changes to a plan's cost sharing while still permitting that plan to be considered the same plan--thus maintaining the same plan ID. Furthermore, we noted that under Sec. 147.106(e)(3)(iv), as long as the variation in cost sharing is solely related to changes in cost and utilization of medical care, or to maintain the same metal tier level (and other applicable requirements under Sec. 147.106(e) are met), the modifications could be considered uniform (thus, a viable exception to guaranteed renewability).

We stated (91 FR 6391) that in the scenario where an issuer modifies what was formerly an exceptions process plan's cost sharing structure while maintaining the same plan ID, enrollees in the plan would be auto-reenrolled from one plan year to the next. We stated that in either case, whether the modification of a former exceptions process plan's cost sharing results in that plan being considered the same or a different plan, enrollees would be crosswalked in accordance with the crosswalk hierarchy at Sec. 155.335(j), including reenrollment, if applicable.

In the proposed rule, we proposed this approach for several reasons. As discussed earlier in this section and in the section of the proposed rule addressing proposed updates to Sec. 156.201 (91 FR 6391), for the last several plan years, we have employed a multi- faceted strategy in an attempt to streamline the consumer experience. This strategy entailed requiring issuers to offer standardized plan options, requiring these plans to meaningfully differ from one another, differentially displaying these plans, making additional enhancements to choice architecture on HealthCare.gov, limiting the number of non- standardized plan options that issuers can offer through the FFEs and SBE-FPs, and permitting issuers to offer additional non-standardized plan options beyond this limit if issuers demonstrate that these plans would substantially benefit consumers with chronic and high-cost conditions.

As we noted (91 FR 6391) in the preamble section of the proposed rule addressing the proposed removal of Sec. 156.201, we have accumulated 4 plan years of experience (PY 2023 through PY 2026) administering this strategy (91 FR 6385). We stated that this cumulative experience provides us with a comprehensive and nuanced perspective regarding weighing both the advantages and disadvantages of employing this strategy, whether this strategy has aligned with our originally articulated objectives, and whether this strategy has yielded the intended results.

Similar to our view on the ineffectiveness of employing standardized plan option requirements, we stated in the proposed rule (91 FR 6391) that based on this experience, we have concluded that imposing non-standardized plan option limits and permitting exceptions to this limit for chronic and high-cost condition plans is an ineffective strategy in counteracting plan proliferation and enhancing the consumer experience on HealthCare.gov, the originally articulated objectives of employing our non-standardized plan option limits and related exceptions process policies.

We stated (91 FR 6392) that this is because requiring issuers to offer additional plans in the form of standardized plan options increased the weighted average number of total plans available per enrollee from 108 in PY 2022, the year before the introduction of the requirement to offer standardized plan options, to 114 in PY 2023, the year in which this requirement was introduced, with most of this increase in plans being comprised of standardized plan options. Furthermore, we noted that plan proliferation as measured by the weighted average number of total plans offered per issuer (which is derived by dividing the weighted average number of total plans available per enrollee by the weighted average number of total issuers per enrollee) increased from 16.9 in PY 2022 to 17.3 in PY 2023-- meaning each issuer on average tended to offer a higher number of plans after the imposition of the requirement to offer standardized plan options than the year before this requirement was made effective.\301\

\301\ “Plan Year 2025 Qualified Health Plan Choice and Premiums in HealthCare.gov Marketplaces.” October 25, 2024. https://www.cms.gov/files/document/2025-qhp-premiums-choice-report.pdf.

Furthermore, we stated (91 FR 6392) that even with the introduction of the non-standardized plan option limit of four in PY 2024 and its reduction to two as well as the introduction of the exceptions process in PY 2025, the net impact of both the requirement to offer standardized plan options as well as the subsequent imposition of non- standardized plan option limits and exceptions on the weighted average number of total plans available per enrollee and the weighted average number of total plans offered per issuer (including both standardized and non-

standardized plan options) was marginal--despite the substantially increased regulatory complexity and the associated burden of creating and submitting certification applications for new plans (standardized plan options) and correspondingly adjusting existing portfolios of plan offerings (non-standardized plan options).

Specifically, we noted (91 FR 6392) that the weighted average number of total plans available per enrollee was reduced from 114 in PY 2023 to 100 in PY 2024 (when the non-standardized plan option limit of four was introduced) and remained constant at 100 in PY 2025 (when the limit was reduced to two and the non-standardized plan option limit exceptions process was introduced). Relatedly, we noted that the weighted average number of total plans offered per issuer decreased from 17.3 in PY 2023 to 14.7 in PY 2024 and 13.7 in PY 2025. Thus, we noted that in PY 2022, the year before this suite of policies was introduced, there was a weighted average number of 108 total plans available per enrollee and a weighted average number of 16.9 total plans offered per issuer, whereas in PY 2025 (after several consecutive years of imposing new layers of requirement), these same measures were 100 and 13.7, respectively.

We stated (91 FR 6392) that we do not believe that the marginal net reductions in the weighted average number of total plans available per enrollee and the weighted average number of total plans offered per issuer achieved by introducing this suite of standardized plan option and non-standardized plan option limit and exceptions requirements warrant imposing additional burden, impeding issuer innovation in plan design, and constraining consumer choice--especially given that these reductions are largely indiscernible to consumers during the plan selection process. We stated that this is especially true given that these metrics continue to remain significantly elevated compared to only several plan years ago. Specifically, we noted that in PY 2020, the weighted average number of total plans available per enrollee was 39, and the weighted average number of total plans offered per issuer was 11.1.

Thus, we stated (91 FR 6392) that the primary metric by which we have evaluated plan proliferation (the weighted average number of total QHPs available per enrollee in the FFEs and SBE-FPs) has remained relatively constant despite the imposition of multiple layers of requirements from PY 2023 to PY 2025 (specifically, the requirement to offer standardized plan options in PY 2023, non-standardized plan option limits in PY 2024, and the reduction of this limit and the introduction of the exceptions process in PY 2025). Further, we stated that the imposition of these requirements substantially increased burden for both issuers and HHS (that is, the burden associated with issuers creating and submitting certification applications for additional plans that would otherwise not be created and offered, and HHS reviewing and certifying these additional plans). We stated that this suite of policies creates additional fixed costs for issuers, introducing market inefficiencies. Finally, we stated that the imposition of these requirements caused a significant degree of market disruption--as reflected by the substantial number of plan discontinuations and the high number of enrollees impacted by these discontinuations, as is discussed in greater detail later in this section.

We referred readers (91 FR 6392) to the section III.E.8. of the proposed rule addressing the proposal to discontinue standardized plan options (Sec. Sec. 155.20, 155.205(b)(1), 155.220(c)(3)(i)(H), 156.201, and 156.265(b)(3)(iv)) for a detailed discussion of relevant literature we also considered in our approach to the proposal to discontinue non-standardized plan option limits and exceptions.

Relatedly, we stated (91 FR 6392) that the strategy of requiring issuers to offer standardized plan options, differentially displaying these plans on HealthCare.gov and the DE pathways, and limiting the number of non-standardized plan options that issuers can offer was intended to enhance plan comparability for consumers navigating the plan selection process. We further stated that, theoretically, requiring issuers to offer plans with standardized cost sharing parameters would facilitate the plan selection process by reducing the number of factors that consumers must consider when evaluating all available plan options--since a certain subset of plans would have the same cost sharing parameters. We stated that as a result of having access to plans with standardized cost sharing parameters, consumers would theoretically have the ability to shift their focus to other important plan attributes, such as premiums, benefit coverage, provider networks, formularies, and quality ratings, during the plan selection process.

However, we stated (91 FR 6392) that in practice, given that standardized plan options continue to be offered alongside non- standardized plan options, whether a particular plan option was a standardized or non-standardized plan option served as yet another variable that consumers must consider during the plan selection process. Furthermore, we stated that in our experience, we have found when consumers are faced with a large number of heterogeneous plan options, they continue to rely primarily on premiums, networks, and issuer brand--meaning that standardizing cost sharing parameters alone (especially when doing so only for a subset of all available plan options) fails to meaningfully reduce decision complexity for consumers.

In addition, we stated (91 FR 6392) that we believe the fact that the consistently high proportion of total FFE and SBE-FP enrollment in as well as active selections (which includes both consumers currently enrolled in a QHP who are making a new plan selection as well as consumers who are enrolling in any QHP offered through the FFEs and SBE-FPs for the first time, but excludes consumers who are auto- reenrolled in their current QHP from one year to the next) of non- standardized plan options reflects the fact that consumers value the full range of choice within these plan offerings.

Specifically, we noted (91 FR 6393) that 80 percent of all consumers in the FFEs and SBE-FPs were enrolled in non-standardized plan options in PY 2023, 67 percent in PY 2024, and 67 percent in PY 2025. Furthermore, we noted that non-standardized plan options constituted 82 percent of FFE and SBE-FP active selections in PY 2023, 74 percent in PY 2024, and 82 percent in PY 2025.\302\ Relatedly, we noted that 75 percent of total plan offerings were non-standardized plan options in PY 2023, 72 percent in PY 2024, and 69 percent in PY 2025.\303\

\302\ “Marketplace Open Enrollment Period Public Use Files.” https://www.cms.gov/data-research/statistics-trends-and-reports/marketplace-products.

\303\ “Plan Year 2025 Qualified Health Plan Choice and Premiums in HealthCare.gov Marketplaces.” October 25, 2024. https://www.cms.gov/files/document/2025-qhp-premiums-choice-report.pdf.

Thus, we stated (91 FR 6393) that total enrollment in non- standardized plan options was higher compared to what would be expected based on the total proportion of plans that were non-standardized plan options in PY 2023 and within the expected range of deviation for PY 2024 and PY 2025. Furthermore, we stated that active plan selections for non-standardized plan options were higher compared to what would be expected based on the total proportion of plans that were non- standardized plan options in PY 2023, PY 2024, and PY 2025.

We stated (91 FR 6393) that the consistently low proportion of consumers enrolled in standardized plan options over the years suggests that these plans fail to appeal to consumers compared to corresponding non-standardized plan options--or at the very least that consumers are unable to perceive a significant difference between standardized and non-standardized plan options. We further stated that this is despite the full suite of differential display features for standardized plan options on HealthCare.gov and the DE pathways that visually distinguish standardized plan options from non-standardized plan options and effectively steer consumers into standardized plan options and away from corresponding non-standardized plan options in accordance with Sec. Sec. 155.205(b)(1), 155.220(c)(3)(i)(H), and 156.265(b)(3)(iv).

We stated (91 FR 6393) that without this full suite of differential display features that visually distinguishes standardized plan options from non-standardized plan options, the proportion of FFE and SBE-FP total enrollment in and active selections of non-standardized plan options would likely be considerably higher. This is because those visual markers have the effect of steering consumers to standardized plan options. We stated that we believe consumers' demonstrated preference for non-standardized plan options (as measured by both total enrollment and active plan selections) is in large part due to the fact that there is a greater degree of choice and variety in these plan offerings compared to standardized plan options.

Indeed, as we noted in the proposed rule (91 FR 6393), in the 2024 Payment Notice (88 FR 25860), many commenters who opposed imposing non- standardized plan option limits emphasized the importance of permitting issuers to maintain a diverse range of plan offerings as a mechanism to maximize the degree of consumer choice. These commenters specifically stated that imposing non-standardized plan option limits would force issuers to drastically reduce the unique plan designs they have thoughtfully developed to best serve their members' health care needs, which would in turn force consumers into a “one-size fits all” benefit offering.

Relatedly, we stated (91 FR 6393) that the combination of standardized plan option requirements as well as non-standardized plan option limits has increasingly constrained issuers' ability to offer a sufficiently broad range of plans for several plan years. We stated that this includes plans with tiered provider networks, plans with separate medical and drug deductibles (as opposed to integrated medical and drug deductibles), plans with separate medical and drug MOOPs (as opposed to integrated medical and drug MOOPs), HSA-eligible high- deductible health plans (HDHPs), and plans with more than four tiers of prescription drug coverage.

We stated (91 FR 6393) that issuers have been constrained by these requirements since they have been forced to discontinue offerings to comply with the non-standardized plan option limit. We noted that the plans that issuers have discontinued have generally been those with lower enrollment--which has often been plans with the aforementioned design features. Thus, we stated that removing this suite of requirements would grant issuers additional flexibility to once more vary plans along these parameters, which would enhance consumer choice. We further stated that removing this suite of requirements would also simultaneously reduce the issuer burden associated with creating and submitting additional QHP certification applications as well as HHS burden in reviewing and approving these applications.

Regarding market disruption that arose from issuers discontinuing plans to conform to the non-standardized plan option limit, we acknowledged (91 FR 6393) that there is a baseline rate of routine plan discontinuations on the FFEs and SBE-FPs that occur for a range of reasons unrelated to the imposition of new requirements. We noted, for example, that in the FFEs and SBE-FPs from PY 2020 to PY 2021, 17 percent of plan-county combinations were discontinued, affecting 10 percent of enrollees.\304\ Additionally, we noted in the FFEs and SBE- FPs from PY 2021 to PY 2022, 22 percent of plan-county combinations were discontinued, affecting 13 percent of enrollees. Thus, we stated that based on measures from the 2 plan years immediately preceding the introduction of the standardized plan option requirements in PY 2023, the baseline rate of routine plan-county discontinuations in the FFEs and SBE-FPs ranged from 17 to 22 percent, while the corresponding baseline rate of enrollees impacted by these discontinuations ranged from 10 to 13 percent.

\304\ Plan-county combinations are the count of unique plan ID and FIPS code combinations. This measure was used because a single plan may be available in multiple counties, and specific limits on non-standardized plan options may have different impacts on one county where there are four plans of the same product network type and metal level versus another county where there are only two plans of the same product network type and metal level, for example.

However, we noted (91 FR 6393) that from PY 2022 to PY 2023, when the requirement for FFE and SBE-FP QHP issuers to offer standardized plan options was introduced, 35 percent of plan-county combinations in the FFEs and SBE-FPs were discontinued, affecting 19 percent of enrollees. In addition, we noted that from PY 2023 to PY 2024, when the non-standardized plan option limit of four was introduced, 24 percent of plan-county combinations in the FFEs and SBE-FPs were discontinued, affecting 17 percent of enrollees. Finally, we noted from PY 2024 to PY 2025, when the non-standardized plan option limit was reduced from four to two, 24 percent of plan-county combinations in the FFEs and SBE-FPs were discontinued, affecting 15 percent of enrollees on the FFEs and SBE-FPs.

Thus, we stated (91 FR 6393) that employing these standardized plan option, non-standardized plan option limit, and non-standardized plan option limit exceptions process policies coincided with an increase in plan-county discontinuations of 18 percent and an increase in enrollees affected by these discontinuations of 9 percent compared to the years immediately preceding the introduction of these requirements (specifically between PY 2020 and 2021 and when the requirement to offer standardized plan options was introduced from PY 2022 to PY 2023). We stated that, ultimately, requiring issuers to discontinue other existing plans (to comply with the new non-standardized plan option limits) increased plan-county discontinuations and the number of enrollees affected by these discontinuations.

We acknowledged (91 FR 6394) that some portion of these plan discontinuations and the subsequent number of enrollees affected by these discontinuations is attributable to the narrowing of the AV de minimis ranges per Sec. Sec. 156.140, 156.200, and 156.400 in PY 2023 (such as the narrowing the AV de minimis range for on-Exchange silver offerings from 66 percent through 72 percent to 70 percent through 72 percent--which required issuers to either discontinue or modify offerings within the 66 percent through 70 percent range to have an AV within the 70 through 72 percent range). However, we noted that the rates of plan-county discontinuations and the subsequent number of enrollees impacted by these discontinuations continued to remain elevated in PY 2024 and PY 2025 (as the non-standardized plan option limit was

introduced and subsequently reduced) compared to baseline rates of plan-county discontinuations and the number of enrollees affected by these discontinuations in PY 2020 through PY 2022--implying that a substantial portion of these discontinuations was also attributable to the imposition of the requirement to offer standardized plan options as well as the introduction of the non-standardized plan option limit.

We stated (91 FR 6394) that, given this accumulation of data, we no longer believe that the advantages of imposing non-standardized plan option limits and exceptions (namely, a marginal net reduction in plan proliferation) outweigh the disadvantages of imposing these requirements (namely, increased burden, increased regulatory complexity, market disruption, inhibition of issuer innovation in plan design, and constrained consumer choice).

Altogether, we proposed (91 FR 6394) to discontinue non- standardized plan option limits under Sec. 156.202(a) through (c) and the corresponding exceptions process under Sec. 156.202(d) through (e), since we have concluded that adopting these measures (in conjunction with requiring issuers to offer standardized plan options) is an ineffective method of achieving our originally articulated objectives of employing this suite of policies to streamline the plan selection process, counteract plan proliferation, and reduce the risk of plan choice overload for consumers on HealthCare.gov. Furthermore, we stated that discontinuing these policies would decrease regulatory complexity, issuer burden, and the market disruption caused by plan discontinuations arising from the non-standardized plan option limit. Finally, we stated that discontinuing these policies would enhance consumer choice by supporting issuers' ability to innovate in plan designs.

We sought comment (91 FR 6394) on this proposal. After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposal to discontinue non-standardized plan option limits and exceptions below.

Comment: Many commenters supported the proposal to discontinue non- standardized plan option limits. These commenters stated that discontinuing these limits would provide issuers with greater flexibility to design plans that better reflect evolving market conditions and consumer preferences. Several commenters further stated that discontinuing the limits would enable a wider range of plan offerings. These commenters specifically cited plans with tiered provider networks, HSA-eligible HDHPs, plans with separate medical and drug MOOPs and deductibles (compared to integrated medical and drug MOOPs and deductibles), plans with more than four formulary tiers, plans that reduce cost sharing for virtual visits, and ICHRAs as examples of plans that would no longer be constrained if the limit were to be discontinued. Several commenters also stated that issuers would also be able to more easily offer a broader range of plans that target chronic and high-cost conditions without being subject to the burden of submitting the justification documentation that is currently required under the non-standardized plan option limit exceptions process.

Commenters that supported discontinuing non-standardized plan option limits also stated that this policy failed to effectively achieve its intended goals--streamlining the plan selection process, counteracting plan proliferation, and reducing the risk of plan choice overload for consumers--while simultaneously increasing regulatory complexity, issuer burden, and market disruption. These commenters pointed to the marginal net reductions in the weighted average total number of plans available per enrollee and issuer from PY 2022 to PY 2025 as well as the substantially increased number of plan discontinuations that coincided with the introduction of the non- standardized plan option limit of four in PY 2024 and the reduction of this limit to two in PY 2025.

Response: For the reasons we detail in the proposed rule (91 FR 6391 through 6394) and stated earlier in this section of this final rule, we agree with commenters who stated that discontinuing non- standardized plan option limits and exceptions will provide issuers with greater flexibility to design plans that reflect evolving market conditions and consumer preferences. We also agree that discontinuing these limits will allow issuers to offer a broader range of plan designs, including plans with tiered provider networks, HSA-eligible HDHPs, plans with separate medical and drug MOOPs and deductibles (compared to integrated medical and drug MOOPs and deductibles), plans with more than four formulary tiers, plans that reduce cost sharing for virtual visits, ICHRAs, and plans that target chronic and high-cost conditions.

We also agree with commenters that stated that this policy failed to effectively achieve its intended goals--streamlining the plan selection process, counteracting plan proliferation, and reducing the risk of plan choice overload for consumers--while simultaneously increasing regulatory complexity, issuer burden, and market disruption. We further agree with these commenters that this failure is evinced by the marginal net reductions in the weighted average total number of plans available per enrollee and issuer from PY 2022 to PY 2025 as well as the substantially increased number of plan discontinuations that coincided with the introduction of the non-standardized plan option limit of four in PY 2024 and the reduction of this limit to two in PY 2025.

Comment: Several commenters opposed the proposal to discontinue non-standardized plan option limits. These commenters stated that these limits prevent excessive plan proliferation and reduce the risk of consumer choice overload while encouraging issuers to offer plans that are meaningfully distinct from one another. Several commenters stated concern that removing these limits could significantly increase the number of plans offered through the FFEs and SBE-FPs, making it more difficult for consumers to meaningfully evaluate all available plan options and select a plan that best meets their unique health care needs.

Commenters also cited research demonstrating that FFE and SBE-FP enrollees experience difficulty comparing plans, including challenges understanding differences in provider networks, benefit coverage, cost sharing, and premiums.\305\ These commenters noted that increasing the total number of plans available to consumers could exacerbate these challenges and lead to poorer decision-making and increase the risk of suboptimal plan selection and unexpected financial costs. Several commenters also raised concerns about broader market impacts, stating that discontinuing these limits would increase opportunities for adverse selection (namely, by allowing issuers to design plans in such a manner to encourage the enrollment of healthier and lower risk consumers and discourage the enrollment of less

healthy and higher risk individuals), potentially destabilizing risk pools and increasing premium volatility.

\305\ Taylor EA, Carman KG, Lopez A, Muchow AN, Roshan P, & Eibner C. (2016) Consumer Decision-making in the Health Care Marketplace. RAND Corporation; Chao Zhou and Yuting Zhang, “The Vast Majority of Medicare Part D Beneficiaries Still Don't Choose the Cheapest Plans That Meet Their Medication Needs.” Health Affairs, 31, no.10 (2012): 2259-2265.

Other commenters warned that discontinuing these limits would enable issuers to offer duplicative plans to increase visibility in FFE and SBE-FP displays and dominate search results--a noncompetitive strategy which could distort plan selection dynamics and lead to fluctuations in market share. In addition, several commenters noted that non-standardized plan option limits and exceptions have only recently been implemented and that HHS has had insufficient time to fully evaluate their effects. These commenters urged continued monitoring before making significant policy changes.

Response: We acknowledge commenters' belief that non-standardized plan option limits may play a role in preventing excessive plan proliferation and reduce the risk of consumer choice overload. We also acknowledge the research that commenters cited regarding consumer difficulty comparing plans and the potential for poorer decision-making outcomes in the presence of an overwhelming number of plan options. Still, in our experience operating the FFEs and SBE-FPs, placing limits on non-standardized plan options has failed to achieve the originally intended results of implementing these policies.

In particular, instead of streamlining the plan selection process, counteracting plan proliferation, and reducing the risk of plan choice overload for consumers (as was originally intended), we received feedback, and observed, that these non-standardized plan option limits increased regulatory complexity, issuer burden, and market disruption; inhibited issuer innovation in plan design; constrained the degree of consumer choice; only had a marginal net impact on plan proliferation; and in conjunction with the standardized plan option policies, complicated the plan selection process by introducing another variable that consumers must consider in the plan selection process.

For the reasons explained in the proposed rule (91 FR 6391 through 6394) and stated earlier in this final rule, while we acknowledge these concerns, we believe that consumers benefit from having access to a wider range of plan designs that better reflect diverse needs and preferences, that any theoretical advantages of employing these non- standardized plan options limits are outweighed by the significant disadvantages (such as inhibited issuer innovation in plan design and constrained consumer choice), and that these concerns would be best addressed by discontinuing non-standardized plan option limits.

We further do not believe that non-standardized plan option limits are the sole nor the most effective, least burdensome, or least disruptive mechanism to address these concerns. Instead, as was discussed in greater detail in section III.E.8. of this final rule, we believe that making enhancements to choice architecture, plan display, and consumer decision-support tools on HealthCare.gov and the DE platforms are better suited to helping consumers navigate a broad and diverse range of plan options and make informed decisions--while avoiding unnecessarily inhibiting issuer innovation and constraining consumer choice. This is because under this approach, consumers would have an enhanced degree of choice in terms of diverse plan offerings (with issuers no longer being constrained by these standardized plan option and non-standardized plan option limit and exception policies), and the search results of all available plan offerings on HealthCare.gov and DE platforms could then be tailored to unique consumer preferences and health care needs.

We also disagree with commenters who stated that discontinuing non- standardized plan option limits could increase the risk of adverse selection and contribute to premium volatility. We note that the non- standardized plan option limit of four was introduced in PY 2024 (with the limit being reduced to two the following year in PY 2025). Given that no such limits were in place prior to PY 2024 (and during that time, there was no evidence to suggest increased risks of adverse selection or premium volatility even when there were no limits in place), discontinuing these limits in PY 2027 would represent a return to the status quo in PY 2023 in terms of risk pool stability and premium volatility. We further note that other program features, including risk adjustment requirements (such as those under 45 CFR part 153) and rating rules (such as those at 45 CFR 147.102), are designed to mitigate adverse selection and promote market stability. Thus, we do not believe that maintaining these limits is necessary or even conducive to achieve these objectives.

We acknowledge commenters' concerns that discontinuing these limits could potentially enable issuers to offer duplicative plans to increase visibility in FFE and SBE-FP displays and dominate search results. However, we note that we do not anticipate such an occurrence at a sufficient scale to warrant the continuation of this policy. In large part, this is because there were only a handful of instances of such duplicate plans out of hundreds of total plan offerings in the FFEs and SBE-FPs in PY 2026 that issuers needed to modify to conform with the meaningful difference standard for standardized plan options at Sec. 156.201(c).

Instead, we anticipate a return to the weighted average total number of plans available per enrollee and issuer to approximate what these metrics were before these limits were introduced in PY 2024 (since these limits only yielded marginal reductions in the first place). We also note that we will continue to monitor FFE and SBE-FP plan offerings and display practices during the annual QHP certification process and through other existing avenues through which consumers regularly submit complaints (such as the Health Insurance Casework System).

We further note that making additional enhancements to plan display and sorting methodologies on HealthCare.gov and the DE platforms would help alleviate these concerns without necessarily imposing restrictive limits on plan offerings. This is because consumers will have an enhanced degree of choice in terms of diverse plan offerings (with issuers no longer being constrained by these standardized plan option and non-standardized plan option limit and exception policies), and the search results of all available plan offerings on HealthCare.gov and DE platforms could then be tailored to unique consumer preferences and health care needs. We note that we continue to research such enhancements and encourage issuers and other DE partners to do the same.

We also considered comments stating that non-standardized plan option limits have only recently been implemented and that additional time may be needed to more comprehensively evaluate their effects. While we acknowledge that these policies were introduced several years ago, we believe that the considerations discussed above support discontinuing these limits at this time to reduce regulatory burden and increase flexibility. Our four years of cumulative experience administering these standardized plan option and non-standardized plan option limit and exception policies has provided us with a comprehensive and nuanced perspective regarding weighing both the advantages and disadvantages employing this strategy. After careful consideration, we have concluded that this strategy had failed to yield the originally intended results, as discussed throughout this section. We further believe that these concerns are better

addressed by enhancing choice architecture and plan display on HealthCare.gov and DE platforms--as discussed throughout this section.

Comment: Several commenters opposed discontinuing the non- standardized plan option limit exceptions process. These commenters stated concern that eliminating the exceptions process would reduce the availability of plans designed to meet the needs of individuals with chronic or high-cost conditions. In particular, commenters noted that plans previously approved through the exceptions process include targeted benefit designs that reduce cost sharing for condition- specific services or prescription drugs. These commenters stated that allowing issuers to discontinue these plans or modify them without being subject to the constraints of the exceptions process (such as demonstrating a substantial reduction in out-of-pocket costs for the treatment of a particular chronic and high-cost condition) could limit access to affordable and comprehensive coverage options for individuals with specific health care needs, including those managing chronic conditions such as diabetes.

Response: We do not agree with concerns that eliminating the non- standardized plan option limit exceptions process could reduce the availability of plans designed to meet the needs of individuals with chronic or high-cost conditions. To the contrary, discontinuing non- standardized plan option limits will increase the ability of issuers to offer plans designed to meet the needs of individuals with chronic or high-cost conditions as well as other potential innovative plan designs. As such, we do not agree that maintaining a formal exceptions framework is necessary or helpful to support the continued availability of such plans.

Under our approach, issuers will have increased flexibility to design and offer a broader and more diverse array of plan options, including those with targeted benefit structures for individuals with chronic and high-cost conditions, without the need to obtain formal approval through the currently required exceptions process. We thus believe that discontinuing the exceptions process removes administrative barriers and will allow issuers to continue offering such plan designs with decreased burden. Further, nothing in this approach requires issuers to discontinue plans that are currently offered through the non-standardized plan option limit exceptions process. 10. Deferral of Network Adequacy Reviews to States With an Effective Provider Access Review Program (Sec. Sec. 156.230 and 155.1050)

In the 2027 Payment Notice proposed rule (91 FR 6394), we proposed to exercise our authority under sections 1311(c)(1)(B) and 1321(a)(1)(B) of the Affordable Care Act to defer reviews of network adequacy to FFE States, including States performing plan management, provided the State elects to conduct such reviews, and demonstrates sufficient authority and the technical capacity to conduct network adequacy reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program under proposed Sec. 155.1050(d)(2) through (d)(4). We proposed to revise Sec. 156.230 to clarify that HHS would continue to conduct network adequacy reviews using standards described at Sec. 156.230(a)(2) through (a)(4) for QHP issuers that use a provider network in FFE States that do not elect to conduct their own provider access reviews, or that HHS has determined do not satisfy applicable criteria to be considered to have an Effective Provider Access Review Program, as described at proposed Sec. 155.1050(d).

Section 1311(c)(1)(B) of the Affordable Care Act requires the Secretary to establish minimum criteria for provider network adequacy that a health plan must meet to be certified as a QHP. Section 1321(a)(1)(B) of the Affordable Care Act directs the Secretary to issue regulations that set standards for meeting the requirements of title I of the Affordable Care Act, which includes section 1311, for, among other matters, the offering of QHPs through such Exchanges.

In the Exchange Establishment Rule (77 FR 18418), we set forth minimum network adequacy standards that plans must satisfy to be certified as QHPs at Sec. 156.230. The Exchange Establishment Rule (77 FR 18409 through 18420) provided that an issuer of a QHP that uses a provider network must maintain a network that is sufficient in number and types of providers, including providers that specialize in mental health and substance use disorder services, to ensure that all services will be accessible to enrollees without unreasonable delay. In the 2016 Payment Notice (80 FR 10830 through 10833), we revised Sec. 156.230(a) to clarify that network adequacy requirements only apply to QHPs that use a provider network, defining such networks as networks comprised only of providers that are contracted as in-network. For PYs 2015 through 2017, the FFEs conducted network adequacy reviews of proposed QHPs for compliance with network adequacy time and distance standards.

The 2017 Market Stabilization final rule (82 FR 18346) initially deferred reviews of network adequacy for QHPs to States that HHS determined to have a sufficient network adequacy review process, an approach that was reiterated in the 2019 Payment Notice (83 FR 16930). Specifically, we deferred these reviews to States that possessed sufficient authority to enforce network adequacy standards that were at least equal to the reasonable access standard defined in Sec. 156.230 and that had the means to assess the adequacy of plans' provider networks. In States without the authority or means to conduct network adequacy reviews, we relied on an issuer's accreditation (commercial, Medicaid, or Exchange) from an HHS-recognized accrediting entity-- specifically, either The National Committee for Quality Assurance (NCQA), URAC, or Accreditation Association for Ambulatory Health Care (AAAHC). Any unaccredited issuers were required to submit an access plan to demonstrate that the proposed QHP's provider network met the requirement in Sec. 156.230(a)(2) to demonstrate that an issuer had standards and procedures in place to maintain an adequate provider network consistent with the National Association of Insurance Commissioners' (NAIC's) Health Benefit Plan Network Access and Adequacy Model Act. To provide additional support to States, we further coordinated with States to monitor network adequacy through consumer complaint tracking and resolution.

On March 4, 2021, the United States District Court for the District of Maryland issued its decision in City of Columbus v. Cochran, which addressed a challenge to the policy of outsourcing network adequacy reviews.\306\ The court specifically vacated the portion of the 2019 Payment Notice's deferral of network adequacy reviews of QHPs offered through the FFEs to States with the authority and means to conduct sufficient network adequacy reviews, first finalized in rulemaking in the Market Stabilization final rule (83 FR 17024 through 17026). While the decision held that our policy of deferring network adequacy reviews to the States was not contrary to law, the court vacated the policy as an arbitrary and capricious agency action, holding that HHS did not meaningfully respond

to comments and evidence in the record.

\306\ City of Columbus v. Cochran, 523 F. Supp. 3d 731 (D. Md. 2021).

Comments and evidence in question centered around assessment of States' ability to meaningfully conduct network adequacy reviews, and the use of accreditation as a basis for determining QHP issuers' satisfaction of provider network adequacy standards. Commenters stated that States' and accrediting entities' review processes do not do enough to ensure enrollees have adequate access to necessary care. In particular, the decision raised concerns about HHS' position that States' network adequacy review procedures are adequate simply because States have State-specific regulations without explaining what these entail or why they are comparable to review under Federal standards. The court also raised concerns about comments stating that State review procedures are often not adequate, have no quantitative standards for network adequacy in place, and, in many States, are complaint driven rather than preemptive, as well as comments that in some States, requirements only apply to certain types of plan designs. Comments expressing concern about relying on accreditation as a determination of network adequacy standard satisfaction stated that accreditation standards are not public, accreditors do not have regulatory authority over plans, and accreditors are not in a position to monitor network adequacy via consumer complaints or other means.

In the 2023 Payment Notice (87 FR 27322), we finalized that we would evaluate the adequacy of QHP provider networks offered through the FFEs, or of plans seeking certification as FFE QHPs, except for FFEs in States performing plan management that elect to conduct network adequacy reviews, so long as the State applies and enforces quantitative network adequacy standards that are at least as stringent as the Federal network adequacy standards established for QHPs under Sec. 156.230 (that is, Michigan, New Hampshire, South Dakota, and West Virginia) beginning with the 2023 QHP certification cycle. Additionally, in the 2023 Payment Notice (87 FR 27322), we adopted time and distance standards at Sec. 156.230(a)(2) to assess whether plans seeking to be certified as QHPs in all FFE States meet network adequacy time and distance requirements.

In the 2024 Payment Notice (88 FR 25740), we revised network adequacy standards at Sec. 156.230(a)(2) to establish appointment wait time standards starting in PY 2025. We also required all individual market QHPs, including individual market SADPs, and all SHOP QHPs, including SHOP SADPs, across all Exchanges to use a network of providers that complies with the network adequacy standards, and removed the exception that these requirements do not apply to plans that do not use a provider network. A limited exception was finalized at Sec. 156.230(a)(4) for certain SADP issuers that sell plans in areas where it is prohibitively difficult for the issuer to establish a network of dental providers.

In the 2025 Payment Notice (89 FR 26218), we finalized Sec. 155.1050(a)(2)(i)(A) to require that State Exchanges and SBE-FPs establish and impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs under Sec. 156.230. We also finalized Sec. 155.1050(a)(2)(i)(B) which required that, for plan years beginning on or after January 1, 2026, State Exchanges and SBE-FPs conduct quantitative network adequacy reviews to evaluate a plan's compliance with network adequacy standards under Sec. 156.230(a)(1)(ii), (a)(1)(iii), and (a)(2)(i)(A) prior to certifying any plan as a QHP, while providing QHP certification applicants the flexibilities described under Sec. 156.230(a)(2)(ii) and (a)(3) and (4).

To implement the requirements for FFEs that were in place from PY 2023 and subsequent years outlined above, we published in the 2023 Final Letter to Issuers in the Federally-facilitated Exchanges \307\ a list of provider types and facility types, developed consistent with industry standards, alongside the time and distance standard for each provider or facility specialty type for each county type designation which are based on population size and density parameters (Large Metro, Metro, Micro, Rural, and Counties with Extreme Access Considerations). All FFE QHP issuers were required to submit a Network Adequacy (NA) template during the QHP certification period which is populated with their in-network provider and facility information (for example, NPI, specialty type, address(s) of their practice(s)). We used that information to conduct geocoding analyses for compliance with network adequacy standards.\308\ This is an iterative process during QHP certification, with issuers informed of their review results and encouraged to contract with more providers to meet the standards if appropriate. Though there was no requirement for issuers to contract with a third-party vendor to assist with populating network adequacy templates, we are aware of some issuers that opt to outsource this work to vendors that have access to their claims data to assist in populating the template with providers with which the issuer is actively contracted.

\307\ “2023 Final Letter to Issuers in the Federally- facilitated Exchanges”, April 28, 2022. Available at https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/final-2023-letter-to-issuers.pdf.

\308\ Geocoding is the process of converting provider street addresses, into geographic coordinates (latitude and longitude), enabling them to be used in the calculation of time and distance analysis.

Additionally, beginning January 1, 2025, QHP issuers in the FFEs were required to meet appointment wait time standards established in the 2023 Letter to Issuers.\309\ The 2025 Final Letter to Issuers on the Federally-facilitated Exchanges established the requirement for QHP issuers to contract with a third-party entity to administer secret shopper surveys on a sample of in-network providers to determine their level of compliance with appointment wait time standards for two provider types; \310\ specifically, the requirement that enrollees would be able to schedule an appointment at least 90 percent of the time within 15 business days for routine primary care, within 10 business days for behavioral health providers, and within 30 business days for routine specialty providers. We use the final Network Adequacy templates submitted by FFE issuers during QHP certification to generate the Provider Population Files for QHP issuers and their third-party entity to develop the Appointment Wait Time Secret Shopper Survey Samples as outlined in the Appointment Wait Time Secret Shopper Survey Technical Guidance.

\309\ “2023 Final Letter to Issuers in the Federally- facilitated Exchanges”, April 28, 2022. Available at https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/final-2023-letter-to-issuers.pdf.

\310\ “2025 Final Letter to Issuers in the Federally- facilitated Exchanges”, April 10, 2024. Available at https://www.cms.gov/files/document/2025-letter-issuers.pdf.

In the proposed rule, we stated that the preceding years of conducting reviews of QHP issuer provider network adequacy, including analyzing issuer submitted data and through discussions with States, issuers, and other various interested parties around diverse market conditions, have demonstrated that a one-size-fits all approach to provider network adequacy review is not satisfactory. We noted, for example, that issuers have highlighted to us persistent challenges in locating and contracting with enough providers of various specialties (for example, allergy and immunology, behavioral health, gastroenterology) in remote or difficult

to access areas of a State. We further noted that States have brought to our attention various geographic constraints that impact QHP issuers' ability to satisfy time and distance requirements and have made suggestions to assess a QHP issuer's ability to meet a time or a distance standard individually, rather than requiring it to meet a standard that assesses time and distance together, which may be insurmountable due to a topographical constraint such as a body of water or navigating roads in mountainous terrain.\311\

\311\ CMS currently uses a calculation for network adequacy that factors in both time and distance. Time and distance is especially critical in large metro areas where, for example 90 percent of Exchange eligible consumers must have access to certain types of providers within 15 miles and 30 minutes. There may be many providers available within 15 miles, but the time to travel would far exceed 30 minutes due to slower travel speeds in urban areas. The “and” condition makes it necessary for a provider location to be available within both the mileage and the time criteria. We are aware of State Exchanges and SBE-FP States that have implemented an “or” condition, particularly in rural areas where topographical limitations may make it feasible to meet a time requirement or a distance requirement without a need to meet both to ensure reasonable access to all services by enrollees without unreasonable delay.

In addition, we stated that partnerships with States performing plan management, who have elected to conduct their own network adequacy reviews, have also highlighted for us how States may innovate in their approach to conducting network adequacy reviews that are sensitive to conditions and capacity in the State. For example, we stated that we are aware of States performing plan management that assess network adequacy based on access to services rather than provider types. We stated that deferring network adequacy reviews to FFE States that demonstrate sufficient authority and the technical capacity by satisfying the criteria to demonstrate they have an Effective Provider Access Review Program would empower these States to similarly innovate and mold their network adequacy standards to the needs of consumers in their individual States. We noted, for example, that a State may find it is in the interest of their consumers to assess network adequacy using a time or a distance standard individually rather than assessing whether a QHP issuer meets a time and distance standard, make adjustments to time and distance standards that account for more remote areas or more urban areas, assess network adequacy in different ways such as through provider-enrollee ratios, expand or change the provider types they assess, and implement other innovative, State-specific approaches to identify and address the systemic issues that result in many issuers being unable to meet the network adequacy standards described at Sec. 156.230(a)(2). We stated that a State, with its more intimate knowledge of its own demographics, topography, quantity, and density of providers, is often best positioned to evaluate local provider networks and market conditions and tailor network adequacy standards in a more nuanced way than Federal requirements.

Thus, in recognition of the crucial role States have in developing and enforcing network adequacy standards and because we believe that States are often best positioned to evaluate local provider networks and market conditions, we proposed at Sec. 155.1050(d), for PY 2027 and subsequent years, to allow FFE States, including States that perform plan management, to conduct reviews for provider access for issuers' plans that use and do not use a provider network, provided that we determine the State has sufficient authority and the technical capacity to conduct the reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program as described at proposed Sec. 155.1050(d)(2) through (d)(4) and the State elects to conduct these reviews. Concurrently, we proposed, for plan years beginning on or after January 1, 2027, to amend Sec. 156.230, including by (1) revising the section heading to state, “Provider access standards for network plans”; (2) revising Sec. 156.230(a)(1) to remove the requirement that a QHP must use a provider network and clarify that the standards described in Sec. 156.230(a)(1)(i), (ii), and (iii) apply to a QHP that uses a network of providers; (3) revising Sec. 156.230(a)(2)(i) and (ii) to clarify that requirements for issuers of QHPs to meet time and distance standards and appointment wait time standards at Sec. 156.230(a)(2) only apply in States that do not elect to conduct their own provider access reviews or States that we have determined do not do not satisfy the criteria to be considered to have an Effective Provider Access Review Program as described at proposed Sec. 155.1050(d); (4) revising the exception at Sec. 156.230(a)(3) to clarify that it applies only when HHS is conducting network adequacy reviews; and (5) revising Sec. 156.230(a)(4) to conform with proposed revisions to Sec. 156.230(a)(1).

Additionally, in recognition of the traditional role that all State Exchanges and SBE-FPs have in developing and enforcing network adequacy standards and to align with proposed changes for FFE States detailed in section III.D.18 of the proposed rule, we proposed to remove the requirements under Sec. 155.1050(a)(2)(i) and (ii) for State Exchanges and SBE-FPs to establish and impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs under Sec. 156.230 and to no longer require State Exchanges and SBE-FPs to conduct quantitative network adequacy reviews to evaluate a plan's compliance with network adequacy standards under Sec. 156.230(a)(1)(ii), (a)(1)(iii), and (a)(2)(i)(A) prior to certifying any plan as a QHP. Instead, we proposed to restore Sec. 155.1050(a)(2) to a pre-PY 2025 policy and require that State Exchanges and SBE-FPs ensure that each QHP provides sufficient access to providers in a manner that meets standards specified in Sec. 156.230(a)(1)(ii) and (iii) for network plans, or proposed Sec. 156.236(a) for non-network plans, as applicable. This proposal is discussed in more detail in section III.D.18 of the proposed rule and this final rule.

In addition, as we stated in section III.E.12. of the proposed rule, we also now believe that there are alternative administrable regulatory standards that can ensure satisfaction of provider sufficiency requirements by QHPs that do not use traditional contracted networks of providers and that, especially in light of efforts to improve health care price transparency, an expanded definition of how to achieve sufficient access to providers would allow for innovations in plan design. Our proposal to allow for QHP certification of plans without a provider network is described in detail in section III.E.12. of the proposed rule.

Our proposed revisions to Sec. Sec. 156.230(a)(2)(i) and (ii) and (a)(3) reflect our proposed change in policy at Sec. 155.1050(d) to defer network adequacy reviews to FFE States that elect to perform such reviews, and that demonstrate they have sufficient authority and the technical capacity to conduct these reviews by satisfying the criteria to be considered to have an Effective Provider Access Review Program as described at Sec. 155.1050(d)(2) through (d)(4), while also retaining Federal standards for HHS to utilize in conducting network adequacy reviews, including time and distance and appointment wait time standards, in States that do not elect to conduct such reviews or do not demonstrate they have sufficient authority and the technical capacity to conduct these reviews.

As we stated in the proposed rule, network adequacy analyses are often highly data-intensive. We stated that because the FFE has economies of scale

in the collection and analysis of various forms of network adequacy data, including time and distance data and appointment wait time data, under our proposal, we would continue collecting this data from all FFE issuers, either to use to conduct Federal network adequacy reviews in FFE States that do not elect to do so or do not demonstrate they have sufficient authority and the technical capacity to conduct these reviews by satisfying the criteria to be considered to have an Effective Provider Access Review Program as described at Sec. 155.1050(d)(2) through (d)(4), or with a view to make it available in a standardized format to States that are determined to have an Effective Provider Access Review Program, to assist them in their network adequacy analysis. We stated that we have extensive tools to standardize data, including a network adequacy template, other supporting document templates, manual data validation resources, and FAQs. We stated that the continuation of the aforementioned activities would support consumer protection as HHS would maintain an ability to utilize the collected data to research and address consumer or other complaints, provide continuity for States that may need time to expand their technical capacity and seek to rely on our infrastructure, and prevent any gaps in awareness as FFE States expand and fortify their own reviews. We further stated that this aspect of our proposal primarily seeks to support States that do not presently have sufficient authority or the technical capacity to conduct reviews and States that demonstrate sufficient authority and the technical capacity but seek to capitalize on HHS' data collection and analysis to supplement their provider access review programs. We stated that we believe this approach appropriately balances State and Federal responsibilities as it seeks to empower States that elect to conduct network adequacy reviews but also utilizes Federal systems to provide support to States, maximizing consumer protection and taking advantage of State expertise in developing and enforcing provider network adequacy requirements.

We stated that we would consider a State to have sufficient authority and the technical capacity to conduct network adequacy reviews if the State meets criteria set forth at proposed Sec. 155.1050(d)(2) through (4) (discussed at section III.D.18. of the proposed rule). The proposal also clarified that if States are not determined to have an Effective Provider Access Review Program, then HHS would continue to perform provider access certification reviews consistent with Sec. 156.230(a)(1) through (a)(4) for network plans and proposed Sec. 156.236 for non-network plans.

We stated that, as proposed at Sec. 155.1050(d)(2), an FFE State with an Effective Provider Access Review Program would be required to ensure that a QHP issuer that uses a network of providers ensures that its network of providers, as available to all enrollees, includes ECPs in accordance with Sec. 156.235, and maintains a network that is sufficient in number and types of providers, including providers that specialize in mental health and substance use disorder services, to ensure that all services will be accessible without unreasonable delay, and is consistent with the rules for network plans of section 2702(c) of the PHS Act. We proposed at Sec. 155.1050(d)(3) that an FFE State with an Effective Provider Access Review Program must ensure that a QHP issuer that does not use a network of providers (a non-network plan) provides access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full, including ECPs and providers that specialize in mental health and substance use disorder services, to ensure that all services will be accessible without unreasonable delay.

We further stated (91 FR 6397) that under our proposal at Sec. 155.1050(d)(4), a State operating an FFE that elects to conduct its own provider access reviews would be considered to have an Effective Provider Access Review Program by satisfying the following requirements:

(1) The FFE State has established provider access standards that are set forth in State statute or regulation which are consistent with provider access standards as set forth in Sec. 156.230(a)(1)(ii) and (iii), and reports to HHS whether the State has delegated authority to some entity other than the State Department of Insurance to perform any or all provider access review activities;

(2) The FFE State's provider access review process includes reporting systems for State-required provider access metrics and documentation of methodology and the State provides descriptions of all data collection systems, resources, templates, and methodologies used by the State or the State's delegated entity to collect and review provider access data; and the State receives from issuers data and documentation in connection with provider access standards that are sufficient to conduct the examination;

(3) The FFE State's provider access review process includes procedures to ensure full and ongoing compliance with State provider access standards and enforcement frameworks applicable to issuers that fail to meet provider access standards so that those issuers come into compliance with State provider access standards, including standardized processes to assess efforts the issuer is pursuing to come into compliance with State provider access standards, and implementing any justification and exception processes for issuers that have not yet or cannot meet provider access requirements;

(4) The FFE State establishes and maintains clear procedures and timeline requirements for regular provider access reviews, including processes that ensure reviews occur prior to each plan year's QHP certification cycle;

(5) The FFE State has a process for monitoring and addressing consumer-related provider access complaints to ensure sufficient access to providers consistent with section 1311(c)(1)(B) of the Affordable Care Act and as set forth in State statute; and

(6) The FFE State has a process to collect and review information sufficient to show that non-network plans provide access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full.

We proposed at Sec. 155.1050(d)(5) that we would determine whether a State has an Effective Provider Access Review Program based on information available to us that demonstrates whether the program meets the criteria described at proposed Sec. 155.1050(d)(4). We proposed at Sec. 155.1050(d)(6) that we may also grant an exception to these criteria if we determined that making such an exception is in the interests of qualified individuals in the State or States in which such Exchange operates. We also proposed at Sec. 155.1050(d)(7) that we would notify the FFE State electing to conduct provider access certification reviews of our decision in writing regarding whether the State is determined to have an Effective Provider Access Review Program and can therefore conduct its own provider access certification reviews. We proposed that we would also reserve the right at any time to evaluate whether, and to what extent, a State's circumstances have changed such that it has established, or no longer has, an Effective Provider Access Review Program under Sec. 155.1050(d). We proposed that these evaluations may result in HHS assuming provider access review responsibilities or transitioning such responsibilities back to the State.

We also proposed that a State would need to demonstrate that it meets applicable criteria for both network plans and non-network plans under Sec. 155.1050(d), if it decides to certify such plans, to receive the designation to have an Effective Provider Access Review Program. We stated that this would mean that a State would not be permitted to elect to conduct provider access certification reviews for only network plans and not non-network plans, if it certifies such plans, or vice versa. We stated that we believe this is important, as some QHP issuers may choose to offer both network and non-network plans, and centralizing reviews to a single entity, whether the FFE State or HHS, for the same issuer would reduce administrative inefficiencies that may result if the FFE State and HHS have to coordinate provider access certification review results across a range of network and non-network plans. We stated that we also believe that review authority being limited to a single entity, either the FFE State or HHS, would allow both network and non-network plans to undergo consistent, standardized reviews conducted by the same reviewing entity. We further stated that we believe this would ensure similar requirements and methodologies would be applied fairly across network and non-network plans and reduce potential differences in provider access review results. We stated that, overall, just as with network plans, non-network plans would be required to ensure sufficient access to a range of providers in a manner consistent with section 1311(c)(1)(B) of the Affordable Care Act.

We stated in the proposed rule that rather than specifying the detailed methodology and standards States would be expected to use to determine sufficient access to providers, the proposed factors focus on processes to ensure a State has sufficient authority and the technical capacity to conduct network adequacy reviews. We further stated that the approach, as set forth at proposed Sec. 155.1050(d), would provide for more than a perfunctory review of authority, but rather would thoroughly investigate States' ability to ensure provider access sufficiency in line with Sec. 156.230(a)(1)(ii) and (iii). We stated that this proposed approach would allow States more flexibility in defining network adequacy standards that reflect their local markets, provider availability, geographic considerations, and demographics. We further stated that we would evaluate if the network adequacy review program in the State has established network adequacy standards that are set forth in State statute and regulation that are consistent with those set forth in Sec. 156.230(a)(1)(ii) and (iii).

The first proposed criterion for evaluation requires that the State has established provider access standards that are set forth in State statute or regulation, which are consistent with provider access standards as set forth in Sec. 156.230(a)(1)(ii) and (iii), and reports to HHS whether the State has delegated authority to some entity other than the State Department of Insurance to perform any or all provider access review activities. We stated that this criterion would be crucial as it addresses whether or not the State has sufficient authority to conduct provider access reviews. We noted that it would also be important for a State to report to us whether the State has delegated authority to some other entity to perform provider access review activities so we understand how the State is handling provider access review data and to whom it entrusts such data.

The second proposed criterion states that the State's provider access review process includes reporting systems for State required provider access metrics and documentation of methodology and the State provides descriptions of all data collection systems, resources, templates, and methodologies used by the State, or the State's delegated entity, to collect and review provider access data; and the State receives from issuers data and documentation in connection with provider access standards that are sufficient to conduct the examination. We stated that this information would be important for us to understand processes a State has in place to appropriately assess provider access. We stated that under our proposal, we would evaluate whether the State's provider access data, documentation, and analysis practices are sufficient to ensure it can conduct provider access reviews.

The third proposed criterion provides that the State's provider access review process includes procedures to ensure full and ongoing compliance with State provider access standards and enforcement frameworks applicable to issuers that fail to meet provider access standards so that those issuers come into compliance with State provider access standards, including standardized processes to assess efforts the issuer is pursuing to come into compliance with State provider access standards, and implementing any justification and exception processes for issuers that have not yet or cannot meet provider access requirements. We stated that this information would be important for reasons similar to the previously discussed proposed factor. We also noted that ensuring that adequate compliance processes exist would bolster the robustness of any network adequacy review to ensure sufficient provider access.

The fourth proposed criterion requires that the State establish and maintain clear procedures and timeline requirements for regular provider access reviews, including processes that ensure reviews occur prior to each plan year's QHP certification cycle. We stated that we believe that it would be important for States to have clearly established procedures for network adequacy review that are not reactive but are preemptive to ensure that plans being offered on an Exchange provide sufficient access to providers and so that consumers shopping for a plan have that guarantee.

The fifth proposed criterion requires the State to have a process for monitoring and addressing consumer-related provider access complaints to ensure sufficient access to providers consistent with section 1311(c)(1)(B) of the Affordable Care Act and as set forth in State statute. We stated that this criterion would be important because provider access can change often during the year. We stated that for plans using a provider network, contracts may be executed or terminated throughout a plan year for various reasons. We stated that any inaccuracies or out-of-date information contained in provider directories can create confusion or be misleading to consumers. Additionally, we noted that consumers may have trouble actually making appointments with network providers due to lack of availability of appointments. We further stated that for plans without a provider network, we anticipate that providers that accept a benefit amount as payment in full may also change frequently depending on market conditions, negotiations, and competition.

The sixth proposed criterion requires the State to have a process to collect and review information capable of demonstrating whether non- network plans provide access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full. We stated that this criterion would be important to ensure that, should a State offer non-network plans, these plans also ensure sufficient access to providers.

We stated that while these proposed criteria for assessing whether a State has an Effective Provider Access Review Program are comprehensive, we believe this approach would provide ample flexibility to States to determine the best

methodology to assess network adequacy within the State. We anticipated each State's approach would be dependent on available resources (for example, technical infrastructure, budget, staffing), topographical considerations, and population needs unique to each State, and we proposed to empower States to utilize these factors to evaluate overall State processes that ensure sufficient consumer protection. We further stated that our proposal also does not dictate the precise network adequacy review methodology which may reasonably differ from State to State.

We stated that under our proposed approach, we would seek to work in partnership with States and would provide numerous resources to States to utilize as they see fit to further develop and enhance their network adequacy review capabilities. We stated that, for example, we would offer extensive resources originally developed for Federal network adequacy review during the annual QHP certification cycle as States may work to further develop network adequacy standards and review methods that best suit the conditions of their distinct consumer populations and needs. We stated that these tools, including a network adequacy template, other supporting document templates, manual data validation resources, and FAQs, could provide support to interested States as States continue to develop and implement processes to standardize any issuer-submitted data during their reviews, leveraging HHS' extensive experience in identifying efficient data formats and validation processes. We noted that this comprehensive support system would be available to States as States continue to develop and implement individualized network adequacy standards and review processes that are most appropriate and protective for their own consumers.

In summary, we proposed, for plan years beginning on or after January 1, 2027, to amend Sec. 156.230, including (1) revising the section heading to state, “Provider access standards for network plans”; (2) revising Sec. 156.230(a)(1) to remove the requirement that a QHP must use a provider network and clarify that the standards described in Sec. 156.230(a)(1)(i), (ii), and (iii) apply to a QHP that uses a network of providers; (3) revising Sec. 156.230(a)(2)(i) and (ii) to clarify that requirements to meet time and distance standards and appointment wait time standards at Sec. 156.230(a)(2) only apply to States that we have determined do not satisfy the criteria to be considered to have an Effective Provider Access Review Program or that do not elect to conduct their own provider access reviews of issuers as described at proposed new Sec. 155.1050(d); (4) revising exceptions to the aforementioned requirements at Sec. 156.230(a)(3) to apply only when HHS is conducting network adequacy reviews; and (5) revising Sec. 156.230(a)(4) to conform to revisions to Sec. 156.230(a)(1). We stated that through these proposed changes, we would defer provider access reviews, for network and non-network plans, to FFE States, including States performing plan management, provided the State elects to conduct such reviews, and demonstrates it has sufficient authority and the technical capacity to conduct network adequacy reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program, as detailed at proposed Sec. 155.1050(d)(2) through (4).

We sought comment on these proposals.

After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy with minor modifications. We are modifying Sec. 155.1050(a)(1) to differentiate between FFE States with an Effective Provider Access Review program and FFE States without an Effective Provider Access Review Program. We are revising Sec. 155.1050(d)(1) to add a phrase clarifying that if States do not elect to conduct provider access reviews, CMS will continue to conduct reviews of QHP issuer provider access consistent with requirements under Sec. 156.230 for network plans and, for plan years beginning on or after January 1, 2028, under Sec. 156.236 for non-network plans and to acknowledge the delay in implementation of the policy, as finalized in this rule, allowing certification of non-network plans as QHPs beginning on or after January 1, 2028. Additionally, we are modifying Sec. 155.1050(d)(4)(iv) to clarify that, to have an Effective Provider Access Review Program, the FFE State must establish and maintain clear procedures and timeline requirements for regular provider access reviews, including processes that ensure reviews occur prior to “completion of” each plan year's QHP certification cycle. We are also modifying Sec. 155.1050(d)(4)(vi) to require that the State have a process to collect and review information described under Sec. 156.236(b)(4) through (b)(9) from non-network plans. We are modifying Sec. 155.1050(d)(5) to clarify that CMS will determine whether a State has an Effective Provider Access Review Program based on information that demonstrates whether the program meets criteria described under Sec. 155.1050 (d)(2) through (d)(4).

We summarize and respond below to public comments received on this proposal.

Comment: Several commenters stated support for the proposal and importance of recognizing FFE State flexibility, noting that States possess deep expertise in their local health care markets and are well- positioned to conduct meaningful network adequacy reviews. They stated that States understand local market dynamics, provider supply, and the specific needs of their populations in ways that Federal reviewers may not. Commenters noted that allowing FFE States to tailor their review processes to local conditions enables more responsive and effective oversight. Commenters noted that many States already have robust network adequacy requirements in place that are comparable to, and in some cases more stringent than, Federal requirements. They noted that these existing frameworks demonstrate that States are capable of conducting rigorous reviews without duplicative Federal oversight. Commenters stated the proposed approach appropriately balances State flexibility with consumer protections through clearly defined criteria FFE States must meet to conduct provider access reviews. Commenters also stated support for maintaining Federal network adequacy reviews as a backstop, ensuring that a Federal safety net remains in place for States that may lack the capacity or infrastructure to conduct robust reviews independently. A few commenters, while supportive of the policy, stated operational concerns and requested that we delay implementation of this policy to allow issuers that operate in multiple FFE States to adapt to potential variability in provider access reviews across FFE States.

Response: We appreciate the support stated by commenters for the proposed approach and will be finalizing the policy as proposed, without delayed implementation, but with minor modifications for clarity which we described above. In particular, we agree that States are uniquely positioned to understand the health care markets within their jurisdictions and that leveraging State expertise can lead to more effective and efficient network adequacy oversight. We also agree that many States have developed sophisticated network adequacy frameworks that reflect a deep understanding of local provider landscapes and consumer needs and we seek to facilitate and support any FFE

States that choose to elect to conduct provider access reviews.

We recognize that duplicative Federal and State review processes can create administrative burden for issuers without commensurate benefit to consumers. By allowing States that meet clearly defined criteria to conduct network adequacy reviews, we aim to reduce this duplication while preserving consumer protections. We believe this approach appropriately balances the goals of State flexibility and Federal oversight.

We also affirm our commitment to maintaining Federal network adequacy reviews as the default and to continued provider data collection, including collection of time and distance and appointment wait time (AWT) data for all FFE States, including States that elect to conduct provider access reviews and are determined to have an Effective Provider Access Review Program. This provider data will be available to States determined to have an Effective Provider Access Review Program, in a standardized format, to assist them in their network adequacy analysis. States that do not meet criteria described at Sec. 155.1050(d)(2) through (d)(4), or that choose not to conduct their own reviews, will continue to be subject to Federal oversight. This ensures that consumers in all States benefit from a baseline level of protection, regardless of the State's capacity, authority, or approach to network adequacy oversight.

With regard to the request to delay implementation due to operational concerns, while we acknowledge the risk that some issuers operating in multiple FFE States may experience an increased administrative burden and are mindful of the potential operational implications for them, we will not be delaying implementation of this proposal. We reiterate that that the default status will be for the continuation of Federal network adequacy reviews and we anticipate most issuers will not experience much change operationally as it relates to network adequacy reviews in PY 2027 compared to PY 2026. In the event an FFE State elects to conduct provider access certification reviews and subsequently meets the criteria to be considered to have an Effective Provider Access Review Program for PY 2027, we will promptly communicate with issuers in that FFE State to inform them that the State is determined to have an Effective Provider Access Review Program for PY 2027. We also encourage issuers to communicate concerns with any States in which they operate and request guidance regarding expectations should the State elect to conduct provider access reviews for PY 2027.

Comment: Many commenters stated general opposition to allowing FFE States to elect to conduct provider access reviews if they are able to demonstrate they have sufficient authority and the technical capacity to conduct these reviews by satisfying the criteria to be considered to have an Effective Provider Access Review Program. The most common concern raised by commenters included that allowing FFE States with Effective Provider Access Review Programs to have more flexibility in developing provider access standards, which may be different than the Federal time and distance standards, may result in implementation of provider access reviews with “relaxed” time and distance standards or removal of time and distance standards altogether. Commenters were concerned that this may result in negative impacts in rural areas, such as longer wait times, reduced access to specialty care, including mental health and substance use disorder services, or the removal of certain specialties from their standards entirely; and generally narrower networks compared to those in FFE States where we will continue to conduct provider access reviews. Many commenters stated concern over a lack of an explicit requirement for FFEs to implement quantitative time and distance and appointment wait time standards, and recommended that CMS continue to require the Federal time and distance standards under Sec. 156.230(a)(2(i)(A) and (B) apply as a requirement for an FFE State to be determined to have an Effective Provider Access Review Program. One commenter specifically requested quantitative requirements for access to mental health and substance use disorder services. Commenters stated that prior changes to Federal network adequacy standards have made meaningful progress in reducing network adequacy-related lawsuits and consumer complaints, and stated concern that the proposed changes would reverse this trend.

Response: We acknowledge the concerns stated by commenters related to how FFE States may choose to implement provider access reviews in instances where they elect to conduct such reviews and are determined to have sufficient authority and the technical capacity to conduct the reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program. We acknowledge commenters' concerns about rural access, specialty care, and the potential for narrower networks, though we believe that many of these concerns are tied to larger systemic issues such as a lack of practicing providers in a particular geographic area and issuer/provider contracting complexities that will not be ameliorated or otherwise impacted significantly by any standardized set of time and distance standards. We want to highlight that under Sec. 155.1050(d)(2), to demonstrate they have an Effective Provider Access Review Program, the FFE State must ensure that a QHP issuer that uses a network of providers ensures that the in-network providers, as available to all enrollees, include essential community providers (ECPs) in accordance with Sec. 156.235, and maintains a network that is sufficient in number and types of providers, including providers that specialize in mental health and substance use disorder services, to ensure that all services will be accessible without unreasonable delay. So, while an FFE State with an Effective Provider Access Review Program could choose to implement standards that differ from the Federal review standards and hypothetically opt to remove a specialty type (for example, pulmonology) from the provider specialty list their FFE State reviews for time and distance, that in no way prevents QHP issuers from continuing to contract with that provider type in an effort to better serve their enrollees. One of the intentions of this policy is to recognize that FFE States are aware of the complexities and challenges present in their local markets and have their consumers' best interests in mind as they develop and enforce network adequacy standards. Additionally, State regulators are, in many respects, better positioned to address these concerns, and through providing them more flexibility to implement standards and reviews that may or may not differ from Federal reviews, they can tailor provider access reviews to the specific needs of their markets and populations.

We recognize that these concerns, including concerns regarding a lack of baseline quantitative standards and concerns that proposed changes would reverse trends in the reduction of network adequacy- related lawsuits and consumer complaints, reflect a broad apprehension about the absence of baseline quantitative requirements, including time and distance standards, that would apply uniformly to FFE States electing to conduct their own reviews. We acknowledge that quantitative standards can serve an important function in supporting

network adequacy reviews that are measurable, enforceable, and meaningful for consumers. For the reasons stated earlier in this final rule, however, we believe that the qualification criteria established in this proposal under Sec. 155.1050(d)(2) through (d)(4) provide a meaningful framework for ensuring that States conducting their own reviews maintain a level of rigor consistent with the Federal goals of ensuring sufficient access to providers, including providers that specialize in mental health and substance use disorder services. We discuss the importance of these criteria earlier in this final rule in detail. Furthermore, the Federal review for network adequacy is still the default for States that do not elect to conduct provider access reviews, and those that do not meet the criteria to be considered to have an Effective Provider Access Review Program.

We are also committed to working in partnership with FFE States that elect to conduct provider access reviews and are determined to have an Effective Provider Access Review Program by providing technical assistance and support, including through continued network adequacy data collection and through maintaining the requirement that all QHP issuers in all FFE States conduct AWT Secret Shopper Surveys. This empowers us to provide additional resources to FFE States as well as to retain the ability to continue to compare and monitor QHP issuer performance.

Additionally, there is also nothing barring FFE States from adopting Federal time and distance and appointment wait time standards, in whole or part, if the State determines this is in the best interest of consumers in their State. We have seen this approach in practice as some States that have transitioned from FFEs to State Exchanges have outright adopted or mirrored our current quantitative time and distance standards. For example, as of PY2027 Georgia continues to implement the network adequacy standards, including time and distance standards and appointment wait time standards, established by CMS.\312\ Because the provider data analysis we will offer FFE States uses Federal time and distance standards, FFE States with an Effective Provider Access Review Program may be more likely to adopt Federal network adequacy standards, in whole or part.

\312\ See Georgia Access Plan Year (PY) 2027 Qualified Health Plan (QHP) Application Instructions for Issuers: https://georgiaaccess.gov/wp-content/uploads/2026/03/Georgia-Access-PY-2027-QHP-Application-Instructions-for-Issuers-3.30.2026.pdf.

Comment: Several commenters specifically stated concern that the proposed policy to allow FFE States to conduct provider access reviews, should they elect to conduct these reviews and be determined to have an Effective Provider Access Review Program, will result in geographic inequities, stating that a consumer's ability to access an adequate network of providers should not depend on where they live. These commenters noted a belief that broad discretion for States to develop network adequacy standards could produce standards that vary widely from State to State, and the potential for a lack of consumer transparency could make it difficult to assess whether the standards being applied are truly effective at measuring network adequacy.

One commenter specifically noted that requiring uniform standards would better support consumers in understanding their plans and assessing whether those plans are in compliance with network adequacy requirements, particularly for appointment wait times.

In this context, many commenters, including those that acknowledged support for State flexibility, called on CMS to maintain clear baseline Federal standards to address common challenges across jurisdictions, and to preserve confidence in the QHP certification process.

Response: We acknowledge commenters' call for consistent, transparent, and comparable standards across States and acknowledge concerns about the potential for variability in provider access reviews across FFE States, including the stated preference for uniform quantitative standards that are applicable to all FFE States, even those that conduct provider access reviews. While FFE States which elect to conduct provider access reviews and are determined to have Effective Provider Access Review Programs will have flexibility around the specific provider access standards and reviews they implement, we are confident, for the reasons stated earlier in this final rule, that the criteria the FFE State must meet to be determined to have the authority and the technical capacity to conduct provider access reviews, as described at Sec. 155.1050(d)(4), will ensure a high bar to conduct provider access reviews and a baseline level of consistency across FFE States. In particular, under Sec. 155.1050(d)(4)(i), the FFE State must establish provider access standards that are set forth in State statute or regulation, meaning they are publicly available, and are consistent with the Federal provider access standards described at Sec. 156.230(a)(1)(ii) and (iii). Additional, non-exhaustive examples of criteria that will ensure a level of consistency and consumer confidence in provider access across FFE States include requirements that the FFE State share its provider access review process with us, including reporting systems, access metrics, and methodology; that the review processes include procedures around ongoing compliance and enforcement of provider access standards; that clear review timelines be established with reviews completed prior to QHP certification; and that processes be in place for monitoring and addressing consumer complaints.

However, uniform policy requiring identical time and distance standards across all FFEs that elect to conduct provider access reviews and are determined to have an Effective Provider Access Review Program would not appropriately capture the realities of local provider availability, provider willingness to contract with issuers, and various geography. The needs of consumers in Alaska, for example, are fundamentally different from those of consumers in Florida, due to differences in geography, population size and distribution, and age of the States' populations.

We reiterate that we do not believe a one-size-fits all approach is satisfactory, as evidenced through our experience in conducting network adequacy reviews, and through discussions with States, issuers, and other various interested parties around diverse market conditions. As we noted in the proposed rule (91 FR 6458), for example, issuers have highlighted to us persistent challenges in locating and contracting with enough providers of various specialties (for example, allergy and immunology, behavioral health, gastroenterology) in remote or difficult to access areas of a State. We further noted that States have brought to our attention various geographic constraints that impact QHP issuers' ability to satisfy time and distance requirements and have made suggestions to assess a QHP issuer's ability to meet a time or a distance standard individually, rather than requiring it to meet a standard that assesses time and distance together, which may be insurmountable due to a topographical constraint such as a body of water or navigating roads in mountainous terrain. In these instances, variability in reviews has the potential to work to the benefit of the consumers, and the closer proximity of State regulators will work to support robust reviews in their own States as State regulators have intimate knowledge of

their local markets, provider availability, geographic considerations, and demographics.

We reiterate that we believe the criteria established under Sec. 155.1050(d)(2) through (d)(4) for an FFE State to demonstrate it has an Effective Provider Access Review Program serves as robust means to ensure States have sufficient authority and the technical capacity to conduct provider access reviews. We discuss the importance of these criteria earlier in this final rule in detail. Additionally, our continued network adequacy data collection from issuers in these States will allow us to continue to monitor QHP issuer performance and provide support to States. The State could then use this network adequacy data to supplement their reviews, according to needs of their State's consumers. There is also nothing barring FFE States from adopting Federal time and distance and appointment wait time standards under Sec. 156.230, in whole or part, if the State determines this is in the best interest of their consumers.

Comment: Many commenters noted that patients, specifically those seeking mental health and substance use disorder services, in areas with fewer in-network providers already face disproportionately higher out-of-pocket costs and stated concern that any loosening of standards would reduce access to affordable coverage, destabilize safety net providers, and expose consumers to even greater financial burden. These concerns were closely linked to broader worries about the proliferation of narrow networks, with commenters citing existing deficiencies in Exchange plans where consumers have had difficulty accessing needed mental health providers due to those providers being out-of-network or lacking available appointments.

Response: We acknowledge the meaningful concerns about narrow networks and the negative impacts on consumers, including those seeking mental health services and substance use disorder services, which are specialties with known, frequent provider supply shortages and exclusion from issuer networks. Additionally, we recognize that many of the access concerns stated by commenters are tied to multiple systemic factors including provider availability and the complex relationship between issuers and providers. We want to reiterate that Federal provider access reviews will remain the default approach and FFE States will not automatically be allowed to conduct provider access reviews. Rather, we intend to ensure that if an FFE State elects to conduct provider access reviews, they have sufficient authority, technical capacity, and standards in place that ensure compliance with the requirements outlined under Sec. 155.1050(d)(2) through (d)(4), which includes the requirement that FFE States that conduct their own provider access reviews establish provider access standards that are consistent with those for FFE States where we continue to conduct provider access reviews.

Comment: Several commenters raised procedural and legal objections to the proposal. Commenters also raised concerns rooted in prior litigation, noting a court case in which a court stated concern about CMS' failure to provide a substantive response to allegations that States were not adequately conducting network adequacy reviews, and stating that little has changed, with more recent analyses continuing to find many States lacking in enforcement actions related to network adequacy. Commenters pointed out that the court had raised concerns about the adequacy of State review procedures and the absence of quantitative standards for network adequacy, deficiencies that commenters stated are not remedied by this proposal, which similarly does not impose quantitative requirements on States. Commenters also stated doubt about our assertion that issuers have identified challenges in contracting with sufficient numbers of providers and stated that in such a case, alternative methods to address provider shortages or provider reluctance to contract should be considered before reducing Federal oversight.

One commenter further stated that monitoring network adequacy is part of the Secretary's statutory duty and that Congress had an explicit intent to require uniform standards applicable to all Exchanges throughout the country.

Response: We appreciate the legal and procedural concerns raised by commenters and take them seriously. As to the commenter's assertion that monitoring network adequacy is part of the Secretary's statutory duty and that Congress intended that uniform standards apply to all Exchanges throughout the country, we believe the approach finalized in this rule is consistent with the statutory framework detailed in section 1311(c)(1)(B) of the Affordable Care Act for the reasons stated earlier in this final rule. We also note that the language in the statute does not specify that the Secretary must define network adequacy standards in detail or create uniform standards that apply across all States. We also note that this policy maintains CMS as the default reviewer of network adequacy and will not result in a blanket deferral of network adequacy reviews to FFE States. The policy does not require FFE States to elect to conduct such reviews if they are satisfied with HHS continuing to conduct Federal provider access certification reviews of QHP issuers in their State consistent with requirements under Sec. 156.230 for network plans and, for plan years beginning on or after January 1, 2028, under Sec. 156.236 for non- network plans.

The policy we are finalizing in this rule is very different than the previous policy which deferred network adequacy reviews to FFE States. It establishes a structured, criteria-based pathway through which FFE States may elect to conduct provider access reviews while retaining CMS as the default review entity. and this policy also preserves meaningful Federal oversight, as we will continue to require QHP issuers in all FFE States to continue to submit network adequacy data prior to QHP certification and to conduct AWT Secret Shopper Surveys, regardless of whether we or the FFE State is conducting provider access reviews. This policy recognizes the unique capability of States to address the specific needs of their own consumers in a way that can be much more nimble, targeted, and flexible than is possible at a Federal level. We reiterate that a State, with its more intimate knowledge of its own demographics, topography, quantity, and density of providers, is often best positioned to evaluate local provider networks and market conditions and tailor network adequacy standards in a more nuanced way than Federal requirements. We discuss this in greater detail earlier in this final rule.

The network adequacy policy vacated in the City of Columbus case in 2021 allowed for the blanket deferral of network adequacy reviews to States. By contrast, under the policy we are finalizing in this rule, we will remain the default reviewing entity and FFE States will be the reviewing entity only if the FFE State elects to do so and only if the FFE State demonstrates it has sufficient authority and the technical capacity through meeting specific criteria described under Sec. 155.1050(d)(2) through (d)(4). For the reasons stated earlier in this section of this final rule, we are confident that the criteria the FFE State must meet to be determined to have the authority and the technical capacity to conduct provider access reviews set a high bar for FFE States to demonstrate they are adequately prepared to conduct these reviews, otherwise we will continue to conduct reviews of QHP issuer provider

access consistent with requirements under Sec. 156.230 for network plans and, for plan years beginning on or after January 1, 2028, under Sec. 156.236 for non-network plans. Specifically, under Sec. 155.1050(d)(2), the FFE State must ensure a QHP issuer that uses a network ensures that the in-network providers, as available to all enrollees, include essential community providers (ECPs) in accordance with Sec. 156.235, and maintains a network that is sufficient in number and types of providers, including providers that specialize in mental health and substance use disorder services, to ensure that all services will be accessible without unreasonable delay. The QHP issuer's provider network consisting of in-network providers, as available to all enrollees, must be consistent with the rules for network plans of section 2702(c) of the PHS Act. Under Sec. 155.1050(d)(3), the FFE State must ensure that a QHP issuer that does not use a network of providers (a non-network plan) provides access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full, including ECPs and providers that specialize in mental health and substance use disorder services, to ensure that all services will be accessible without unreasonable delay.

Additionally, we are confident, for the reasons stated earlier in this final rule, that the criteria the FFE State must meet to be determined to have sufficient authority and the technical capacity to conduct provider access reviews, as described at Sec. 155.1050(d)(4), will ensure a high bar to conduct provider access reviews and a baseline level of consistency across FFE States. In particular, under Sec. 155.1050(d)(4)(i), the FFE State must establish provider access standards that are set forth in State statute or regulation, meaning they are publicly available, and are consistent with the Federal provider access standards described at Sec. 156.230(a)(1)(ii) and (iii). Additional, non-exhaustive examples of criteria that will ensure a level of consistency and consumer confidence in QHP certification across FFE States, that were not present in the previously vacated policy, include requirements that the FFE State share its provider access review process with us, including reporting systems, access metrics, and methodology; that the review processes include procedures around ongoing compliance and enforcement of provider access standards; that clear review timelines be established with reviews completed prior to QHP certification; and that processes be in place for monitoring and addressing consumer complaints.

This policy seeks to empower FFE States that elect to conduct these reviews and are able to demonstrate sufficient authority and the technical capacity to do so with a level of flexibility intended to allow them to implement review programs that best fit their consumer needs, market conditions, and resource availability. This may include implementing reviews that are different from our quantitative time and distance review and reviews that are potentially more qualitative in nature, however, for the reasons stated earlier in this final rule, we believe we have developed a robust, comprehensive set of criteria that must be met and thus are confident FFE States that elect and that are determined to have Effective Provider Access Review Programs will conduct provider access reviews that are of a high quality and protect consumers.

Additionally, another difference in this policy is that we will continue to collect provider data from all QHP issuers in all FFE States, regardless of who is conducting the review, to maintain a level of awareness of QHP issuer provider networks and an ability to be responsive to consumer and interested parties complaints. All QHP issuers in all FFE States will also continue to conduct Appointment Wait Time Secret Shopper Surveys during the plan year using the provider data submitted to us during QHP certification. For the reasons stated earlier in this section of this final rule, we are confident that this policy will ensure a baseline level of consumer protection and access to care while empowering FFE States to innovate and invest in improving access for consumers through addressing concerns more locally and through the ability to make adjustments in standards and compliance requirements in a nimbler and more informed way than we are able.

Comment: A number of commenters raised concerns about the capacity and consistency of State oversight under the proposed approach. Commenters questioned whether States have the resources, infrastructure, and capacity to conduct rigorous network adequacy reviews, and noted that the administrative burden of conducting such reviews would be shifted onto States that may not be equally vigilant in ensuring compliance. These concerns were reinforced by commenters who cited reports documenting wide variation in State network adequacy review practices, noting that many States rarely take enforcement actions and rely primarily on consumer complaints as their primary source of oversight data. Commenters stated concern that this historical variability and inconsistency in State oversight would be perpetuated, and potentially amplified under the proposed approach, resulting in reduced accountability and inconsistent protections for consumers across States. A few commenters urged CMS to delay the policy, citing the large number of policies proposed across the rule and the need for additional time to adapt to State network adequacy standards and to develop detailed compliance mechanisms.

Response: We appreciate the concerns raised by commenters regarding the capacity and consistency of State oversight under the proposed approach and take these concerns seriously. We reiterate that the policy we are finalizing in this rule maintains CMS as the default reviewing entity unless an FFE State elects to and demonstrates sufficient authority and the technical capacity to conduct these reviews through meeting specific criteria described under Sec. 155.1050(d)(2) through (d)(4). This policy is not a blanket deferral to all FFE States and does not require them to conduct these reviews if they do not wish to absorb the administrative burden and are satisfied with CMS conducting reviews of QHP issuer provider access or if the FFE State elects to but is unable to meet the criteria to demonstrate they have the authority and the technical capacity to conduct these reviews. In such cases, we will continue to conduct reviews consistent with requirements under Sec. 156.230 for network plans and, for plan years beginning on or after January 1, 2028, under Sec. 156.236 for non- network plans. This policy establishes a structured, criteria-based pathway through which only those FFE States that elect to conduct provider access reviews and can demonstrate sufficient authority and the technical capacity to conduct such reviews by satisfying criteria to be considered to have an Effective Provider Access Review program will be permitted to do so. The qualification criteria, discussed in detail in earlier in this final rule, are specifically designed to address the concerns commenters raised by ensuring that FFE States that take on this responsibility have demonstrated, to our satisfaction, that they wish to absorb the administrative burden of review and are equipped to conduct provider access reviews.

We acknowledge the commenter concerns regarding the wide variation in network review practices across States, the assertion that States rarely take

enforcement action, and the reliance on consumer complaints to drive enforcement action. However, we are confident the requirements an FFE State must meet to demonstrate sufficient authority and the technical capacity to have an Effective Provider Access Review Program adequately address these concerns. While this policy is intended to allow flexibility in how FFE States conduct provider access reviews, the requirements described under Sec. 155.1050(d)(2) through (d)(4) are designed to ensure that we will not approve an FFE State to conduct reviews unless they demonstrate sufficient authority and the technical capacity to do so. Specifically, Sec. 155.1050(d)(iii) requires that the State's provider access review process includes procedures to ensure full and ongoing compliance with State provider access standards and enforcement frameworks applicable to issuers that fail to meet provider access standards so that those issuers come into compliance with State provider access standards. Additionally, Sec. 155.1050(d)(4)(v) requires that the State have a process for monitoring and addressing consumer-related provider access complaints.

Regarding a call to delay implementation of this policy, we will be finalizing the policy as proposed for PY 2027. We acknowledge the operational concerns issuers may have in the event an FFE State they operate in elects to and is determined to meet the criteria to have an Effective Provider Access Review Program, but we believe that some FFE States may already be prepared to conduct these reviews. For example, some FFE States performing plan management have already elected to conduct network adequacy reviews in prior plan years. These States have already demonstrated sufficient authority and technical capacity in prior plan years to conduct provider access reviews, and may therefore already be positioned to meet the criteria to have an Effective Provider Access Review Program in PY 2027 and subsequent years. In our partnerships with these States, they have also highlighted how States may innovate in their approach to conducting network adequacy reviews that are sensitive to conditions and capacity in the State. We also want to reiterate that there is no requirement for FFE States to take on provider access reviews for PY 2027. If FFE States wish to elect to conduct provider access reviews, we encourage--and would require--them to take the time necessary to ensure they have established an Effective Provider Access Review Program that meets HHS standards. We will also notify issuers in FFE States if their State elects to conduct provider access reviews and is determined to have an Effective Provider Access Review Program. We encourage issuers and other interested parties to communicate and work directly with their State, if they have concerns surrounding when an FFE State may elect to conduct provider access reviews and any processes and expectations surrounding the way FFE States will conduct these reviews. We are also committed to providing necessary guidance and technical assistance to support States and issuers as they navigate this process. We will continue collecting network adequacy data, including time and distance and appointment wait time data from all FFE issuers, including FFE States determined to have an Effective Provider Access Review Program, with a view to make it available in a standardized format to assist them in their network adequacy analysis. We also offer extensive resources originally developed for Federal network adequacy review during the annual QHP certification cycle as States may work to further develop network adequacy standards and review methods that best suit the conditions of their distinct consumer populations and needs. These tools, including a network adequacy template, other supporting document templates, manual data validation resources, and FAQs, provide support to interested States as States continue to develop and implement processes to standardize any issuer-submitted data during their reviews, leveraging our extensive experience in identifying efficient data formats and validation processes.

Comment: We received one comment recommending, we also remove the requirement that FFE States that conduct plan management ensure that QHP issuers follow quantitative time and distance network adequacy standards that are at least as stringent as standards for QHPs on the FFEs.

Response: We acknowledge the commenter's request to adjust network adequacy requirements for FFE States performing plan management. For FFE States performing plan management, as with other FFE States, the current default is that CMS conducts network adequacy reviews of QHP issuer provider access consistent with requirements under Sec. 156.230 for network plans and, for plan years beginning on or after January 1, 2028, under Sec. 156.236 for non-network plans. However, we note that in the 2023 Payment Notice, we clarified that FFE States performing plan management could elect to perform their own network adequacy reviews, but that these reviews must be at least as stringent as Federal network adequacy standards established for QHPs under Sec. 156.230. We have since previously approved a limited number of FFE States performing plan management to conduct network adequacy reviews in their State, who have elected to conduct such reviews, provided the State conducts network adequacy reviews in a manner as stringent as Federal network adequacy reviews.

We have made clear in this proposal, that should the four FFE states performing plan management functions that currently conduct their own network adequacy reviews also elect to conduct provider access reviews and be determined to have an Effective Provider Access Review Programs, they can tailor network adequacy standards to reflect State-specific needs, just as any other FFE State with an Effective Provider Access Review will be able to. This will allow this group of FFE States the flexibility, to tailor network adequacy standards to best reflect the needs of their State. We also clarify that we will work closely with FFE States that conduct plan management functions that have been previously approved to conduct their own network adequacy reviews in previous plan years to assist in a smooth transition to determine if they have Effective Provider Access Review Program in place if they elect to continue to conduct provider access reviews.

Comment: One commenter requested clarification on operational details regarding the Effective Provider Access Review Program and inquired as to why instructions regarding submission of an attestation for having an Effective Provider Access Review Program were not mentioned when it was detailed in the proposal for an Effective ECP Review Program. The commenter also requested why HHS did not propose to codify the regulatory text to include a requirement to submit an attestation for having an Effective Provider Access Review Program. The commenter also noted that the Effective ECP Review Program proposal outlined a process by which, after an FFE State has been determined to have an Effective ECP Review Program, in subsequent years, HHS would reach out to the FFE State to confirm that the State wishes to continue conducting their own ECP reviews and verify if any circumstances had changed that may affect the State's authority and technical capacity to continue conducting such reviews. They questioned why this detail was not also

included in the Effective Provider Access Review Program proposal.

Response: We appreciate the commenter raising these additional questions. The regulatory text concerning the process FFE States must follow to elect to conduct their own provider access reviews is located under Sec. 155.1050(d)(1), (5), and (7). We did not address the attestation process or the process for FFE States to confirm they will continue conducting provider access reviews in subsequent plan years because we believe these details are more operational in nature and intend to address these considerations through other guidance including communications sent directly to FFE States. However, we refer the commenter to the discussion in the proposed rule concerning the attestation form and related operational matters in the section of the rule discussing the Effective ECP Review Program (91 FR 6405) and clarify that we will require an attestation from FFE States that elect to conduct provider access reviews just as an attestation will be required of FFE States that elect to conduct ECP reviews. After the publication of this final rule, we intend to notify FFE States about their flexibility to conduct provider access reviews and provide FFE States with instructions on how to do so, including by providing an attestation form to FFE States. We will provide FFE States that elect to conduct provider access reviews time to complete the form, and after an FFE State completes this form, we will begin the determination process to assess if the FFE State meets all applicable criteria under Sec. 155.1050(d)(2) through (4) to be considered to have an Effective Provider Access Review Program. Afterwards, we will send notice of our decisions to FFE States on a rolling basis. The detailed timeline for the entirety of this process, including the deadline to submit the attestation form, and our targeted timeframe for completing our determination process, will be communicated to FFE States through additional guidance. If an FFE State elects to conduct provider access reviews and is identified as having an Effective Provider Access Review Program, we will permit the FFE State to immediately begin conducting provider access certification reviews and will coordinate with the FFE State to communicate to issuers that the State will complete provider access certification reviews. We also will, in subsequent years, confirm with FFE States already determined to have an Effective Provider Access Review Program that they wish to continue to conduct such reviews and whether any circumstances have changed that may affect the State's authority and technical capacity to conduct provider access reviews.

Comment: We received several comments that included recommendations for the Effective Provider Access Review Program. These included recommendations to remove the exceptions process entirely, to develop an appeal process for States that are determined to not meet the criteria for an Effective Provider Access Review Program, phasing out provider data collection, developing standard definitions to describe provider specialties and county designations, developing a common methodology to measure access, and requirements for FFE States to conduct oversight of provider availability throughout the plan year. Additionally, a few commenters recommended we publicly disclose all information submitted by the State to us, our written determinations, decisions to re-evaluate States that may newly qualify or cease to qualify, and requiring States to submit an annual report on their network adequacy review activities and standardized network adequacy metrics. Finally, one commenter provided a recommendation that CMS verify network adequacy through its own audits and subject States to a corrective action plan or revoke their ability to be solely responsible for their own network adequacy reviews when States perform poorly on network adequacy metrics.

Response: We appreciate the thoughtful feedback regarding the Effective Provider Access Review Program requirements. At this time, we are not going to finalize any additional requirements, but we will consider these modifications in future rulemaking, as appropriate.

We will retain the exceptions process as it provides flexibility to accommodate FFE States who may be developing innovative methods to assess for provider access but may be, for example, temporarily not clearly meeting a criterion to be determined to have sufficient authority and the technical capacity to conduct provider access reviews and retains room for potential methods and scenarios beyond what we have explicitly described in Sec. 155.1050(d)(2) through (4), which may ultimately benefit consumers in those States. Additionally, while we may consider an appeals process in future rule making, we are not developing an appeals process at this time, but do view the exceptions process as a route that provides comparable flexibility to an appeals process in that if an FFE State is electing to conduct provider access reviews but is aware of criteria they may or will not meet, the exceptions process retains flexibility and offers an open line of communication between the FFE State and HHS to determine if an exception is appropriate and the FFE State can otherwise be determined to have sufficient authority and the technical capacity to conduct provider access reviews.

We are choosing to retain provider data collection requirements for all QHP issuers in all FFE States as we believe this allows us to remain responsive to consumer and other interested parties complaints while providing additional support to FFE States with an Effective Provider Access Review Program. We want to reiterate that QHP issuers in FFE States with an Effective Provider Access Review Program will not be reviewed by us for compliance with our network adequacy standards.

As to the request to develop standard definitions to describe provider specialties and county designations, we believe that these are not necessary as there is already a level of standardization around provider specialty definitions and county type designations. We will not be requiring a common methodology to measure access or requirements for FFE States to conduct oversight of provider availability throughout the plan year as we believe this runs counter to the goals of this policy to allow FFE States flexibility in developing methodologies that are most responsive to specific needs of the State. However, we do want to highlight that to be determined to have sufficient authority and the technical capacity to have an Effective Provider Access Review Program, an FFE State must meet the requirements listed at Sec. 155.1050(d)(4)(ii) which includes a requirement to submit a description of its methodology to us, and these FFE States must also comply with the requirement at Sec. 155.1050(d)(4)(iv) which requires that FFE States conduct reviews prior to the completion of QHP certification. The latter requirement does not prevent the FFE State from additionally conducting mid-year reviews.

As it relates to the request that we publicly disclose all information submitted to us by the State, including our written determinations and decisions to re-evaluate States, and require States to submit an annual report on their network adequacy review activities and standardized network adequacy metrics, we will not be including these as requirements as it may risk disclosing QHP issuer confidential business information,

including contracting details and network development strategies. While we will consider these suggestions for future policymaking, we highlight that in no way are we preventing the FFE State from publicly disclosing the items mentioned above and we encourage interested parties to work with their FFE State that is determined to have an Effective Provider Access Review Program to proactively make these items publicly available to consumers in their States.

As it relates to the comment requesting that we audit FFE States with Effective Provider Access Review Programs, at this time we will not include any additional requirements or develop timelines or processes for proactive audits, but we will consider it for future plan year rulemaking. Due to the nascent state of the policy and the expectation that it may take a few plan years before we see many FFE States electing to conduct and satisfy the criteria to have Effective Provider Access Review Programs, we believe that, currently, the addition of a proactive audit would be an unneeded additional burden on States that are or will be the process of initial qualification. Though, we will consider this for future rule-making we feel we first must gain a clear understanding of the number of FFE States who elect to conduct provider access reviews, receive their initial submission of the contents of their Effective Provider Access Review Programs, and understand how they intend to conduct these reviews before we can begin to develop an auditing process. In the meantime, we also view the continued collection of provider data from all QHP issuers, including those in FFE States determined to have an Effective Provider Access Review Program, as a means of maintaining awareness of provider access relative to our Federal time and distance standards, should complaints arise from interested parties.

Comment: Several commenters called for transparency efforts and opportunity for public comment on an FFE State's ability to implement and maintain an Effective Provider Access Review Program. These include requests for public facing documentation of an FFE State's network adequacy standards, publishing issuer deficiencies and any justifications and exceptions granted, information around consumer complaints, information on inaccuracies in provider directories, and notification of any proposed timelines for an FFE to demonstrate that it will meet standards for becoming an Effective Provider Access Review Program.

Response: While we will continue to consider commenters' points, at this time, we will not include additional requirements concerning FFE State transparency as it relates to their election, application, development, or operation of an Effective Provider Access Review Program. Regarding requests for the publishing of issuer deficiencies, justifications, exceptions, and consumer complaints, we believe that requiring public disclosure of this information may risk disclosing confidential business information, including contracting details and network development strategies, which would be inappropriate. We also believe that publishing this information may lack context, for example, it may not always be obvious or clear when deficiencies or complaints are due to geographic limitations or provider availability outside of an issuer's control. Additionally, any remediation efforts to resolve outstanding deficiencies or complaints may not be made easily clear and may risk disclosure of confidential business information. Regarding inaccurate provider directories, we note that provider directory information is highly dynamic and changes frequently and believe that public reporting of provider directory inaccuracies may pose significant operational burden. Any public reporting of inaccuracies that is not updated in near-real time could become a source of misinformation in and of itself.

Regarding requests for public facing documentation of an FFE State's network adequacy standards, we believe that the criteria described under Sec. 155.1050(d)(4) that an FFE State must meet to be determined to have an Effective Provider Access Review Program, specifically the requirement that the State have its provider access standards set forth in statute or regulation, satisfies this request. We would refer FFE States with an Effective Provider Access Review Program to our Network Adequacy QHP Certification web page as a model for items to make publicly available regarding provider access reviews. Regarding notifications of and updates on any proposed timelines for an FFE State to demonstrate that it will meet standards to become an Effective Provider Access Review Program, we note that numerous factors may influence a State's timeline that may cause frequent revision, which may ultimately cause more confusion for the public. However, we plan to publicly share a list of States that have been determined to have an Effective Provider Access Review Program once that determination has been made. We will continue to evaluate the appropriate scope and format of any necessary public disclosures and highly encourage interested parties to engage with their State regulators to achieve a level of transparency that all parties find satisfactory. 11. Essential Community Provider Standards for Network Plans (Sec. 156.235) and Implementation of the Effective Essential Community Provider Review Program (Sec. 155.1051)

In the 2027 Payment Notice proposed rule (91 FR 6399), for PY 2027 and subsequent plan years, we proposed changes to QHP certification requirements for essential community providers (ECPs) included within a network plan issuer's provider network. First, we proposed to reduce the minimum percentage requirement (also referred to as the “ECP thresholds” or “ECP threshold requirements”) from 35 to 20 percent. (The minimum percentage requirement specifies a minimum percentage of participating ECPs that must be included within a network plan issuer's provider network based on the total available ECPs within the issuer's service area). Second, we proposed to change the narrative justification regulation text at Sec. 156.235(a)(3) and (b)(3) to be consistent with systems changes and existing issuer ECP data submission requirements as part of ECP certification reviews. Third, as further discussed in this section, we proposed at new Sec. 155.1051 to allow FFE States, including States performing plan management, to elect to conduct their own ECP certification reviews of QHP issuers' plans provided that the State has sufficient authority and the technical capacity to conduct these reviews, demonstrated by satisfying applicable criteria established by HHS to be considered an Effective Essential Community Provider (ECP) Review Program.

Section 1311(c)(1)(C) of the Affordable Care Act directs the Secretary to establish by regulation certification criteria for QHPs, including criteria that require QHP issuers to include ECPs within health insurance plan networks. ECPs include providers that serve predominantly low-income and medically underserved individuals, such as health care providers described in section 340B(a)(4) of the PHS Act and section 1927(c)(1)(D)(i)(IV) of the Act. We first implemented the above statutory provisions of the Affordable Care Act and codified ECP standards at Sec. 156.235 in the Exchange Establishment Rule (77 FR 18310).

These standards help ensure medical QHPs and SADP issuers include in their provider networks a sufficient number and geographic distribution of ECPs, where available, as a requirement to receive certification as a QHP. a. Reduction of the Minimum Percentage (or Threshold) Requirement From 35 to 20 Percent

Sections 156.235(a)(2)(i) and (b)(2)(i) stipulate that a plan applying for QHP certification to be offered through an FFE has a sufficient number and geographic distribution of ECPs if it demonstrates, among other criteria, that its provider network includes as participating providers at least a minimum percentage, as specified by HHS, of available ECPs in each plan's service area collectively across all ECP categories defined under Sec. 156.235(a)(2)(ii)(B). As stated in Sec. 156.235(a)(2)(i) and (b)(2)(i), for purposes of satisfying this minimum percentage requirement, also known as the ECP threshold requirement, multiple providers at a single location count as a single ECP toward both the available ECPs in the plan's service area and the contracted ECPs included in the issuer's network for calculating the threshold.

The minimum percentage requirements have been modified over the years (for example, 20 percent, 30 percent, 35 percent) to accomplish different policy and operational priorities, such as to reduce regulatory burden (82 FR 18373, 83 FR 17025), to align with market conditions (82 FR 18373, 83 FR 17025), to expand access to care for consumers (87 FR 27336, 88 FR 25882), and to promote broader networks (87 FR 27336, 88 FR 25882). For example, for QHP certification for PY 2018, we reduced the minimum percentage requirement from 30 to 20 percent to substantially reduce the regulatory burden on issuers (due to issuers needing to submit less data on provider contracts with ECPs to demonstrate satisfaction of the ECP standard under Sec. 156.235), while still requiring issuers to include a sufficient number and geographic distribution of ECPs in their networks (82 FR 18373). These minimum percentage requirements have been set at 35 percent since PY 2023 (87 FR 27336). In the 2024 Payment Notice (88 FR 25882), we also began to apply these minimum percentage requirements separately to two existing types of ECP categories that comprise more than 60 percent of all facilities on the HHS ECP List: FQHCs and family planning providers, in accordance with revisions to Sec. 156.235(a)(2)(i) and (b)(2)(i).\313\

\313\ Revisions made to Sec. 156.235(a)(2)(i) and (b)(2)(i) implemented separate minimum percentage requirements for the FQHC and family planning provider categories by specifying that a plan applying for QHP certification to be offered through an FFE must include as participating providers within their provider network at least a minimum percentage of available ECPs in each plan's service area within certain ECP categories, as specified by HHS. HHS applied this requirement to the FQHC and family planning provider categories.

At a high level, to meet the ECP threshold requirements under Sec. 156.235, issuers have been required to contract with at least 35 percent of available ECPs in each plan's service area to participate in the plan's network (that is, the overall ECP threshold requirement), at least 35 percent of available FQHCs that qualify as ECPs in the plan's service area (that is, the FQHC threshold requirement), and at least 35 percent of available family planning providers that qualify as ECPs in the service area (that is, the family planning provider threshold requirement).

To reduce administrative burden for QHP issuers, we proposed (91 FR 6399) to reduce the overall threshold, FQHC threshold, and family planning provider threshold requirements from 35 to 20 percent for both medical QHP and SADP issuers in FFE States, including States performing plan management, for PY 2027 and thereafter. We stated that we would consider medical QHP and SADP issuers to have satisfied the overall threshold requirement if these issuers contract with at least 20 percent of available ECPs in each plan's service area collectively across all ECP categories defined under Sec. 156.235(a)(2)(ii)(B) to participate in the plan's provider network. Additionally, we stated that medical QHP issuers would be considered to have satisfied the separate FQHC and family planning provider threshold requirements by contracting with at least 20 percent of available FQHCs that qualify as ECPs in the plan's service area and at least 20 percent of available family planning providers that qualify as ECPs in the plan's service area, respectively. We also stated that SADP issuers would be considered to have satisfied the separate FQHC threshold requirement by contracting with at least 20 percent of FQHCs offering dental services in the plan's service area. We stated that the calculation methodology for determining if an issuer meets the threshold requirements would be consistent with previous years.\314\ We noted that while we proposed to lower the requirements for each of these three thresholds, we recognized that issuers have the flexibility to continue to choose to exceed the proposed minimum percentage requirement within their provider networks. We further noted that each plan year, ECP certification data consistently indicate that the majority of issuers on the FFE, including States performing plan management, exceed each of the minimum percentage requirements,\315\ and in prior years when the minimum percentage requirement was reduced (for example, from 30 to 20 percent during PY 2018), many FFE issuers continued to choose to exceed minimum percentage requirements.

\314\ In calculating an issuer's satisfaction of the threshold requirements, we consider the number of in-network ECPs with which an issuer designates a contract is executed within their QHP certification application. The number of in-network contracted ECPs includes any qualified ECPs located within the plan's service area. The number of in-network contracted ECPs is the numerator in the threshold requirement calculation, and this number is divided by all available and qualified ECPs located within the plan's network service area in the denominator to create a threshold percentage. For the family planning provider and FQHC threshold requirements, we only count family planning providers and FQHCs in the calculation methodology within the numerator and denominator and not other ECP categories.

\315\ For PY 2026, the average threshold percentage for all FFE QHP issuers, including issuers in States performing plan management, for the overall ECP threshold requirement was 71 percent, 85 percent for the family planning provider threshold requirement, and 79 percent for the FQHC threshold requirement.

In the proposed rule (91 FR 6400), we stated that we believe reducing the overall threshold, FQHC threshold, and family planning provider threshold requirements from 35 to 20 percent would provide additional flexibility for QHP issuers to build provider networks that comply with the ECP Standard under Sec. 156.235. We further stated that we believe reverting to the previous 20 percent minimum percentage that issuers were accustomed to at the establishment of the FFE in PY 2014 and during PYs 2018 through 2022 would minimize disruptions for issuers in adjusting to meet the threshold requirements. We stated that in the past, several commenters on the Market Stabilization final rule (82 FR 18373) supported our proposals to decrease ECP threshold requirements, commenting that the lower threshold requirement would reduce the administrative burden on issuers, especially for those issuers in rural areas or States with few ECPs. We welcomed comments on if the proposed threshold percentage would still enable enrollees to access ECPs in rural areas and would not impose barriers to entry for issuers in rural areas by discouraging issuers from expanding into such areas (91 FR

6400). Similarly, we stated that we expect these proposed changes would continue to reduce the regulatory and administrative burden on QHP issuers, such as by reducing the number of resources expended to secure and negotiate additional provider contracts and potential compliance related costs associated with submitting additional ECP data on provider contracts to meet the ECP standard under Sec. 156.235. We further stated that this may provide issuers with more resources and flexibilities while still ensuring that a meaningful number of ECPs are included within an issuer's provider network consistent with the requirements of section 1311(c)(1)(C) of the Affordable Care Act. We also solicited comment on whether there is an alternative threshold percentage that is more effective and appropriate, including threshold percentages that may be targeted to specific geographic areas where issuers may require additional flexibilities to meet threshold requirements, and a percentage that strikes the appropriate balance between issuer flexibility and enrollee access. Furthermore, we stated that we understand that network participation negotiations are an important tool that issuers use to manage costs; therefore, fewer provider contracts needed to comply with threshold requirements may free up financial resources that issuers may leverage for other activities, such as innovating plan offerings to meet the diverse needs of consumers or passing on savings to consumers through lower premium rates that may especially benefit low-income and underserved populations.

Lastly, we stated that we continue to recognize concerns shared previously by commenters related to potential access to care barriers when reducing ECP threshold requirements in the past (82 FR 18373). We noted that when ECP threshold requirements were set at or reduced to 20 percent in previous years (PY 2014, PYs 2018 through 2022), we expanded efforts to ensure continued access to care to ECPs within an issuer's provider network. We continuously monitored potential issues raised by consumers and escalated any ECP access concerns identified through monitoring efforts by performing direct outreach to QHP issuers, as appropriate, including as part of post-certification monitoring and compliance efforts. Similarly, we stated that we would continue to monitor potential issues and undertake efforts to ensure consumers maintain adequate access to ECPs, and we would address any concerns through future guidance and/or possible rulemaking, as appropriate.

We sought comment on this proposal to reduce the overall threshold, FQHC threshold, and family planning provider threshold requirements from 35 to 20 percent. We received many comments from a variety of commenters that represent issuers, provider-based advocacy organizations, ECPs, and consumers.

After considering these comments and for the reasons outlined in the proposed rule and this final rule, we are not finalizing this proposal. Accordingly, HHS will retain the existing threshold requirements at 35 percent. We summarize and respond to public comments received on this proposal below.

Comment: We received many comments in response to this proposal. The majority of commenters, such as consumers, advocacy groups representing providers, and ECPs (for example, FQHCs, family planning providers, Ryan White Providers, dental health centers, hemophilia treatment centers, cancer hospitals, etc.) opposed the proposed reduction of threshold requirements from 35 to 20 percent.

Commenters raised an array of concerns regarding access to care and other downstream impacts to safety-net providers that such a reduction in threshold requirements may perpetuate, especially for low-income and medically underserved individuals that rely on ECPs. Commenters believed this would weaken one of the few statutory safeguards within the Affordable Care Act that is intended to protect access to safety- net providers. Commenters stated that lowering threshold requirements would narrow and destabilize provider networks, affecting a consumer's reliable access to ECPs as participating providers in their issuer's provider network. Some commenters noted that this may widen existing gaps in provider networks between “theoretical network coverage” and “practical access,” which are influenced by providers no longer accepting new patients or an issuer's plan, or even “ghost networks” \316\; thus, commenters stated even if an issuer includes 20 percent of ECPs within their service area, some ECPs listed as in-network by the issuer could be inaccessible for other reasons, such as not having the bandwidth or resources to accept all the issuer's enrollees at one given time.

\316\ Ghost networks typically refer to circumstances where large numbers of providers or health care facilities are listed as “in-network” on an issuer's provider directory, but are not actually available to care for enrollees (that is, no longer in- network, not accepting new patients, inaccurate provider directory information, etc.).

Commenters further stated that if issuers include fewer ECPs within their provider networks as in-network providers due to this proposal, then consumers may experience disruptions in established relationships with existing ECPs, which may push some consumers to change providers. Other commenters noted that reducing the number of in-network providers may further limit enrollee choice, increase waiting times, cause families to travel farther for care, make consumers forgo needed services, or necessitate that consumers switch plans to stay with their provider of choice.\317\ In addition, commenters added that disruptions in continuity of care could affect quality of care and health outcomes if fewer in-network ECPs cause delays in seeking preventive services and routine screenings, regular chronic disease management, behavioral health services, and specialty care, which may increase avoidable emergency department visits.

\317\ KFF. (2024). How Narrow or Broad Are ACA Marketplace Physician Networks? https://www.kff.org/private-insurance/how-narrow-or-broad-are-aca-marketplace-physician-networks/#:%7E:text=Reducing%20the%20number%20of%20providers,care%20for%20those%20switching%20plans.

In contrast, some commenters, including issuers, supported the proposal to reduce the threshold requirement from 35 to 20 percent. These commenters reasoned that this would reduce contracting burden while still maintaining meaningful inclusion of ECPs within an issuer's network. One commenter stated that a minimum percentage of 35 percent may force plans to include any willing ECP regardless of their quality or cost-efficiency to meet regulatory requirements, and reducing the minimum percentage may allow plans to focus on curating a network of higher-quality ECPs. Lastly, one commenter stated that they would support a proposed reduction in the threshold requirement, provided issuers continue to ensure at least one ECP category per county in the issuer's service area is included in their networks.

Response: The commenters raised valid points about the proposal negatively affecting access to care by potentially disrupting enrollees' established relations with ECPs and limiting enrollee choice by incentivizing issuers to narrow networks, potentially disrupting continuity of care and risking negative health outcomes. We continue to prioritize consumers' adequate access to ECPs through their plans and do not intend to potentially harm consumer

access through a reduced minimum percentage. We agree that ECPs provide valuable services to their communities (for example, preventive services, specialty care, etc.). Thus, we believe commenters' concerns warrant additional consideration and analysis, before finalizing a reduction in the threshold requirement, especially to safeguard low- income, medically underserved individuals that rely on ECPs as safety- net providers within their communities. For these reasons, we are not finalizing the proposal at this time.

In particular, we recognize the valid points that consumers raised regarding the existence of ghost networks or “theoretical networks” and the ECP threshold reduction potentially widening gaps in access already impacted by ghost networks, leading to no guarantee that all ECPs that an issuer contracts with are truly available and even more so if less ECPs are in-network with the issuer. We agree with commenters that these are important issues that need to be addressed, and that maintaining the existing threshold requirement could mitigate some of these effects while we conduct further analysis. While additional policy solutions would likely be required to address the specific issue of ghost or theoretical networks, which are beyond both the scope and purpose of this proposal, we appreciate the commenters' attention and feedback.

We also recognize concerns raised by commenters that reducing the number of in-network ECP facilities may further limit enrollee choice, and increase wait times, cost, and consumer burden due to the need to travel farther for care, potentially leading to consumers forgoing needed medically necessary services, including specialty care. We believe that retaining the existing minimum threshold would help stabilize the number of ECPs within current issuer networks at the current level, which would assist in addressing commenters' concerns that the threshold reduction would compromise enrollee choice and increase wait times and cost due travel time for specialized care.

Furthermore, we understand that some commenters believe that a specific minimum percentage may incentivize some issuers to contract with additional providers or facilities to meet requirements regardless of quality and that a lower minimum percentage may allow issuers to focus more resources on curating a network of higher quality ECPs. While it is possible that the specific minimum percentage could produce tradeoffs in the extent to which issuers consider the quality versus quantity of providers and facilities in their network, we believe that assuring consumers have more choice in the ECPs available within issuer's network and service area and adequate access should be prioritized. HHS can help facilitate this by setting a specific minimum percentage to ensure consumers have access to ECPs, but we do not currently set parameters on quality and cost-efficiencies for ECPs nor how issuers choose which qualified ECPs to include in their networks, as issuers are best equipped to consider these factors when deciding which providers are in their networks. Issuers retain the discretion to select among HHS-approved, qualified ECPs when curating their networks. The pool of eligible ECPs already reflects a baseline standard of eligibility and qualifications, as ECPs are reviewed and approved by HHS and other Federal partners \318\ to verify that covered entities meet all applicable statutory requirements prior to inclusion. Issuers therefore have the flexibility to prioritize ECPs within that qualified pool while still meeting the existing threshold.

\318\ HHS has collaborated with HRSA and SAMHSA to curate the Federal ECP List.

Lastly, regarding the commenter who supported a threshold reduction if the category per county requirement was retained, we confirm that issuers must continue to offer a contract to at least one ECP category per county in the issuer's service area and networks, as we did not propose to remove this requirement.

Comment: Commenters raised several potential cost impacts to consumers, ECPs, and issuers resulting from a reduction in the threshold requirement from 35 to 20 percent. Specifically, some commenters stated that if finalized, this proposal would cause issuers to choose to include fewer ECPs as in-network providers, and this may raise consumer out-of-pocket costs unless consumers can find other in- network ECPs. Multiple commenters also stated that if issuers contract with fewer ECPs, then ECPs would lose an important source of revenue from network contracts which could be financially destabilizing when ECPs already face declining margins, a disproportionate share of uncompensated care, and low reimbursement rates, further increasing existing risks of facility closures. Commenters that are ECPs further added that this may impact their ability to use Federal ECP requirements as leverage during contract negotiations with QHP issuers since these issuers would face less pressure to offer contracts to include additional facilities with almost a 50-percent reduction in the stringency of the threshold percentage requirement, if finalized.

However, commenters in support of the proposal stated that a reduction in threshold requirements may help lower costs for consumers with savings from a decrease in administrative costs, if issuers have more flexibility to evade contracts with higher-cost providers that increase premiums. These commenters also reasoned that lower threshold requirements would allow issuers more resources to account for other variables in their network designs, such as workforce shortages and improving care coordination, while still ensuring consumers have access to ECPs. One commenter believed there was little evidence to prove that the previous 20 percent threshold harmed access to care when in effect; though, many commenters opposing this proposal stated that reducing administrative burden is an insufficient reason to reduce threshold requirements, which increase the risk of impacting patient care.

Response: We thank commenters for sharing different perspectives on this issue. We continue to believe that the affordability of plans through the FFE remains important, and that lowering a consumer's out- of-pocket costs helps serve this purpose. We do not intend to increase consumer out-of-pocket costs through a lower threshold requirement, rather we stated in the proposed rule that a lower threshold requirement could potentially decrease premiums. However, we believe that consumers raise important points on how a lower threshold requirement could potentially increase out-of-pocket costs if consumers cannot identify alternative in-network ECPs within their service area if an issuer ceases contracts with their preferred ECP, which becomes an out-of-network provider. We recognize that when ECPs become out-of- network, this could result in out-of-pocket costs for consumers continuing to see these ECPs. We understand that ECPs serve low-income, medically underserved individuals that may be less equipped to assume additional out-of-pocket costs, including those who often receive expensive specialty care services (for example, cancer care, HIV/AIDs treatment, etc.) from ECPs, which could serve as a significant barrier to accessing needed and/or critical services. Thus, we believe that these cost-related concerns and risks to the financial stability of ECPs warrant additional consideration and analysis before

finalizing any possible reduction in the threshold requirement to safeguard access.

Additionally, we believe commenters raised important concerns regarding the financial stability of ECPs, including the financial strain of declining margins, disproportionate shares of uncompensated care, and low reimbursement rates. These cost-related concerns and risks to the financial stability of ECPs warrant additional consideration and analysis before finalizing any reduction in the threshold requirement. We remain open to understanding more directly from ECPs how specific minimum percentages influence an ECPs' ability to successfully negotiate contracts with QHP issuers.

Furthermore, in response to comments that supported reducing threshold requirements due to lower administrative costs for issuers and greater flexibility in network design, we understand that a reduced threshold requirement may reap these benefits, but we remain more concerned about the impact of this policy on ECP financial stability and consumer out-of-pocket costs. While one commenter stated that there is no substantive evidence that the previous 20 percent threshold negatively impacted access to care, we believe the potential for harm to vulnerable populations warrants a particularly cautious approach. Lastly, we hope that recent HHS initiatives to reduce issuer administrative burden and costs during QHP certification will further mitigate these concerns; for example, MPMS enhancements to allow issuers to import ECP data from their previous year's QHP application, filter options to only display applicable ECPs meeting specific ECP requirements, and a new ECP calculation workspace that provides direct feedback to issuers on performance and how to close gaps.

We will continue to monitor ECP inclusion trends and may revisit the threshold requirements in future rulemaking if evidence supports a revision. In the meantime, we reiterate that as crucial safety-net providers, ECPs must continue to treat patients on a sliding fee schedule and regardless of ability to pay; thus, regardless of the specific minimum percentage, ECPs should continue to serve low-income, medically underserved individuals regardless of insurance status and not subject individuals to excessive out-of-pocket costs far beyond their ability to pay. Thus, in this way, we agree with commenters that it is important to ensure low-income, medically underserved individuals receiving care at ECPs are not exposed to significant out-of-pocket costs.

Comment: Many commenters deliberated on the appropriate, specific ECP minimum percentage that HHS should require. Most commenters believed that HHS should maintain the ECP minimum percentage at 35 percent. Commenters reasoned that since the majority of current QHP issuers exceed the 35 percent threshold, they were not convinced that issuers currently struggle to meet existing ECP threshold requirements enough to justify a reduction, and reasoned that some plans demonstrate even more capacity to maintain broader networks as evidenced by issuers that have exceeded the current 35 percent threshold. A few commenters added that the minimum percentage should not be lowered if issuers currently prove the existing minimum percentage is achievable, and that the purpose of a minimum percentage is to function as a guardrail for plans that are outliers due to poorer performance on ECP thresholds. Commenters pointed to HHS' progress in expanding protections for populations served by ECPs through current ECP requirements under Sec. 156.235, as evidenced by higher compliance amongst issuers achieving ECP threshold requirements, and some commenters noting they have noticed fewer legal disputes and consumer complaints related to ECP access likely due to current ECP requirements. Commenters were concerned that if HHS were to proceed with reducing the ECP minimum percentage, this may reverse current progress if issuers reduce participating ECPs in their networks, and consequently, cause networks to narrow over time. Furthermore, many commenters did not believe enough empirical evidence (for example, through geographic modeling, network-composition analysis, literature, etc.) exists to demonstrate that HHS could reduce the ECP threshold without affecting access to care, and thus, encouraged HHS to share more data to support that a 20 percent minimum percentage would ensure meaningful access for low- income, medically underserved individuals.

Commenters also responded to HHS' comment solicitation on whether there is an alternative threshold percentage that is more effective and appropriate, including threshold percentages that may be targeted to specific geographic areas where issuers may require additional flexibilities to meet threshold requirements, and a percentage that strikes the appropriate balance between issuer flexibility and enrollee access. Specifically, some commenters recommended maintaining the threshold requirement at 35 percent or an alternative threshold between 20 and 35 percent until CMS can publish additional data to evaluate enrollee access to ECPs and impact on premiums. One commenter believed the existing 35-percent threshold is too low and should be increased. A few commenters suggested that CMS at least maintain the FQHC threshold requirement at 35 percent, create a new threshold requirement for ECPs that treat serious illnesses (for example, Cancer Hospitals, Ryan White Providers, Community Mental Health Centers, etc.), or require issuers that seek to include in their network around 20 percent of available ECPs in the issuer's service area to demonstrate that ECP access for underserved populations will be maintained.

Response: Due to the concerns raised regarding the empirical evidence present to justify this proposal in particular, we agree that it is not appropriate to finalize a reduction in ECP threshold requirements until we conduct additional data analysis, including leveraging geographic modeling or network-composition analyses to ensure a threshold reduction would not adversely affect access to care. We are currently expanding data analysis efforts by utilizing geographic and composition analysis methods to analyze access to ECPs, including ECP category types, within certain geographic areas and according to different demographics. As part of these efforts, we also seek to understand the impact of specific ECP threshold percentages, such as if issuers are more likely to experience barriers in meeting ECP threshold requirements within certain geographic areas. Thus, we may consider this data along with these comments and make modifications to the ECP threshold requirements, as appropriate, through future rulemaking. We will also take into careful consideration the range of alternative threshold recommendations offered by commenters when examining if modifications to the threshold requirements are needed after supplemental analyses (for example, an interim threshold between 20 and 35 percent, maintaining at least the FQHC threshold at 35 percent or creating a new threshold category for ECPs that treat serious illnesses, and/or requiring documentation for issuers scoring between 20 and 35 percent).

We thank commenters who highlighted our progress in expanding protections for populations served by ECPs, as evidenced by higher rates of issuer compliance due to most issuers

achieving threshold requirements across a range of service areas and market conditions, and a reduction in legal disputes and consumer complaints related to ECP access. We do not intend to potentially reverse this progress by creating conditions in which issuers have less incentive to maintain robust ECP participation. Thus, we are maintaining the existing minimum percentage at the attainable 35 percent, while identifying if additional approaches exist that promote issuer flexibility and maintain robust access to ECPs.

Comment: Multiple commenters raised concerns that a reduction in the overall ECP threshold may decrease the number of ECPs within categories of services that are encompassed under the overall ECP threshold but do not currently have their own categorical threshold requirements like FQHCs and family planning providers. For example, commenters that represented Inpatient Hospitals, Ryan White Providers, Specialized Cancer Centers, Mental Health Facilities, and Hemophilia Treatment Centers were concerned that if the overall ECP threshold requirement were reduced further, fewer of these specialized facility types would be included in issuers' provider networks since there are no standalone categorical threshold requirements for these ECP category types. Commenters stated that less representation of these facility types in the overall ECP threshold could affect access to quality and comprehensive HIV care, chronic disease management, bleeding disorder care, pediatric specialty care, oncology services, and treatment for rare and complex conditions, which could impose additional costs to consumers.

Response: We appreciate the concerns raised by commenters representing specialized ECP categories (such as Inpatient Hospitals, Ryan White Providers, Specialized Cancer Centers, Mental Health Facilities, Hemophilia Treatment Centers) regarding the potential downstream effects of reducing the overall ECP threshold for facility types that do not currently have their own standalone categorical threshold requirements. We understand the concerns stated by these commenters that a reduction in the overall ECP threshold could affect the representation of these specialized facility types within issuer networks, given that they are not independently protected by categorical threshold requirements in the same manner as FQHCs and family planning providers. We also recognize that these providers and facilities furnish services that often have limited alternatives within a given service area, and believe commenters raise important concerns that if the reduction in the overall threshold reduces the number of specialized facility types as in-network providers, consumers may face greater costs if receiving these services out-of-network, or may forgo needed care altogether due to cost or access barriers. We do not intend to create differential access to certain categories of ECPs through a proposed reduction in minimum percentage requirements, nor do we intend to signal that issuers should contract with one type of ECP category over another to meet the overall ECP threshold requirement. We continue to believe that all ECP categories should be represented within an issuer's provider network, which is why we continue to maintain the current ECP category per county requirements under Sec. 156.235(a)(2)(ii)(B), so that issuers include in their network at least one ECP per each ECP category per county. Nevertheless, since we do not have sufficient data at this time to prove issuers would retain specialty care providers if there were a reduction in the overall ECP threshold, we believe it is not appropriate to finalize this proposal at this time until we understand these concerns in more depth through subsequent data analyses. We may also consider whether additional categorical threshold requirements or other targeted protections for ECPs providing specialty care may be warranted to better safeguard access for enrollees with complex, chronic, or rare conditions.

Comment: Many commenters stated concerns specific to the FQHC threshold and family planning provider threshold. Commenters that represented community health centers, or FQHCs, shared specific concerns on potential impacts of reducing the FQHC threshold requirement from 35 to 20 percent and that FQHCs should not be treated interchangeably with other ECP categories. Commenters stated that FQHCs operate greater than 17,000 sites nationwide and serve more than 52 million patients annually, such as by providing comprehensive primary and behavioral health care services, care coordination, and reproductive health care. Commenters stated that FQHCs serve as the backbone of care to predominately low-income, medically underserved individuals, those in rural communities, people of color, individuals living with disabilities, and pregnant woman. Commenters shared that health center patients are four times more likely to have an income at or below the Federal Poverty Level (FPL) and twice as likely to have an income under 200 percent of the FPL compared to the U.S population.\319\ Thus, commenters stated that reducing the FQHC threshold may further risk that issuers include fewer FQHCs in their networks, potentially impacting access to essential services for enrollees if FQHCs become out-of-network and making contractual terminations financially destabilizing when FQHCs are currently experiencing declining margins.

\319\ Weitzman, 2025; 024 UDS Data, HRSA.

Commenters further shared additional implications that a reduction in the FQHC threshold may have on dental services. Multiple commenters that represent dental health centers shared that FQHCs serve as crucial dental safety-net providers that provide dental care and treat severe dental infections for enrollees who often face financial, geographic, and insurance-related barriers to accessing routine dental care. These commenters were concerned that the reduction of the FQHC threshold may have a compounding disadvantage for safety-net dental providers alongside broader proposals to reinstate the prohibition on coverage of routine non-pediatric dental services as an essential health benefit.

Furthermore, some commenters were similarly concerned over the proposed reduction in the family planning provider threshold. Commenters reasoned that family planning providers serve as the safety- net for sexual and reproductive health care, women preventive care and screening, and counseling, and that these providers have relied on the family planning provider thresholds as points of leverage during contract negotiations with Exchange insurers. Commenters added that family planning providers have experienced significant, increasing financial pressure and operational strains in recent years to serve patients due to funding disruptions, thus losing additional revenue from contracts with insurers may further disrupt timely access to care and worsen maternal health outcomes.

Response: We agree with commenters that FQHCs and family planning providers continue to serve as important safety-net providers within their community and provide an array of services to cater to a variety of health needs. This is why we established separate categorical threshold requirements for FQHCs and family planning providers to expand access to these provider types, and why we also require issuers to offer a contract to an FQHC and family planning provider

within each county consistent with category per county requirements under Sec. 156.235(a)(2)(ii)(B). Additionally, we understand commenters' concerns that FQHCs and family planning providers currently face significant financial strain, and we agree that these are important issues to address. Therefore, after consideration of these comments, we are not finalizing this proposal. We also take note of the concerns raised by commenters that a reduction in the FQHC threshold, considered alongside broader proposals affecting dental benefits, could have a disproportionate and compounding disadvantage for dental providers and the populations they serve.

In addition, we take note of the concerns raised by commenters that family planning providers have experienced significant financial pressures and operational strains in recent years due to funding disruptions, and the concern that a reduction in the threshold requirement would potentially correspond to the loss of revenue from insurer contracts if issuers do not renew contracts with ECPs due to lower threshold requirements. Not finalizing this proposal would allow us to further examine these concerns in more depth. Additionally, we will continue monitoring consumer access to FQHC and family planning provider, and consider potential future revisions to these threshold requirements as needed.

Comment: Commenters addressed HHS' comment solicitation on if the proposed threshold percentage would still enable enrollees to access ECPs in rural areas and would not impose barriers to entry for issuers in rural areas by discouraging issuers from expanding into such areas. Commenters highlighted that rural residents currently face high premiums, fewer plan choices, long travel distances to access care, rural hospital closures, provider shortages, and poorer health outcomes compared to urban populations. Commenters also added that even having rural providers in-network does not guarantee these providers are accessible due to geographic and transportation barriers, and that reducing even a small number of safety-net providers can materially affect access to care and further narrow networks of rural providers. One commenter suggested that HHS conduct a rural impact analysis, while closely looking at access to rural hospitals.

Response: We appreciate the concerns raised by commenters regarding the potential impact of reducing the ECP threshold requirement on enrollee access to ECPs in rural areas. We agree with the commenters' suggestion that we should consider conducting a rural impact analysis, especially with greater focus on rural hospitals, and believe this is a critical area that we can include as part of future data analysis initiatives. We understand that rural areas currently face significant provider supply shortages, which is why we are engaging rural providers as part of upcoming provider outreach initiatives, to recruit more eligible, qualified rural providers to HHS' ECP List, which would expand access to these ECPs. We also appreciate commenters for sharing specific barriers to care that rural residents regularly face, and we do not intend to risk further exacerbating disparities in access to care in rural areas where geographic and transportation barriers inherent to rural areas already make seeing in-network providers challenging, and where provider density is already limited and few alternative in-network options may be available. We intend to take all these comments into account to ensure that existing and future threshold requirements do not adversely affect access to care for rural enrollees.

Comment: One commenter recommended that if HHS were to finalize a reduction in ECP threshold requirements from 35 to 20 percent, that HHS should require State Exchanges and issuers offering plans through State Exchanges to report data on in-network, contracted ECPs within each plan's service area and demographical data (for example, diagnoses, disability status, race/ethnicity, sex, etc.) on consumers seeking care from these ECPs.

Response: We appreciate the commenter's suggestion. We would welcome the opportunity to collaborate with both States and issuers to better understand broader trends in access to ECPs within issuer's networks across State Exchange types, along with more details on consumers that typically receive care from ECPs. However, we did not propose or intend to impose any ECP-related threshold requirements on State Exchanges as a part of this proposal, and we do not currently require State Exchanges to submit ECP data collected from QHP issuers to HHS. Thus, we do not believe it is appropriate to finalize this recommended requirement at this time. Lastly, we believe this requirement could impose additional burden on both issuers in State Exchanges and States that do not currently report data to HHS, and issuers would have to implement new processes and expend resources to comply with ECP data reporting requirements.

Comment: One commenter stated that if HHS were to finalize a reduction in ECP threshold requirements, this would require additional effort for States that currently rely on the medical QHP and SADP ECP Review Tools. Some States, especially State Exchanges, currently utilize these tools as part of State certification review processes by having QHP issuers in their State utilize the tools to calculate the total number of ECPs included in each plan's network within a service area to determine a threshold percentage of participating ECPs. The commenter was concerned that the State would need to perform additional data analyses if the State does not have a 20 percent threshold requirement.

Response: We thank the commenter for sharing their concern as it relates to the reduction in the ECP threshold requirement and how States rely on the medical QHP and SADP ECP Review Tools. We want to clarify that, regardless of the Federal ECP minimum threshold percentage, State Exchanges, State-based Exchanges on the Federal platform, and issuers in these Exchanges that utilize the QHP and SADP ECP Review Tools would continue to have access to these ECP resources. We intend to continue developing and maintaining these tools and resources for States for PY 2027. Furthermore, the ECP Review Tools are already designed with flexibility to accommodate varying threshold requirements across States. Specifically, the tools allow users to modify the ECP threshold percentage within the tool to align threshold percentage requirements applicable in their respective State, including for State Exchanges that have established a different ECP threshold standard than the Federal minimum percentage. As such, States that maintain a threshold requirement that differs from the Federal minimum would retain the ability to configure the tools accordingly, without the need for additional data analyses outside of the existing tools. b. Modifications to Narrative Justification Requirements at Sec. Sec. 156.235(a)(3) and 156.235(b)(3)

Additionally, we proposed to change the narrative justification regulation text at Sec. 156.235(a)(3) and (b)(3) to be consistent with system changes, current HHS operational processes, and existing issuer ECP data submission requirements as part of ECP certification reviews.\320\ The regulations at

Sec. 156.235(a)(3) and (b)(3) currently state that if a plan applying for QHP certification to be offered through an FFE does not satisfy the ECP standard (under Sec. 156.235(a)(2) for the General ECP Standard and Sec. 156.235(b)(2) for the Alternate ECP Standard), the issuer must include as part of its QHP application a narrative justification describing how the plan's provider network provides an adequate level of service for low-income enrollees or individuals residing in Health Professional Shortage Areas within the plan's service area and how the plan's provider network will be strengthened toward satisfaction of the ECP standard prior to the start of the benefit year.

\320\ QHP certification and ECP Data Collection to Support QHP Certification are already assessed and encompassed by the currently approved information collections (Continuation of Data Collection to Support QHP Certification and other Financial Management and Exchange Operations (OMB Control Number 0938-1187 (CMS-10433)/ Expiration date: June 30, 2025) and Essential Community Provider/ Network Adequacy (ECP/NA) Data Collection to Support QHP Certification (OMB Control Number. 0938-1415 (CMS-10803)/Expiration date: December 31, 2027)).

However, as we stated in the proposed rule, since beginning to collect this narrative justification information in PY 2014, we have instituted multiple refinements and modernizations to this process in recent years, including through innovations and standardizations to ECP data collection by implementing the ECP User Interface (UI) \321\ in the Marketplace Plan Management System (MPMS). MPMS allows us to collect the same type of information previously obtained from the narrative justification without having to actually require issuers to fill out the narrative justification. We have integrated the ECP data collection into MPMS such that issuers can easily submit their ECP data, including justification related information previously collected through written narratives and pre-populated Excel templates, without having to again explain or describe how the plan's provider network provides an adequate level of ECPs prior to the start of the benefit year.

\321\ The ECP UI is the web-based interface of the ECP section of the Marketplace Plan Management System (MPMS) Module, which is a sub-system of the Health Insurance and Oversight System, where QHP issuers demonstrate that they have a sufficient number and geographic distribution of ECPs. Medical QHP and SADP issuers submit provider data in each network associated with a QHP and/or SADP into the ECP UI.

In the proposed rule, we stated that due to these technical enhancements, along with other process efficiencies and resources provided to issuers (for example, Final Plan Year ECP Lists, outreach activities, and change reports), we have been able to efficiently obtain relevant quality data to adequately perform ECP certification reviews while reducing the time and resources required by issuers to submit supporting information, including the narrative justifications required by Sec. 156.235(a)(3) and (b)(3). The ECP data obtained by issuers during the QHP certification process details which qualified ECPs have contracts executed with the issuer within each of the issuer's provider networks and service areas, which allows us to calculate an issuer's satisfaction of the ECP standard. This ECP data also identifies opportunities to alleviate gaps in an issuer's network and service area to ensure reasonable and timely access to ECPs by identifying additional ECPs an issuer may contract with to meet the ECP standard, while also highlighting different contract negotiation statuses that may explain why an issuer has not yet executed a contract with a specific provider.

Therefore, we proposed to modify and simplify this regulatory language at Sec. 156.235(a)(3) and (b)(3) to remove the narrative justification and description requirement so that the regulatory language simply requires that an issuer include as part of its QHP application the status of contract offers to qualified ECPs available in the network plan's service area. As stated above, we believe that continuing to collect contract negotiation status data from issuers is essential for performing ECP certification reviews. We stated that not only does this data allow us to monitor an issuer's progress toward contracting with a specific ECP and learn the rationale for why an issuer has yet to offer a contract with a specific ECP, the type of contract negotiation status an issuer selects for an ECP also determines whether the issuer will receive credit for that ECP toward satisfaction of the threshold, category per county, and Indian health care requirements under the ECP Standard. For example, if an issuer designates that an ECP rejected their contract offer in MPMS as part of their QHP application, the issuer will receive credit towards their efforts to offer a contract despite it being rejected as part of the calculations for the category per county and Indian health care requirements under Sec. 156.235(a)(2)(ii), but will not receive credit as part of the calculations for the threshold requirements under Sec. 156.235(a)(2)(i) and (b)(2)(i), which require that contract offers be fully executed with an ECP to receive credit. We stated that overall, collecting these contract statuses within the ECP UI in MPMS has allowed us to conduct ECP certification reviews that are as fulsome as certification reviews informed by narrative justifications, since the same information previously collected through narrative justifications is still received within MPMS but submitted by issuers in a simplified format through pre-populated contract status options that reduces issuer burden without written narratives required.

Moreover, we stated that this data had previously been collected through ECP narrative justifications, but the ECP UI enhancement now allows us to gather this information from issuers in a simplified and standardized format through various pre-populated fields, which eliminates the need for issuers to provide open-ended written descriptions that may be more time consuming for issuers that are continuing to work toward satisfaction of the ECP standard. In the ECP UI, this data is mainly collected from the status of contract negotiations. For example, the issuer could designate in its QHP application the contract negotiation status with an ECP for its networks by selecting if a contract was executed, a contract offer was made and awaiting a response, or a contract was not offered due to no response following issuer outreach, as some of the available standardized options.\322\ To reflect collecting this type of information as part of ECP certification reviews, we proposed to revise the regulations at Sec. 156.235(a)(3) and (b)(3) to state that a network plan applying for QHP certification to be offered through a FFE must include as part of its QHP application the status of contract offers to qualified ECPs available in the network plan's service area. We noted that since issuers have already been including this information as part of their QHP applications since PY 2025, there would be no substantive operational changes as a result of this proposal to the ECP data submission process as part of QHP certification.

\322\ Options for contract negotiation statuses are as follows: Contract Executed; Contract Offer Made-Awaiting Response; Pre- Contract Negotiations in Progress (Contract Offer Not Made Yet); Offer Rejected; Contract Not Offered Due to No Response Following Issuer Outreach; Facility Closed; Facility Does Not Contract And Has No Interest To Contract With Commercial Insurance; Facility Does Not Provide Medical Services; Facility Does Not Provide Dental Services; Provider is in an Exclusivity Contract That Prohibits Us From Contracting With Them; Provider is Not Licensed, Accredited, or Certified by the State; Provider Has Relocated Outside Service Area Preventing Us From Contracting With Them.

Additionally, we noted that issuers are not required to designate the contract negotiation status for all available ECPs within their service area in their QHP application. We stated that we understand the total number of ECPs

for which a contract negotiation status is selected within each network and service area is variable among issuers for multiple factors, including the size of the issuer's service area, the number of qualified ECPs available in the service area, the number of ECPs the issuer has contacted and/or engaged in contract discussions with, resources required by the issuer to initiate contract discussions with all qualified ECPs in their service area, if an issuer finds evidence that an ECP may no longer be eligible to qualify as an ECP, and the number of ECPs an issuer must contract with to achieve each of the requirements of the ECP standard. For these reasons, we proposed to additionally clarify at Sec. 156.235(a)(3) and (b)(3) that a network plan does not need to report on the status of contract negotiations for all available ECPs in their service area, but must at least report on the status of contract offers for all ECPs which the issuer has either included in its network plan or offered a contract to be included in its network plan within each service area.

We sought comment on this proposal to modify the existing narrative justification requirement to be consistent with current ECP data submission requirements as part of QHP certification.

After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on this proposal below.

Comment: Overall, commenters provided mixed opinions on our proposal to remove the narrative justification requirement. Issuers agreed with our proposal since the proposed modifications to the regulation text to instead designate that an issuer should include as part of its QHP application the status of contract offers to qualified ECPs would be more consistent with current ECP data submission processes within MPMS. However, multiple commenters stated concerns that modifying this requirement would remove pathways to ensure issuers justify how the plan's network would protect access to care and provide an adequate level of service for low-income enrollees or individuals in Health Professional Shortage Areas, leading to diminished transparency and accountability mechanisms, less meaningful enforcement, and would allow certification of plans that do not actually meet ECP requirements. Furthermore, commenters stated that narrative justifications compel issuers to articulate an access strategy that would provide regulators qualitative data regarding whether their network design meaningfully serves low-income, medically underserved populations, which may not be captured through contract statuses.

Response: We thank commenters for sharing their concerns with removing the narrative justification requirement to instead collect the status of contract offers. As we previously stated, MPMS allows us to collect the same type of information previously obtained from the narrative justification, such that issuers can easily submit their ECP data, including justification-related information previously collected through written narratives and pre-populated Excel templates. During QHP certification, issuers input additional information such as contract offer dates, point of contact information, and sources pertaining to a provider's potentially changed status if applicable, and can use additional notes to indicate why the issuer did not fully execute or offer a contract to an ECP. Thus, we do not agree with commenters that we would lose important data needed to meaningfully enforce ECP requirements, and we have taken steps to directly engage issuers to ensure their network design provides meaningful access to care to populations served by ECPs. Specifically, we have expanded outreach activities to issuers before, during, and post-certification through various informational QHP certification webinars, calls to issuers that require additional assistance, and compliance activities to ensure certain QHP issuers are actively taking steps to remedy any identified deficiencies in ECP requirements. These outreach efforts have been important to gather justification information by communicating directly with issuers that share any barriers to meeting ECP requirements and how the plan's provider networks provide an adequate level of service for low-income enrollees or individuals residing in Health Professional Shortage Areas within the plan's service area, while disseminating information on ECP certification requirements and providing targeted assistance to issuers in overcoming common barriers in developing networks to meet the ECP standard.

In addition to outreach efforts and MPMS modifications to collect justification-related information from issuers, we have implemented more widespread supports and resources that have effectively assisted issuers in meeting ECP requirements and reduced the number of issuers who have needed to submit detailed narratives for not meeting the ECP requirements under Sec. 156.235. When we first codified narrative justification requirements at Sec. 156.235(a)(3) and Sec. 156.235(b)(3) in the 2016 Payment Notice (80 FR 10838), we stated that “[w]e expect the need for issuers to submit such [narrative] justifications to decrease over time as issuers further develop their networks in adherence to HHS standards.” Since then, we launched our ECP Annual Application and Renewal Form (formerly called “ECP Petition Site”) initiative on December of 2015 to allow providers the opportunity to request to be added to the HHS ECP List and update their provider data on the ECP List. We have actively maintained and strengthened the HHS ECP List since the establishment of this initiative by ensuring the list more actively reflects the universe of qualified available ECPs in each service area, conducting outreach to providers to verify their information, and confirming prospective providers satisfy certain criteria prior to receiving a qualified ECP status. These efforts have provided issuers with a useful resource to identify providers that qualify for inclusion in an QHP issuer's plan network toward satisfaction of the ECP standard under Sec. 156.235, which has assisted more QHP issuers in meeting the ECP standard and decreasing the number of QHP issuers needing to submit narrative justifications. Therefore, we continue to believe that the proposed modifications to Sec. 156.235(a)(3) and Sec. 156.235(b)(3) are appropriate, and we are finalizing these modifications so that the regulatory language simply requires that an issuer include as part of its QHP application the status of contract offers to qualified ECPs available in the network plan's service area. c. Implementation of an Effective Essential Community Provider (ECP) Review Program (Sec. 155.1051)

To align with proposals in sections III.D.18 and III.E.10 of the proposed rule that would provide FFE States with additional flexibilities to conduct their own network adequacy reviews of QHP issuers operating in their States as long as they have sufficient authority and the technical capacity to conduct these reviews, demonstrated by satisfying criteria established by HHS to be considered an Effective Provider Access Review Program, we proposed to adopt new flexibilities for FFE States to conduct ECP certification reviews of QHP issuers' plans in their States provided that the State is determined by HHS to have an Effective ECP Review Program, as discussed later in this section. In proposing flexibilities for

FFE States to conduct ECP certification reviews, we proposed to exercise our authority under section 1311(c)(1)(C) of the Affordable Care Act, which provides the Secretary authority to establish QHP certification criteria related to ECPs, and our authority under section 1321(a)(1)(B) of the Affordable Care Act, which grants HHS general rulemaking authority to issue regulations related to offering QHPs through the Exchanges.

Thus, beginning with PY 2027, we proposed to provide the opportunity for FFE States, including States performing plan management, to elect to conduct their own ECP certification reviews of QHP issuers' plans provided that the State demonstrates it has sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria established by HHS to have an Effective ECP Review Program to ensure reasonable and timely access to ECPs for low-income, medically underserved individuals. We set forth this proposal at new Sec. 155.1051.

Over the years, we have deferred network adequacy reviews of QHPs to FFE States that were determined to have a sufficient network adequacy review process (82 FR 18346, 83 FR 16930). In determining whether it was appropriate to defer network adequacy reviews to FFE States, we considered a States' legal authority to enforce network adequacy standards and conduct network adequacy reviews, the means to conduct assessments on the adequacy of plans' provider networks, and the ability of States to enforce minimum access standards established by HHS (for example, reasonable access standards defined under Sec. 156.230). In contrast, we have not historically deferred ECP certification reviews wholly to FFE States, in part due to the complexity of conducting ECP certification reviews, which require sufficient technical capacity and resources that may not be readily available to States. However, as we stated in the proposed rule, given the prior experience of many FFE States in reviewing issuer submitted network adequacy data and some FFE States in reviewing ECP data (for example, States performing plan management), we believe it is appropriate to reconsider a FFE State's desire, legal authority, and technical capability to effectively conduct ECP certification reviews. We noted that some States performing plan management have experience conducting ECP certification reviews prior to PY 2026 due to previous data integration and system limitations that prevented HHS from being able to conduct these reviews before we implemented the ECP UI in MPMS, which eventually allowed us to effectively conduct these reviews for issuers operating in States performing plan management.

In the proposed rule, we recognized that States possess unique knowledge on local factors related to ECP reviews, such as on market conditions, geographic constraints, areas in the State with limited economic resources, provider shortages, workforce issues, and population demographics. We stated that the States' unique knowledge of these various local factors, in particular, could strengthen ECP certification reviews, which often involve identifying low-income areas and geographic areas with health professional shortages. We further stated that a State's local knowledge of low-income areas and geographic areas with health professional shortages within the State could effectively help locate facilities in these areas that may qualify as ECPs to both measure access to ECPs across the State and for possible inclusion of these ECPs within an issuer's network towards satisfaction of the ECP standard under Sec. 156.235. Lastly, we stated that a State's unique knowledge of local factors may allow States to innovate their approach to conduct ECP certification reviews that are more sensitive and tailored to local conditions and provider capacity in the State. We noted, for example, that a State may choose to implement additional or alternative access standards for mental health facilities, a type of ECP, and consider these standards during ECP certification reviews if the State is experiencing many Mental Health Professional Shortage Areas that necessitate tailored approaches to ensure consumers have increased access to mental health facilities within their networks.

Additionally, we stated that we believe several States already have robust ECP requirements in place, including quantitative measures to oversee the number or percentage of ECPs included in an issuer's network operating in their State. We noted, for example, that a Government Accountability Office (GAO) report in 2022 found evidence that approximately 19 States reported having a quantitative standard for ECPs when reviewing individual and group plans.\323\ The example given in the report of a quantitative standard is that multiple States require that 35 percent of ECPs in a service area must be included in the plan's network, which is consistent with the current Federal ECP threshold requirement. Furthermore, we noted that we have developed and expanded resources over the years that have familiarized some States with our ECP certification review process and methodologies, including various ECP review tools and templates, the Final Plan Year ECP List which captures qualified ECPs in each State, sub-regulatory guidance published on the QHP certification website (for example, Frequently Asked Questions, QHP Application Materials for the ECP section), and webinars and office hours with States. We also stated that we discovered through interested party engagement and communications throughout the years that some States utilize the aforementioned ECP certification resources as a foundation for their State ECP List and/or State ECP requirements.

\323\ GAO. (2022, December). Private Health Insurance: State and Federal Oversight of Provider Networks Varies. Available at https://www.gao.gov/assets/gao-23-105642.pdf.

Lastly, we noted (91 FR 6402) that States have stated interest in the past for us to grant them with additional flexibility to conduct reviews of ECP data. For example, in response to our proposal in the 2026 Payment Notice proposed rule (90 FR 4506) to allow HHS to conduct ECP certification reviews of QHP issuers in States performing plan management, one State that operates a State Exchange stated that each State's market demands tailored approaches to meet their unique needs, which may be more effectively addressed through State-level decision making and reviews of issuer-submitted ECP data.

For all these reasons, we stated that we believe FFE States may have the legal authority, technical capacity, expertise, and interest to conduct their own ECP certification reviews. Thus, beginning PY 2027 and thereafter, we proposed to allow FFE States, including States performing plan management, to elect to perform their own State reviews of issuer-submitted ECP data provided the State demonstrates sufficient authority and technical capacity by meeting the applicable criteria, as determined by HHS, to have an Effective ECP Review Program. We stated that an FFE State would be granted an Effective ECP Review Program designation if we determine it meets all applicable requirements described for this program under proposed Sec. 155.1051. We stated that we believed establishing applicable requirements under proposed Sec. 155.1051 for FFE States to demonstrate they have an Effective ECP Review Program is necessary to ensure States have the authority and technical capacity to conduct these ECP certification reviews in a way that

continues to ensure consumers have adequate access to ECPs through their plans. We stated that if we determined that an FFE State does not have an Effective ECP Review Program, then we would continue to perform ECP certification reviews consistent with Sec. 156.235 for network plans.

We stated that we continued to believe that HHS should continue to primarily conduct ECP certification reviews as the default approach for issuers' plans applying for certification to be offered as QHPs through an FFE, including States performing plan management, except if an FFE State elects to conduct ECP certification reviews and is determined to have sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria to be considered to have an Effective ECP Review Program. We stated that we believed Federal ECP certification reviews are highly valuable for several reasons.

First, we noted (91 FR 6403) that ECPs serve predominately low- income, medically underserved individuals, and these populations often experience higher rates of illness and are less equipped to field high out-of-pocket costs; additionally, the services furnished by ECP facilities are often more highly specialized with greater levels of acuity and expense,\324\ such as cancer care at Free-Standing Cancer Centers, Black Lung Disease treatment at Black Lung Clinics, tuberculosis treatment at Tuberculosis Clinics, hemophilia treatment at Hemophilia Treatment Centers, HIV/AIDs treatment with Ryan White Providers, and more. We stated that altogether, centralized Federal ECP certification reviews are continuously valuable to perform complex analyses that aim to protect these more vulnerable populations and decrease potential disparities in access across States.

\324\ Edward J, Wiggins A, Young MH, Rayens MK. Significant Disparities Exist in Consumer Health Insurance Literacy: Implications for Health Care Reform. Health Lit Res Pract. 2019 Nov 5;3(4):e250-e258. doi: 10.3928/24748307-20190923-01. Available at https://pmc.ncbi.nlm.nih.gov/articles/PMC6831506/. Karen Pollitz, Kaye Pestaina, Alex Montero, Lunna Lopes, Isabelle Valdes, Ashley Kirzinger, and Mollyann Brodie. KFF. (2023, June 15). KFF Survey of Consumer Experiences with Health Insurance. Available at https://www.kff.org/mental-health/poll-finding/kff-survey-of-consumer-experiences-with-health-insurance/. OASH, Health People 2023, Literature Review. Available at https://odphp.health.gov/ healthypeople/priority-areas/social-determinants-health/literature- summaries/ poverty#:~:text=Unmet%20social%20needs%2C%20environmental%20factors,f or%20people%20with%20lower%20incomes.&text=For%20example%2C%20people% 20with%20limit.

Second, we stated that while we were aware of many States that have qualitative and/or quantitative network adequacy regulatory standards that are comparable to standards under Sec. 156.230 (including with respect to time and distance and appointment wait time requirements) and experience conducting such reviews, less is known about to what extent States may have different and separate requirements for ECPs, integrate ECP and network adequacy requirements together under one standard, or do not have standalone ECP requirements at all. For this reason, we stated that we believed HHS retaining primary responsibility over conducting ECP certification reviews as the default approach is appropriate, at least until we learn additional information from FFE States on their ECP requirements as part of the Effective ECP Review Program determination process. To broaden knowledge on this issue, we solicited comments on different ways that FFE States, including States performing plan management, currently implement State-specific requirements for ECP standards and how these requirements may be comparable to or different from ECP requirements implemented at Sec. 156.235.

Third, we stated that through interested party engagement throughout the years, we are also aware that some State Departments of Insurance may have limited resources and bandwidth to conduct ECP certification reviews, which are highly complex and data intensive. We stated that in the past, these State Departments of Insurance supported HHS conducting ECP certification reviews due to State resource limitations. We further stated that we have expanded our data collection capabilities and means to efficiently and adequately conduct ECP certification reviews over the years, such as through the development of the ECP List \325\ and ECP data collection in MPMS. The ECP List has helped us identify the exact geographic location and distribution of ECPs to highlight specific ECPs that may be available within an issuer's service area and available for contracting with the issuer to satisfy ECP requirements under Sec. 156.235. And, use of the ECP List simultaneously ensures that the full range of different ECP categories defined in section 340B(a)(4) of the PHS Act and, for network plans, providers described in section 1927(c)(1)(D)(i)(IV) of the Social Security Act, are adequately represented and available to consumers in an issuer's network. We noted that this ECP List has been embedded within the ECP UI in MPMS, so QHP issuers can select specific ECPs from this list that are contracted with the issuer and included in their network within a particular service area, which allows us to calculate an issuer's satisfaction toward the ECP threshold, ECP category per county, and ECP Indian health care requirements. Based on our experience conducting ECP certification reviews, we maintained that having adequate and accurate data on available ECPs in a geographic area, sufficient tools to collect and calculate issuer submitted ECP data, and sound methodologies to quantitatively assess this data to determine reasonable and timely access to ECPs in accordance with section 1311(c)(1)(C) of the Affordable Care Act is crucial for any FFE State to demonstrate the technical capacity to conduct their own ECP certification reviews. We noted that outside of a couple of State Exchanges that have reached out annually to inquire about our ECP List and a couple of States that have shared that they keep their own State- specific list of available ECPs, it is unknown how many States can develop and maintain a similar State-specific list of qualified ECPs or utilize HHS' ECP List that can be applied to conduct their own ECP certification reviews of issuer-submitted ECP data. We further noted (91 FR 6404) that it is also unknown what tools States may currently utilize to collect issuer submitted ECP data and methodologies States apply to assess this data to demonstrate reasonable and timely access to ECPs. For these reasons, too, we stated we believe it is appropriate that HHS retain primary responsibility over conducting ECP certification reviews as the default approach, at least until we learn additional information from FFE States as part of the Effective ECP Review Program determination process. We stated that this additional information would include whether FFE States have a process to identify qualified ECPs “where available” that may be included within a network plan's provider network, tools to collect issuer-submitted ECP data, and methodologies to assess the adequacy of an issuer's network of ECPs. Additionally, to broaden our knowledge in this area, we sought comment to learn which States have their own ECP List or other related process to identify qualified ECPs that may be utilized for certification purposes.

\325\ HHS has developed and regularly maintained an ECP List since 2015, which provides a large national snapshot of the universe of qualified ECPs across all States and by various category types.

Accordingly, we proposed to set forth the criteria for an Effective ECP Review Program by adding Sec. 155.1051 to part

155, subpart K. Under Sec. 155.1051(a), we proposed that FFE States may elect to conduct their own ECP certification reviews of issuers' plans applying for certification to be offered as QHPs through an FFE, including States performing plan management, provided that the State demonstrates sufficient authority and technical capacity to conduct these reviews by satisfying the applicable criteria in proposed Sec. 155.1051. We proposed that if FFE States do not satisfy the criteria established in proposed Sec. 155.1051, then we would continue to perform ECP certification reviews consistent with Sec. 156.235 for network plans.

In alignment with the proposal in section III.E.12. of the proposed rule to allow plans that do not use a network (non-network plans) to receive QHP certification, we stated that we would also provide additional flexibilities to FFE States to conduct ECP certification reviews of non-network plans if they are determined to have an Effective ECP Review Program. We further stated that, similar to the approach for network plans, we would perform ECP certification reviews for non-network plans under proposed Sec. 156.236 if FFE States do not satisfy criteria for having an Effective ECP Review Program. We stated that an FFE State would need to demonstrate that it meets applicable criteria for both network plans and non-network plans (under proposed Sec. 155.1051(b) through (c)), and the sufficient authority and technical capacity to conduct reviews of such plans (as assessed under proposed Sec. 155.1051(e)), if they decide to certify non-network plans, to receive a designation as having an Effective ECP Review Program. We also stated that this would mean an FFE State would not be permitted to elect to conduct ECP certification reviews for only network plans and not non-network plans, if they certify non-network plans, or vice versa. However, we stated that if an FFE State notifies us that it does not intend to certify non-network plans within their State and consequently does not offer these plans to consumers on the FFEs operating in their State altogether (regardless of if the State or HHS would conduct ECP certification reviews), then we would continue to review whether an FFE State meets all applicable criteria for only network plans during the Effective ECP Review Program determination process. For additional details regarding the criteria for the Effective ECP Review Program under proposed Sec. 155.1051 and how these criteria would pertain to reviews of non-network plans in FFE States electing to conduct ECP certification reviews, we referred readers to the discussion under sections III.D.19 and III.E.12.e of the proposed rule.

Furthermore, to ensure that issuers in FFE States continue to meet ECP requirements issued under section 1311(c)(1)(C) of the Affordable Care Act, and consistent with Sec. 156.235 for network plans, we proposed in Sec. 155.1051(b) that FFE States with an Effective ECP Review Program must ensure that a QHP issuer with a provider network includes in its provider network a sufficient number and geographic distribution of ECPs, where available, to ensure reasonable and timely access to a broad range of such providers for low-income individuals or individuals residing in Health Professional Shortage Areas within the QHP's service area, in accordance with the Exchange's network adequacy standards. Furthermore, we stated that we continue to believe that to protect low-income, medically underserved populations, and to ensure that enrollees in all FFEs have a minimum standard for consumer protections on reasonable access to providers and that disparities in access are minimized across FFE States, issuers in FFE States with an Effective ECP Review Programs must continue to demonstrate that they meet State requirements to ensure reasonable and timely access to ECPs that are consistent with requirements of the ECP Standard under Sec. 156.235. Thus, we proposed in Sec. 155.1051(c) that FFE States with an Effective ECP Review Program must have established ECP requirements that are set forth in State statute or regulation. We stated that FFE States must demonstrate that these established ECP requirements ensure that issuers with a provider network in their State meet all of the following requirements that promote a sufficient number and geographic distribution of ECPs: the minimum percentage requirements under Sec. 156.235(a)(2)(i), the Indian health care provider requirement under Sec. 156.235(a)(2)(ii)(A), and the category per county requirements for each of the eight ECP category types described under Sec. 156.235(a)(2)(ii)(B). In this manner, we stated that we believe that FFE States having ECP requirements consistent with the three aforementioned requirements would help maintain access to ECPs.

However, we recognized that FFE States may have alternative, distinct ECP requirements to ensure a sufficient number and geographic distribution of ECPs are included within an issuer's network to address various local conditions unique to each State. We stated, for example, some FFE States may have time and distance requirements that issuers must satisfy for enrollees to access certain types of ECPs; some FFE States may have different minimum percentage requirements than those described under Sec. 156.235(a)(2)(i),\326\ such as minimum percentages for rural health providers, mental health facilities, or other types of ECP facilities; and some FFE States may have ECP facility to enrollee ratio requirements, which may require an issuer to contract with a certain number or categories of ECPs based on the number of enrollees enrolled in their plan (for example, 1 FQHC per 1,000 enrollees). We acknowledged (91 FR 6404) that there could be numerous quantitative and qualitative methods beyond these aforementioned examples that States may use to analyze access to ECPs, which may especially be influenced by factors unique to each State. We stated that, for these reasons, FFE States with alternative ECP requirements would be required to demonstrate how these requirements would promote a sufficient number and geographic distribution of ECPs to ensure reasonable and timely access to ECPs, and an adequate level of service for low-income enrollees or individuals residing in Health Professional Shortage Areas under Sec. 155.1051(d). We further stated that to assess an FFE State's satisfaction of the requirements in proposed Sec. 155.1051(d), we would require FFE States to submit a written description of their alternative ECP requirements, an explanation of how the State collects ECP data from issuers to measure compliance with the alternative ECP requirement, and a detailed explanation of how the State uses this ECP data to analyze access to ECPs within an issuer's network.

\326\ Current ECP minimum percentage requirements include an overall ECP threshold, FQHC threshold, and family planning provider threshold.

In addition, we stated that for an FFE State to conduct ECP certification reviews, under our proposal, the FFE State would need to first express its interest to HHS and submit an attestation for having an Effective ECP Review Program. We stated that an FFE State would have the choice to submit an attestation for an Effective ECP Review Program, Effective Provider Access Review Program (described in section III.E.10. of the proposed rule), or both. We further stated that this means that an FFE State can elect to conduct their own ECP certification reviews, provider access certification reviews, or

both reviews provided the State demonstrates that it has sufficient authority and the technical capacity by satisfying the applicable criteria for the applicable review program depending on which review(s) it wishes to conduct. We proposed that if an FFE State does not directly communicate to HHS its interest in conducting its own ECP certification reviews, then we would assume the FFE State prefers that we continue conducting these reviews. We also stated that FFE States with an interest in conducting their own ECP certification reviews would need to submit their attestation that the State has an Effective ECP Review Program prior to the start of the QHP certification cycle for the first plan year it wishes to assume responsibility to conduct ECP certification reviews. We stated that we would review information submitted by the FFE State to ensure the State has the authority and technical capacity to conduct effective, timely reviews of ECP data submitted by an issuer prior to each plan year's QHP certification cycle. We noted that in our review, we would consider whether the FFE State receives adequate issuer data and documentation sufficient to conduct an examination of ECP requirements described in Sec. 156.235 for network plans. For additional details regarding the proposed criteria for the Effective ECP Review Program under proposed Sec. 155.1051 and how these criteria would pertain to reviews of non-network plans in FFE States electing to conduct ECP certification reviews, we referred readers to the discussion under sections III.D.19 and III.E.12.e of the proposed rule. We proposed in Sec. 155.1051(e)(1) through (10) that we would consider the following factors in our review to determine if an FFE State has an Effective ECP Review Program: \327\

\327\ Please see the discussion regarding factors (5), (7), and (11) in section III.E.12.e of this final rule.

(1) The State's legal authority to review whether plans applying for QHP certification meet ECP requirements, including relevant State regulations and statutes;

(2) Evidence that the State's requirements are consistent with ECP requirements under proposed Sec. 155.1051(c)(1) through (c)(3) that promote a sufficient number and geographic distribution of ECPs, or the State's explanation of how its alternative ECP requirements promote a sufficient number and geographic distribution of ECPs to ensure reasonable and timely access to ECPs;

(3) A description of the State's definition of an ECP, if different from the definition under Sec. 156.235(c), including relevant categories and eligibility criteria that the State uses to determine whether a facility qualifies as an ECP;

(4) Whether the State utilizes the Federal ECP List or has a process it uses to identify qualified ECPs that may be included within a network plan's provider network;

(5) Whether the State utilizes the Federal ECP List or has a process it uses to identify qualified ECPs that may accept a non- network plan's benefit amount as payment in full;

(6) A description of data collection systems, resources, templates, or methodologies used by the State to collect and review ECP data;

(7) Whether the State generally collects information from QHP issuers regarding the status of contract offers for network plans or offers of benefit amounts as payment in full to an ECP for non-network plans;

(8) Whether the State has delegated authority to some other entity other than the State Department of Insurance to perform ECP any or all review activities;

(9) Whether the State has compliance reviews, follow-up procedures, and enforcement frameworks applicable to issuers that demonstrate inadequate networks of ECPs so that those issuers come into compliance with State ECP requirements, including standardized processes to assess efforts the issuer is pursuing to come into compliance with State ECP requirements and any justification and exception processes for issuers that have not yet or cannot meet ECP requirements;

(10) Whether the State has a process for monitoring and addressing consumer-related complaints regarding access to ECPs to ensure sufficient access to ECPs consistent with section 1311(c)(1)(C) of the Affordable Care Act and set forth in State statute.

The first proposed factor under Sec. 155.1051(e)(1) requires that the FFE State has established ECP requirements that are set forth in State statute or regulation. We stated (91 FR 6405) that this factor is crucial since it identifies whether the FFE State has sufficient legal authority to issue regulations to establish ECP requirements, and that it has the authority to conduct ECP certification reviews to ensure QHP issuers meet such requirements.

The second proposed factor under Sec. 155.1051(e)(2) requires evidence that the FFE State's ECP requirements are consistent with ECP requirements under proposed Sec. 155.1051(c)(1) through (c)(3) that promote a sufficient number and geographic distribution of ECPs, or the FFE State provides a rationale to describe how its alternative State ECP requirements promote a sufficient number and geographic distribution of ECPs to ensure reasonable and timely access to ECPs. We stated that this factor is important to ensure that an FFE State's requirements are consistent with those under Sec. 156.235 for network plans and under proposed Sec. 156.236 for non-network plans, so that these requirements continue to maintain access to ECPs especially if they differ from those ECP requirements under Sec. 156.235 and proposed Sec. 156.236.

The third proposed factor under Sec. 155.1051(e)(3) considers the FFE State's definition of an ECP, if different from the definition under Sec. 156.235(c), and relevant categories and eligibility criteria that the FFE State uses to determine whether a facility qualifies as an ECP. We stated that this factor acknowledges that FFE States may have different categories of ECPs compared to those described under Sec. 156.235(c), including that some FFE States may have chosen to expand the categories of facilities that may qualify to be an ECP in the State. We stated that an understanding of the FFE State's definition of an ECP is necessary to ensure the State satisfies statutory requirements under section 1311(c)(1)(C) of the Affordable Care Act which requires the Secretary to issue regulations to ensure QHPs include within their networks certain categories of ECPs, such as those specified in section 340B(a)(4) of the PHS Act and entities described in section 1927(c)(1)(D)(i)(IV) of the Act.

The fourth and fifth proposed factors under Sec. 155.1051(e)(4) and (e)(5) evaluate an FFE State's process to identify qualified ECPs that may be included within a network plan's provider network, or qualified ECPs that accept a non-network plan's benefit amount as payment in full, respectively; or whether it utilizes the Federal ECP List to identify qualified ECPs. As stated in the discussions above, we stated that we believe it is critical for the FFE State to have a process to identify qualified ECPs, “where available.” We stated that understanding whether the FFE State utilizes the Federal ECP List or has its own process to identify qualified ECPs is crucial to evaluate the FFE State's satisfaction of the requirements under section 1311(c)(1)(C) of the Affordable Care Act which requires the Secretary to issue regulations to ensure QHP issuers include within health insurance plan networks those ECPs, “where available,” that serve predominately low-income, medically underserved individuals. We also stated that an FFE State implementing a process to identify qualified ECPs, or even the FFE State's

utilization of the Federal ECP List, would allow the State to identify the exact geographic location and distribution of ECPs to highlight specific ECPs that may be available within an issuer's service area and available for contracting with the issuer to satisfy ECP requirements. And we stated that if the FFE State identifies the category of services an ECP provides when identifying the qualified ECP, it can simultaneously ensure that the full range of different ECP categories defined in section 340B(a)(4) of the PHS Act and providers described in section 1927(c)(1)(D)(i)(IV) of the Social Security Act is adequately represented and available to consumers in an issuer's network.

The sixth proposed factor under Sec. 155.1051(e)(6) considers if the FFE State has data collection systems, resources, templates, or methodologies to collect and review ECP data. We stated that this information would be important for HHS to understand processes a FFE State has in place to efficiently collect large, complex amounts of an issuer's ECP data and their ability to meaningfully leverage that data to apply assessment methodologies to measure access to ECPs across the State. We also stated that this information would offer additional evidence to demonstrate an FFE State's technical capacity by indicating the different documentation, resources, and expertise it has developed to have the means to conduct an effective, timely examination of ECP data.

The seventh proposed factor under Sec. 155.1051(e)(7) considers if the FFE State collects information from QHP issuers regarding the status of contract offers for network plans or offers of benefit amounts as payment in full to an ECP for non-network plans. We stated that we believe this type of ECP data is important for an FFE State to collect from QHP issuers during its assessment of the adequacy of an issuer's network of ECPs or during its assessment to ensure access to a sufficient choice of ECPs that would accept a non-network plan's benefit amount in full. We stated that an FFE State collecting this type of data would demonstrate that it has the technical capacity to validate a QHP issuer's progress towards contracting with ECPs, which allows the FFE State to track an issuer's effort in pursuing to build a sufficient network of ECPs so that consumers in network plans have reasonable and timely access to a broad range of ECPs. Similarly, we stated that an FFE State collecting data from QHP issuers with non- network plans regarding the status of offering benefit amounts as payment in full to ECPs would allow the State to assess the issuer's commitment to facilitating access to a sufficient number of ECPs that an enrollee can access in their service area without needing to pay charges in excess of the benefit amount for an array of services. We stated that these contract statuses would serve as important metrics during an FFE State's assessment of ensuring access to ECPs, where available, including by allowing States to measure an issuer's compliance with the minimum threshold percentage, category per county, and Indian health care requirements under proposed Sec. 156.236(b)(1) through (b)(3), which would be evaluated based on measurements of contracts offered or executed, and benefit amounts as payment in full that were offered to or accepted by an ECP.

The eighth proposed factor under Sec. 155.1051(e)(8) considers whether the FFE State has delegated authority to some other entity other than the State Department of Insurance to perform any or all ECP review activities. We stated that it would be important for an FFE State to report to us any delegated authority to other entities to perform ECP review activities, so we understand how the FFE State is handling ECP review data and to whom it entrusts such data. In addition, we stated that it is important to review whether entities conducting such reviews have sufficient expertise to competently handle ECP reviews and that these entities would be able to conduct ECP reviews in such a way that would allow the FFE State to still satisfy all applicable criteria in proposed Sec. 155.1051 as part of having an Effective ECP Review Program.

The ninth proposed factor under Sec. 155.1051(e)(9) considers whether the FFE State has compliance reviews, follow-up procedures, and enforcement frameworks applicable to issuers that demonstrate inadequate networks of ECPs or inadequate access to ECPs that accept benefit amounts as payment in full, so that those issuers come into compliance with State ECP requirements. We stated that this factor would also consider whether the FFE State has standardized processes to assess efforts the issuer is pursuing to come into compliance with State ECP requirements and any justification and exception processes for issuers that have not yet or cannot meet ECP requirements. We explained that we believe the existence of these processes is critical for an FFE State to demonstrate sufficient enforcement authority, while maintaining the ability to evaluate the integrity and outcome of ECP certification reviews, which aims to ensure that low-income, medically underserved populations traditionally served by ECPs have sufficient access to these ECPs through their plans, where available. We stated that overall, these processes would ensure an FFE State has the ability to require that QHP issuers continue to meet state ECP requirements and comply with ECP statutory requirements under section 1311(c)(1)(C) of the Affordable Care Act.

The tenth proposed factor under Sec. 155.1051(e)(10) considers whether the FFE State has a process for monitoring and addressing consumer-related complaints regarding access to ECPs to ensure sufficient access to ECPs consistent with section 1311(c)(1)(C) of the Affordable Care Act and as set forth in State statute. We stated that this factor is important since it would indicate the FFE State has a process to continuously monitor access to ECPs and ensure that State ECP requirements aimed to promote access to ECPs have their intended effect among consumers. We noted that access to ECPs can change during the year for a multitude of factors, including due to facility closures, network terminations, changes in services offered by ECPs, financial stability and funding reductions, and staffing shortages. We further noted that for plans using a provider network, contracts may be executed or terminated throughout a plan year for various reasons. Also, we stated that any inaccuracies or out-of-date information contained in provider directories can create confusion or be misleading to consumers. Additionally, we stated that consumers may have trouble making appointments with network providers due to lack of availability of appointments. We also stated that for plans without a provider network, we anticipate that ECPs that accept a benefit amount as payment in full could change depending on market conditions, negotiations, and competition, or that consumers may require additional assistance in understanding how to utilize plan benefit amounts to meet their health care needs in such a way that does not increase out-of- pocket costs beyond the plan's benefit amount.

Lastly, in Sec. 155.1051(f), we proposed that we would notify the FFE State electing to conduct ECP certification reviews of our decision in writing prior to the start of the QHP certification cycle whether the FFE State is determined to have an Effective ECP Review Program and can therefore conduct its own ECP certification reviews for the plan year. We stated that in subsequent years and prior to the

start of the QHP certification cycle each year, we would reach out to FFE States with an Effective ECP Review Program designation to confirm if the FFE States wish to continue conducting their own ECP certification reviews for the upcoming plan year and to verify if any circumstances have changed that may affect an FFE State's authority and technical capacity to continue conducting effective, timely reviews of ECP data. We proposed that we would reserve the right to evaluate the FFE State at any time to determine whether, and to what extent, the FFE State's circumstances have changed such that it has begun to or has ceased to satisfy the criteria established by HHS under proposed Sec. 155.1051, and consequently no longer has an Effective ECP Review Program. We noted that we often complete an annual environmental scan of State authorities to maintain situational awareness of changing authorities across FFE States, and stated that the same would apply to this proposal to ensure FFE States with an Effective ECP Review Program continue to satisfy all applicable Federal requirements.

Additionally, we clarified that we would be available to provide technical assistance to FFE States on any issues related to the Effective ECP Review Program. We stated that we remain open to assisting FFE States at any point of the process, from electing to conduct their own ECP certification reviews to performing ECP certification reviews as an Effective ECP Review Program State, to ensure an FFE State's ECP requirements and certification review process continue to protect access to ECPs for low-income, medically underserved populations. We further stated that we would also continue to make ECP resources publicly available, including for those FFE States that are determined to have an Effective ECP Review Program and wish to utilize these resources as part of their ECP certification reviews. We noted that these resources include the Final Plan Year ECP List and Rolling Draft ECP List, medical QHP and SADP ECP tools, the Available ECP Write-in List, the Plan Validation workspace in MPMS, and guidance on the QHP certification website.\328\ We stated that we believe these supporting documents and tools are widely used across many States and among many issuers, serving as important resources for both identifying ECPs nationally to potentially include in a plan's network and assisting issuers in meeting ECP requirements.

\328\ These resources may be found at https://www.qhpcertification.cms.gov/QHP/applicationmaterials/Essential-Community-Providers.

We further stated (91 FR 6407) that in addition to the aforementioned resources and technical assistance that we would provide to FFE States, we would continue collecting ECP data from FFE issuers in FFE States with an Effective ECP Review Program, similar to the proposed approach for network adequacy in section III.E.10. of the proposed rule. We stated that we believe this data would provide additional insight to assess how QHP issuers are performing across the FFE, including in FFE States with an Effective ECP Review Program, to consistently compare issuer performance. We further stated that collecting this data would also provide us with the ability to continue to monitor consumer access to ECPs across the FFE. We also stated that the data would also be available in a standardized format to FFE States with an Effective ECP Review Program, which could be utilized to inform their ECP certification reviews and to perform additional analyses to analyze access to ECPs across the State. We stated that we believe this proposed approach would support FFE States in their capacity to conduct these complex ECP reviews.

We sought comment on this proposal.

After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy with modifications. Specifically, as discussed in section III.E.12. of this final rule, we are delaying implementation of QHP certification of non-network plans to PY 2028, which means that we will also delay implementation of the provisions allowing FFE States with an Effective ECP Review Program to conduct ECP certification reviews for non-network plans under Sec. 155.1051. Also, in response to comments, we are finalizing adding Sec. 155.1051(e)(11) to state that, in our review to determine if an FFE State has an Effective ECP Review Program, we will consider whether the FFE State collects the information described under Sec. 156.236(b)(4) through (b)(9) from non-network plans, which issuers of non-network plans must submit to the FFE for a determination that the plan provides reasonable and timely access to ECPs that accept the plan's benefit amount as payment in full. We refer readers to section III.E.12.e. of this final rule where we discuss and respond to a comment regarding QHP certification of non-network plans and ECP certification reviews of non-network plans by FFE States with an Effective ECP Review Program.

In the sections below, we summarize and respond to public comments received on the proposals above to allow FFE States, including States performing plan management, to elect to conduct their own ECP certification reviews of QHP issuers' plans provided that the State demonstrates it has sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria established by HHS to have an Effective ECP Review Program under Sec. 155.1051.

Comment: Commenters stated different perspectives on whether HHS should allow FFE States to conduct their own ECP certification reviews. Multiple commenters stated concerns that allowing FFE States to conduct their own ECP certification reviews would create inconsistency and variability in the application and enforcement of ECP requirements across FFE States, leading to a “patchwork” of varying ECP criteria, especially if FFE States are permitted to establish different ECP requirements. Some commenters stated that States may lack the resources and ability to establish their own review processes, and that CMS has much greater ECP data collection and analytical capacity than States, including to ensure compliance with section 1311(c)(1)(C) of the Affordable Care Act. One issuer recommended that CMS continue to perform ECP certification reviews since shifting these reviews to additional reviewing entities (for example, State Departments of Insurance) could increase administrative complexity for issuers and necessitate additional resources for issuers to manage varying Federal and State processes and timelines. Another commenter requested that, since ECP certification reviews are data-intensive and complex, HHS should not finalize this proposal and revisit this topic when more information can be gathered regarding the existing landscape of ECP requirements across States, including existing FFE State authority and technical capacity.

In contrast, multiple commenters stated that States are best positioned to assess access to ECPs within an issuer's network, and that States possess special insight on local markets, community needs, provider availability, and geographic conditions relevant to performing ECP certification reviews. Commenters also noted that proximity makes States best suited to design ECP requirements that address the specific needs of consumers; and that geographic distribution of ECPs varies significantly across States, so States have the expertise to evaluate whether issuers are

meeting the needs of low-income, medically underserved individuals within their jurisdictions. Lastly, commenters supported HHS continuing to conduct ECP certification reviews for FFE States that do not elect to conduct their own reviews, or for those that do not satisfy all requirements under proposed Sec. 155.1051.

Nevertheless, the majority of commenters agreed that if FFE States are permitted to conduct ECP certification reviews, it would be essential to ensure Federal oversight of FFE States conducting ECP reviews and to establish clearly-defined, minimum requirements that FFE States must satisfy to demonstrate having an Effective ECP Review Program, which would promote consistent access to ECPs across FFE States and preserve consumer protections. These commenters stated that this Federal oversight includes HHS determining that FFE States demonstrate sufficient authority and the technical capacity to have an Effective ECP Review Program. One commenter noted that States being well-suited to now conduct ECP certification reviews as an Effective ECP Review Program is rooted in the establishment of Federal ECP requirements that have been strengthened through years of rulemaking and refined implementation. The commenter stated that the establishment of robust Federal ECP requirements over time has provided an acceptable model for States to understand best practices for formulating ECP requirements and ensuring that issuers meet these requirements, now setting States up for success to have autonomy over ECP certification reviews. The commenter further added that State flexibility, combined with a defined, minimum Federal standard are complementary, not incompatible.

Response: We thank commenters for providing valuable feedback on this proposal. We understand commenters' concerns regarding the potential for inconsistency and variability in the application and enforcement of ECP requirements across FFE States if FFE States conduct their own ECP certification reviews, which could cause differential access to ECPs across FFE States. However, we do not believe a one- size-fits all approach, by solely implementing HHS' review processes and standards, is the most effective approach to ensure access to ECPs; rather, some variability in FFE State requirements and certification review processes are valuable. FFE States with an Effective ECP Review Program will have flexibility under our policy as finalized in this rule to tailor their ECP review processes to address local ECP access by taking into account various conditions unique to each FFE State during reviews to maximize consumer impact, including geographic constraints, areas in the State with limited economic resources, provider shortages, workforce issues, and population demographics. For example, an FFE State that has numerous rural counties with significant Mental Health Professional Shortage Areas may consider adding additional types of mental health ECP facilities to its definition of mental health facilities to incentivize issuers to add more mental health facility types to their network to satisfy ECP requirements (including category per county requirements for mental health facilities).

In response to commenters that remain concerned about a “patchwork” of ECP requirements across the FFE if FFE States implement alternative ECP requirements, we believe that our proposal establishes a Federal floor of baseline ECP requirements that apply across the FFE to ensure reasonable consumer access across FFE States, even if FFE States have different ECP certification review processes or requirements. In particular, we remind commenters that under Sec. 155.1051(c) through (e), during HHS' evaluation of whether an FFE State has an Effective ECP Review Program, HHS will closely examine whether FFE State ECP requirements and processes differ from those on the Federal level, and analyze whether identified differences will continue to promote a sufficient number and geographic distribution of ECPs or even strengthen access to ECPs. In addition, to help reduce potential variability in ECP access across FFE States if FFE States conduct ECP certification reviews, we proposed to continue collecting ECP data from issuers in FFE States with an Effective ECP Review Program. As we stated, this would help ensure we can continue to compare QHP issuer performance across the FFE, so that we can monitor consumer access to ECPs across the FFE and take additional actions if disparities emerge that could endanger consumer access.

Additionally, we recognize commenters' concerns that not all FFE States may possess the resources and ability to conduct ECP certification reviews. If we were to find during the Effective ECP Review Program determination process that an electing FFE State does not demonstrate sufficient authority and technical capacity to conduct ECP reviews due to insufficient resources and processes, then we would not permit the FFE State to conduct its own ECP certification reviews.

Furthermore, regarding concerns that this proposal may create additional administrative complexity and burden among issuers, we will continue to collaborate with FFE States approved to conduct their own ECP certification reviews to promptly communicate important information to QHP issuers and make resources widely available to facilitate a less burdensome, clear, and seamless QHP certification process. To help mitigate this burden, we will also continue to make MPMS available to FFE States should they wish to utilize the ECP UI in MPMS for their ECP certification reviews, which may reduce issuer burden if issuers submit ECP data through a centralized platform.

Lastly, in regard to commenters' suggestion to revisit this proposal once more information is gathered from FFE States on their authority and technical capacity to conduct ECP certification reviews, we do not believe there is a risk to consumers if HHS finalizes this proposal with a PY 2027 effective date. This is because HHS will only allow FFE States to conduct ECP certification reviews if they satisfy all the requirements under proposed Sec. 155.1051 to demonstrate they have an Effective ECP Review Program with the sufficient authority and the technical capacity needed to ensure access to ECPs is maintained or expanded for consumers enrolled in QHPs in the State. Also, we believe that the Effective ECP Review Program determination process will provide HHS a unique opportunity to learn more in-depth information from FFE States when electing States submit information to HHS to demonstrate having an Effective ECP Review Program, since this detailed information will provide HHS insight into the FFE States' ECP requirements and processes to enforce these requirements. In addition, we acknowledged in the proposed rule (91 FR 6402) that we had evidence to believe several States already have robust ECP requirements and review processes, and this was one of the reasons that we proposed to allow FFE States flexibility to conduct ECP certification reviews if determined to have an Effective ECP Review Program.

Furthermore, we agree with the majority of commenters that Federal oversight combined with a minimum, clearly defined Federal ECP baseline would be essential to ensure consistent access to ECPs across FFE States if FFE States were permitted to conduct their own ECP certification reviews. In fact, this proposal would effectively establish a robust Federal floor for minimum

requirements across the FFEs that are consistent with existing Federal ECP requirements under Sec. 156.235 and that FFE States must meet prior to conducting their own ECP certification reviews (consistent with Sec. 155.1051(b) through (e)). Collectively, these requirements, in particular, would help ensure reasonable consumer access to ECPs across FFE States, and ensure that FFE States use similar well-founded and reliable processes for conducting ECP reviews.

Comment: One commenter urged HHS to require FFE States conducting their own ECP certification reviews to incorporate relevant Indian health care provider requirements at Sec. 156.235(a)(2)(ii)(A) that would require FFE States to establish ECP requirements that require issuers to offer contracts to all available Indian health care providers in the service area. In addition, this commenter stated concerns over HHS suggesting that it would provide FFE States with flexibility to develop alternative ECP requirements under proposed Sec. 155.1051(d), especially if such alternative ECP requirements may not require QHP issuers to offer contracts to all Indian health care providers within the service area. The commenter was concerned that this may reduce consumer protections for American Indian/Alaskan Native enrollees and cause disparities in access across States. For this reason, the commenter requested that HHS modify Sec. 155.1051(d) to include that FFE States with an Effective ECP Review Program cannot propose alternatives to the Indian health care provider requirement under Sec. 156.235(a)(2)(ii)(A) for network plans and under Sec. 156.236(b)(3) for non-network plans.

Response: We agree with commenters that access to Indian health care providers must be maintained if FFE States conduct their own ECP certification reviews, as Indian health care providers are an important ECP facility category that provide essential services to tribal populations, including American Indian/Alaskan Native Exchange enrollees. Indian health care providers are one of the types of ECPs included under section 340B(a)(4) of the PHS Act and section 1927(c)(1)(D)(i)(IV) of the Social Security Act, as required under section 1311(c)(1)(C) of the Affordable Care Act. In this regard, FFE States must also comply with Federal statutory requirements to ensure access to Indian health care providers within a QHP issuer's provider network. Accordingly, we are finalizing the proposed requirement at Sec. 155.1051(c)(2) that FFE States with an Effective ECP Review Program must have established ECP requirements set forth in State statute or regulation that ensure network plans meet Indian health care requirements under Sec. 156.235(a)(2)(ii)(A) and non-network plans meet Indian health care requirements under Sec. 156.236(b)(3).

Furthermore, in response to the concern that an FFE State's alternative ECP requirements may not require issuers to offer contracts to all available Indian health care providers in the service area, consistent with proposed Sec. 155.1051(d), we assure the commenter that if FFE States do have alternative ECP requirements to those described under Sec. 155.1051(c)(1) through (c)(3), including requirements that ensure network plans meet Indian health care requirements under Sec. 156.235(a)(2)(ii)(A) that require issuers to offer contracts to all available Indian health care providers in the service area, FFE States must submit additional information to HHS. FFE States would need to describe these alternative ECP requirements, explain how the FFE State collects ECP data from issuers to measure compliance with the alternative ECP requirements, and include a detailed explanation of how the FFE State uses this ECP data to analyze access to ECPs within an issuer's network. During this review, we would assess how this alternative ECP requirement compares to existing Federal ECP requirements, especially as it relates to maintaining access to care for tribal populations. If we identify during this review that the FFE State possesses an alternative ECP requirement related to Indian health care providers, we will not consider the FFE State to have an Effective ECP Review Program if the alternative requirement does not promote a sufficient number and geographic distribution of Indian health care providers and is not adequate to at least maintain or strengthen access to Indian health care providers. If the FFE State is determined to have an Effective ECP Review Program and is permitted to conduct its own ECP certification reviews while also having alternative ECP requirements, we will continue to collect ECP data from QHP issuers in these FFE States. This ECP data will quantitatively assess that a QHP issuer offers contracts to all available Indian health care providers in its service area. If HHS were to identify trends that issuers in the FFE State have poorer performance related to ensuring access to Indian health care providers, HHS may determine that the FFE State has ceased to satisfy criteria under proposed Sec. 155.1051(d) and, under Sec. 155.1051(f), revoke its prior determination that the FFE State has an Effective ECP Review Program. While we do not intend to adopt the commenter's proposed regulation text modification at this time, if we identify disparities in access to Indian health care providers within an FFE State that has an alternative ECP requirement for Indian health care providers, we will consider additional actions to remedy these disparities, which could include future rulemaking, as applicable.

Comment: One commenter urged HHS to strengthen its oversight of the FFE States' ECP review processes, including by ensuring these processes prioritize that vulnerable populations can depend on consistent, access to care.

Response: We agree with the commenter that FFE States must ensure their ECP certification review processes ensure that vulnerable populations, such as low-income, medically underserved individuals typically served by ECPs, have a sufficient number and geographic distribution of ECPs within their plans to provide reasonable and timely access to care. For this reason, under Sec. 155.1051(e)(6), we proposed that during our review to determine if an FFE State has an Effective ECP Review Program, we would consider the FFE State's description of data collection systems, resources, templates, or methodologies used by the State to collect and review ECP data. We believe that finalizing this factor will address the commenter's request to strengthen Federal oversight, as it will allow us to collect information from FFE States to ensure FFE States have sufficient ECP certification review processes, which we do not currently collect from FFE States. This factor is important for us to understand processes an FFE State has in place to efficiently collect large, complex amounts of an issuer's ECP data and its ability to meaningfully leverage that data to apply assessment methodologies to measure access to ECPs across the State. Lastly, we remind the commenter that we will continue to collect ECP data from issuers in FFE States with an Effective ECP Review Program. If upon analyzing this data, we observes inadequate access to ECPs within issuers' networks across the FFE State, we may re-examine the FFE State's review processes to determine if the State's assessment and data collection methodologies no longer effectively ensure that issuers maintain adequate access to ECPs in their networks.

Comment: A few commenters requested clarifications related to operations associated with the Effective

ECP Review Program determination process. Specifically, one commenter was unclear why HHS did not propose to codify regulatory text to explicitly state that an FFE State must submit an attestation for having an Effective ECP Review Program. The same commenter requested clarity on when HHS will make determinations on if an FFE State has an Effective ECP Review Program and when HHS will inform the FFE State. In addition, the same commenter wanted more information regarding the process for Effective ECP Review Program determinations, including if the FFE State may appeal HHS's decision if HHS determines the FFE State does not have an Effective ECP Review Program, if HHS can clarify circumstances that may cause HHS to conclude that an FFE State no longer has an Effective ECP Review Program, and if HHS can share an example of the attestation form for electing to have an Effective ECP Review Program.

Response: We appreciate the commenter asking these additional questions. The regulatory text concerning the review process and applicable criteria FFE States must satisfy to have an Effective Essential Community Provider Review Program to conduct their own ECP reviews is at new Sec. 155.1051, and we refer the commenter to the discussion in the proposed rule concerning the attestation form and related operational matters (91 FR 6405). Furthermore, after the publication of this final rule, we intend to notify FFE States about their flexibility to conduct ECP certification reviews and will provide FFE States with ample instructions on how to do so, including by providing an attestation form to FFE States through the Plan Management State Coordination email. We will provide FFE States time to complete the form, and after an FFE State completes this form, we will begin the determination process to assess if the FFE State meets all applicable criteria under Sec. 155.1051 to be considered to have an Effective ECP Review Program. Afterwards, we will send notice of our decisions to FFE States on a rolling basis. The detailed timeline for the entirety of this process, including the deadline to submit the attestation form, and our targeted timeframe for completing our determination process will be communicated to FFE States through additional guidance. If an FFE State is identified as having an Effective ECP Review Program, we will permit the FFE State to immediately begin conducting ECP certification reviews and will coordinate with the FFE State to communicate to issuers that they will complete ECP certification reviews.

We do not intend to establish a formal appeal process at this time. We may consider this recommendation for future plan years, especially if FFE States state a need for an appeal process during the first plan year for PY 2027. Since we will remain available to FFE States throughout the determination process should the FFE State reach out to us for further assistance, we do not see a need to adopt an appeals process at this time. We will provide technical assistance to the FFE State should the State require more tailored feedback on how to expand its authority and technical capacity to demonstrate having an Effective ECP Review Program. If we determine that an FFE State did not adequately demonstrate having an Effective ECP Review Program, the FFE State may request to meet with us to request additional feedback. The FFE State may resubmit an updated attestation form to us to elect to conduct ECP certification reviews during the following plan year's QHP certification cycle. Prior to the beginning of the following plan year's QHP certification cycle, we will communicate information to FFE States to assess if FFE States conducting ECP certification reviews wish to continue conducting these reviews and will provide a timeline for the Effective ECP Review Program determination process for the upcoming plan year to newly electing FFE States.

Furthermore, as we proposed under Sec. 155.1051(f), we reserve the right to evaluate at any time whether, and to what extent, an FFE State's circumstances have changed such that it has begun to or has ceased to satisfy the criteria established by us and consequently no longer has an Effective ECP Review Program. For example, these circumstances may include significant changes in the FFE State's authority and technical capacity to conduct ECP certification reviews such that it no longer can do so in a timely and effective manner, or if we identify data (after collecting issuer data from FFE States with an Effective ECP Review Program) indicating that consumers in the FFE State have inadequate access to ECPs, consistent with Sec. 155.1051(f).

Comment: One commenter questioned the need for continued data collection from QHP issuers in FFE States with an Effective ECP Review Program who must still submit ECP data to HHS, which HHS would evaluate to see if these QHP issuers would meet Federal ECP requirements. The commenter did not see the meaning of collecting this data when FFE States conducting ECP certification reviews may have different ECP requirements than under Sec. 156.235. Some commenters requested additional information on how HHS plans to release ECP data to QHP issuers in FFE States with an Effective ECP Review Program. Lastly, one commenter requested that HHS phase out issuer ECP data collection in FFE States that elect to conduct their own ECP certification reviews.

Response: We appreciate these questions from commenters about ECP data collection from QHP issuers in FFE States with an Effective ECP Review Program. As we have stated in the proposed rule (91 FR 6407) and within this final rule, continuing to collect issuer ECP data will allow us to continue to compare QHP issuer performance across the FFE, so that we can monitor consumer access to ECPs across the FFE, including to address other commenters' concerns on the potential for inconsistency and variability in the application and enforcement of ECP requirements across FFE States if FFE States conduct their own ECP certification reviews. Accordingly, we do not plan to phase out ECP data collection from QHP issuers in FFE States with an Effective ECP Review Program. Lastly, we plan to release ECP data to QHP issuers in FFE States with an Effective ECP Review Program directly within the ECP UI in MPMS. QHP issuers in FFE States with an Effective ECP Review Program will still validate and submit ECP data within the ECP UI in MPMS and respond to data related errors, if applicable. After successful ECP data submission, QHP issuers may download their ECP results directly in the calculation workspace within the ECP UI.

Comment: One commenter recommended that HHS establish a standardized, national ECP data submission template with detailed data descriptions aligned to HHS' existing ECP data submission processes, develop uniform review timelines, and create a single data submission pathway usable regardless of whether HHS or the FFE State conducts the review to promote consistency and streamline ECP data transfers.

Response: We appreciate the commenter's unique suggestion to maximize efficiencies and reduce issuer burden within the QHP certification data submission process. Due to current timing constraints with the upcoming QHP certification window for PY 2027, we cannot implement this suggestion at this time and believe such a solution would require coordination and agreement among multiple interested

parties, including FFE States and other QHP issuers. We also recognize that multiple factors exist that may prohibit uniform review timelines across HHS and FFE States, including different rulemaking cycles on the State versus Federal level, differences in resources and data collection systems, conflicting deadlines to complete certification review processes, and issuer volume. In the meantime, we will continue to make MPMS available to FFE States should they wish to utilize issuer ECP data submitted through the ECP UI in MPMS for their ECP certification reviews, which may reduce issuer burden if issuers submit ECP data through this centralized platform. We will provide technical assistance to FFE States should they wish to utilize the ECP UI in MPMS as part of State ECP certification processes, to reduce issuer burden.

Comment: One commenter encouraged HHS to require FFE States with an Effective ECP Review Program to publicly report participating ECPs within an issuer's network by ECP category type, appointment availability, and wait times at ECPs, and publicly identify issuers who have been found by the State to have ghost networks.

Response: Currently, we do not intend to require FFE States to publicly report issuer ECP data on ECP category type, appointment availability, and wait times at ECPs. Our intention in proposing the Effective ECP Review Program and its associated requirements under Sec. 155.1051 was to effectively create a robust Federal floor of minimum requirements that an FFE State must meet to conduct its own ECP certification reviews. These minimum requirements are consistent with existing Federal ECP requirements and certification review procedures under Sec. 156.235. Since HHS does not currently publicly disseminate issuer ECP data submitted to HHS as part of QHP certification due to the data being market-sensitive and proprietary, imposing this additional reporting requirement on FFE States would be more stringent than existing Federal requirements and review procedures and not consistent with the goals of establishing a Federal floor for ECP certification reviews and processes. However, we welcome FFE States to transparently share this data with HHS or the public as they desire and see fit.

Regarding the commenters' suggestion to require FFE States to report issuer data on ECP category type, we will continue to collect issuer ECP data from those QHP issuers operating in FFE States with an Effective ECP Review Program. Thus, HHS already has the analytic capability to identify individual ECP category types that may be included within a QHP issuer's network of ECPs, which diminishes the necessity to require FFE States to provide this to HHS or the public. HHS plans to make this data available in a standardized format to FFE States with an Effective ECP Review Program, which FFE States may utilize to perform additional analyses to analyze access to ECPs across the State (including by category). We hope that providing issuer ECP data to FFE States with an Effective ECP Review Program in this manner will foster Federal and State collaboration and promote data exchange between HHS and FFE States, which may naturally allow us to receive additional data on individual ECP category types included within a QHP issuer's network of ECPs that were not identified by HHS.

HHS also does not intend to require FFE States to publicly report issuer ECP data on appointment availability and wait times to HHS, since we do not currently require issuers to separately meet these requirements and report associated data on ECP appointment availability and wait time requirements under Sec. 156.235. For FFE States to publicly report this issuer ECP data, they would need to collect this data directly from issuers as part of ECP certification reviews. To facilitate this data collection, HHS would likely have to impose an additional requirement for FFE States to collect this data on appointment availability and wait times at ECPs to ensure it can be reported by FFE States. Overall, imposing these additional requirements on FFE States that are inconsistent with existing Federal ECP requirements and review processes would conflict with the goals of establishing a Federal floor of minimum standards for ECP certification reviews. However, if FFE States have ECP appointment availability and wait time requirements, these would constitute alternative ECP requirements compared to threshold, category per county, and Indian health care requirements (under Sec. 155.1051(c)(1) through (c)(3)) that States must describe to us, consistent with requirements at Sec. 155.1051(d). That is, the FFE State must disclose these alternative ECP requirements in its attestation form when electing to conduct ECP certification reviews. If the FFE State is determined to have an Effective ECP Review Program and conducts their own ECP certification reviews, at the minimum, the FFE State should communicate these alternative ECP requirements to issuers so issuers understand the types of ECP data that must be submitted to meet these requirements. The FFE State then has discretion to publicly disseminate this data, as appropriate.

Lastly, for the reasons above regarding the need to establish a Federal floor consistent with ECP requirements and review processes under Sec. 156.235, we do not believe it would be appropriate to require FFE States to highlight issuers with found ghost networks. While we agree that this type of information could be useful to the public, we believe HHS would first need to understand different initiatives and processes FFE States are currently taking to address issuer ghost networks within their State prior to HHS considering any additional requirement related to ghost networks. We also believe this specific requirement is beyond the scope of this proposal and would be more appropriate to contemplate through potential future rulemaking along with other policy solutions related to ghost networks.

Comment: A few commenters recommended that HHS delay implementation of this proposal to a PY 2028 effective date. Commenters raised concerns that FFE States likely do not have enough time to make any necessary changes in State ECP requirements or operations that may be required to demonstrate having an Effective ECP Review Program, or if an FFE State wishes, to make modifications to State ECP requirements and associated processes (for example, legislation, rulemaking, review methodologies) to hold QHP issuers to more stringent ECP requirements than those currently reflected under Sec. 156.235. The commenter also stated that this could affect QHP issuers as well, if additional contracting is needed to meet more stringent requirements. Another commenter shared additional implementation concerns, recommending that HHS require FFE States to give advance notice to and partner with QHP issuers in developing any new ECP requirements.

Response: We recognize that some FFE States may not currently be in the position to elect to conduct ECP certification reviews and undergo the Effective ECP Review Program determination process at this time. If this is the case, these FFE States still have an ability to elect to conduct ECP certification reviews and submit an attestation for PY 2028, as we are also providing this flexibility for FFE States for future plan years, not just for PY 2027. Thus, if an FFE State does not have the ability at this time to conduct ECP certification reviews and submit

information to HHS as part of the Effective ECP Review Program determination process, then we will continue to conduct ECP certification reviews and encourage the FFE State to submit an attestation in future plan years. We also believe that it is possible some FFE States would be in the position to elect to conduct ECP certification reviews beginning PY 2027, which reduces the need to delay implementation of this proposal to PY 2028. For example, some States performing plan management have experience conducting ECP certification reviews prior to HHS assuming responsibility of these reviews after we expanded capacity to conduct ECP certification reviews of issuers in States performing plan management through implementation of the ECP UI in MPMS; so, it is possible some of these States may be ready to elect to conduct ECP certification reviews. Lastly, if the FFE State were to impose more stringent ECP requirements than those currently under Sec. 156.235, we believe that this would likely be consistent with existing State law and authority, independent of the Effective ECP Review Program determination process. Overall, if an FFE State is approved to conduct ECP certification reviews, we recommend that QHP issuers coordinate with their State to understand State ECP requirements (especially to learn if the FFE State has more stringent ECP requirements than under Sec. 156.235) and ECP data submission processes.

Lastly, in response to the commenter that requested HHS require FFE States to coordinate with QHP issuers in developing any new ECP requirements, we believe finalizing this requirement would interfere with State-specific rulemaking procedures and outreach processes which are beyond the scope or intention of our proposal, which aims to set a pathway for an FFE State to conduct their own ECP certification reviews. Nevertheless, we believe that any new ECP requirements issued at the State level would likely require some coordination with QHP issuers that would need to submit ECP data and documentation to demonstrate meeting such requirements during certification. We would encourage FFE States that are approved to conduct ECP certification reviews as an Effective ECP Review Program to communicate State- specific ECP requirements to QHP issuers and consider QHP issuers' feedback on those requirements.

Comment: A State operating as an SBE-FP noted that it is not currently possible for some States to evaluate plans' compliance with ECP requirements under the current configuration of the MPMS. The commenter stated that, currently, when users with the State Reviewer role download the network adequacy template from MPMS, the ECP facility tab remains blank and the State experiences issues with the ECP data being imported. The commenter believed that this potential system limitation could affect the ability of an FFE State with an Effective ECP Review Program to leverage Federal infrastructure (such as MPMS) to conduct their own reviews of issuer-submitted ECP data.

Response: We thank the State for providing their experience with MPMS as it relates to ECP data submission and States conducting ECP reviews. First, we clarify that we did not propose to apply the Effective ECP Review Program under Sec. 155.1051 to SBE-FPs, as SBE- FPs already conduct their own ECP certification reviews. Rather, we proposed to allow FFE States, including States performing plan management, to elect to conduct ECP certification reviews. SBE-FPs, FFE, States performing plan management, and FFE States with an Effective ECP Review Program should be able to effectively view and download issuer submitted ECP data through the ECP UI in MPMS. We do not believe that FFE States with an Effective ECP Review Program would be limited in utilizing MPMS to conduct their own ECP certification reviews. We remains available to provide technical assistance to all States that utilize MPMS and/or HHS provided certification tools, thus we welcome further coordinating with the State during the QHP certification process to address this issue.

Altogether, we summarize below our finalized policies under this section related to ECP requirements. We are not finalizing our proposal to reduce ECP minimum percentage requirements for the overall ECP threshold, family planning provider threshold, and FQHC threshold from 35 to 20 percent. Thus, the minimum percentage requirement will remain 35 percent. We are finalizing our proposal to amend narrative justification requirements at Sec. 156.235(a)(3) and (b)(3) to be consistent with current ECP data submission requirements as part of QHP certification, which require issuers to include as part of its QHP application the status of contract offers to qualified ECPs available in the network plan's service area. Lastly, we are finalizing under Sec. 155.1051 our proposal to allow FFE States, including States performing plan management, to elect to conduct their own ECP certification reviews of QHP issuers, with or without a network, provided that HHS determines the FFE State has sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria be considered to have an Effective ECP Review Program. However, consistent with our decision to delay implementation of our finalized policy (as discussed in section III.E.12. of this final rule) to permit certification of non-network plans as QHPs to PY 2028, FFE States that we determine to have an Effective ECP Review Program will be permitted to conduct ECP certification reviews of non- network plans effective beginning PY 2028. Lastly, we will also continue to collect ECP data from all FFE issuers for monitoring purposes and remain available to provide technical assistance and publicly available ECP resources to all States. 12. QHP Certification of Non-Network Plans (Sec. Sec. 155.1050, 155.1051, 156.230, 156.235, 156.236, 156.275, and 156.810)

In the 2027 Payment Notice proposed rule (91 FR 6407), we proposed a number of revisions to parts 155 and 156 to allow plans that do not use a network (non-network plans) to receive QHP certification beginning in PY 2027 by demonstrating that they ensure a sufficient choice of providers in a manner consistent with section 1311(c)(1)(B) and (C) of the Affordable Care Act. In addition, to ensure that non- network plans are subject to similar requirements as network plans, we proposed that (1) FFE States that elect to conduct provider access certification reviews and are determined by HHS to have an Effective Provider Access Review Program under proposed Sec. 155.1050(d) would be permitted to perform provider access reviews of non-network plans if the State satisfies all applicable criteria under Sec. 155.1050(d); and (2) FFE States that elect to conduct ECP certification reviews and are determined by HHS to have an Effective ECP Review Program under proposed Sec. 155.1051 would be permitted to perform ECP certification reviews of non-network plans if the State satisfies all applicable criteria under Sec. 155.1051. For additional details on how the Effective Provider Access Review Program and Effective ECP Review Program proposals would apply to FFE States conducting reviews of non- network plans, we referred readers to these discussions in section III.E.12.d and section III.E.12.e of the proposed rule.