You Down With NBPP? (Yeah You Know Me!) CMS releases final #NBPP2025!


The Affordable Care Act includes a long list of codified instructions about what's required under the law. However, like any major piece of legislation, many of the specific details are left up to the agency responsible for implementing the law.

While the PPACA is itself a lengthy document, it would have to be several times longer yet in order to cover every conceivable detail involved in operating the ACA exchanges, Medicaid expansion and so forth. The major provisions of the ACA fall under the Department of Health & Human Services (HHS), and within that, the Centers for Medicare & Medicaid (CMS)

Every year, CMS issues a long, wonky document called the Notice of Benefit & Payment Parameters (NBPP) for the Affordable Care Act. This is basically a list of proposed tweaks to some of the specifics of how the ACA is actually implemented for the following year.

Earlier today I posted the general press release from CMS, which includes some of the more "layman friendly" provisions of the 2025 NBPP, including:

  • All states will now be allowed to require ADULT dental services as an Essential Health benefit (pediatric dental coverage is already required).
  • Network Adequacy rules will now apply to EVERY state, not just ones hosted by HCgov.
  • The sub-150% FPL Special Enrollment Period will no longer rely on the enhanced IRA subsidies being in place.
  • All state-based exchanges will have to to (mostly) line up their start/end dates with HCgov
  • If you enroll in the 2nd half of the month your coverage will now start the 1st of the following month in all states
  • Every exchange will now have to have live call center reps during official hours as well as auto-renew enrollment to those in Catastrophic plans.

In this post I'm including the rest of the 2025 NBPP Fact Sheet:

Prescription Drug Benefits

CMS finalizes revisions to certain EHB prescription drug benefit requirements. First, CMS is revising the minimum membership standards for Pharmacy & Therapeutics (P&T) Committees to require at a minimum one patient representative, as this addition would ensure that the consumer experience with a disease or condition is considered in the design of formulary benefits and would offer insights into real consumer experiences unknown to P&T committees, which would educate the committee on consumer challenges related to medication use and assist the committee in exploring solutions to these challenges during the formulary development process. CMS is also finalizing requirements related to the patient representative, including that the patient representative must (1) represent the patient perspective; (2) have relevant experience or participation in patient or community-based organizations; (3) be able to demonstrate the ability to integrate data interpretations with practical patient considerations; (4) have no fiduciary obligation to a health facility or other health agency and have no material financial interest in the rendering of health services; (5) have a broad understanding of one or more conditions or diseases, associated treatment options, and research; and (6) disclose financial interests on their conflict-of-interest statements.

Second, CMS is codifying its current policy that prescription drugs that a plan covers in excess of those covered by a state’s EHB-benchmark plan are considered EHBs, subject to EHB protections, including the annual limitation on cost sharing and the restriction on annual and lifetime dollar limits, unless the coverage of the drug is mandated by state action such that it would not be considered EHB. The final rule does not address the application of this policy to large group market health plans and self-insured group health plans. The Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Departments) will be issuing a FAQ to address the applicability of this provision in the final 2025 NBPP to self-insured group health plans and large group market plans for purposes of the prohibition on lifetime and annual limits under PHS Act section 2711 and the annual limitation on cost sharing under PHS Act section 2707(b).

Increase State Flexibility in the Use of Income and Resource Disregards for Non- Modified Adjusted Gross Income (MAGI) Populations

CMS is not finalizing providing states with greater flexibility to adopt income and/or resource disregards in determining financial eligibility for Medicaid under section 1902(r)(2) of the Social Security Act for individuals excepted from application of the MAGI financial methodologies. Some commenters raised concerns that the proposal leaves open the possibility that states could use the offered flexibility to narrow existing disregards and that CMS should impose safeguards, guardrails, or no-harm requirements that would effectively prohibit the states’ use of the flexibility to reduce eligibility.

CMS intends to further evaluate the comments regarding the additional flexibility and will consider commenters’ recommendations as well as whether there are other modifications to its proposal that would address these commenters’ concerns in future rulemaking.

This makes sense to me for the same reason that the Federal Poverty Level (FPL) is 15% higher in Hawaii and 25% higher in Alaska than in the rest of the continental United States: The cost of living varies. This sounds like a more specific, targeted version of that.

Simplifying Choice and Improving the Plan Selection Process

Standardized and Non-Standardized Plan Options

CMS finalizes to follow the approach finalized in the 2024 Payment Notice concerning standardized plan option metal levels and to otherwise maintain continuity with the approach to standardized plan options finalized in the 2023 and 2024 Payment Notices. CMS finalizes only minor updates to the plan designs for plan year (PY) 2025 to ensure these plans have actuarial values within the permissible de minimis range for each metal level.

CMS believes these standardized plan options continue to play a meaningful role in simplifying and streamlining the plan selection process by reducing the number of variables consumers must consider when selecting a plan option, making it easier for consumers to compare available plan options more meaningfully. CMS further believes these standardized plan options include several distinctive features, such as enhanced pre-deductible coverage for several benefit categories and copayments instead of coinsurance rates for a greater number of benefit categories, that continue to play an important role in reducing barriers to access, combatting discriminatory benefit designs, and advancing health equity.

In addition, CMS finalizes an exceptions process to the non-standardized plan option limit to promote consumer access to plans with design features that facilitate the treatment of chronic and high-cost conditions while simultaneously continuing to reduce the risk of plan choice overload. Under this exceptions process, for PY 2025 and subsequent years, an issuer may offer additional non-standardized plan options beyond the limit of two for each product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area if it demonstrates that these additional plans’ cost sharing for benefits pertaining to the treatment of chronic and high-cost conditions (including benefits in the form of prescription drugs, if pertaining to the treatment of the condition(s)) is at least 25% lower, as applied without restriction in scope throughout the plan year, than the cost sharing for the same corresponding benefits in an issuer’s other non-standardized plan option offerings in the same product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area. Reduced cost sharing for these benefits will reduce barriers to accessing services important to consumers with chronic and high-cost conditions. This exceptions process will play an important role in combatting health disparities and advancing health equity since the chronic and high-cost conditions these plans will target disproportionately impact disadvantaged populations.

Hmmmm I'm not thrilled about this; as far as I'm concerned the 2-plans-per-type limit should be held to pretty strictly, but I suppose there could be some exceptions.

EHB Benchmark Update Process Improvements

For plan years beginning on or after January 1, 2026, CMS finalizes three revisions to the standards for state selection of EHB-benchmark plans to address long-standing requests from states to improve, and reduce the burden of, the EHB-benchmark plan update process.

First, CMS is consolidating the options for states to change EHB-benchmark plans such that a state may change its EHB-benchmark plan by selecting a set of benefits that would become the state’s EHB-benchmark plan. Any changes to a state’s EHB-benchmark plan options also apply to states when choosing a benchmark plan used to define EHBs in a Medicaid ABP or BHP standard health plan.

Second, CMS is removing the generosity standard and revising the typicality standard so that, in demonstrating that a state’s new EHB-benchmark plan provides a scope of benefits that is equal to the scope of benefits of a typical employer plan in the state, the scope of benefits of a typical employer plan in the state is defined as any scope of benefits that is as or more generous than the scope of benefits in the state’s least generous typical employer plan, and as or less generous than the scope of benefits in the state’s most generous typical employer plan, from a defined set of plans identified as typical employer plans.

Third, CMS is removing the requirement for states to submit a formulary drug list as part of their documentation to change EHB-benchmark plans unless the state changes its prescription drug EHBs.

Failure to File and Reconcile Process

CMS finalizes that all Marketplaces must send notices to consumers or tax filers found to have failed to reconcile for one year to inform them of the risk of being determined ineligible for APTC. This policy codifies the procedures of Marketplaces on the Federal platform and imposes the obligation on State Marketplaces to ensure that tax filers enrolled in a State Marketplace have more adequate notice to correct potential failed APTC reconciliation. Nothing in this policy relieves the consumer of their requirement to file and reconcile taxes after the receipt of APTC. In the final rule, CMS noted that it will provide State Marketplaces with additional guidance and technical assistance on implementation.

Improving Incarceration Status Check for the Purposes of QHP Eligibility Verification

CMS finalizes that all Marketplaces may accept consumer attestation of incarceration status without further verification. CMS found that connecting to an alternative incarceration data source would be administratively costly for Marketplaces on the Federal platform, and the rate of incarcerated individuals applying for coverage is very low. Continuing to use electronic data sources to verify incarceration status adds to current costs and health equity challenges for Marketplaces on the Federal platform because incarceration data matching issues (DMIs), which are costly and burdensome to applicants, would continue to be generated.

CMS finalizes that State Marketplaces may continue using existing data sources, and if they wish to verify incarceration status using an alternative electronic data source, they should submit their proposed alternative data source for HHS approval if they have not already done so. If HHS approves their use of an alternative electronic data source, they must continue to generate DMIs whenever a mismatch is present between the applicant’s attestation and the data source or other information provided by the applicant or in the Marketplace’s records.

Apparnetly it's a much bigger pain in the butt to verify that you were recently released from prison than I thought. Huh.

Effective Date of Coverage in the Basic Health Program

CMS finalizes to provide states that operate a BHP additional flexibility in establishing an effective date of eligibility for enrollment in BHP coverage. This allows a state to select a standard in which all BHP-eligible applicants have an effective date of coverage on the first day of the month following the month of application or eligibility determination, regardless of when they apply or are found eligible to enroll in a standard health plan in the BHP. CMS finalizes an additional option allowing a state to establish its own uniform effective date policy for enrollment, subject to HHS approval. States continue to have the option to follow the Marketplace standards or the Medicaid process to determine the effective date of eligibility for enrollment in a standard health plan in the BHP.

This sounds like it's similar to the SEP effective date standardization tweak noted above. Good. It's also worth noting that Oregon is scheduled to become the 3rd state (after Minnesota and New York) to launch their own Basic Health Plan program starting July 1st.

Enhancing Standards and Guaranteed Consumer Protections

State-Mandated Benefits and Defrayal

CMS finalizes that state-mandated benefits are not considered “in addition to EHB” under CMS’ defrayal policy if the mandated benefit is an EHB in the state’s EHB-benchmark plan. This helps protect consumers by ensuring that existing EHB benefits in states’ EHB-benchmark plans remain subject to EHB nondiscrimination rules, the annual limitation on cost sharing, and restrictions on annual or lifetime dollar limits. This change may also impact BHPs and Medicaid ABPs.

At Least One Year of Operation as SBM-FP Before State Marketplace Transition

CMS finalizes requiring a state to operate for at least one year, including its Open Enrollment period, an SBM-FP prior to transitioning to operating a State Marketplace. This gives the state sufficient time to create, staff, and structure a State Marketplace organization that could transition to operating its own eligibility and enrollment platform, strengthen its Navigator and consumer outreach programs, and communicate effectively with consumers to support enrollment and avoid health care coverage gaps. Further, a year operating an SBM-FP provides the state time to prepare and familiarize consumers, consumer assisters, partners in the coordination of eligibility functions, and other interested parties with the operations of the new State Marketplace.

This is clearly targeted towards Georgia, which got into a huge battle with CMS last year because the state wanted to skip right past the SBM-FP status straight for a full SBM in one year. Until now, using the transitionary status for a year was always done and recommended but wasn't specifically required. Georgia ended up grudgingly accepting the transitionary year but going forward other states will have to do so.

State Marketplaces to Operate a Centralized Eligibility and Enrollment Platform on the State Marketplace’s Website

CMS finalizes that a Marketplace must operate a centralized eligibility and enrollment platform on the Marketplace’s website (or, for an SBM-FP, on the Federal eligibility and enrollment platform), allowing for the submission of the single, streamlined application for enrollment in QHPs and insurance affordability programs by consumers through the Marketplace’s website (or, for an SBM-FP, on the Federal eligibility and enrollment platform).

This codifies and ties together existing requirements that the Marketplace is the entity responsible for making all determinations regarding eligibility for QHP coverage and insurance affordability programs through the Marketplace’s operation of a centralized eligibility platform, regardless of whether an individual files an application for enrollment in a QHP on the Marketplace’s website or a non-Marketplace website operated by an entity such as a web-broker, a direct enrollment entity, or QHP issuer. This policy also requires that only state entities or other eligible contracting entities that a Marketplace contracts with to operate its centralized eligibility and enrollment platform can perform the eligibility determination function on behalf of the Marketplace.

Again, this is clearly being done in response to Georgia's prior attempt to circumvent having any official ACA exchange/marketplace whatsoever in their 2019 "State Innovation Waiver" proposal. They almost pushed this through (it was approved by the Trump Administration) but thankfully had the kibosh put on it by the Biden Administration before it could be implemented. Going forward, other states inclined to try and pull this particular fast one won't be able to do so, at least not without the NBPP being overhauled again.

Ensure Web-brokers and Direct Enrollment Entities Operating in State Marketplaces Meet Certain HHS Standards Applicable in the FFMs and SBM-FPs

CMS finalizes extending certain existing HHS standards for Marketplaces that use the Federal platform that apply to web-brokers and direct enrollment entities assisting consumers on those Marketplaces to newly apply to web-brokers and direct enrollment entities assisting consumers on Individual Marketplaces and SHOPs in State Marketplaces. CMS finalizes minimum federal standards that govern web-broker website display of standardized comparative QHP information, information pertaining to a consumer’s eligibility for APTC or CSRs, disclaimer language, providing consumers with correct information, access by downstream agents and brokers, and operational readiness apply to web-brokers across all Marketplaces.

CMS also finalizes minimum federal standards that govern direct enrollment entity marketing and displaying QHPs and non-QHPs, website disclaimer language, application assisters, providing consumers with correct information, and operational readiness apply across all Marketplaces. Under these policies, State Marketplaces that do not use the Federal platform retain some flexibility to customize certain processes to best meet their needs consistent with these minimum requirements.

When the first Direct Enrollment & Enhanced Direct Enrollment (EDE) entities (like Health Sherpa, etc) started operating, there were concerns that some of them were playing fast & loose with the rules about properly displaying all on-exchange plan information, including inappropriate content and so forth. Until now, EDEs have only been able to interface with the federal exchange, but going forward some state-based exchanges are planning on integrating them as well. That's a good thing, but this rule would nip any of those concerns in the bud for SBMs as well as the FFM.

Require Changes be Reflected on Direct Enrollment Entity Non-Marketplace Websites within a Notice Period Set by HHS

CMS finalizes that direct enrollment entities in FFM and SBM-FP states must implement and prominently display changes to their non-Marketplace websites in a manner that is consistent with display changes made by HHS to by meeting standards communicated and defined by HHS within a time period set by HHS unless HHS approves a deviation. For State Marketplaces that implement DE programs, CMS finalizes without modification but with technical changes that State Marketplace website changes be implemented and prominently displayed on their direct enrollment entity non-Marketplace websites within a time period set by the State Marketplace, unless the State Marketplace approves a deviation.

The types of changes that HHS will require direct enrollment entities in FFM and SBM-FP states to make to their non-Marketplace websites to align with changes focus on enhancing the consumer experience, simplifying the plan selection process, and increasing consumer understanding of plan benefits, cost-sharing responsibilities, and eligibility for financial assistance.

Again, EDEs aren't a thing on SBMs yet, but they will be over the next few years so CMS is prepping for that. Good.

Section 1332 Waiver Public Notice Requirements

The Department of Health & Human Services (HHS) and the Department of the Treasury (collectively, the Departments) finalize flexibilities to the public notice requirements and post-award forum participation requirements for section 1332 waivers. Specifically, the Departments permit states applying for section 1332 waivers to conduct public hearings in a virtual (that is, one that uses telephonic, digital, and/or web-based platforms) or hybrid (that is, one that provides for both in-person and virtual attendance) format in lieu of conducting an in-person meeting as part of state public notice requirements.

The Departments also finalize flexibilities regarding the annual post-award forum, where states may conduct the forum in an in-person, virtual, or hybrid format. By allowing states the opportunity to hold post-award forums and public hearings virtually and through digital platforms, states are able to continue facilitating attendance from interested parties, increase opportunities for engagement in policymaking for communities and local partners who may face barriers to in-person participation, and enhance public participation in the section 1332 waiver review and monitoring process.

Ah, the Zoomification of the COVID era continues to take over for good or for bad...

Reinterpreting the Authority to Access Certain Data through Medicaid, CHIP, and Marketplace Hub Services

Requiring State Marketplaces and State Medicaid and CHIP Agencies to Pay to Access Income Data via the Verify Current Income Hub Service

CMS finalizes the reinterpretation of State Exchange and State Medicaid and CHIP agency use of the Federal Data Services Hub (Hub) to access and use the income data provided by the optional VCI Hub service as a State Exchange or a State Medicaid and CHIP agency function, and that beginning July 1, 2024, State Exchanges and State Medicaid and CHIP agencies will be required to pay for the costs of their access to and use of the VCI Hub service.

We are also finalizing the proposal with a modification: rather than requiring states to pay in advance for their use of the VCI Hub Service, HHS will invoice states monthly for the amount the state must pay to reimburse HHS for the costs of their access and actual utilization of CSI income data from the prior month. Specifically, HHS will invoice states on a monthly basis for their actual utilization of the CSI income data accessed through the VCI Hub Service, as well as an administrative fee to account for any direct or indirect costs of making CSI income data accessed through the VCI Hub service available to Exchanges and State Medicaid and CHIP agencies, in accordance with the Intergovernmental Cooperation Act and interpretive OMB Circulars A-97 and A-25. State Medicaid and CHIP agencies that choose to utilize the VCI Hub service may request federal financial participation for their share of the costs.

States may be eligible for a 75% federal match for their Medicaid system operational costs to obtain CSI income data via the VCI Hub service. State Medicaid agencies may submit an Advance Planning Document (APD) to request the 75% federal match.

It sounds to me like they're gonna start charging states to use an income data service which I presume has been free to use until now. Not sure whether that's reasonable or not, but if the goal is to increase equity/etc that seems like a step backwards, since I presume some ACA-hostile states will use the new fees as an excuse not to utilize the data hub?

Strengthening Markets

FFM and SBM-FP User Fees

For the 2025 benefit year, CMS finalizes an FFM user fee rate of 1.5% of total monthly premiums and an SBM-FP user fee rate of 1.2% of total monthly premiums, which are lower than user fee rates for the 2024 benefit year.

This is the 3rd or 4th time over the past several years that CMS has reduced the user fees for HealthCare.Gov, which were originally 3.5% of premiums for plans enrolled via the exchange. This is reasonable as the initial overhead cost of operating the site was amortized years ago and the ongoing maintenance of it has presumably been streamlined (and of course as enrollment has increased, the per-enrollee cost has shrunk a bit).

In fact, this is even lower than CMS's proposed 2025 user fee rates, which were originally supposed to drop to 2.2% and 1.5% respectively.

As it happens, the main reason Nevada moved off of the federal exchange onto their own platform back in 2019 was specifically due to the then-excessive user fees for utilizing HealthCare.Gov, which was 3.0% at the time. Ironically, Illinois, which passed legislation to move to their own state-based exchange in 2026, will actually be charging nearly twice as much as the federal exchange at 2.75%. Huh.

HHS-Operated Risk Adjustment Program

For the 2025 benefit year, CMS finalizes the use of the 2019, 2020, and 2021 enrollee-level EDGE data for recalibration of the HHS risk adjustment models. Consistent with prior benefit year model recalibrations, this involves the use of the three most recent consecutive years of enrollee-level EDGE data that were available at the time CMS incorporated the data in the draft recalibrated coefficients for the applicable benefit year. Using the three most recent consecutive years to recalibrate the HHS risk adjustment models provides stability. It minimizes volatility in changes to risk scores between benefit years due to differences in the dataset’s underlying populations, while reflecting the most recent years’ claims experience available. Additionally, CMS will continue to apply a market pricing adjustment to the plan liability associated with Hepatitis C drugs in the risk adjustment models for the 2025 benefit year.

As I've noted before, risk adjustment is very much not in my wheelhouse, so I can't comment too much on this entry...

CMS finalizes updates to the CSR adjustment factors for American Indian and Alaska Native (AI/AN) zero cost sharing and limited cost sharing plan variant enrollees for the 2025 benefit year and beyond unless changed through notice-and-comment rulemaking. These changes align with CMS’ efforts to continuously update the HHS risk adjustment models with incremental changes to improve model prediction by updating the AI/AN CSR adjustment factors to predict plan liability more accurately for this subpopulation. CMS also believes that these changes increase the incentives for issuers to engage the AI/AN population, whose communities have been historically underserved and face significant health disparities.

...however, this line is noteworthy:

In addition, CMS finalizes retaining the current CSR adjustment factors for silver plan variant enrollees for the 2025 benefit year and beyond, unless changed through future notice-and-comment rulemaking.

This is all about both Silver Loading specifically and proper Premium Alignment in general. CMS seems to be saying that they're not going to force the issue unless there's overwhelming support for doing so via public comments, which I suspect they'll get. This sounds like a classic case of "I want to do it, now make me do it."

Risk Adjustment User Fee for the 2025 Benefit Year

CMS finalizes a risk adjustment user fee for the 2025 benefit year of $0.18 per member per month, which is a decrease from the 2024 benefit year risk adjustment user fee rate of $0.21 per member per month. For the 2025 benefit year, HHS will operate the risk adjustment program applicable to the individual, small group, and merged markets in every state and the District of Columbia. These costs cover development of the models and methodology, collections, payments, account management, data collection, data validation, program integrity and audit functions, operational and fraud analytics, interested parties training, operational support, and administrative and personnel costs dedicated to HHS-operated risk adjustment program activities.

Premium Adjustment Percentage and Payment Parameters

On November 15, 2023, CMS issued the 2025 benefit year premium adjustmentpercentage index and related payment parameters in guidance, consistent with the policy finalized in the 2022 Payment Notice (86 FR 24238).

There's a whole mess of other wonky stuff embedded into the actual NBPP rule itself...all 747 pages of it!...but this should cover the main points.