CMS Publishes Major ACA Exchange Rules Changes

The proposed CMS rules Fact Sheet:

https://www.cms.gov/newsroom/fact-sheets/hhs-notice-benefit-payment-parameters-2027-proposed-rule

HHS Notice of Benefit and Payment Parameters for 2027 Proposed Rule
Fact Sheet - February 9, 2026

HHS Notice of Benefit and Payment Parameters for 2027 Proposed Rule

Introduction

Today, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), issued the proposed “Notice of Benefit and Payment Parameters” for the 2027 plan year (the 2027 Payment Notice proposed rule) that sets standards for the Health Insurance Exchanges, as well as for health insurance issuers, brokers, and agents who connect millions of consumers to Affordable Care Act (ACA) coverage.

The 2027 Payment Notice proposed rule contains provisions to improve implementation of the ACA, including payment parameters and provisions related to the HHS-operated risk adjustment and risk adjustment data validation (HHS-RADV) programs, as well as 2027 user fee rates for issuers offering qualified health plans (QHPs) through Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the Federal platform (SBE-FPs).

This proposed rule also includes provisions related to the defrayal of state-mandated benefits; civil money penalties (CMPs) for noncompliant issuers and other responsible entities; strengthened standards of conduct for and administrative actions against noncompliant agents, brokers, and web-brokers; the expansion and codification of hardship exemption eligibility; implementation of the State Exchange Improper Payment Measurement (SEIPM) program; discontinuation of standardized plan option requirements and the non-standardized plan option limit and exceptions process; provider access and essential community provider standards for QHP certification; QHP certification of non-network plans; a prohibition on issuers from including routine non-pediatric dental services as an Essential Health Benefit (EHB); cost-sharing changes for catastrophic and individual market bronze plans; standards for multi-year contract terms for catastrophic plans and seeks comment on whether to apply similar standards to metal level plans; QHP issuer quality improvement strategies (QISs); revision to federal funding for certain individuals enrolled in the Basic Health Program (BHP); and seeks comment on potential adjustments to the Federal medical loss ratio (MLR) standard in the individual market. This proposed rule also includes updates needed to align regulations with changes made in Public Law (Pub. L.) 119-21, also known as the Working Families Tax Cut (WFTC) legislation.

The 2027 Payment Notice proposed rule can be accessed via the Federal Register at https://www.federalregister.gov/d/2026-02769. The deadline for submitting public comments is March 13, 2026.

Enhancing Program Integrity

Expand Regulations on Marketing Practices

CMS proposes to strengthen regulations on marketing practices for QHPs offered through Exchanges, as well as for agents, brokers, and web-brokers assisting consumers with enrollment in QHPs through the FFEs and SBE-FPs. This proposal includes examples of prohibited marketing practices, such as providing cash, monetary rebates, or cash equivalents to induce consumers to enroll; falsely asserting or suggesting that consumers will qualify for zero-dollar insurance or zero-dollar premiums; and miscommunicating enrollment timelines and deadlines. CMS also proposes requirements for timely production of marketing materials for monitoring, audit, or enforcement purposes. This proposal would ensure consumers are provided accurate information about the Exchange prior to enrollment, maintain the integrity of the Exchanges, and foster trust between consumers and agents, brokers, and web-brokers.

Mandating a Standard Eligibility Application Review Form and Consumer Consent Form

CMS proposes to require agents, brokers, and web-brokers to use the HHS-approved and created form to meet the eligibility application review documentation requirements and consent documentation requirements. CMS also proposes to clarify what types of actions constitute a consumer “taking an action” to review and confirm the accuracy of their information on their eligibility application and consent documentation. These proposals would protect consumers enrolling on the Exchanges from noncompliant agents, brokers, and web-brokers and protect consumers from inaccurate eligibility determinations, being enrolled in health coverage that does not meet their needs, and unexpected tax liabilities.

Implement and Apply the SEIPM Program

CMS proposes implementing a SEIPM program in calendar year 2027 to measure improper payments of advance payments of the premium tax credit (APTC) administered by State-based Exchanges (SBEs). CMS currently has a process in place to measure improper payments of APTC for the FFEs, but not one for SBEs. This proposal would ensure oversight of improper payments across all Exchanges, promoting consistency and parity in program integrity efforts nationwide. CMS further proposes to permit SBEs to satisfy certain requirements of the independent external programmatic audit by completing the SEIPM process.

Empowering States and Enhancing Qualified Health Plan Certification Flexibilities

Provider Access and Essential Community Provider (ECP) Certification Reviews

CMS proposes that FFE states may elect to conduct their own provider access reviews and/or ECP certification reviews of issuers’ plans, with or without a provider network, that apply for QHP certification to be offered through a FFE(including states that perform plan management), provided that CMS determines the state has sufficient authority and the technical capacity to conduct such reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program for provider access certification reviews, and/or an Effective ECP Review Program for ECP certification reviews. A FFE state would have the choice to elect to conduct their own provider access certification reviews, ECP certification reviews, or both reviews provided the FFE state satisfies the applicable criteria for each effective review program it wishes to administer. CMS also proposes to continue collection of provider access and ECP data from all issuers with or without a provider network across FFE states, regardless of whether the FFE state or CMS is conducting certification reviews, in an effort to extend our existing infrastructure to monitor consumer access to a sufficient choice of providers across the FFE and to provide technical assistance to states, including FFE states that seek to expand their own technical capacity to conduct their own reviews in future plan years. If an FFE state does not elect to conduct its own reviews or is not determined by CMS to have an Effective Provider Access Review Program and/or Effective ECP Review Program, as applicable, then CMS would continue to perform such reviews of QHP issuers with and without a provider network.

In addition, CMS proposes to restore aspects of network adequacy authority back to the SBEs and SBE-FPs through the removal of requirements for SBEs and SBE-FPs to establish and implement quantitative time and distance standards that are at least as stringent as those for QHPs participating in the FFEs by 2026. Instead, states would be required to ensure that each QHP applying for certification to be offered through a SBE or SBE-FP provides sufficient choices of providers in a manner that meets applicable standards specified in § 156.230(a)(1)(ii) and (iii) for network plans, or § 156.236(a) for non-network plans.

These proposed policies recognize that states often possess unique knowledge of local factors including on market conditions, geographic constraints, provider shortages, and population demographics. In addition, these proposals recognize State certification reviews may benefit from using the provider access data CMS currently collects. Empowering FFE States to tailor their certification reviews to the needs of consumers in their state with this data resource may strengthen reviews and improve the consumer experience. The proposal also would reduce regulatory burden on issuers participating in the Exchange and address concerns raised about duplicative state and federal oversight processes.

ECP Standards and Requirements

CMS proposes revising the minimum percentage of ECPs that issuers must contract with in each plan’s service area to participate in the plan’s provider network from 35 percent to 20 percent, applicable to the overall ECP threshold and, separately, to the federally qualified health center (FQHC) and family planning provider thresholds. CMS also proposes to remove the narrative justification requirement to be consistent with systems changes and existing QHP issuer ECP data submission requirements as part of ECP certification reviews. These proposed policies would potentially reduce regulatory burden on QHP issuers and provide such issuers with more resources that they can leverage for other activities, such as innovating plan offerings or passing on savings to consumers, while ensuring ECPs are included within an issuer’s provider network consistent with the requirements of the ACA.

QHP Certification of Non-Network Plans

CMS proposes to allow non-network plans to receive QHP certification beginning with plan year 2027 by demonstrating a sufficient choice of providers in a manner consistent with sections 1311(c)(1)(B) and (C) of with the ACA. Unlike network-based plans, non-network plans do not rely on a contracted set of providers that agree in advance to specific terms and negotiated payment rates, nor do they condition or differentiate benefits to enrollees based on whether the issuer has a network participating agreement with a provider that furnishes covered services. Instead, these plans set specific benefit amounts for covered services and communicate those benefit amounts to enrollees who may then seek covered services from any provider. Under this proposal, non-network plans would be required to ensure access to a range 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 services will be accessible without unreasonable delay. This proposed policy aims to reduce overall health care costs by (1) empowering enrollees to utilize price transparency information to shop for lower prices and negotiate directly with providers, thus fostering increased competition, and (2) eliminating substantial administrative overhead associated with traditional network management, potentially resulting in lower premiums.

Further Refining the HHS-operated Risk Adjustment Program

Recalibrating the 2027 Benefit Year HHS Risk Adjustment Models

To continue keeping the HHS risk adjustment models up to date while promoting model stability, CMS proposes to recalibrate the HHS risk adjustment models for the 2027 benefit year using 2021, 2022, and 2023 benefit year enrollee-level External Data Gathering Environment (EDGE) data.

Reflecting HHS-RADV Sampling Changes in the HHS-RADV Error Estimation Methodology

To align with the HHS-RADV sampling policy finalized in the 2026 Payment Notice [1] that improves the precision of HHS-RADV error estimation methodology, CMS proposes that starting with 2025 benefit year HHS-RADV, it would add an additional scaling factor to the calculation of the HHS-RADV error rates. This scaling factor would allow the HHS-RADV error estimation methodology to appropriately estimate the proportion of the issuer’s total plan liability risk score that is hierarchical condition category (HCC)-related after the removal of no-HCC enrollees from the initial validation audit HHS-RADV sample.

2027 Risk Adjustment User Fee

CMS, on behalf of HHS, is responsible for operating risk adjustment in every state and the District of Columbia for the 2027 benefit year. For the 2027 benefit year, CMS proposes a risk adjustment user fee of $0.20 per member per month, the same user fee rate used for the 2026 benefit year.

Promoting State Flexibility to Establish and Operate Exchanges

Approval of an Exchange

For states that elect to transition directly from the FFE to a SBE, CMS proposes to remove the requirement that a state operate for one year as an SBE-FP prior to its full transition to operating an SBE. This proposed policy would eliminate unnecessary barriers for states that are well-prepared to implement a SBE more immediately.

Exchange Blueprint Submission Activities

CMS proposes to rescind a requirement that a state, as part of its activities for establishing a SBE, provide to HHS upon its request supplemental documentation detailing the state’s progress towards meeting milestones outlined in its “Blueprint for Approval of State-Based Health Insurance Exchanges”, which currently already sets forth how the state will meet Exchange approval standards and demonstrate operational readiness.

State Exchange Enhanced Direct Enrollment Option

CMS proposes to establish a new optional Exchange model known as the State Exchange Enhanced Direct Enrollment option. If adopted, this proposal would permit an SBE to adopt a private sector-based approach for consumers seeking coverage through an SBE, whereby an SBE may rely exclusively on web-brokers to operate the consumer-facing websites that facilitate the applicant eligibility and enrollment process. This proposed approach would be an alternative to the SBE operating a centralized, consumer-facing eligibility application and enrollment website on its own SBE website. Accordingly, CMS also proposes to remove the requirement that SBEs must operate a centralized consumer-facing eligibility and enrollment website on their SBE websites, allowing the SBEs to elect to implement this proposed State Exchange Enhanced Direct Enrollment option model.

Maintaining EHB Alignment and Increasing State Accountability

Prohibit Issuers from Including Routine Non-Pediatric Dental Services as an EHB

CMS proposes to prohibit issuers from including routine non-pediatric (adult) dental services as an EHB. CMS believes this reversal of the policy finalized in the 2025 Payment Notice better aligns with statutory requirements under section 1302(b)(2)(A) of the ACA, which directs that the scope of EHB be equal to the scope of benefits provided under a typical employer plan.

Cost Defrayal of State-Mandated Benefits

CMS proposes revisions to states’ responsibilities when mandating benefits beyond the federally required EHB package. Beginning with plan year (PY) 2027, CMS proposes that any state-required benefit would be considered “in addition to EHB”—and thus not EHB—if it is required by state action after December 31, 2011, applies to the small group and/or individual markets, is specific to required care, treatment, or services, and is not mandated for compliance with federal requirements. Under this proposed policy, states would be required to defray the cost of these additional benefits for enrollees in QHPs offered through the Exchange, regardless of whether the benefit is embedded in the state’s EHB-benchmark plan.

This proposal would restore previously established standards to mitigate premium increases for unsubsidized enrollees, stabilize a predictable insurance market, provide clearer rules for state and issuer responsibilities, and increase cost transparency to assure that states, rather than consumers, bear the financial responsibility for additional mandated benefits.

Increasing Consumer Accountability and Reducing Improper Enrollments

Fixed-Dollar and Gross Percentage-Based Premium Payment Thresholds

To decrease the risk that consumers are improperly enrolled in coverage, CMS seeks comment on whether CMS should temporarily or permanently rescind the option for issuers to implement a fixed-dollar and/or gross percentage-based premium payment threshold for PY 2027 and beyond. CMS also seeks comments on whether State Exchanges should have the flexibility to adopt one or both thresholds, even if they remain unavailable for Exchanges on the Federal platform.

Extending the Removal of the 150 percent FPL Special Enrollment Period (SEP) Beyond PY 2026

To align Exchange regulations with section 71304 of the WFTC legislation, CMS proposes to amend the regulations such that Exchanges would continue to be prohibited from offering the 150 percent FPL SEP after PY 2026. This proposal would help to reduce opportunities for unauthorized enrollments and unauthorized plan switching.

Pre-Enrollment SEP Verification

CMS proposes to re-introduce the pre-enrollment SEP verification requirement for Exchanges on the Federal platform, which was finalized in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074) and then stayed by the court in City of Columbus et. al. v. Kennedy et. al., 25-cv-2114-BAH (D. Md.) This new proposal reflects changes in circumstances and new supporting information since the original policy was established in June 2025 and would allow for Exchanges on the Federal platform to conduct verification for additional SEPs beyond loss of minimum essential coverage and require Exchanges on the Federal platform to conduct verification for at least 75 percent of new enrollments [through SEPs]. This proposal would ensure more consistent application of eligibility criteria and reduce instances of improper enrollments, which can lead to a more balanced risk pool and potentially lower premiums, benefiting consumers.

Increasing Sustainability of the Federal Exchange

Repeal Standardized Plan Options and Non-Standardized Plan Option Limits and Exceptions Process

CMS proposes to discontinue (1) the requirement for FFE and SBE-FP issuers to offer standardized plan options in the individual market, and (2) the limit on the number of non-standardized plan options that may be offered by FFE and SBE-FP issuers, and the related exceptions process. To minimize potential disruption related to this proposal, CMS proposes to permit issuers to choose whether to discontinue existing standardized plan options and the chronic and high-cost condition plans originally offered through the non-standardized plan exceptions process altogether or continue offering them with either the same or modified cost sharing. These proposed policies would reduce issuer and HHS burden and regulatory complexity and enhance flexibility for issuers to innovate in plan design.

2027 FFE and SBE-FP User Fee

Per section 1311(d)(5)(A) of the ACA, CMS charges user fees to participating issuers as a means of generating funding to support its operations of the FFE and SBE-FP. For the 2027 benefit year, CMS proposes an FFE user fee rate of 2.5 percent of monthly premiums and SBE-FP user fee rate of 2.0 percent of monthly premiums, which are the same as the user fee rates established for the 2026 benefit year.

Sunsetting the Vendor Training Program

CMS proposes to remove the requirements in § 155.222 that HHS will approve vendors to facilitate annual agent and broker training on an annual basis for a given plan year, effectively discontinuing the vendor program. Agents and brokers will still have full access to complete annual Exchange training and registration requirements via the Marketplace Learning Management System (MLMS).

Ensuring Subsidies for Eligible Individuals

Limit APTC Eligibility to “Eligible Noncitizens”

CMS proposes updating its regulations to align with section 71301 of the WFTC legislation which requires an individual to be an “eligible alien” to be allowed a PTC, and therefore APTC and CSRs, and requires Exchanges to verify applicants’ “eligible alien” status. CMS also proposes conforming updates to the Basic Health Program (BHP) regulations to define “eligible noncitizen” and specify that an individual must be a citizen or eligible noncitizen for that individual to be included in the calculation of federal BHP payments to states in states that operate BHPs, beginning with plan years starting on or after January 1, 2027.

Disallow APTC for Individuals Who are Ineligible for Medicaid Due to Their Immigration Status and Have Income Below 100 Percent of the Federal Poverty Level (FPL)

To align Exchange regulations with section 71302 of the WFTC legislation, CMS proposes to remove the requirement that an Exchange must determine a tax filer eligible for APTC if the Exchange determines that they are expected to have an annual household income of less than 100 percent of the FPL for the benefit year for which coverage is requested and they are a noncitizen who is lawfully present and ineligible for Medicaid due to their immigration status. Because federal BHP payments to states are tied to the amount of PTC a BHP enrolled individual would have received had they instead enrolled in a QHP, BHP enrollees in this population would no longer be included in the calculation of federal BHP payments beginning January 1, 2026. This proposal would align with statutory requirements and ensure that subsidies are reserved for eligible individuals.

Verifying Consumer Income Eligibility for Insurance Affordability Programs

Income Verification When Data Sources Indicate Income Less Than 100 Percent of the FPL

CMS proposes to re-introduce the requirement for consumers to submit documents to verify their income when data sources indicate household income is under 100 percent of the FPL, which was finalized in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074) and then stayed by the court in City of Columbus et. al. v. Kennedy et. al. This requirement originally included a “sunset” date, and CMS proposes to remove the sunset language. This proposal would improve program integrity, reduce the burden of excess APTC on the federal taxpayer, and benefit federal taxpayers by ensuring subsidies are appropriately allocated.

Income Verification When Tax Data Is Unavailable

CMS proposes to re-introduce the policy to remove the requirement for Exchanges to accept a household’s income attestation when IRS returns no data for the household, which was finalized in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074) and then stayed by the court in City of Columbus et. al. v. Kennedy et. This proposal originally included a date to add back in this policy, and CMS proposes to remove this policy permanently. This proposal would reduce the risk of improper enrollments, protect consumers from surprise tax liabilities, and reduce APTC overpayments and expenditures.

Failure to File and Reconcile

CMS proposes to amend the regulations to codify the requirement that, beginning PY 2028, an Exchange must determine a tax filer or their enrollee ineligible for APTC if: (1) HHS notifies the Exchange that the tax filer (or either spouse if the tax filer is a married couple) received APTC for a prior year for which tax data would be utilized for verification of income, and (2) the tax filer did not comply with the requirement to file a federal income tax return and reconcile APTC for that year. For PY 2027, Exchanges would have the option to implement this proposal or continue the current two-year FTR policy. This proposal would provide Exchanges two tracks for adjusting operations to meet the new requirement in section 71303 of the WFTC legislation that Exchanges conduct the one-year FTR process to ensure PTCs are made available only to eligible consumers in PY 2028. This change would minimize improper enrollments and protect consumers from accumulating tax liabilities.

Solicit Comment on Eligibility Verification Provisions of the WFTC Legislation, Section 71303

Section 71303(a) and (b) of the WFTC legislation imposes new requirements on Exchanges related to eligibility verification, effective beginning with PY 2028. CMS solicits comments on topics including operational considerations for SBEs, issuers, agents and brokers, navigators and assisters, consumers, and effective communications. CMS seeks input from stakeholders regarding the required timelines to comply with the law and on the anticipated complexity, costs, burden, enrollment impacts, and any state-specific considerations.

Strengthening Issuer Accountability

Audit and Compliance Review Authority Changes

To further protect federal funds, CMS proposes to clarify that HHS has the authority to audit or conduct a compliance review of an issuer offering a QHP through an Exchange to assess its compliance with all applicable requirements pertaining to the APTC, cost-sharing reduction (CSR), and user fee programs, and that compliance reviews may be conducted on an as needed or annual basis rather than only on an ad hoc basis, as determined necessary by HHS.

Civil Money Penalty Changes

CMS proposes to reiterate that in determining a CMP amount, HHS would identify the lawful purpose or purposes of the CMP. CMS also proposes to clarify that HHS has the authority to impose CMPs against issuers in SBEs and SBE-FPs for identified violations of any Exchange requirements applicable to issuers offering a QHP in an Exchange when a State notifies HHS that it is not enforcing these requirements or when HHS determines that a State is failing to substantially enforce these requirements. Lastly, CMS proposes net payments owed to issuers and their affiliates under the same tax identification number against certain payments and CMPs owed to the federal government. These proposals would increase transparency into the CMP process, increase HHS’ enforcement authority, and support HHS’ continued ability to recover federal debts owed by issuers.

Administrative Review of QHP Issuer Sanctions

CMS proposes to provide an administrative law judge that would preside over an appeal of a sanction imposed against a QHP issuer, such as a CMP, the option to issue subpoenas and proposes the procedures governing the process for issuing subpoenas. CMS also proposes to revise the application of discovery provisions, so they do not apply to administrative appeals of proposed CMPs for violations identified through audits of the APTC, CSR, or user fee programs. These proposals would improve the accuracy of hearing decisions and increase hearing efficiency.

Quality Improvement Strategy (QIS)

CMS proposes to require QHP issuers to submit QISs addressing any two of the five topic areas listed in section 1311(g)(1) of the ACA, without mandating which specific topics a QHP issuer must address to meet the QIS statutory certification requirement beginning with PY 2027. QHP issuers would no longer be required to submit a QIS that addresses health and health care disparities as a specific topic area within their QIS, which would allow issuers to target quality efforts to the most pressing health outcome needs of their own enrollees and potentially yield more meaningful quality improvements. This change does not impact publicly reported quality ratings.

Additional CSR Data in Rate Filings

CMS proposes to require issuers that load rates to account for unreimbursed CSRs for the applicable rating year to submit certain information related to CSR loading in the Unified Rate Review Template and the Actuarial Memorandum for each year in which CSRs are not funded beginning with PY 2027 rate filings.

Improving Access to Coverage

Expansion of Hardship Exemption Eligibility

CMS proposes to allow individuals who are ineligible for APTC or CSRs due to projected household income below 100 percent or above 250 percent of the FPL to qualify for a hardship exemption. coverage when they experience change in their household income. HHS published guidance on September 4, 2025, that expanded eligibility for a hardship exemption to individuals ineligible for APTC or CSRs due to projected household income for consumers in FFE States, SBE-FP States, and State Exchange States that delegate their exemption processing to HHS. The proposed change would expand hardship exemption eligibility to individuals in all states aged 30 and older who receive this hardship exemption to enroll in catastrophic coverage, if otherwise eligible. This policy would improve consumers’ access to affordable coverage when they experience change in their household income.

Further Align Affordability and Coverage Incentives between Catastrophic and Metal Level Health Plans

CMS proposes standards under which catastrophic plans may have terms of multiple consecutive years of up to 10 years and seeks comment on whether to issue similar standards for metal-level plans. Related to that proposal, CMS proposes to allow issuers to make plan-level adjustments to the index rate for such catastrophic plans, and to allow issuers of such plans to apply the applicable cost-sharing for each plan year in the contract, prorated monthly. Also, multi-year catastrophic plans would be permitted to utilize value-based insurance designs to cover preventive services over and above those that currently must be covered under certain recommendations and guidelines, before an enrollee satisfies their deductible or hits their out-of-pocked maximum. Additionally, to address an issue that has arisen in the implementation of section 1302(c) through (e) of the ACA, CMS proposes to change the permissible cost-sharing parameters for bronze plans and to update cost-sharing requirements for catastrophic plans, beginning in PY 2027. These proposals would improve consumers’ access to affordable health care coverage and provide consumers the flexibility to tailor their coverage to their needs.

Comment Solicitation on Potential Changes to the MLR Standard

CMS seeks comment on the impact of the Federal MLR standard on individual market costs and premiums, whether to amend regulations to enable HHS to adjust the MLR standard in the individual market (including in states that do not request an MLR adjustment), and how to reduce burden for states interested in requesting an adjustment to the MLR standard for their individual market.

[1] See 90 FR 4449 through 4458.