Summary of Final HHS Notice of Benefit and Payment Parameters for 2025
Executive Summary Only, download document above for full article
Disclaimer
This document represents our interpretation of the regulations and is intended for informational purposes only. While we have made every effort to ensure the accuracy of the information presented, the original source data (Health and Human Services (HHS) Notice of Benefit and Payment Parameters for 2025 Final Rule) should always be considered the authoritative source. We encourage readers to consult the original source data for the most accurate and up-to-date information.
Executive Summary
The HHS Notice of Benefit and Payment Parameters for 2025 Final Rule (2025 Payment Notice) was recently released1 , and it is accompanied by a summary fact sheet. (2–see download above). The lengthy final rule was faithful to the proposed notice, and most proposals were finalized as proposed.
Significant simplifications were made to the state Essential Health Benefit (EHB) (see download above) benchmark plan revision process, effective January 1, 2026. (3, 4 – see download above) The simplifications reduced the number of options and guardrails states would need to consider, increased the flexibility of options with definitional changes, and reduced the documentation requirements if formulary changes are not made. A reinterpretation gives states more flexibility by allowing the addition of benefits and services categorized as non-pediatric routine dental, which were previously not allowed. Additional clarification regarding defining EHBs and non-EHBs was made to close gaps in understanding surrounding state defrayal requirements.
Similarly, continuity was the emphasized in Standardized Plan Options (see download above). While the limitation on non-standardized plan offerings will continue as expected, the exceptions process for plans directed toward chronic and high-cost conditions received much needed clarification.
Network Adequacy (see download above) time and distance standards were finalized for State Exchanges and State Based Exchange on the Federal Platform (SBE-FPs) with a little extra time, with implementation effective for plan year 2026 instead of plan year 2025 as originally proposed.
A good portion of the Payment Notice was devoted to Exchange standards (see download above) to improve consumer experience and continuity by extending several minimum standards to State Exchanges.
Retroactive Termination (see download above) of Qualified Health Plan (QHP) enrollment for members enrolling in Medicare Parts A or B (even through Medicare Advantage), also received discussion, particularly regarding logistics. There may still be many unanswered questions, not the least being the impact, however, we believe it is unlikely a significant portion of an issuer’s population would request retroactive termination.
Risk adjustment (see download above) underwent few modifications in the latest update. The annual parameters were finalized, and there was a detailed discussion on the risk adjustment model, with the most significant change being the increase in the cost-sharing reduction (CSR) factors for American Indian/Alaska Native (AI/AN) groups. Additionally, the payment notice mentioned potential adjustments in pricing for GLP-1 and gene therapy drugs, hinting that these changes may be part of future regulations.
Enrollees with catastrophic plans (see download above) who will lose eligibility were added to the auto-enrollment hierarchy to avoid lapses in coverage.
Special enrollment periods (SEP), (see download above) specifically the 150% Federal Poverty Line (FPL) SEP was made permanent.