2027 Payment Notice: Changes to Health Insurance Regulations

The U.S. Department of Health and Human Services, through the Centers for Medicare & Medicaid Services (CMS), has released the proposed "Patient Protection and Affordable Care Act, HHS Notice of Benefit and Payment Parameters for 2027" on February 11, 2026. Known as the 2027 Payment Notice, it outlines regulatory changes for issuers of Qualified Health Plans (QHPs) offered via Federally-facilitated and State-based Exchanges on the Federal platform. Stakeholders are invited to submit feedback until March 13, 2026.

This annual rule proposes updates concerning payment parameters, risk adjustment, and user fee rates. It also suggests modifications to Essential Health Benefits (EHBs), civil penalties, and operational standards for agents and brokers. Among the significant proposed changes is the exclusion of routine non-pediatric dental services from being classified as EHBs, thereby affecting coverage across various market segments. CMS is requesting comments on the potential impacts of these changes.

The proposal addresses State-required benefits, stating that from 2027, benefits mandated by states but included in the EHB benchmark plans will be categorized as "in addition to EHB." States will need to cover these benefits' costs by compensating enrollees or issuers. The review process for State applications of EHB-benchmark plans is on hold, pending potential revisions in future rulemaking.

Regarding risk adjustment, CMS will maintain the program across individual, small group, and merged markets nationwide. Comments are sought on whether separate calculations for risk adjustment transfers should continue for different plan types within merged and non-merged market states. Civil money penalties are addressed with a proposal to enhance transparency and enforcement authority. CMS suggests netting payments owed by issuers against Federal government debts.

Non-network plans will be eligible for QHP certification starting in 2027, provided they offer adequate provider choice and meet other certification requirements. Measures for restoring network adequacy authority to State-based Exchanges are also proposed. Catastrophic plans may have terms extended to a maximum of ten years, with adjustments allowed to reflect the term's length. CMS invites feedback on application processes for these adjustments.

Modifications to the Federal Medical Loss Ratio (MLR) standard could be implemented to safeguard individual market stability. CMS considers reducing application burdens for states requesting MLR adjustments. Finally, CMS plans to codify the filing instructions related to cost-sharing reductions (CSRs), requiring issuers to provide detailed information on CSR impacts on premiums, ensuring that CSR loads are justified and match lost payments, thus preventing undue federal expenditure increases.

These proposals aim to refine regulatory processes, enhance market stability, and ensure financial integrity within the health insurance marketplace.