New HHS Final Rule for 2027 Sets Standards for Health Insurance Exchanges
The U.S. Department of Health and Human Services (HHS), via the Centers for Medicare & Medicaid Services (CMS), has unveiled the "HHS Notice of Benefit and Payment Parameters for 2027" final rule. This regulation sets new standards for Health Insurance Exchanges and health insurance issuers, including agents, brokers, and web-brokers involved in Affordable Care Act (ACA) coverage.
The 2027 regulation aims to refine ACA implementation by addressing payment parameters, HHS-operated risk adjustment programs, and issuer user fee rates for Federally-facilitated Exchanges and State-based Exchanges. Provisions also address civil penalties for noncompliance, regulatory standards, and expanded eligibility for hardship exemptions.
CMS is tightening marketing regulations for agents, brokers, and web-brokers to enhance transparency during enrollment for qualified health plans. New rules prohibit unethical practices and mandate the prompt creation of marketing materials for oversight purposes. Additionally, starting in 2028, a standardized eligibility application review form and consumer consent form will be required to safeguard consumers against coverage inaccuracies and unexpected tax liabilities.
Commencing in 2027, the State Exchange Improper Payment Measurement (SEIPM) program will monitor improper payments related to advance premium tax credits in State Exchanges, aligning with practices in the Federal Exchange. Furthermore, CMS is removing the requirement for HHS-approved vendors for annual agent and broker training, opting to provide these training services directly.
For 2028, non-network plan certifications will require demonstrating access to a broad range of providers. These plans will focus on benefit amounts rather than negotiated provider rates. Additionally, hardship exemption eligibility expands, allowing more individuals to opt for catastrophic coverage when income changes unexpectedly, thus broadening access to affordable insurance.
Catastrophic plans may now extend up to ten years, incorporating value-based insurance designs to promote cost-effective healthcare service usage. For 2027, issuer user fees in Federally-facilitated and State-based Exchanges are reduced to 1.9% and 1.5% of premiums, respectively. CMS restores the authority for states with sufficient capacity to conduct certification reviews, including Essential Community Provider (ECP) certifications, streamlining processes and recognizing state expertise.
In risk adjustment, CMS refines its model using recent EDGE data and introduces scaling factors to improve error rate estimations under the HHS-RADV program. Changes align advanced premium tax credit (APTC) eligibility with the Working Families Tax Cut legislation, ensuring subsidies reach eligible individuals. More robust income verification processes are mandated, eliminating the acceptance of self-attested income when tax data is unavailable.
CMS emphasizes compliance with APTC, cost-sharing reductions, and user fee requirements, outlining civil penalties and compliance review procedures to enhance transparency and enforcement. Adjustments to Quality Improvement Strategy requirements allow issuers to target impactful health outcomes. Issuers must report on cost-sharing reduction loadings in rate filings for unfunded reimbursement years, aiming to boost program integrity, regulatory efficiency, consumer protection, and market flexibility within the ACA framework.