Census Bureau
Foreign-Trade Zones Board
International Trade Administration
National Institute of Standards and Technology
National Oceanic and Atmospheric Administration
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Health Resources and Services Administration
National Institutes of Health
Coast Guard
U.S. Immigration and Customs Enforcement
Drug Enforcement Administration
Federal Aviation Administration
Federal Transit Administration
Comptroller of the Currency
Internal Revenue Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents electronic mailing list, go to https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new, enter your e-mail address, then follow the instructions to join, leave, or manage your subscription.
Office of Critical Minerals and Energy Innovation, Department of Energy.
Final rule.
In 1992, Congress directed to be established a program to encourage production of electric energy from facilities owned by a State, a political subdivision of a State, or a non-profit electric cooperative using certain renewable energy resources. In response, the U.S. Department of Energy (DOE or the Department) implemented the Renewable Energy Production Incentive (REPI) program following the statute's requirements through a final rule in 1995. Incentive payments to eligible recipients were subject to the availability of appropriated funds; funds were last appropriated for this program in Fiscal Year 2009. This final rule is necessary to align the regulations with the underlying statute, which includes a payment sunset date at the end of Fiscal Year 2026. Specifically, the statute provides that no payment (incentive) may be made after September 30, 2026.
This rule is effective on October 1, 2026.
Ms. Audrey Robertson, U.S. Department of Energy, Office of Critical Minerals and Energy Innovation, 1000 Independence Avenue SW, Washington, DC 20585;
On May 16, 2025, DOE published a notice of proposed rulemaking (May 2025 NPRM) to rescind the REPI program regulations at 10 CFR part 451 in preparation for the approaching sunset of the REPI program. 90 FR 20939. As described in the May 2025 NPRM, the REPI program was authorized through section 1212 of the Energy Policy Act of 1992 to encourage production of electric energy from facilities owned by a State, a political subdivision of a State, or a non-profit electric cooperative using certain renewable energy resources and implemented through the procedures set in part 451. The May 2025 NPRM invited comments and sought to provide stakeholders with advanced notice of the Department's intent to rescind 10 CFR part 451 at the close of fiscal year 2026. This final rule aligns with the statute's underlying sunset provision, which once passed would render the regulations obsolete. 90 FR 20939, 20940.
DOE received two comments in response to the May 2025 NPRM.
One individual commenter opposes ending renewable energy production incentives, arguing that renewable energy reduces household energy costs and improves air quality.
As a general response to the comments received, DOE notes that Congress has not appropriated funding for the REPI program in over 15 years. Further, the President's Budget Request for Fiscal Year 2026 does not include funding for the REPI program. While commenters identify benefits of this program, DOE finds that the regulations for the REPI program are no longer necessary for supporting renewable energy, given that other federal and state incentives may be available, including tax credits, loan guarantees, and other grants. In addition, weatherization, bill payment, and home energy efficiency assistance are offered by many states and utilities, which may lower household energy costs and improve indoor air quality. Additionally, if Congress were to extend the REPI
For the reasons discussed in the preceding sections of this document, DOE is finalizing this rule, as originally proposed, to rescind the regulations for the Renewable Energy Production Incentive Program after September 30, 2026. This final rule removes an inactive and obsolete regulatory program.
Section 6(a) of Executive Order (`E.O.”) 12866, “Regulatory Planning and Review,” requires agencies to submit “significant regulatory actions” to the Office of Information and Regulatory Affairs (“OIRA”) in the Office of Management and Budget for review. OIRA has determined that this regulatory action does not constitute a “significant regulatory action” under section 3(f) of E.O. 12866. Accordingly, this action was not submitted to OIRA for review under E.O. 12866.
DOE has examined this final rule and has determined that it is consistent with the policies and directives outlined in E.O. 14154 “Unleashing American Energy,” E.O. 14192, “Unleashing Prosperity Through Deregulation,” and Presidential Memorandum, “Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis.” While this final rule does not result in cost savings, DOE considers this a deregulatory action for the purposes of E.O. 14192 because it reduces the burden on society by eliminating obsolete regulations as discussed in this preamble. As such, DOE considers this final rule as one of the 10 regulations identified for elimination as required by E.O. 14192.
The Regulatory Flexibility Act (5 U.S.C. 601
DOE reviewed this final rule under the provisions of the Regulatory Flexibility Act and the policies and procedures published on February 19, 2003. DOE concludes that the impacts of the rule will not have a “significant economic impact on a substantial number of small entities,” and that the preparation of an FRFA is not warranted. DOE will transmit this certification and supporting statement of factual basis to the Chief Counsel for Advocacy of the Small Business Administration for review under 5 U.S.C. 605(b).
This final rule imposes no new information collection requirements subject to the Paperwork Reduction Act and OMB clearance is not required. (44 U.S.C. 3501
Pursuant to the National Environmental Policy Act of 1969 (“NEPA”), DOE has analyzed this final withdrawal in accordance with NEPA, as amended, and DOE's NEPA implementing regulations (set forth in 10 CFR part 1021), and DOE's NEPA implementing procedures (published outside the Code of Federal Regulations on June 30, 2025 (Available at:
DOE has determined that rescinding the procedures set out in part 10 CFR part 451 in preparation for the approaching sunset of the REPI program is administrative and routine; as such, is not a major Federal action significantly affecting the quality of the human environment within the meaning of NEPA and no further environmental review is needed.
Executive Order 13132, “Federalism,” 64 FR 43255 (August 10, 1999), imposes certain requirements on Federal agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. The E.O. requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The E.O. also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined this final rule and has determined that it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, no further action is required by E.O. 13132.
With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (February 7, 1996), imposes on Executive agencies the general duty to adhere to the following requirements: (1) eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. With regard to the review required by section 3(a), section 3(b) of E.O. 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any
Title II of the Unfunded Mandates Reform Act of 1995 (“UMRA”) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). For a regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect them. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820. DOE's policy statement is also available at
DOE examined this final rule according to UMRA and its statement of policy and determined that the final rule does not contain a Federal intergovernmental mandate, nor is it expected to require expenditures of $100 million or more in any one year by State, local, and Tribal governments, in the aggregate, or by the private sector. As a result, the analytical requirements of UMRA do not apply.
Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This final rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.
Pursuant to E.O. 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights,” 53 FR 8859 (March 18, 1988), DOE has determined that this final rule would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.
Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review most disseminations of information to the public under information quality guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving Implementation of the Information Quality Act (April 24, 2019), DOE published updated guidelines which are available at:
Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OIRA at OMB, a Statement of Energy Effects for any significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that: (1) is a significant regulatory action under E.O. 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For any significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.
This final rule is not a significant regulatory action under E.O. 12866. Moreover, it would not have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as such by the Administrator at OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects.
As required by 5 U.S.C. 801, DOE will submit to Congress a report regarding the issuance of this final rule prior to the effective date set forth at the outset of this rule. The report will state that it has been determined that the rule is not a “major rule” as defined by 5 U.S.C. 801(2).
The Secretary of Energy has approved publication of final rule.
Building and facilities, Electric utilities, Energy conservation, Grant programs—energy, Income taxes, and Reporting and recordkeeping requirements.
This document of the Department of Energy was signed on May 14, 2026, by Audrey Robertson, Assistant Secretary of Energy (EERE), pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Railroad Retirement Board.
Direct final rule.
The Railroad Retirement Board amends its regulations to remove limitations on the beginning date of an employee annuity under the Railroad Retirement Act based on attaining age 60 with 30 years of railroad service. As currently written, the regulation requires a claimant to accept a reduced monthly benefit in order to begin the annuity on the first day of the first full month in which the claimant attains age 60. This requirement is no longer consistent with the statutory criteria in the Railroad Retirement Act for the earliest annuity beginning date permitted by law and is therefore facially unlawful.
This rule is effective June 22, 2026.
Peter J. Orlowicz, Senior Counsel, Railroad Retirement Board, 844 North Rush Street, Chicago, IL 60611-1275, (312) 751-4922.
Section 2(a)(1)(ii) of the Railroad Retirement Act, 45 U.S.C. 231a(a)(1)(ii), provides for annuities to be paid to railroad workers who file an application for an annuity and who have attained age 60 and completed 30 years of railroad service. Prior to 2001, section 3(a)(3) of the Act required that when an employee began receiving such an annuity prior to attaining age 62, the amount of the annuity would be reduced in the same manner as early retirement benefits under the Social Security Act.
(1) The day after the day the claimant last worked for a railroad employer;
(2) The first day of the first full month in which the claimant is age 60 and will accept a reduced annuity;
(3) The first day of the month in which the claimant attains age 62; or
(4) The first day of the sixth month before the month in which the application is filed.
Section 102 of the Railroad Retirement and Survivors' Improvement Act of 2001 amended section 3(a) of the Railroad Retirement Act to remove this reduction for annuities based on attaining age 60 with 30 years of railroad service. Public Law 107-90, 102 (Dec. 1, 2001). Instead, individuals entitled to an annuity based on attaining age 60 with 30 years of railroad service are deemed to have attained full retirement age under the Social Security Act and the individual may receive an unreduced annuity beginning at age 60. 45 U.S.C. 231b(a)(2). Although the Board implemented the statutory amendments in the Railroad Retirement and Survivors' Improvement Act of 2001 in policy and practice to permit an unreduced annuity to begin at age 60 with 30 years of service, the regulation at 20 CFR 218.9(d) was not updated to reflect these statutory amendments.
As part of its review of regulations directed by Executive Order 14219, Ensuring Lawful Governance and Implementing the President's “Department of Government Efficiency” Deregulatory Initiative (Feb. 19, 2025), the Board identified this provision purporting to require claimants to accept a reduced annuity as a condition of beginning an annuity at age 60 with 30 years of railroad service as facially unlawful and in conflict with the statutory criteria in the Railroad Retirement Act for receiving such an annuity. In accordance with the Presidential memorandum of April 9, 2025, directing the repeal of unlawful regulations, the Board is amending its regulations at 20 CFR 218.9(d) to remove this facially unlawful condition. Pursuant to the memorandum, notice and comment proceedings are unnecessary and contrary to the public interest because the statutory criteria of the Railroad Retirement Act controls the earliest annuity beginning date permitted by law and the application or non-application of reductions to an annuity, with no discretion left to the agency. Therefore, no comments are being requested.
The Board, with the Office of Management and Budget, has determined that this is not a significant regulatory action under Executive Order 12866, as supplemented by Executive Order 13563. Therefore, no regulatory impact analysis is required.
The Board certifies that this direct final rule would not have a significant economic impact on a substantial number of small entities because it affects only individuals.
This direct final rule imposes no reporting or recordkeeping requirements subject to Office of Management and Budget clearance.
Railroad retirement, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, the Railroad Retirement Board amends 20 CFR part 218 as follows:
45 U.S.C. 231f(b)(5).
The revision reads as follows:
(d) * * *
(2) The first day of the first full month in which the claimant is age 60; or
By Authority of the Board.
Internal Revenue Service (IRS), Treasury.
Final regulations.
This document contains final regulations modifying information reporting obligations with respect to sales or exchanges of certain interests in partnerships owning inventory or unrealized receivables.
Benjamin Weaver, (202) 317-6850 (not a toll-free number).
This document contains final regulations amending the Income Tax Regulations (26 CFR part 1) under section 6050K of the Internal Revenue Code (Code) by removing § 1.6050K-1(c)(2).
Section 6050K(a) provides that, except as provided in regulations prescribed by the Secretary of the Treasury or the Secretary's delegate (Secretary), a partnership is required to file a return if there is an exchange described in section 751(a) of the Code of any interest in the partnership during any calendar year. Section 6050K(a) also contains express delegations of authority for the Secretary to promulgate regulations prescribing the information required to be disclosed on such partnership returns, the manner in which such returns are made, and the due date of such returns.
Section 6031(a) of the Code provides an express grant of authority for the Secretary to prescribe in forms or regulations partnership reporting information required “for the purpose of carrying out the provisions of subtitle A.”
Section 7805(a) of the Code authorizes the Secretary to “prescribe all needful rules and regulations for the enforcement of [the Code], including all rules and regulations as may be necessary by reason of any alteration of law in relation to internal revenue.”
Section 741 of the Code provides that gain or loss recognized by a transferor partner upon sale or exchange of a partnership interest is considered as gain or loss from the sale or exchange of a capital asset, except as provided in section 751. Section 751(a) provides that the amount of any money, or the fair market value of any property, received by a transferor partner in exchange for all or a part of the transferor partner's interest in the partnership attributable to (1) unrealized receivables of the partnership, or (2) inventory items of the partnership, will be considered as an amount realized from the sale or exchange of property other than a capital asset. Section 1.6050K-1(a)(4)(i) refers to a sale or exchange to which section 751(a) applies as a “section 751(a) exchange.”
Section 6050K(a) requires a partnership to file a return if there is a section 751(a) exchange of any interest in the partnership during any calendar year. Section 6050K(a) further provides that the return must state the name and address of the transferee and transferor in the section 751(a) exchange and such other information as the Secretary may by regulations prescribe.
Section 1.6050K-1(a)(1) generally requires a partnership to make a separate return using Form 8308,
Section 6050K(b) requires a partnership to provide certain information to transferors and transferees that are parties to a section 751(a) exchange on or before January 31 of the year following the calendar year of the section 751(a) exchange. Among other things, the information provided to each transferor and transferee must include the information required to be shown on the partnership's return under section 6050K(a) with respect to such person.
Section 6050K(c)(1) provides that the transferor of the partnership interest must notify the partnership of any exchange described in section 6050K(a). Under section 6050K(c)(2), a partnership is not required to make a return under section 6050K with respect to any exchange until the partnership is notified of such exchange.
Section 1.6050K-1(c)(1) clarifies that each partnership that is required to file a Form 8308 must furnish a statement to the transferor and transferee by the later of (1) January 31 of the year following the calendar year in which the section 751(a) exchange occurs, or (2) 30 days after the partnership receives notice of the exchange as specified under section 6050K(c) and § 1.6050K-1(e). Prior to its modification by these final regulations, § 1.6050K-1(c)(1) generally required a partnership to use a copy of the completed Form 8308 as the required statement.
In addition, prior to its removal by these final regulations, § 1.6050K-1(c)(2) required a partnership to furnish to a transferor partner the information necessary for the transferor to make the transferor partner's required statement in § 1.751-1(a)(3). Section 1.751-1(a)(3) requires a transferor partner in a section 751(a) exchange to submit with the transferor partner's income tax return for the taxable year in which the sale or exchange occurs a statement separately stating the date of the sale or exchange, the amount of any gain or loss attributable to section 751 property, and the amount of any gain or loss attributable to capital gain or loss on the sale of the partnership interest. Consistent with § 1.6050K-1(c)(2), Part IV of Form 8308 requires a partnership to report, among other items, the partnership's gain or loss from a deemed sale under section 751 and the transferor partner's share of such amount.
The Department of the Treasury (Treasury Department) and the IRS received comments from stakeholders that many partnerships are unable to furnish the information required in Part IV of the Form 8308 to transferors and transferees by the January 31 due date prescribed by § 1.6050K-1(c)(1) because, in many cases, partnerships do not have all the information required by Part IV of the Form 8308 by January 31 of the year following the calendar year in which the section 751(a) exchange occurred.
In response to those comments, on August 19, 2025, the Treasury Department and the IRS published a notice of proposed rulemaking (REG-108822-25) in the
As a result of the proposed changes to § 1.6050K-1 and the associated changes in the instructions to Form 8308, a partnership would be required to furnish the information reported on only Parts I, II, and III of Form 8308, or a statement that includes the same information, to the transferor and transferee in a section 751(a) exchange by the later of (1) January 31 of the year following the calendar year in which the section 751(a) exchange occurred, or (2) 30 days after the partnership has received notice of the exchange as specified under section 6050K and § 1.6050K-1.
Further, the preamble to the proposed regulations explained that the Treasury Department and the IRS would update the Instructions for Form 8308 to make clear that a partnership must file a completed Form 8308, including Part IV, as an attachment to its Form 1065. The update to the Form 8308 instructions reflects this. Accordingly, and pursuant to § 1.6031(a)-1(a)(2), which provides that a partnership return must contain the information required by the prescribed form and the accompanying instructions, a partnership would be required to file the completed Form 8308, including Part IV, as an attachment to its Form 1065, for the taxable year of the partnership that includes the last day of the calendar year in which the section 751(a) exchange took place. Thus, the requirement that a partnership file a completed Form 8308, including Part IV, as an attachment to its Form 1065 would remain unchanged by the proposed regulations.
The preamble to the proposed regulations further explained that, pursuant to § 1.6031(b)-1T(a)(3), the partnership will also continue to be required to report the information required of the transferor in § 1.751-1(a)(3) to the transferor (including the information required in Part IV of the Form 8308), in the Schedule K-1 (Form 1065),
Finally, the proposed regulations would modify § 1.6050K-1(c)(1)(i) to clarify that the partnership will be providing to the IRS the information included on a substitute statement furnished in lieu of a Form 8308 under § 1.6050K-1(c)(1).
The preamble to the proposed regulations stated that § 1.6050K-1(c)(2) was proposed to be removed on the date the regulations are published as final regulations in the
The Treasury Department and IRS did not receive any comments pertaining to the proposed regulations, and no public hearing was requested or held. Accordingly, these final regulations adopt the proposed regulations without change.
These final regulations are not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (July 4, 2025) between the Treasury Department and the Office of Management and Budget (OMB) regarding review of tax regulations. Therefore, a regulatory impact assessment is not required.
The Executive Order 14192 designation for this rule is expected to be deregulatory.
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) generally requires that a Federal agency obtain the approval of the OMB before collecting information from the public, whether such collection of information is mandatory, voluntary, or required to obtain or retain a benefit. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number. These final regulations do not impose a new collection of information or modify an existing collection of information.
It is hereby certified that the final regulations will not have a significant economic impact on a substantial number of small entities pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6). These final regulations affect partnerships for which there is a section 751(a) exchange (as defined in § 1.6050K-1(a)(4)(i)). These final regulations will likely affect a substantial number of small entities organized as partnerships for Federal tax purposes, but the impact of the final regulations is limited because the final regulations delay the date by which partnerships must provide transferors of interests in the partnership the information necessary for the transferor to make the transferor's required statement under § 1.751-1(a)(3). This delay benefits the partnerships by providing additional time to furnish the information but will not have a significant economic impact. Accordingly, a regulatory flexibility analysis under the Regulatory Flexibility Act is not required.
Section 202 of the Unfunded Mandate Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million (updated annually for inflation). These final regulations do not include any Federal mandate that may result in expenditures by State, local, or Tribal governments or by the private sector in excess of that threshold.
Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. These final regulations do not have federalism implications and do not impose substantial, direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.
Pursuant to section 7805(f) of the Code, the proposed rule preceding these final regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. No comments were received from the Chief Counsel for Advocacy of the Small Business Administration.
Pursuant to the Congressional Review Act (5 U.S.C. 801
The principal author of these final regulations is the Office of Associate Chief Counsel (Passthroughs, Trusts, and Estates). However, other personnel from the Treasury Department and the IRS participated in their development.
Income taxes, Reporting and recordkeeping requirements.
Accordingly, the Treasury Department and IRS amend 26 CFR part 1 as follows:
26 U.S.C. 7805 * * *
The addition and revisions read as follows:
(c)
(i) The information shown on the statement will be supplied to the Internal Revenue Service,
(h)
Coast Guard, Department of Homeland Security.
Temporary final rule.
The Coast Guard is proposing to establish a temporary special local regulation (SLR) for certain navigable waters of the Red River near Shreveport, LA. The SLR is needed to protect personnel, vessels, and the marine environment from potential hazards created by a high-speed marine event between mile markers 227.8 to 229. This regulation prohibits persons and vessels from entering the regulated area unless specifically authorized by the Captain of the Port, Sector Lower Mississippi River or their designated representative.
This rule is effective from 8 a.m. to 5 p.m. daily from May 22, 2026, through May 24, 2026.
To view available documents go to
If you have questions about this rule, contact MST1 Cole Perkins, Sector Lower Mississippi River Waterways Management Division, U.S. Coast Guard; telephone 901-208-0311, or email
On November 20, 2025, an organization notified the Coast Guard that they are planning a powerboat race on the Red River near Shreveport, LA from May 22, 2026, through May 24, 2026. The event will involve multiple races over several hours on each day.
The Captain of the Port Sector Lower Mississippi River (COTP) is issuing this Special Local Regulation (SLR) under the authority in 46 U.S.C. 70041. The COTP has determined that potential hazards associated with this race event include vessels transiting at extreme speeds and the potential for airborne watercraft, collisions, capsizing, dangerous projectiles, and mechanical failures. The purpose of this rulemaking is to protect event participants, non-participants, and transiting vessels before, during, and after the scheduled event.
Because of these potential hazards, the Coast Guard is issuing this rule without prior notice and comment. As is authorized by 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable and contrary to the public interest. The Coast Guard was not able to publish an NPRM and consider public comments in time to begin enforcement of this temporary regulation by May 22, 2026. Delaying enforcement of this regulation would place personnel, vessels, and the marine environment at risk from the hazards associated with the event.
For the same reasons, the Coast Guard finds that under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the
This rule establishes a temporary SLR from 8 a.m. to 5 p.m. daily from May 22,
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders.
The regulatory flexibility analysis provisions of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, do not apply to rules that are not subject to notice and comment. Because the Coast Guard has, for good cause, waived the notice and comment requirement that would otherwise apply to this rulemaking, the Regulatory Flexibility Act's flexibility analysis provisions do not apply here.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), if this rule will affect your small business, organization, or governmental jurisdiction and you have questions, contact the person listed in the
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
We have analyzed this rule under Executive Order 13132, Federalism, and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in that Order.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
As required by The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538), the Coast Guard certifies that this rule will not result in an annual expenditure of $100,000,000 or more (adjusted for inflation) by a State, local, or tribal government, in the aggregate, or by the private sector.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
This rule is a special local regulation. It is categorically excluded from further review under paragraph L61 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1.
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows:
46 U.S.C. 70041; 33 CFR 1.05-1.
(a)
(b)
(c)
(2) To seek permission to enter, contact the COTP or the COTP's representative on VHF-FM channel 16 or by telephone at (866) 360-3386. Those in the special regulated area must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.
(3) The COTP will provide notice of the regulated area through local notice to mariners and broadcast notice to mariners.
(d)
Coast Guard, Department of Homeland Security.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for navigable waters on the Straits of Mackinac, in particular within a 500-yard radius of the vessels Ugle Duckling and Streak while they are conducting
This rule is effective from June 1, 2026, through July 31, 2026. It will be subject to enforcement each day from 6:00 a.m. until 6:00 p.m.
To view available documents go to
If you have questions about this rule, contact LT Rebecca Simpson, Sector Northern Great Lakes Waterways Management Division, U.S. Coast Guard; telephone 906-635-3223, or email
The Coast Guard is establishing a temporary safety zone for navigable waters within a 500-yard radius of the vessels Ugle Duckling and Streak while they are conducting underwater survey operations. The safety zone is necessary to protect vessels while a Hovering Autonomous Underwater Vehicle (HAUV)/Remotely Operated Vehicle (ROV) is conducting underwater surveys on Lake Michigan in the vicinity of the Straits of Mackinac, MI. Hazards from HAUV/ROV operations include submerged navigation obstruction from the HAUV/ROV as well as limited maneuverability of the control vessels. The Captain of the Port Sector Northern Great Lakes (COTP) has determined that potential hazards associated with HAUV/ROV operations are a safety concern for anyone within 500 yards of the operation. Therefore, the COTP is proposing this rule under the authority in 46 U.S.C. 70034, which is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone. The regulatory text we are proposing appears at the end of this document.
Because of these potential hazards, the Coast Guard is issuing this rule without prior notice and comment. As is authorized by 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable. It is impracticable to publish an NPRM because we must establish this safety zone by June 1, 2026, and we lack sufficient time to provide a reasonable comment period and consider those comments before issuing the rule.
For the same reason, the Coast Guard finds that under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the
This rule establishes a safety zone from 6 a.m. until 6 p.m. each day from June 1, 2026 through July 31, 2026. The safety zone would cover all navigable waters within 500 yards of the survey vessels. No vessel or person would be permitted to enter the safety zone without obtaining permission from the COTP or their designated representative. The regulatory text we are proposing appears at the end of this document.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders.
The regulatory flexibility analysis provisions of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, do not apply to rules that are not subject to notice and comment. Because the Coast Guard has, for good cause, waived the notice and comment requirement that would otherwise apply to this rulemaking, the Regulatory Flexibility Act's flexibility analysis provisions do not apply here.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), if this rule will affect your small business, organization, or governmental jurisdiction and you have questions, contact the person listed in the
Small businesses may send comments to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards by calling 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
We have analyzed this rule under Executive Order 13132, Federalism, and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in that Order.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
As required by The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538), the Coast Guard certifies that this rule will not result in an annual expenditure of $100,000,000 or more (adjusted for inflation) by a State, local, or tribal government, in the aggregate, or by the private sector.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
This rule is a safety zone. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051, 70124; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 00170.1, Revision No. 01.4.
(a)
(b)
(c)
(2) To seek permission to enter, contact the COTP or the COTP's representative on VHF-FM channel 16 or by telephone at (906) 635-3233. Those in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.
(d)
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing temporary moving and fixed security zones on the Lower Mississippi River to provide security for visiting personnel and vessels during the New Orleans Sail 250 events. The fixed security zone will cover all waters of the Lower Mississippi River between mile markers 92.7 to 98. The moving security zone will apply to certain designated vessels as they transit between the Southwest Pass entrance and mile marker 98. Entry of vessels or persons into these zones is prohibited unless specifically authorized by the Captain of the Port.
This rule is effective from 12:01 a.m. on May 24, 2026, through 11:59 p.m. on June 1, 2026.
To view available documents, go to
If you have questions on this rule, call or email Lieutenant Commander Jacob Gamble, Sector New Orleans, U.S. Coast Guard; 504-269-7251, email
Sail 250 New Orleans is a major public event that involves visiting tall ships and other vessels that will be moored along the Lower Mississippi River riverfront in New Orleans. A large gathering of attendees is anticipated over the duration of this event, which begins with the first vessel arrivals around May 24, 2026, and ends June 1, 2026. While planning for this event, the Coast Guard determined that existing permanent security zones on the Lower Mississippi River, at 33 CFR 165.812 and 33 CFR 165.846, are inadequate to provide the necessary security for visiting vessels and attendees. The Captain of the Port (COTP) New Orleans determined that it is necessary to create a new temporary regulation to provide for a larger fixed security zone area, and to apply a moving security zone to participating vessels that are not cruise ships or United States naval vessels. Therefore, the COTP is proposing this rule under the authority of 46 U.S.C. 70051 and 70124, which is needed to protect personnel, vessels, and the marine environment in the navigable waters of the Lower Mississippi River in the vicinity of New Orleans.
Because of the risks associated with this event, the Coast Guard is issuing this rule without prior notice and opportunity to comment. As authorized by 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable and contrary to public interest. Planners for the Sail 250 New Orleans project continue to develop and refine the timeline for vessel arrivals and other events, and the Coast Guard has not had sufficient time to publish an NPRM, consider public comments, and issue a final rule. The Coast Guard must establish these temporary security zones by May 24, 2026, to provide security to waterway users, visiting vessel crews, other personnel associated with the project, and the public.
For the same reasons, the Coast Guard finds that under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the
This rule temporarily establishes fixed and moving security zones for vessels involved in the New Orleans Sail 250 event from 12:01 a.m. on May 24, 2026, through 11:59 p.m. on June 1, 2026. First, it establishes a moving security zone for certain protected vessels designated by the COTP, as they transit the Lower Mississippi River between the Southwest Pass Entrance Lighted Buoy “SW”, at approximate position 28°52′42″ N, 89°25′54″ W [NAD 83] and Lower Mississippi River mile marker 98 in New Orleans, Louisiana. No person or vessel will be allowed to approach within 100 feet of a protected vessel, and vessels within 500 yards of the protected vessel must transit at the minimum safe speed necessary to
Second, it establishes a fixed security zone area from MM 92.7 to MM 98 on the Lower Mississippi River, in the vicinity of the New Orleans riverfront. Vessels and persons are prohibited from entering this area without the permission of the COTP.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders.
The regulatory flexibility analysis provisions of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, do not apply to rules that are not subject to notice and comment. Because the Coast Guard has, for good cause, waived the notice and comment requirement that would otherwise apply to this rulemaking, the Regulatory Flexibility Act's flexibility analysis provisions do not apply here.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), if this rule will affect your small business, organization, or governmental jurisdiction and you have questions, contact the person listed in the
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
We have analyzed this proposed rule under Executive Order 13132, Federalism, and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in that Order.
Also, this proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
As required by The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538), the Coast Guard certifies that this proposed rule will not result in an annual expenditure of $100,000,000 or more (adjusted for inflation) by a State, local, or tribal government, in the aggregate, or by the private sector.
We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
This rule establishes a temporary security zone regulation. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination will be available in the docket.
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard is amending 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051, 70124; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 00170.1, Revision No. 01.4.
(a)
(1)
(2)
(b)
(c)
(2) When within 500 yards of a vessel protected by a moving security zone described in paragraph (a)(1) above, vessels must transit at the minimum speed necessary to maintain a safe course past the protected vessel.
(3) The COTP will issue Broadcast Notice to Mariners and other public advisories to inform the public of the presence of the moving and fixed security zones.
(4) To seek permission to enter, contact the COTP or the COTP's representative on VHF Channels 13/67 or via phone at (504) 589-2780 or (504) 589-6261. Those in the security zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.
(d)
Coast Guard, Department of Homeland Security.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for navigable waters in North Carolina, on Morehead City Harbor. The safety zone is needed to protect personnel, vessels, and the marine environment from potential hazards associated with an aerobatic demonstration over the navigable waterway. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port, Sector North Carolina, or their designated representative.
This rule is effective from 4:30 p.m. to 5:30 p.m. on May 30, 2026.
To view available documents go to
If you have questions about this rule, contact MSTC Shawn Stanley, Sector North Carolina Waterways Management Division, U.S. Coast Guard; telephone 571-607-6971, or email
The Coast Guard has received notification that there will be a single performer aerobatic demonstration over certain waters of Morehead City Harbor, Morehead City, NC. As explained by the Federal Aviation Administration, which regulates aerobatic flight at 14 CFR 91.303, “[i]n aerobatic flight, the pilot abruptly changes an aircraft's angle compared to the earth, takes an abnormal position (such as flying upside down), or accelerates abnormally.”
Because the Coast Guard must establish this safety zone by May 30, 2026 to protect personnel, vessels, and the marine environment from these potential hazards, and because there is insufficient time for the Coast Guard to provide prior notice and comment before then, the Coast Guard is issuing this rule without prior notice and comment. As is authorized by 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable to do so.
For the same reasons, the Coast Guard finds that under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the
This rule establishes a safety zone from 4:30 p.m. to 5:30 p.m. on May 30, 2026. The safety zone will cover all navigable waters in the Morehead City Harbor within the following points: Point 1 at 34°34′01.19″ N, 76°43′16.77″ W, thence to Point 2 at 34°42′35.07″ N, 76°43′23.53″ W, thence to Point 3 at 34° 42′55.26″ N, 76°42′18.88″ W thence to Point 4 at 34°42′30.77″ N, 76°42′24.20″ W; thence returning to Point 1. Vessels and persons will not be allowed to enter the zone during this time, unless authorized by the Captain of the Port.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders.
The regulatory flexibility analysis provisions of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, do not apply to rules that are not subject to notice and comment. Because the Coast Guard has, for good cause, waived the notice and comment requirement that would otherwise apply to this rulemaking, the Regulatory Flexibility Act's flexibility analysis provisions do not apply here.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), if this rule will affect your small business, organization, or governmental jurisdiction and you have questions, contact the person listed in the
Small businesses may send comments to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards by calling 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
We have analyzed this rule under Executive Order 13132, Federalism, and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in that Order.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
As required by The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538), the Coast Guard certifies that this rule will not result in an annual expenditure of $100,000,000 or more (adjusted for inflation) by a State, local, or tribal government, in the aggregate, or by the private sector.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
This rule is a safety zone. It is categorically excluded from further review under paragraph L60(a); of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket.
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051, 70124; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; DHS Delegation No. 00170.1, Revision No. 01.4.
(a)
(b)
(c)
(2) To seek permission to enter, contact the COTP or the COTP's representative on VHF-FM channel 16 or by telephone at (833) 732-8628. Those in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.
(d)
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
In this final rule, NMFS is changing regulations to implement the binding International Commission for the Conservation of Atlantic Tunas (ICCAT) Recommendation 24-12 on mobulid rays of the family Mobulidae. Specifically, this action prohibits retention of mobulid rays in fisheries for Atlantic highly migratory species (HMS), requires mobulid rays to be released unharmed in HMS fisheries, and implements mobulid ray handling practices for vessels fishing with pelagic longline gear.
This final rule is effective June 22, 2026.
Additional information related to this final rule, including electronic copies of the supporting documents are available from the HMS Management Division website at
Carrie Soltanoff at
Federal Atlantic HMS fisheries (tunas, billfish, swordfish, and sharks) are managed under the 2006 Consolidated HMS Fishery Management Plan (HMS FMP) and its amendments, pursuant to the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act; 16 U.S.C. 1801
NMFS has prepared a comprehensive document that presents the alternatives considered for this final rule and analyzes their anticipated environmental, social, and economic impacts. This supporting document consolidates the requirements of a number of Federal statutes and executive orders and includes, among other sections, a Final Environmental Assessment (EA), Regulatory Impact Review (RIR), and Final Regulatory Flexibility Analysis (FRFA). A brief summary of background information and the alternatives considered is provided below. Additional information regarding this action and HMS management overall can be found in the supporting document, the HMS FMP and its amendments, the annual HMS Stock Assessment and Fishery Evaluation (SAFE) Reports, and online at
Under section 971d(c)(1)(A) of ATCA, NMFS must promulgate such regulations as may be necessary and appropriate to carry out binding recommendations of ICCAT. Further, regulations promulgated shall, to the extent practicable, be consistent with FMPs prepared and implemented under the Magnuson-Stevens Act (see section 971d(c)(1)(C)). Additionally, the Magnuson-Stevens Act requires measures in an FMP such as the HMS FMP to be consistent with regulations implementing recommendations by international organizations, as well as the national standards (see section 303(a)(1)(C) or 16 U.S.C. 1853(a)(1)(C)). National Standard 9 requires that conservation and management measures shall, to the extent practicable: (A) minimize bycatch (as defined at 16 U.S.C. 1802(2)); and, (B) to the extent bycatch cannot be avoided, minimize the mortality of such bycatch (see section 301(a)(9) or 16 U.S.C.
On August 22, 2025, NMFS published a proposed rule (90 FR 41024) and released a draft of the supporting document, which included a Draft EA, RIR, and Initial Regulatory Flexibility Analysis (IRFA). The proposed rule and supporting document contain background information relevant to this action and are not repeated here. The comment period for the proposed rule closed on September 22, 2025. NMFS received 19 written comments during the proposed rule public comment period, as well as comments during a public hearing webinar and an HMS Advisory Panel meeting. The comments received, and the responses to those comments, are summarized in the Response to Comments section.
In this action, consistent with ICCAT Recommendation 24-12, NMFS prohibits retention of mobulid rays of the family Mobulidae in HMS fisheries, requires mobulid rays to be released unharmed in HMS fisheries, and implements mobulid ray handling and release practices for vessels fishing with pelagic longline gear. These measures are also consistent with National Standard 9, and for giant manta rays, the 2024 Draft Recovery Plan and Draft Recovery Implementation Strategy under the Endangered Species Act (ESA) (
In this action, NMFS prohibits retention of all mobulid rays in the family Mobulidae in all HMS fisheries, under Alternative A3. Vessels issued, or which should have been issued, any HMS permit, commercial or recreational, are prohibited from retaining, transshipping, landing, or storing any parts or whole carcasses of mobulid rays. Persons are prohibited from selling or purchasing any mobulid ray, a whole carcass or part thereof, that was caught by a vessel issued or required to be issued a permit for HMS.
These measures implement Recommendation 24-12, prohibiting retention of mobulid rays taken in association with ICCAT fisheries. Fisheries for tunas and tuna-like species (
Researchers conducting research on mobulid rays need an exempted fishing permit or related permit (
In this action, NMFS requires vessels issued, or which should have been issued, any HMS permit to release unharmed, to the extent practicable, mobulid rays as soon as they are seen on the hook or at the vessel, under Alternative B2 (with additional requirements for pelagic longline vessels as described below). These measures implement Recommendation 24-12, requiring vessels to promptly release mobulid rays unharmed, to the extent practicable. Application of this requirement in all HMS fisheries, rather than only ICCAT fisheries for tunas and tuna-like species, ensures consistent application, facilitates effective implementation, and provides clarity for the regulated community and for enforcement purposes.
In addition, these measures align HMS fishery requirements with the giant manta ray handling and release procedures recommended after the ESA listing, which state that giant manta rays should be released in a manner that will promote their survival after any fishery interaction. Because these measures apply this requirement to all mobulid rays, these measures also avoid any differing requirement among species of mobulid rays that could lead to mishandling of giant manta rays due to misidentification. The 2024 Recovery Status Review for Giant Manta Ray describes a high rate of misidentification between giant manta rays and other mobulid rays.
In this action, NMFS further requires vessels issued, or which should have been issued, an HMS permit and fishing with pelagic longline gear to disentangle and release, as safely as practicable, any hooked or entangled mobulid rays using dehookers or line clippers or cutters, under Alternative B3. When using a line clipper or cutter, the gangion is required to be cut so that less than 3 feet (91.4 centimeters (cm)) of line remains attached to the hook and, to the extent practicable, any line that is wrapped around the animal is removed. Handling requirements also state that mobulid rays must be left in the water, and no mobulid ray may be gaffed.
These measures implement the suggested best handling practices for the safe release of mobulid rays in Recommendation 24-12. In addition, these measures align HMS fisheries with aspects of the recommended giant manta ray handling and release procedures developed following the ESA listing. As these measures apply this requirement to all mobulid rays, these measures also avoid any differing requirement among species of mobulid rays that could lead to mishandling of giant manta rays due to misidentification. Further, requiring mobulid rays to be disentangled and either dehooked or cut off the line with a limited amount of line remaining attached to the hook facilitates the ability of NMFS observers and vessel captains or crew to identify and report which species of mobulid ray was involved in the interaction. The
In addition to the measures described above, in the supporting document for this action, NMFS analyzed two no action alternatives (Alternatives A1 and B1) that would maintain the status quo in HMS fisheries. NMFS did not select the no action alternatives because they do not meet the objectives of the rule. The supporting document also describes the impacts of one other alternative. Alternative A2 would prohibit retention of mobulid rays in fisheries for tunas and tuna-like species. NMFS did not select Alternative A2 because, while it would implement Recommendation 24-12, application of this measure in some HMS fisheries and not others (
NMFS received 19 written comments from individual members of the public. All written comments can be found at
Regulations implemented under this action apply to the owners and operators of vessels issued any HMS permit—whether they are fishing in Federal, State, or territorial waters, or outside the U.S. EEZ—as a condition of the permit, unless the State or territory has more restrictive regulations that apply (see 50 CFR 635.4(a)(10)).
As a result of further conversations with NMFS' Office of Protected Resources regarding the proposed rule, observer data, and typical mobulid behavior once hooked or entangled, NMFS has added additional language to § 635.21(c)(6) and the corresponding prohibition at § 635.71(a)(69) to clarify that the intention of the rule is to leave less than 3 feet (91.4 cm) of line on the hook when releasing it
As described in the introduction, NMFS is issuing this final rule pursuant to the Atlantic Tunas Convention Act section 971d(c)(1)(A) and the Magnuson-Stevens Act section 305(d). The NMFS Assistant Administrator has determined that this final rule is consistent with the HMS FMP and its amendments, other provisions of the Magnuson-Stevens Act, and other applicable law.
This final rule has been determined to be not significant for purposes of Executive Order 12866.
This final rule is not an Executive Order 14192 regulatory action because this rule is not significant under Executive Order 12866.
NMFS has determined that this action would not have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes; therefore, consultation with Tribal officials under Executive Order 13175 is not required, and the requirements of section (5)(b) and (c) of Executive Order 13175 also do not apply. A Tribal summary impact statement under section (5)(b)(2)(B) and (c)(2) of Executive Order 13175 is not required and has not been prepared.
A FRFA was prepared for this final rule. The FRFA incorporates the IRFA, a summary of the significant issues raised by the public comments in response to the IRFA, NMFS' responses to those comments, and a summary of the analyses updated in response to the comments and completed to support the action. A copy of this analysis is available from NMFS (see
Section 604(a)(1) of the Regulatory Flexibility Act (RFA) requires agencies to state the need for, and objective of, the final action. The need for this action is to implement binding ICCAT Recommendation 24-12, adopted in 2024, which prohibits the retention of mobulid rays in ICCAT fisheries and details best practices for handling and release of mobulid rays. Current regulations for HMS fisheries do not address retention or bycatch of mobulid rays. The purpose of this action is to protect mobulid rays and minimize their bycatch and bycatch mortality to the extent practicable in HMS fisheries consistent with ICCAT Recommendation 24-12, as well as National Standard 9 of the Magnuson-Stevens Act.
Section 604(a)(2) of the RFA requires a summary of significant issues raised by the public in response to the IRFA, a summary of the agency's assessment of such issues, and a statement of any changes made in the rule as a result of the comments. NMFS received 19 written comments on the proposed rule and associated analyses during the public comment period. Summarized public comments and NMFS' responses to them are included above. NMFS received one comment that referred to the economic impacts of the rule. NMFS received a comment opposing implementing regulations regarding mobulid ray retention. The commenter stated that there is no need to allocate resources toward enforcement of such regulations since there is currently no fishery for mobulid rays or value in mobulid ray retention, and that regulations and enforcement would be a burden on fishermen.
In response to this comment, NMFS agrees that there is currently no fishery for mobulid rays and that mobulid rays are a bycatch and not a target species. In support of this, NMFS notes that it does not have records of sale of mobulid rays from HMS fisheries in Atlantic HMS dealer data. However, the lack of a current fishery does not indicate that a fishery for mobulid rays is not possible in the future without restrictions against it. Furthermore, maintaining the status quo and not implementing regulations regarding mobulid ray retention would not meet the purpose and need for this action to implement binding ICCAT Recommendation 24-12, which prohibits the retention of mobulid rays in ICCAT fisheries. As described in the supporting document, there are potential benefits to implementing binding ICCAT recommendations, including avoiding being identified for noncompliance by the ICCAT Compliance Committee. Compliance could also positively affect public perception of HMS fisheries and influence decisions by consumers. Also, as described in the supporting document, fishermen are already required to disentangle protected species, such as turtles, and to release sharks with a maximum of 3 feet (91.4 cm) of trailing line. In the short-term, fishermen may experience inefficiencies as they adjust to applying the existing handling and release practices when handling and releasing mobulid rays. However, NMFS expects that any resulting inefficiencies would be minimal and that fishermen would become adept in using these practices to release mobulid rays over time given they are adept at using similar practices to release sharks and protected species. Therefore, NMFS believes that Alternative A3 will likely result in neutral short-term and long-term social and economic impacts. NMFS also believes that, because there is no fishery for mobulid rays and because the handling and release practices are the same as what is already required for other species, implementing this restriction would not result in a need for additional resources for enforcement.
Section 604(a)(3) of the RFA requires the agency to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA) in response to the proposed rule, and a detailed statement of any change made in the rule as a result of such comments. NMFS did not receive any comments from the Chief Counsel for Advocacy of the SBA in response to the proposed rule.
Section 604(a)(4) of the RFA requires agencies to provide descriptions of, and where feasible, an estimate of the number of small entities to which the rule would apply. The SBA has established size criteria for all major industry sectors in the United States, including fish harvesters. Provision is made under SBA's regulations for an agency to develop its own industry-specific size standards after consultation with Advocacy and an opportunity for public comment (see 13 CFR 121.903(c)). Under this provision, NMFS may establish size standards that differ from those established by the SBA Office of Size Standards, but only for use by NMFS and only for the purpose of conducting an analysis of economic effects in fulfillment of the agency's
This final rule would apply to the permit holders of 150 Swordfish Directed, 56 Swordfish Incidental, 73 Swordfish Handgear, 173 Shark Directed, 209 Shark Incidental, and 205 Atlantic Tunas Longline category limited access permits. The final rule would also apply to the permit holders of 109 Commercial Caribbean Small Boat permits, 616 Swordfish General Commercial permits (with 373 shark endorsements), 211 Smoothhound Shark permits, 2,420 Atlantic Tunas General category permits (with 1,258 shark endorsements), 37 Atlantic Tunas Harpoon category permits, and 4,409 HMS Charter/Headboat permits (with 3,208 shark endorsements and 2,212 commercial sale endorsements). This final rule would also affect HMS Angling permit holders, but those permit holders are considered individuals and not small entities under RFA. NMFS considers all HMS permit holders, both commercial and for-hire, to be small entities because they have average annual receipts of less than their respective sector's standard of $11 million and $14 million. NMFS has determined that the final rule would not likely affect any small governmental jurisdictions. More information regarding the description of the fisheries affected, and the categories and number of permit holders can be found in the HMS SAFE Report.
Section 604(a)(5) of the RFA requires agencies to describe any new reporting, record-keeping, and other compliance requirements. The action does not contain any new collection of information, reporting, or record-keeping requirements.
Section 604(a)(6) of the RFA requires agencies to describe the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected. As described below, NMFS analyzed several different alternatives in this final rulemaking and provides rationales for identifying the preferred alternatives to achieve the desired objectives. The FRFA assumes that each vessel will have similar catch and gross revenues to show the relative impact of the final action on vessels.
Under Alternative A1, the No Action alternative, the HMS regulations at 50 CFR part 635 would continue not to address retention of mobulid rays. In HMS fisheries, mobulid rays are bycatch and are not targeted or retained. NMFS examined Atlantic HMS dealer data and did not find any recorded sales of mobulid rays. This would likely indicate neutral economic impacts on small entities participating in HMS fisheries. However, there are potential costs to not implementing binding ICCAT recommendations, including potentially being identified for noncompliance by the ICCAT Compliance Committee and thereby influencing decisions by consumers due to negative public perception, which could result in minor adverse economic impacts. By contrast in the future, if small entities permitted in HMS fisheries decide to retain and sell mobulid rays under Alternative A1, that decision could result in revenue that has minor beneficial economic impacts. The impact is likely to be minor since there is a very limited market in the United States. The same potential costs to noncompliance with binding ICCAT recommendations could exist. On balance, the net benefit of Alternative A1 would likely be neutral since the limited minor beneficial impacts from being able to sell mobulid rays in the future would likely be offset by negative impacts from noncompliance with the ICCAT recommendation.
Under Alternative A2, NMFS would prohibit retention of mobulid rays in fisheries for tunas and tuna-like species (
Under preferred Alternative A3, NMFS would prohibit retention of mobulid rays in all HMS fisheries. In HMS fisheries, mobulid rays are bycatch and are not targeted or retained. NMFS examined Atlantic HMS dealer data and did not find any recorded sales of mobulid rays. Therefore, Alternative A3 would likely result in neutral economic impacts on small entities participating in HMS fisheries. Compared to Alternative A2, this alternative would simplify the regulations by prohibiting mobulid rays in all HMS fisheries and would thus make communicating this change easier and reduce the time and effort needed by fishery participants to understand the retention prohibition, without increasing any costs to fishery participants. In addition, there are potential benefits to implementing binding ICCAT recommendations, including avoiding being identified for noncompliance by the ICCAT Compliance Committee. Compliance could also positively affect public perception of HMS fisheries and influence decisions by consumers.
Under Alternative B1, the No Action alternative, the HMS regulations at 50 CFR part 635 would continue to not address handling practices or require release of mobulid rays. Current recommended giant manta ray handling and release procedures under the ESA would remain in place. Alternative B1 would not require any changes to current mobulid rays handling and release practices and, therefore, would likely result in neutral economic impacts on small entities participating in HMS fisheries. However, there are potential costs to not implementing binding ICCAT recommendations related to required release, including potentially being identified for noncompliance by the ICCAT
Under preferred Alternative B2, vessels issued any HMS permit would be required to release unharmed, to the extent practicable, mobulid rays as soon as they are seen on the hook or at the vessel (with additional requirements for pelagic longline vessels as described under Alternative B3). In HMS fisheries, mobulid rays are bycatch and are not targeted or retained. NMFS does not have records of sales of mobulid rays from HMS fisheries. Therefore, Alternative B2 would likely result in neutral economic impacts on small entities participating in HMS fisheries.
Under preferred Alternative B3, NMFS would implement handling practices for mobulid rays caught on pelagic longline gear, including requirements to disentangle any mobulid rays, to limit trailing line to 3 feet (91.4 cm), to leave mobulid rays in the water, to use a dehooking device or line clipper or cutter, and to not gaff mobulid rays. Currently, pelagic longline fishermen are required to use a dehooking device or line clipper or cutter if a protected species (
Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121) states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule and shall designate such publications as “small entity compliance guides” (see 5 U.S.C. 601). The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, NMFS prepared a web page that also serves as small entity compliance guide. Copies of this final rule and compliance guide are available on the HMS Management Division website (
This final rule contains no information collection requirements under the Paperwork Reduction Act of 1995.
Fisheries, Fishing, Fishing vessels, Foreign relations, Imports, Penalties, Reporting and recordkeeping requirements, Statistics, Treaties.
For the reasons set out in the preamble, NMFS amends 50 CFR part 635 as follows:
16 U.S.C. 971
(a) * * *
(4) Any mobulid ray caught by a vessel that has been issued or should have been issued an HMS permit must be released unharmed, to the extent practicable, as soon as it is seen on the hook or at the vessel, except that a vessel with pelagic longline on board must undertake the additional bycatch mitigation measures described in paragraph (c)(6) of this section.
(c) * * *
(6) The owner or operator of a vessel permitted or required to be permitted under this part and that has pelagic longline gear on board must, as safely as practicable, disentangle and release any hooked or entangled mobulid ray using dehookers or line clippers or cutters. If using a line clipper or cutter to release the mobulid ray, to the extent practicable, the gangion must be cut so that less than 3 feet (91.4 cm) of line remains attached to the hook and any line that is wrapped around the animal is removed. Mobulid rays must be released without removing the ray from the water. No mobulid ray may be gaffed.
(g)
(d)
(e)
(a) * * *
(68) Retain, transship, land, store, sell, or purchase any mobulid ray, a whole carcass or part thereof, as specified in § 635.21(a)(5), § 635.22(g), § 635.24(d), and § 635.31(e).
(69) Fail to release a mobulid ray when seen on the hook or at the vessel
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; closure.
NMFS is prohibiting directed fishing for Pacific cod by catcher/processors using hook-and-line (HAL) gear in the Central Regulatory Area of the Gulf of Alaska (GOA). This action is necessary to prevent exceeding the A season allowance of the 2026 Pacific cod total allowable catch (TAC) allocated to catcher/processors using HAL gear in the Central Regulatory Area of the GOA.
Effective 1200 hours, Alaska local time (A.l.t.), May 18, 2026, through 1200 hours, A.l.t., September 1, 2026.
Abby Jahn, 907-586-7228.
NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared and recommended by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.
The A-season allowance of the 2026 Pacific cod TAC allocated to catcher/processors using HAL gear in the Central Regulatory Area of the GOA is 850 metric tons (mt) as established by the final 2026 and 2027 harvest specifications for groundfish in the GOA (91 FR 11902, March 11, 2026).
In accordance with § 679.20(d)(1)(i), the Regional Administrator, Alaska Region, NMFS (Regional Administrator) has determined that the A season allowance of the 2026 Pacific cod TAC allocated to catcher/processors using HAL gear in the Central Regulatory Area of the GOA will be or has been reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 840 mt and is setting aside the remaining 10 mt as incidental catch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance will be or has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by catcher/processors using HAL gear in the Central Regulatory Area of the GOA to prevent exceeding this sector's A season allowance of Pacific cod TAC.
While this closure is effective, the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.
NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR part 679, which was issued pursuant to section 304(b) of the Magnuson-Stevens Act, and is exempt from review under Executive Order 12866.
Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be impracticable and contrary to the public interest, as it would prevent NMFS from responding to the most recent fisheries data on Pacific cod catch in a timely fashion and would delay the closure of directed fishing for Pacific cod by catcher/processors using HAL gear in the A season in the Central Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data on Pacific cod catch only became available as of May 15, 2026.
There is good cause under 5 U.S.C. 553(d)(3) to establish an effective date less than 30 days after date of publication. This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.
16 U.S.C. 1801
U.S. Immigration and Customs Enforcement (“ICE”), Department of Homeland Security (“DHS”).
Notice of proposed rulemaking (NPRM).
DHS is proposing to update the fee required by section 100016 of the Budget Reconciliation Act (known as the HR-1). This fee applies to certain aliens ordered removed in absentia who fail to depart the United States and are subsequently arrested by ICE. DHS is proposing to increase the fee from $5,130 to $18,000. This rule also makes clear that DHS will adjust this fee for inflation each year.
Comments must be received on or before June 22, 2026.
You may submit comments on this NPRM, identified by DHS Docket Number ICEB-2026-0034, through the Federal eRulemaking Portal at
Comments submitted in a manner other than the one listed above, including emails or letters sent to DHS officials, will not be considered comments on the rule and may not receive a response from DHS. DHS cannot accept any comments that are hand-delivered or couriered. In addition, DHS cannot accept comments contained on any form of digital media storage devices, such as CDs, DVDs, or USB drives. DHS is not accepting mailed comments at this time. If you cannot submit your comment using
The Office of the Principal Legal Advisor, U.S. Immigration and Customs Enforcement, Department of Homeland Security, 500 12th Street SW, Washington, DC 20536-5901; telephone (202) 732-6960 (not a toll-free call) (for questions only—no comments will be accepted at this phone number).
DHS encourages all interested parties to participate in this rulemaking by submitting data, views, comments, and arguments on all aspects of this notice of proposed rulemaking. Comments providing the most assistance to DHS will reference a specific portion of this proposed rule, explain the reason for any recommended change and include the data, information, or authority that supports the recommended change. See the
All comments must be submitted in English, or an English translation must be provided. If you submit comments, you must include the DHS docket number for this rulemaking (ICEB-2026-0034), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. Include data, information, or authority that supports the comment. Your comments must be submitted online by 11:59 p.m. EST on the last day of the comment period.
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to
The authority of the Secretary of Homeland Security (the Secretary) to implement the proposed regulatory amendments in this rule can be found in various provisions of the immigration laws. The Secretary derives the authority to promulgate regulations primarily from the Immigration and Nationality Act (INA), as amended.
8 U.S.C. 1814 requires a fee for aliens ordered removed in absentia, unless the alien's order is rescinded pursuant to section 240(b)(5)(C) (8 U.S.C. 1229a(b)(5)(C)).
DHS immigration officers have broad authority to arrest and detain aliens pending immigration proceedings and for removal from the United States, who have not established a legal right to remain, pursuant to a warrant issued by the Department of Homeland Security, or without a warrant.
Pursuant to section 287(a)(1)-(2) of the INA, 8 U.S.C. 1357(a)(1)-(2), DHS immigration officers have the authority to interrogate and to arrest aliens for whom there is probable cause to believe are removable from the United States.
In addition to these authorities, INA 241, 8 U.S.C. 1231, provides DHS with the authority to detain aliens to effectuate a removal order, including a removal order entered in absentia.
Under INA sec. 240, 8 U.S.C. 1229a, an alien receives notice of the removal proceedings and hearing date when DHS serves the alien with a Notice to Appear (NTA).
The NTA and hearing notices are served in person to the alien or, if personal service is not practicable, through service by mail to the alien or the alien's counsel of record.
HR-1 provides an exception from the immigration enforcement fee authorized in section 1814, 8 U.S.C. 1814, in certain circumstances when the removal order in absentia is rescinded pursuant to INA 240(b)(5)(C), 8 U.S.C. 1229a(b)(5)(C).
Effective September 8, 2025, ICE began issuing the FY 2025 fee of $5,000 from any alien who falls under 8 U.S.C. 1814.
An alien subject to the fee under 8 U.S.C. 1814 receives written notice of the fee. This notice of the fee assessment provides the alien with a list of determinations made by the arresting officer, including the date the alien was ordered removed in absentia, the fact that the alien was subsequently arrested, and the fee amount. The written notice of the fee assessment makes clear that failure to promptly pay the fee results in consequences such as the accrual of interest, administrative costs, and a late payment penalty charge pursuant to 31 U.S.C. 3717, 6 CFR 11.10, and 31 CFR 901.9. An alien may dispute the written fee notice within 30 days of issuance of the notice.
ICE has reviewed the data on the cost of ICE immigration enforcement actions and determined that the partial reimbursement fee of $5,130 is too low to sufficiently reimburse ICE for the cost of arresting an alien who has been ordered removed in absentia.
The total cost of arresting an alien ordered removed in absentia requires consideration of the broader costs of identifying, detaining, processing, and removing such alien, in addition to the direct cost of the arrest subsequent to the in absentia removal order. ICE also incurs a variety of indirect and overhead costs, including, but not limited to, training, vehicles, and support staff. These costs are subsumed in the cost of arresting an alien. Just as the act of arresting an alien directly imposes costs to detain, process, and remove that alien.
ICE's immigration enforcement lifecycle (IEL) cost framework, produced by ICE's Office of Budget and Program Performance (OBPP) Performance Analysis and Evaluation (PA&E) Unit, provides information on the cost of each stage of the IEL, including direct costs, indirect costs, and overhead costs. On average, the total cost of the IEL for an alien is $18,042, justifying the DHS Secretary's exercise of authority to increase the $5,130 fee amount required by 8 U.S.C. 1814.
The table below details each phase of the IEL and reflects the direct and indirect costs involved in an arrest, ending with removal.
Moreover,
The $18,000 fee proposed in this NPRM constitutes a partial reimbursement of ICE's total costs in accordance with 8 U.S.C. 1814(a). ICE data on the IEL indicates that the average cost accrued by ICE to identify, arrest, detain, process, and remove a single alien in 2025 is $18,040. The meaningful increase in the number of aliens ordered removed in absentia combined with the overall cost of the IEL continues to put a significant strain on ICE's already stretched enforcement resources and diverts those essential resources from other immigration enforcement priorities. To alleviate the strain on resources and reduce the amount paid by U.S. taxpayers for these enforcement activities,
Additionally, because 8 U.S.C. 1814 provides that 50 percent of the fee shall be deposited into the General Fund of the U.S. Treasury, a $18,000 fee ensures actual and meaningful partial reimbursement to ICE. DHS believes rulemaking is needed to ensure that DHS collects a more appropriate partial reimbursement fee that properly reflects the enormous amount of resources expended on aliens ordered removed in absentia who fail to depart and are subsequently arrested by ICE.
The changes proposed in this NPRM also protect the integrity of immigration enforcement and help promote public safety. An alien who fails to depart the United States upon issuance of a final order of removal in absentia has already violated U.S. immigration laws and processes.
Furthermore, an in absentia removal order can only be rescinded if the alien files a motion to reopen with the immigration judge,
An alien's failure to depart creates additional enforcement costs that could otherwise be spent on DHS' and the administration's vast immigration enforcement priorities.
Codifying the fee at 8 U.S.C. 1814 into regulation provides clarity to the public and easy access to the law. Additionally, codification assists with a more effective implementation of the law and disincentivizes aliens from engaging in violations of immigration law.
Congress established a minimum fee at 8 U.S.C. 1814 and afforded the Secretary the ability to increase that fee in her discretion.
Under this proposal, the new fee of $18,000 is a partial reimbursement to the agency for its costs associated with arresting aliens ordered removed in absentia. The new fee will apply to all aliens who are ordered removed in absentia pursuant to section 240(b)(5)(A) (8 U.S.C. 1229a(b)(5)(A)) and are subsequently arrested by ICE on or after the effective date of the final rule.
As described in the background above, the notice of the fee assessment provides the alien with a list of determinations made by the arresting officer, including the date the alien was ordered removed in absentia, the fact that the alien was subsequently arrested, and the fee amount. The notice of fees also makes clear that failure to promptly pay the fee has consequences, including the accrual of interest, administrative costs, and a late payment penalty charge pursuant to 31 U.S.C. 3717, 6 CFR 11.10, and 31 CFR 901.9. An alien may dispute the notice within 30 days of issuance.
DHS has proposed these amendments at 8 CFR 103.7(d). 8 CFR 103.7(d) describes fees related to immigration enforcement, including but not limited to fees assessed and collected by the Department of Justice (DOJ), U.S. Customs and Border Protection (CBP), U.S. Citizenship and Immigration Services (USCIS), and ICE. Therefore, DHS is proposing to amend this section of the CFR to add this statutorily required fee and allow for the continued application of this fee in subsequent fiscal years, with annual adjustments for inflation as authorized by statute.
Executive Orders 12866 (Regulatory Planning and Review) and 13563 (Improving Regulation and Regulatory Review) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 14192 (Unleashing Prosperity Through Deregulation) directs agencies to significantly reduce the private expenditures required to comply with Federal regulations and provides that “any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least 10 prior regulations.”
The Office of Management and Budget (OMB) has designated this rule a “significant regulatory action” as defined under section 3(f)(1) of E.O. 12866 because its annual effects on the economy exceed $100 million annually. Accordingly, the rule has been reviewed by OMB.
This rule is not an Executive Order 14192 regulatory action because it is being issued with respect to an immigration-related function of the United States. The rule's primary direct purpose is to implement or interpret the immigration laws of the United States (as described in INA sec. 101(a)(17), 8 U.S.C. 1101(a)(17)) or any other function performed by the U.S. Federal Government with respect to aliens.
DHS proposes raising the fee for aliens who have been ordered removed in absentia and subsequently arrested by ICE from $5,130 to $18,000, which serves as a partial reimbursement for the total cost of arresting such an alien. This increase is due to the significant costs that ICE incurs for the arrest of aliens ordered removed in absentia. In FY 2024, ICE incurred an average of $18,042 per alien (in 2026 dollars), a significant cost and use of crucial immigration resources that could have been applied to other immigration enforcement priorities.
ICE has reviewed the data on the cost of ICE immigration enforcement actions and determined that the partial reimbursement fee of $5,000 is too low to sufficiently reimburse ICE for the cost of arresting an alien who has been ordered removed in absentia.
In addition to the actual cost of arresting an alien, ICE also incurs a variety of indirect and overhead costs, including, but not limited to, training, vehicles, and support staff. These costs are inseparable from the cost of the arrest of an alien, just as the arrest of an alien is inseparable from that alien's removal. The proposed fee increase, from $5,130 to $18,000, serves as a partial reimbursement to DHS for the significant enforcement expenses incurred, which have risen due to a surge in in absentia removal orders. This proposed rule aims to protect the integrity of immigration enforcement, discourage noncompliance with removal orders, and alleviate the strain on ICE's essential and limited resources.
The proposed rule would impact aliens who are ordered removed in absentia and subsequently arrested by ICE. To identify the impacted population, DHS reviewed data from the Office of Homeland Security Statistics on the number of aliens ordered removed in absentia and how many arrests of this population are made each year by ICE. Table 1 shows the number of removal orders issued in absentia between fiscal years 2016 and 2025 from EOIR.
The total number of in absentia removal orders issued each year represents a maximum estimate of the affected population, as an alien having been issued an in absentia removal order is only the first of two conditions required for the fee to be applied. Some aliens issued removal orders in absentia may depart the country voluntarily, evade arrest, or have their in absentia removal order rescinded prior to ICE arrest. To further analyze the affected population, DHS reviewed arrest data from ICE Enforcement and Removal Operations (ERO) as shown in Table 2. In fiscal year 2025, there were 23,670 arrests of aliens with removal orders issued in absentia.
DHS faces challenges forecasting the affected population because of data quality issues and several other factors impacting population size. The Covid-19 pandemic appears to have dramatically lowered the number of removal orders issued and arrests made in 2021 affecting what would be a trendline in the future without a pandemic. The announcement of the fee will likely change the behavior of the affected alien population. Aliens may be more likely to appear in immigration court, decreasing the number of removal orders issued in absentia. Additionally, aliens issued removal orders in absentia are more likely to leave the country on their own accord than risk the prospect of arrest and a fee. Significant funding from HR-1 for immigration enforcement, including the hiring of 10,000 ICE officers, will likely lead to more arrests being made. As a result of these countervailing forces, DHS presumes the number of arrests will remain at the same levels as FY 2025, 23,670 for FY 2026 and FY 2027.
Transfer payments are monetary payments from one group to another that do not affect the total resources available to society. Transfers such as insurance payments, fees, direct subsidies, and indirect subsidies can have significant efficiency effects in addition to distributional effects and are not included in the estimates of the benefits and costs of a regulation. Transfers are analyzed in this proposed rule because the proposed fee is a transfer from the affected alien population to ICE and the U.S. Treasury.
DHS assumes there will be 23,670 arrests in FY 2026 and 2027. The maximum possible amount of transfers then would be equal to the number of arrests (23,670) times the fee ($18,000) resulting in $426,060,000 transferred annually. The net transfer resulting from this rule would be equal to the number of arrests (23,670) multiplied by the change in fee ($18,000−$5,130 = $12,870). DHS found the net transfers resulting from the rule to range between $15,231,645 and $304,632,900 with a midpoint estimate of $159,932,273.
ICE began issuing this fee once the fee became effective on September 8, 2025. Since then, DHS has experienced uncertainty in estimating collection rates due to the short time frame this fee has been in effect and the current operational realities. The current operational pace has introduced a specific challenge in the fee collection process, as the removal of aliens is not being postponed due to unpaid fees. Because of these factors, DHS anticipates that the collection of this fee and its impacts may not be realized until aliens seek future admission to the United States. For example, aliens who were previously removed due to an in absentia removal order, and have outstanding fees, may seek lawful admission to the United States or an immigration benefit at a later point. In addition to considering prior unlawful presence, the prior removal order, and the prior failure to appear for proceedings,
To address the uncertainty regarding collection rates, DHS has modeled high, midpoint, and low collection rate estimates. DHS assumes a 100 percent collection rate as an upper bound estimate of the dollar amount of transfers from aliens to ICE and the U.S. Treasury to assess the maximum potential impact on the alien population. DHS also modeled a low estimate, assuming a 5 percent collection rate and the midpoint of the two other estimates at 52.5 percent. DHS uses the midpoint estimate as the primary estimate in Table 4.
The proposed fee would serve as a partial reimbursement for the lifecycle costs incurred by DHS from the arrest of aliens ordered removed in absentia. This reimbursement will allow DHS to apply its limited immigration resources to other immigration enforcement priorities.
The proposed fee would likely result in more aliens attending court appearances which may extend legal proceedings and require additional resources. Additionally, DHS recognizes that a fee of $18,000 could be costly for aliens to pay, but as explained above, this fee amount is justified by Congress's intent to provide ICE with partial reimbursement of the total IEL costs of arresting aliens ordered removed in absentia.
DHS considered the alternative of the fee remaining at $5,130 and increasing the fee to amounts less than $18,000. These alternatives were deemed unacceptable as such amounts would not result in actual and meaningful partial reimbursements for the total IEL costs incurred by ICE during the arrest of an alien ordered removed in absentia.
DHS also considered the alternative of increasing the fee to $36,000 to account for the fact that 50 percent of the fee is deposited into the U.S. Treasury General Fund. A fee of $36,000 would ensure that ICE receives $18,000 in partial reimbursement from each fee it assesses and collects, which is closer to the actual IEL costs compared to 50 percent of an $18,000 fee. However, after reviewing the limited legislative history of HR-1
Table 4 presents the accounting statement as required by Circular A-4 for the total impacts of the rule. The proposed rule would result in annualized net transfers of $304,632,900 (discounted at 3 percent and 7 percent) from aliens to ICE and the U.S. Treasury for FY 2026 and FY 2027.
DHS has reviewed this proposed regulation in accordance with the Regulatory Flexibility Act of 1980 (RFA) (5 U.S.C. 601-612), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121, tit. II, 110 Stat. 847, and has determined that this rule would not have a significant economic impact on a substantial number of small entities. The rule would not regulate “small entities” as the term is defined in 5 U.S.C. 601(6). The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000 people.
By codifying the 8 U.S.C. 1814 fee into regulations, this proposed rule would increase transfers to the government. The fee at 8 U.S.C. 1814 is paid by individuals who are not, for purposes of the RFA, within the definition of small entities established by 5 U.S.C. 601(6). While it is possible that some aliens may pay the fee through a representative, ultimately the alien is responsible for the fee, not the representative. Therefore, DHS certifies this proposed rulemaking would not have a significant economic impact on a substantial number of small entities.
The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, Public Law 104-121, 110 Stat. 847, 858-59, 5 U.S.C. 601
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector in any one year of $100 million or more in 1995 dollars, updated annually for inflation. That threshold is currently approximately $213 million in 2026 dollars based on the CPI-U.
All Departments are required to submit to OMB for review and approval any reporting or recordkeeping requirements inherent in a rule under the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13, 109 Stat. 163 (codified at 44 U.S.C. 3501
This proposed rule does not propose a new “collection[s] of information” as that term is defined under the PRA. There would be no changes to the reporting burden for any existing collections of information.
This proposed rule would not have substantial direct effects on the states, on the relationship between the federal government and the states, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of E.O. 13132, DHS determined that this rule would not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.
This proposed rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of E.O. 12988,
DHS has analyzed this proposed rule under E.O. 13211,
DHS and its components analyze final actions to determine whether the National Environmental Policy Act of 1969 (“NEPA”), 42 U.S.C. 4321
NEPA allows Federal agencies to establish categories of actions (“categorical exclusions”) that experience has shown do not, individually or cumulatively, have a significant effect on the human environment and, therefore, do not require an environmental assessment (“EA”) or environmental impact statement (“EIS”). An agency is not required to prepare an EA or EIS for a proposed action “if the proposed agency action is excluded pursuant to one of the agency's categorical exclusions.” 42 U.S.C. 4336(a)(2). The Instruction Manual, Appendix A, lists the DHS Categorical Exclusions. For an action to be categorically excluded under DHS's Instruction Manual, the action must satisfy each of the following three conditions: (1) the entire action clearly fits within one or more of the categorical exclusions; (2) the action is not a piece of a larger action; and (3) no extraordinary circumstances exist that create the potential for a significant environmental effect.
This NPRM is categorically excluded from DHS's NEPA implementing procedures, because it satisfies all three relevant conditions. First, the Departments have determined that the NPRM fits clearly within categorical exclusions A3(a) of DHS's Instruction Manual, Appendix A, for the promulgation of rules of a “strictly administrative or procedural nature.” This NPRM increases a fee that was established and authorized by 8 U.S.C. 1814. The fee increase proposed in this NRPM does not result in a change in the fee's environmental impact. Second, this NPRM is a standalone rule and is not part of any larger action. Third, the Department is not aware of any extraordinary circumstances that would cause a significant environmental impact. Therefore, this NPRM is categorically excluded, and no further NEPA analysis or documentation is required.
This proposed rule does not have tribal implications under E.O. 13175,
This proposed rule would not cause the taking of private property or otherwise have taking implications under E.O. 12630,
E.O. 13045,
The National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the OMB, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impracticable. Voluntary consensus standards are technical standards (
DHS has determined that this proposed action would not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 2681).
Administrative practice and procedure, Authority delegations (Government agencies), Fees, Freedom of information, Immigration, Privacy, Reporting and recordkeeping requirements, Surety bonds
Accordingly, DHS proposes amending part 103 of chapter I, subchapter B of title 8 of the Code of Federal Regulations as follows:
5 U.S.C. 301, 552, 552a; 8 U.S.C. 1101, 1103, 1304, 1356, 1365b, 1372, 1814; 31 U.S.C. 9701; 48 U.S.C. 1806; Public Law 107-296, 116 Stat. 2135 (6 U.S.C. 1
(d) * * *
(17)
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for all Airbus SAS Model A330-841 and Model A330-941 airplanes. This proposed AD was prompted by reports of crack findings on the sloping rib. This proposed AD would require a repetitive inspection of the external surface of each sloping rib and each slat 1 inboard seal, and applicable corrective actions. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by July 6, 2026.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
• For European Union Aviation Safety Agency (EASA) material identified in this proposed AD, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
• You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
Bill Ashforth, Aviation Safety Engineer, FAA, 2200 South 216th St., Des Moines, WA 98198; phone: 206-231-3520; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments using a method listed under the
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI
EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2025-0179, dated August 13, 2025 (EASA AD 2025-0179) (also referred to as the MCAI), to correct an unsafe condition for all Airbus SAS Model A330-841 and Model A330-941 airplanes. The MCAI states that occurrences of crack findings on the sloping rib were reported. This condition, if not addressed, could affect the handling qualities of the airplane, which could result in reduced controllability of the airplane.
The FAA is proposing this AD to address the unsafe condition on these products.
You may examine the MCAI in the AD docket at
EASA AD 2025-0179 specifies procedures for repetitive general visual inspection of the external surface of each left-hand (LH) and right-hand (RH) sloping rib for damage (which includes cracking, dents, and corrosion) and each LH and RH slat 1 inboard seal for damaged and missing seals, and applicable corrective actions. Corrective actions include contacting Airbus for repair instructions and doing the repair, and replacing or reinstalling any damaged or missing seal. EASA AD 2025-0179 also specifies procedures for an alternative method of compliance for any repetitive inspection by accomplishing a certain inspection or replacement.
This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
These products have been approved by the civil aviation authority of another country and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, that authority has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop in other products of the same type design.
This proposed AD would require accomplishing the actions specified in EASA AD 2025-0179 described previously, except for any differences identified as exceptions in the regulatory text of this proposed AD.
In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some civil aviation authority (CAA) ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, the FAA proposes to incorporate EASA AD 2025-0179 by reference in the FAA final rule. This proposed AD would, therefore, require compliance with EASA AD 2025-0179 in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Using common terms that are the same as the heading of a particular section in EASA AD 2025-0179 does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in EASA AD 2025-0179. Material required by EASA AD 2025-0179 for compliance will be available at
The FAA estimates that this AD, if adopted as proposed, would affect 37 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
The FAA has received no definitive data on which to base the cost estimates for the on-condition repairs specified in this proposed AD.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by July 6, 2026.
None.
This AD applies to all Airbus SAS Model A330-841 and Model A330-941 airplanes.
Air Transport Association (ATA) of America Code 57, Wings.
This AD was prompted by reports of crack findings on the sloping rib. The FAA is issuing this AD to address cracking on the sloping rib. The unsafe condition, if not addressed, could affect the handling qualities of the airplane, which could result in reduced controllability of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Except as specified in paragraph (h) of this AD: Comply with all required actions and compliance times specified in, and in accordance with, European Union Aviation Safety Agency (EASA) AD 2025-0179, dated August 13, 2025 (EASA AD 2025-0179).
(1) Where EASA AD 2025-0179 refers to its effective date, this AD requires using the effective date of this AD.
(2) Where paragraph (2) of EASA AD 2025-0179 specifies “If any damage is found on a sloping rib, before next flight, contact Airbus for approved repair instructions and, within the compliance time specified therein, accomplish those instructions accordingly”, this AD requires replacing that text with “If any cracking is detected on a sloping rib during any inspection required by this AD, the cracking must be repaired before further flight using a method approved by the Manager, AIR-520, Continued Operational Safety Branch, FAA; or EASA; or Airbus SAS's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature. If any damage other than cracking is detected on a sloping rib during any inspection required by this AD, before next flight, contact Airbus for approved instructions and, within the compliance time identified therein, accomplish those instructions accordingly.”
(3) This AD does not adopt the “Remarks” section of EASA AD 2025-0179.
The following provisions also apply to this AD:
(1)
(2)
(3)
For more information about this AD, contact Bill Ashforth, Aviation Safety Engineer, FAA, 2200 South 216th St., Des Moines, WA 98198; phone: 206-231-3520; email:
(1) The Director of the Federal Register approved the incorporation by reference of the material listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this material as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) European Union Aviation Safety Agency (EASA) AD 2025-0179, dated August 13, 2025.
(ii) [Reserved]
(3) For EASA material identified in this AD, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
(4) You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
(5) You may view this material at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, visit
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for all Rolls-Royce Deutschland Ltd & Co KG (RRD) Model Trent7000-72 and Trent7000-72C engines. This proposed AD was prompted by reports of engine in-flight shut-downs (IFSDs) caused by the premature failure of certain parts. This proposed AD would prohibit the installation of certain lubrication/scavenge pumps unless certain
The FAA must receive comments on this NPRM by July 6, 2026.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
• For European Union Aviation Safety Agency (EASA) material identified in this AD, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; phone: +49 221 8999 000; email:
• You may view this material at the FAA, Operational Safety Branch, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call (817) 222-5110.
Barbara Caufield, Aviation Safety Engineer, FAA, 2200 South 216th Street, Des Moines, WA 98198; phone: (781) 238-7146; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments using a method listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Barbara Caufield, Aviation Safety Engineer, FAA, 2200 South 216th Street, Des Moines, WA 98198. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.
EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2024-0029, dated January 29, 2024 (EASA AD 2024-0029) (also referred to as the MCAI), to correct an unsafe condition on RRD Model Trent7000-72 and Trent7000-72C engines. The MCAI states that there have been reports of engine IFSDs prompted by low oil pressure indications. An investigation revealed that these events were caused by early-life failure of the internal eccentric ring/gerotor in certain affected lubrication/scavenge oil pumps due to eccentric contact between the ring and gerotor causing wear on the components. To address this potential unsafe condition, the manufacturer published service material that provides installation criteria for the affected oil pumps. This condition, if not corrected, could result in failure of the affected oil pump, and engine IFSD with consequent reduced control or loss of control of the airplane.
You may examine the MCAI in the AD docket at
The FAA reviewed EASA AD 2024-0029, which specifies installation criteria for affected oil pumps each time an affected part is installed or reinstalled on an engine. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
These products have been approved by the civil aviation authority (CAA) of another country and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, that authority has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would require accomplishing the actions specified in EASA AD 2024-0029, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD.
In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some CAA ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, EASA AD 2024-0029 is incorporated by reference in this AD. This AD requires compliance with EASA AD 2024-0029 in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this AD. Using common terms that are the same as the heading of a particular section in EASA AD 2024-0029 does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required
The FAA estimates that this AD, if adopted as proposed, would affect 98 engines, installed on airplanes of U.S. registry.
The FAA estimates the following costs to comply with this proposed AD:
The FAA estimates the following costs to do any necessary screening tests that would be required based on the results of the proposed installation criteria verification. The agency has no way of determining the number of engines that might need these screening tests:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by July 6, 2026.
None.
This AD applies to all Rolls-Royce Deutschland Ltd & Co KG Model Trent7000-72 and Trent7000-72C engines.
Joint Aircraft System Component (JASC) Code 7261, Turbine Engine Oil System.
This AD was prompted by reports of engine in-flight shut-downs (IFSDs) due to low oil pressure indications, which were caused by the early-life failure of the internal eccentric ring/gerotor. The FAA is issuing this AD to require certain installation criteria be met for affected oil pumps prior to installation or reinstallation on an engine. The unsafe condition, if not addressed, could result in failure of the affected oil pump, and engine IFSD with consequent reduced control or loss of control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Except as specified in paragraph (h) of this AD, perform all required actions within the compliance times specified in, and in accordance with, European Union Aviation Safety Agency (EASA) AD 2024-0029, dated January 29, 2024 (EASA AD 2024-0029).
(1) Where EASA AD 2024-0029 requires compliance from its effective date, this AD requires using the effective date of this AD.
(2) Where paragraph (1) of EASA AD 2024-0029 states “From the effective date of this AD, it is allowed to install an affected part on any engine, or an engine equipped with an affected part on any airplane, provided that, prior to installation, it is determined
(3) This AD does not adopt the “Remarks” paragraph of EASA AD 2024-0029.
The Manager, AIR-520 Continued Operational Safety Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager, AIR-520 Continued Operational Safety Branch, send it to the attention of the person identified in paragraph (j) of this AD and email to:
For more information about this AD, contact Barbara Caufield, Aviation Safety Engineer, FAA, 2200 South 216th Street, Des Moines, WA 98198; phone: (781) 238-7146; email:
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the material listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this material as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) European Union Aviation Safety Agency (EASA) AD 2024-0029, dated January 29, 2024.
(ii) [Reserved]
(3) For EASA material identified in this AD, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; phone: +49 221 8999 000; email:
(4) You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call (817) 222-5110.
(5) You may view this material at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, visit
Drug Enforcement Administration, Department of Justice.
Notice of proposed rulemaking.
The Drug Enforcement Administration (DEA) proposes to revise existing regulations relating to the management of quotas for schedule I and II controlled substances and the list I chemicals, ephedrine, pseudoephedrine, and phenylpropanolamine, to be utilized by DEA-registered manufacturers. This rule is being proposed to: restructure DEA's manufacturing and procurement quota regulations for more clarity and consistency; clarify which use-specific subcategories for quotas should be used for controlled substances that will be sold domestically and controlled substances that will be exported; and revise the applications for individual manufacturing and procurement quota. The changes are necessary to increase visibility into the controlled substance supply chain by providing DEA with more detailed information allowing the agency to react more precisely in preventing drug shortages; and to ensure that enough of the schedule I and II controlled substances and three list I chemicals can be manufactured to meet estimated scientific, medical, lawful export, and inventory needs. This rule also contains revisions to use gender neutral language and other non-substantive revisions.
Comments must be received by July 20, 2026. Commenters should be aware that the electronic Federal Docket Management System will not accept comments after 11:59 p.m. Eastern Time on the last day of the comment period.
Comments must be submitted in one of the following two ways (please choose only one of the ways listed):
• Electronically at
• You may mail written comments to the following address: Drug Enforcement Administration, Attn: DEA Federal Register Representative/DPW, 8701 Morrissette Drive, Springfield, Virginia 22152. Mailed comments must be received by the close of the comment period.
Do not include any personally identifiable information (such as name, address, or other contact information) or confidential business information that you do not want publicly disclosed. All comments are public records; they are publicly displayed exactly as received, and will not be deleted, modified, or redacted. Comments may be submitted anonymously.
Follow the search instructions on
Heather Achbach, Regulatory Drafting & Policy Section, Diversion Control Division, Drug Enforcement Administration; Telephone: (571) 776-3882.
Please note that all comments received in response to this docket are considered part of the public record. The Drug Enforcement Administration (DEA) will make all comments available for public inspection online at
Commenters submitting comments which include personal identifying information (PII), confidential, or proprietary business information that the commenter does not want made publicly available should submit two copies of the comment. One copy must be marked “CONTAINS CONFIDENTIAL INFORMATION” and should clearly identify all PII or business information the commenter does not want to be made publicly available, including any supplemental materials. DEA will review this copy, including the claimed PII and confidential business information, in its consideration of comments. The second copy should be marked “TO BE PUBLICLY POSTED” and must have all
For easy reference, an electronic copy of this document and supplemental information to this notice of proposed rulemaking are available at
DEA implements and enforces the Controlled Substances Act (CSA) which authorizes the Administrator of the DEA (by delegation from the Attorney General) to promulgate rules and regulations that the Administrator deems necessary and appropriate for the efficient execution of the Administrator's functions. 21 U.S.C. 871(b). The CSA also requires the Administrator to establish the aggregate production quota (APQ) for each basic class of controlled substance listed in schedules I and II and the assessment of annual needs (AAN) for three list I chemicals annually. The APQ and AAN represent the total quantity to be manufactured in the United States (U.S.) each calendar year to provide for the estimated medical, scientific, research, and industrial needs of the U.S., the lawful export requirements, and the establishment and maintenance of reserve stocks. 21 U.S.C. 826(a). The Administrator also is required to fix manufacturing quotas for registered manufacturers of the same controlled substances. In fixing those quotas, the Administrator is required to consider, among other things, the manufacturer's current rate of disposal, the manufacturer's production cycle, and the manufacturer's inventory position. 21 U.S.C. 826(c).
In the August 2023 final rule “Management of Quotas for Controlled Substances and List I Chemicals,”
While the CSA requires DEA to consider production cycles in establishing quotas, DEA currently has limited insight into manufacturers' intended production calendars for the quota year. At present, DEA obtains production cycle information irregularly from individual manufacturers. Furthermore, while manufacturers currently note on quota applications the amounts requested for domestic products as opposed to products for export, DEA's quota subcategories do not formally account for that distinction. The absence of a formalized process for collecting this data makes it more difficult for DEA to assess midyear whether quotas remain adequate to meet estimated domestic needs. This restricts DEA's ability to help prevent drug shortages by adjusting quota allotments based on manufacturers' production timelines. Thus, this rule aims to implement two of the four steps to increase manufacturer transparency and receive better data regarding drug production cycles mentioned by the Agency in a November 2023 letter to manufacturers: (1) requiring drug manufacturers to submit their anticipated production timelines for medications to DEA as a part of their application for quota; and (2) specifying whether a manufacturer's quota allotment is for the production of products for the domestic market or export market.
Through this Notice of Proposed Rulemaking (NPRM), DEA proposes to require additional information to be submitted during the application process for individual manufacturing quotas and procurement quotas for controlled substances in schedules I and II and the list I chemicals. In addition, DEA proposes to revise existing subcategories and add additional subcategories to both the regulations and the relevant quota applications. These changes would assist DEA in complying with its statutory responsibilities in reviewing applications for individual manufacturing quota and procurement quota. The provisions being proposed in this rule will help DEA anticipate shortages in drugs containing these controlled substances or manufactured using these listed chemicals and will reduce related potential burdens on patients by allowing DEA to adjust quotas more quickly. The structural changes will provide a cohesive organization of the quota sections of the regulations.
DEA formalized use-specific subcategories for individual manufacturing and procurement quotas. These subcategories allow DEA to avoid “double counting” legitimate needs as the material moves from registrant to registrant, preventing an artificial increase in the APQ.
• Quota for Commercial Sale;
• Quota for Transfer;
• Quota for Product Development;
• Quota for Replacement; and
• Quota for Packaging/Repackaging and Labeling/Relabeling.
The use-specific subcategories help DEA achieve its key objective for the quota system which is to track how much of a schedule I or II controlled substance or list I chemical is available, ensuring that there is sufficient material to provide for the estimated medical, scientific, research, and industrial needs of the U.S., for lawful export requirements, and for the establishment and maintenance of reserve stocks. DEA now seeks to clearly delineate the amount of quota needed to meet domestic needs and the amount needed for lawful exports.
An individual manufacturing quota is the maximum quantity of a schedule I or II controlled substance or list I chemical a bulk manufacturer is authorized to manufacture in a calendar year.
A procurement quota, in contrast, establishes the maximum quantity of a schedule I or II controlled substance or
In establishing manufacturing and procurement quotas, DEA is required by the CSA to consider the manufacturer's production cycle. 21 U.S.C. 826(c). Historically and to date, DEA has received little data about such production cycles. Even as manufacturing practices have evolved, supply chains have become significantly more efficient, and manufacturers have improved the data they use to create sales forecasts, DEA has continued to receive the same types of data about manufacturers' production cycles that DEA received in decades past. The lack of more detailed information has made it difficult for DEA to have accurate and timely visibility into the controlled substance supply chain, preventing the agency from reacting with greater precision in preventing drug shortages. To increase manufacturing transparency and receive better data to inform DEA's quota determinations under the CSA, DEA now seeks to require drug manufacturers to submit additional information about their anticipated production cycles at the time of application for quota. To achieve this, DEA is proposing to require bulk manufacturers to provide certain information when applying for individual manufacturing quota under proposed 21 CFR 1303.22(c) for controlled substances and proposed 21 CFR 1315.22(c) for listed chemicals. DEA likewise is proposing to require non-bulk manufacturers to submit additional information when applying for procurement quota under proposed 21 CFR 1303.14(b) for controlled substances and proposed 21 CFR 1315.32(b) for listed chemicals.
Under DEA's “Management of Quota for Controlled Substances and List I Chemicals” rulemaking,
For controlled substances, DEA proposes to discuss the process of applying for and granting procurement quotas in three sections: 21 CFR 1303.13, 1303.14, and 1303.15. To do so, DEA would move existing text. This reconfiguration of text would add significant clarity and would more closely mirror the organization of the regulations relating to individual manufacturing quotas for controlled substances. DEA would move the current 21 CFR 1303.13, relating to adjustments of APQs, to the reserved 21 CFR 1303.12; move the current Procurement Quotas heading to before 1303.13; move the current 1303.15(a) to 1303.13; move 1303.15(b) and (e) to a new section 1303.14 and break the current 1303.15(b) into six paragraphs; move the current 1303.15(c) and (f) up to 1303.15(a) and (b), respectively; move the current 1303.15(d) to 21 CFR 1303.17; and move the current text of 1303.17 relating to abandonment of procurement quotas to a new 21 CFR 1303.18.
For the listed chemicals, DEA proposes creating five new sections for the procurement quota process. DEA would be moving paragraphs (f), (h), and (i) of 21 CFR 1315.32 to 21 CFR 1315.35(a), (b), and (c), respectively. In addition, DEA proposes to move 1315.32(g) to 21 CFR 1315.37. Last for the restructuring, DEA would move the current 21 CFR 1315.37 to 21 CFR 1315.38. DEA also would make appropriate changes to the cross-references within these sections. These changes would allow for the listed chemical procurement quota regulations to align with, as best as possible, the procurement quota regulations for controlled substances.
DEA is also proposing changes to current practices by requiring DEA Form 250 and DEA Form 189 to be completed in the online Quota Management System. DEA is proposing corresponding changes to eliminate cross-references to the Table of DEA Mailing Addresses in 21 CFR 1321.01 that currently appear (for example in 21 CFR 1303.15, 1303.22, 1315.22, and 1315.32) and to eliminate the option of obtaining copies of the application forms from DEA (as currently provided in 21 CFR 1303.22, 1315.22, and 1315.32).
In moving the current text of 21 CFR 1303.15(a) to the new 1303.13, DEA is proposing a minor non-substantive change to more clearly reflect that DEA's reference to the manufacturing of “dosage forms or other substances” is merely an illustrative example of the types of manufacturing that may be undertaken with, and that require, a procurement quota. Procurement quota has always been required for the acquisition of any schedule I or II controlled substance for the purpose of any manufacturing after its initial bulk manufacture.
DEA proposes to require non-bulk manufacturers to provide additional information when applying for procurement quota under 21 CFR 1303.14(b) for controlled substances and under 21 CFR 1315.32(b) for listed chemicals. Manufacturers would be required to provide this additional information on the DEA Form 250. The specified information would give DEA more insight into the manufacturer's production cycle for that controlled substance. As noted above, the CSA requires DEA to consider the manufacturer's production cycle in establishing quotas. This information will provide DEA with a better understanding of when the finished drug product will be estimated to enter the domestic market or be exported. This will better allow DEA to assess midyear whether quotas remain adequate to meet the estimated needs in the United States and for lawful export requirements. That is, with additional insight into the products that have yet to reach the market—information that DEA currently lacks—DEA can more comprehensively consider whether quotas need to be increased in order to meet the CSA's directives. DEA also can utilize this information to help prevent relevant drug shortages by adjusting quota allotments based on manufacturers' timelines.
For each basic class or chemical (as applicable) desired to be procured or used, the application would be required to include the following information:
1. The length of time it will take to receive the controlled substance or active pharmaceutical ingredient (API) after receiving the quota letter from DEA pursuant to 21 CFR 1303.15 or 1315.35;
2. The supplier of the basic class or chemical, if obtaining it from another registrant;
3. The length of time it will take to begin the production cycle after receiving the controlled substance or chemical;
4. The estimated length of time it will take to perform the production cycle; and
5. The length of time it will take for the applicant to ship the finished goods to the next registrant in the supply chain after production is complete.
DEA similarly is proposing to require additional information from bulk manufacturers when applying for individual manufacturing quota under 21 CFR 1303.22(c) for the relevant controlled substances and under 21 CFR 1315.22(c) for the relevant listed chemicals. The requested additional information would be added to DEA Form 189 and would require the manufacturer to be more transparent with DEA regarding the production timeline. The information gained would provide insight into the processing timeline in much the same way as it would for procurement quota. Obtaining this information at the time of application allows DEA to more quickly respond to any problems that arise during the year and helps prevent possible drug shortages due to lack of available API.
For each basic class or chemical (as applicable), the application would be required to include the following information:
1. The desired individual manufacturing quota;
2. The length of time it will take to start the production cycle after receiving the quota letter from DEA pursuant to 21 CFR 1303.21 or 1315.21;
3. The length of time it will take to perform the production cycle;
4. The length of time it will take for the applicant to ship the finished goods to the next registrant in the supply chain after production is complete; and
5. Any additional factors which the applicant finds relevant to the fixing of the individual manufacturing quota, including the trend of (and recent changes in) the applicant's and the national rates of net disposal, the applicant's production cycle and current inventory position, the economic and physical availability of raw materials for use in manufacturing and for inventory purposes, yield and stability problems, potential disruptions to production (including possible labor strikes) and recent unforeseen emergencies such as floods and fires.
As noted above, DEA currently has limited insight into how much quota will be utilized to manufacture API and finished products for export as opposed to domestic use. Currently, the use-specific subcategories of quota for commercial sale, product development, and packaging/repackaging and labeling/relabeling do not distinguish between quota utilized in the production of API or finished drug products to be consumed domestically versus quota utilized in the production of items to be exported.
To obtain this important data, DEA proposes to bifurcate these subcategories. For example, “Quota for Commercial Sale” would be separated into two further subcategories: “Quota for Domestic Commercial Sale,” which would apply to quota used to manufacture API or finished drug products that will remain in the U.S., and “Quota for Commercial Manufacturing for Export,” which would apply to quota used to manufacture API or finished drug products for lawful export purposes. Similarly, “Product Development” would be separated further into “Quota for Domestic Product Development,” which would apply to quota used in the development of finished drug products that will remain in the U.S., and “Quota for Product Development for Export,” which would apply to quota that will be used for the development of finished drug products for lawful export purposes. Finally, “Packaging/Repackaging and Labeling/Relabeling” would be separated further into “Quota for Packaging/Labeling Domestic,” which would apply to quota used in the packaging/repackaging and labeling/relabeling of API and/or finished products that will remain in the U.S., and “Quota for Packaging/Labeling for Export,” which would apply to quota that will be used in the packaging/repackaging and labeling/relabeling of API and/or finished products for lawful export purposes.
Specifically, DEA would add two further subcategories to the current subcategory Quota for Commercial Sale in 21 CFR 1303.04(a) and 1315.07(a). The first further subcategory would be (1) “Quota for Domestic Commercial Sale” to specify that this subcategory applies when the quota being requested will be used for controlled substances (or list I chemicals) that will be manufactured and distributed within the U.S. The “Quota for Commercial Manufacturing for Export” category would be subcategory (2) and would be used by a manufacturer if they will export the item that they are manufacturing. That subcategory also would be used if the manufacturer knows the item being manufactured will be exported after some later manufacturing step performed by another registered manufacturer. If the bulk and dosage form manufacturers do not know whether the finished product will be exported, but the manufacturer who is assigned to package/repackage or label/relabel the finished product does know, the last manufacturer in the supply chain will apply for “Quota for Packaging/Labeling for Export” quota to reflect this information. However, registrants would be required to provide correct and detailed information about the next destination of the product.
Similarly, DEA would add two further subcategories to the current subcategory Quota for Product Development in 21 CFR 1303.04(c) and 1315.07(c). The first further subcategory would be (1) “Quota for Domestic Product Development” for quota used in the development of finished drug products that will remain in the U.S. The “Quota for Product Development for Export” category would be subcategory (2) and would apply to quota that will be used for the development of finished drug products where the approval and distribution will occur outside the U.S. DEA likewise would add two further subcategories to the current subcategory “Quota for packaging/repackaging and labeling/relabeling” in 21 CFR 1303.04(e) and 1315.07(e). The first further subcategory would be (1) “Quota for Packaging/Labeling Domestic” and the “Quota for Packaging/Labeling for Export” category would be subcategory (2) in the section.
These further subcategories would allow DEA to better track material that is being utilized under the current “Quota for Commercial Sale,” “Quota for Product Development,” and “Quota for Packaging/Repackaging and Labeling/Relabeling” subcategories. This would allow DEA to better execute its responsibility to establish quotas to account for both the needs within the United States and for lawful export requirements. This additional data also would allow DEA to better anticipate how much of a drug is available for
DEA has decided that the existing subcategories for quotas for transfer and replacement do not need to be revised to distinguish their application between domestic use and export use. The amount necessary for domestic use and export use is already accounted for in the quota for commercial sale applications; therefore, bifurcating these two categories would be redundant.
The domestic/export distinction would be applicable for controlled substances and list I chemicals requiring a quota for manufacturing purposes as defined in the CSA. While DEA is currently focused on the manufacturing of drug products containing schedule II controlled substances, for example medications used in the treatment of pain or attention deficit/hyperactivity disorder as these medications are important in healthcare, they need to be manufactured and consumed responsibly. The aggregate production quotas for controlled substances are affected by both legitimate domestic medical needs and exportation to meet global requirements and therefore the submission of separate detailed data will enhance DEA's visibility into production and the supply chain.
In proposing these changes, DEA also proposes minor clarifying changes in 21 CFR 1303.04(a) and (c) and 1315.07(c). Those sections currently refer specifically to approval of drug products by the U.S. Food and Drug Administration (FDA). DEA understands that manufacturers in the U.S. may manufacture products that are authorized for marketing in countries other than the U.S. To avoid any potential confusion, DEA is proposing to expand the existing references to FDA approval to also include approval or authorization by equivalent foreign regulatory bodies. DEA views this as merely clarifying DEA's intent without effecting any substantive change. Similarly, DEA proposes to revise the text of 21 CFR 1303.04(a) and 1315.07(a), relating to quota for commercial sale, to reflect that both apply to bulk API that is produced by a registrant, in addition to API that is acquired by a registrant. These changes clarify the manner in which the text applies to individual manufacturing quotas. As these provisions have always applied to individual manufacturing quotas, DEA does not view these changes as substantive.
DEA has determined that this rulemaking is not a “significant regulatory action” under section 3(f) of Executive Order (E.O.) 12866, Regulatory Planning and Review. Accordingly, this proposed rule has not been submitted to the Office of Management and Budget (OMB) for review. This proposed rule has been drafted and reviewed in accordance with E.O. 12866, “Regulatory Planning and Review,” section 1(b), Principles of Regulation; E.O. 13563, “Improving Regulation and Regulatory Review,” section 1(b), General Principles of Regulation; and E.O. 14192, “Unleashing Prosperity Through Deregulation.”
DEA proposes to revise existing regulations that manage the quotas for controlled substances and the list I chemicals, ephedrine, pseudoephedrine, and phenylpropanolamine, held by DEA-registered manufacturers. This rule is being proposed to: restructure DEA's procurement quota regulations for more clarity and consistency, clarify which subcategories for quotas should be used for controlled substances that will be sold domestically and controlled substances that will be exported, and revise the applications for individual manufacturing and procurement quota. The changes are necessary to ensure clarity, provide DEA with adequate information about manufacturing to help the agency foresee and prevent both shortages and oversupply, and to ensure enough of the schedule I and II controlled substances and three list I chemicals can be manufactured to meet estimated scientific, medical, lawful export, and inventory needs. Additionally, DEA proposes to codify current practices by requiring DEA Form 250 and DEA Form 189 to be completed online. This NPRM has been determined not to be a significant regulatory action under E.O. 12866 with an estimated annual cost of $50,496. This rule is not subject to E.O. 14192 because it is not a significant regulatory action under section 3(f) of E.O. 12866.
This NPRM contains three types of changes. First, DEA proposes to require non-bulk manufacturers to submit additional information online on the DEA Form 250 to give DEA more insight into their procurement process and their production cycle. Second, DEA proposes to require bulk manufacturers to submit additional information online on the DEA Form 189 to give DEA more insight into their production cycle. Third, DEA proposes to revise the use-specific subcategories for procurement and individual manufacturing quotas for controlled substances and listed chemicals to help in the administration of these quotas. DEA would add new further subcategories to DEA's regulations in 21 CFR 1303.04 for controlled substances and 21 CFR 1315.07 for listed chemicals. The revised subcategories would allow for the continued tracking of material being moved at all stages of manufacturing so that DEA is able to anticipate how much of a drug is available in the U.S. DEA has examined the benefits and costs of each provision of this proposed rule and are as follows.
This NPRM would expand upon previously implemented regulations by requiring additional information from registrants applying for individual manufacturing quotas and procurement quotas for controlled substances in schedules I and II and the list I chemicals. In addition, DEA would revise the subcategories in its regulations and the relevant applications. The changes proposed in this NPRM would enable DEA to receive better data on the manufacturer's anticipated drug production cycles at the time the manufacturer applies for individual manufacturing quota or procurement quota. The provisions being proposed in this notice of proposed rulemaking will help DEA anticipate shortages and reduce burdens on patients by allowing DEA to adjust more quickly. Finally, codifying the current practice for completing DEA Form 250 and DEA Form 189 online provides clarity and alignment between practice and regulations.
As discussed above, DEA proposes to require additional information from non-bulk manufacturers when applying for procurement quota under 21 CFR 1303.14(b) for controlled substances and under 21 CFR 1315.32(b) for listed chemicals. The information would be added to DEA Form 250 and would require the manufacturer to give DEA more insight into their production cycle timeline, including the timeline for procurement of materials. Based on the estimated time to complete the current application, DEA estimates an additional 20 minutes will be needed to provide the additional information and minimal additional time to complete the new use-specific subcategory for procurement quotas.
As discussed above, DEA is proposing to require additional information from bulk manufacturers when applying for individual manufacturing quota under 21 CFR 1303.22(c) for controlled substances and under 21 CFR 1315.22(c) for listed chemicals. For each basic class or chemical (as applicable) desired to be synthesized or extracted, the applicant would be required to include the additional information. The information would be added to DEA Form 189 and would require the manufacturer to be more transparent with DEA regarding the production timeline. DEA estimates an additional 20 minutes will be needed to provide the additional information and minimal additional time to complete the new use-specific subcategory for individual manufacturing quotas. The current practices are used as baseline for the purposes of this analysis.
DEA estimates, under the proposed rule, there is a cost associated with the estimated additional 20 minutes to complete DEA Form 189 and 250.
The U.S. Bureau of Labor Statistics (BLS) data indicates that the median hourly wage for a purchasing manager is $63.15.
DEA estimated the number of affected persons based on the total number of DEA Forms 189 and 250 received in 2022. In 2022, DEA received 875 DEA Forms 189 from 40 bulk manufacturers and 2,514 DEA Forms 250 from 291 non-bulk manufacturers and six bulk manufacturers. Table 1 summarizes the total number of affected registrants.
Applying the estimated cost of $29.81 per application to the 875 and 2,514 (6 from bulk and 2,508 from non-bulk manufacturers) Forms 189 and 250 received, DEA estimates the total cost of this proposed rule is $101,026: $26,084 (875 × $29.81) for DEA Form 189 by bulk manufacturers, $179 (6 × $29.81) for DEA Form 250 by bulk manufacturers, and $74,763 (2,508 × $29.81) for DEA Form 250 by non-bulk manufacturers. Table 2 summarizes the total cost burden of both DEA Form 189 and 250 applications.
As described earlier, the proposed change to require DEA Form 250 and DEA Form 180 to be completed online codifies current practices. All such forms are already submitted to DEA online and meet the requirements of the proposed change. Therefore, there is no cost associated with this proposed change.
The provisions of this regulation meet the applicable standards set forth in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to eliminate ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.
This rulemaking does not have federalism implications warranting the application of E.O. 13132. The rule does not have substantial direct effects on the States, on the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government.
This rule does not have tribal implications warranting the application of E.O. 13175. It does not have direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
The proposed rule does not reduce competition, entrepreneurship, and innovation.
Executive Order 14294 specifies that all notices of proposed rulemaking (NPRMs) and final rules published in the
The Administrator, in accordance with the Regulatory Flexibility Act (RFA), has reviewed this proposed rule and by approving it, certifies that it will not, if promulgated, have a significant economic impact on a substantial number of small entities.
The RFA requires agencies to analyze options for regulatory relief of small entities unless it can certify that this rule will not have a significant impact on a substantial number of small entities. For the purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. DEA evaluated the impact of this rule on small entities, and discussions of its findings are below.
DEA is proposing to expand upon existing regulations by requiring additional information be provided during the application process for individual manufacturing quotas and procurement quotas for controlled substances in schedules I and II and the three list I chemicals. In addition, DEA proposes to revise its subcategories in its regulations and the relevant applications for controlled substance and list I chemical quotas. Finally, DEA is proposing to require DEA Form 250 and DEA Form 189 to be completed online. The proposed change codifies current practices as all such forms are already submitted to DEA online and meet the requirements of the proposed change. Therefore, there is no cost associated with this proposed change.
The provisions being proposed in this rule will help DEA execute its functions as defined in 21 U.S.C. 826, will help DEA anticipate and prevent shortages, and will help reduce burdens on patients by allowing DEA to adjust more quickly. The structural changes will provide a cohesive organization of the quota sections.
This proposed rule would, if implemented, affect bulk manufacturers and non-bulk manufacturers who apply for individual manufacturing quota and procurement quota. Based on a review of the North American Industry Classification System (NAICS) codes for the best representation of affected industries, DEA estimates that the proposed rule primarily affects the following industries:
• 325411—Medicinal and Botanical Manufacturing.
• 325412—Pharmaceutical preparation Manufacturing.
Small Business Administration (SBA) size standards for 325411—Medicinal and Botanical Manufacturing, 325412—Pharmaceutical preparation Manufacturing are 1,000 and 1,250 employees, respectively.
The U.S. Census Bureau's Statistics of U.S. Businesses (SUSB) is an annual series that provides economic data by enterprise size and industry. SUSB data contains the number of firms for various employment or revenue size ranges for each industry. Specifically, SUSB data contains the number of firms by size ranges for each NAICS code. For the purposes of this analysis, the term “firm” as defined in the SUSB data is used interchangeably with “entity” as defined in the RFA. Comparing the size ranges to the SBA size standards, DEA estimated the number of entities in each affected industry, number of small entities in each affected industry, and number of affected small entities. For NAICS code 325411, there are 667 firms of which 635 are small firms. For NAICS code 325412, there are 1,154 firms, of which 1,080 are small firms.
DEA calculated the percent of firms that are small firms for each industry, then applied these percentages to the number of affected entities to estimate the number of affected small entities. Based on the analysis above 95.2 percent (635/667) and 93.6 percent (1,080/1,154) of entities in 325411 and 325412 are small firms, respectively. Based on this analysis, DEA estimates 308 small entities would be affected by this proposed rule, 38 (40 × 0.952) in the
In summary, this proposed rule is estimated to affect 38 of 635 small entities in the 325411—Medicinal and Botanical Manufacturing industry and 272 of 1,080 small entities in the 325412—Pharmaceutical preparation manufacturing industry. Therefore, this proposed rule will not affect a substantial number of small entities. Table 4 summarizes the number of firms, small firms, and affected small entities for each affected NAICS code.
DEA also estimated the impact on small entities by comparing the average cost of the rule to annual receipts on a `per entity' basis. The estimated average cost of this proposed rule is $652 ($26,084/40) and $257 ($74,763/291) for entities in 325411 and 325412, respectively. Table 5 summarizes the average cost per entity.
From 2017 SUSB data, the most recent year with receipts data, the average annual receipts are lowest for the smallest of small entities, with “<5 employees,” with average annual revenues of $689,768 and $1,183,789 per entity, respectively.
As discussed above, this proposed rule would affect 38 of 635 small entities in NAICS 325411 and 272 of 1,080 entities in NAICS 325412. Additionally, the economic impact of the proposed rule, as compared to estimated annual receipts, is 0.095 and 0.022 percent for NAICS 325411 and 325412, respectively. Therefore, DEA estimates the proposed rule will not have a significant economic impact on a substantial number of small entities.
In accordance with the Unfunded Mandates Reform Act (UMRA) of 1995, 2 U.S.C. 1501
This proposed rule would modify existing collections of information under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3521. DEA has identified the following collections of information related to this proposed rule: 1117-006 and 1117-0008. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a valid OMB control number. Copies of existing information collections approved by OMB may be
1.
DEA proposes modifying this application by requiring bulk manufacturers to submit additional information on the form when applying for individual manufacturing quota for controlled substances and listed chemicals. While the current form is online, DEA is proposing to eliminate the paper form making the form online only. The applicant would also be required to provide the following:
(1) the desired individual manufacturing quota;
(2) the length of time it will take to start the production cycle after receiving the quota letter from DEA pursuant to 21 CFR 1303.21 and 1315.21;
(3) the length of time it will take to complete the production cycle;
(4) the length of time it will take for the applicant to ship the finished goods to the next registrant in the supply chain after production is complete; and
(5) any additional factors which the applicant finds relevant to the fixing of his individual manufacturing quota, including the trend of (and recent changes in) his and the national rates of net disposal, his production cycle and current inventory position, the economic and physical availability of raw materials for use in manufacturing and for inventory purposes, yield and stability problems, potential disruptions to production (including possible labor strikes) and recent unforeseen emergencies such as floods and fires.
DEA is also proposing to bifurcate the current subcategories found on the form for “Quota for Commercial Sale,” “Quota for Product Development,” and “Quota for packaging/repackaging and labeling/relabeling.” DEA proposes that “Quota for Commercial Sale” would be separated into two further subcategories: “Quota for Domestic Commercial Sale,” for quota to be used for controlled substances and ephedrine, pseudoephedrine, and phenylpropanolamine products and bulk API acquired by outsourcing facilities, manufacturers, etc. that will be manufactured and distributed within the U.S., and “Quota for Commercial Manufacturing for Export,” which would apply to quota used to manufacture controlled substances and ephedrine, pseudoephedrine, and phenylpropanolamine products and bulk API acquired by outsourcing facilities, manufacturers, etc. for lawful export purposes. Similarly, “Product Development” would be separated further into “Quota for Domestic Product Development,” and “Quota for Product Development for Export.” Finally, “Quota for packaging/repackaging and labeling/relabeling” would be separated further into “Quota for Packaging/Labeling Domestic,” and “Quota for Packaging/Labeling for Export.” Like the other subcategories, these subcategories would be requested on the existing online form.
DEA estimates the following number of respondents and burden associated with this collection of information:
•
•
•
•
•
2.
DEA proposes modifying this application by requiring non-bulk manufacturers to submit additional information on the form when applying for procurement quota for controlled substances and listed chemicals. While the current form is online, DEA is proposing to eliminate the paper form making the form online only. Applicants would be required to also provide the following for each basic class or chemical (as applicable) desired to be procured or used for the next calendar year:
(1) the length of time it will take to receive the controlled substance or active pharmaceutical ingredient after receiving the quota letter from DEA pursuant to 21 CFR 1303.15 and 1315.35;
(2) the supplier of the basic class or chemical, if obtaining it from another registrant;
(3) the length of time it will take to start production after receiving the controlled substance or chemical;
(4) the estimated length of time it will take to perform the production cycle; and
(5) the length of time it will take for the applicant to ship the finished goods to the next registrant in the supply chain after production is complete.
DEA is also proposing to bifurcate the current subcategories found on the form for “Quota for Commercial Sale,” “Quota for Product Development,” and “Quota for packaging/repackaging and labeling/relabeling.” DEA proposes that “Quota for Commercial Sale” would be separated into two further subcategories: “Quota for Domestic Commercial Sale,” for quota to be used for controlled substances and ephedrine, pseudoephedrine, and phenylpropanolamine that will be manufactured and distributed within the U.S., and “Quota for Commercial Manufacturing for Export,” which would apply to quota used to manufacture controlled substances and the three listed chemicals for lawful export purposes. Similarly, “Product Development” would be separated further into “Quota for Domestic Product Development,” and “Quota for Product Development for Export.” Finally, “Quota for packaging/repackaging and labeling/relabeling” would be separated further into “Quota for Packaging/Labeling Domestic,” and “Quota for Packaging/Labeling for Export.” Like the other subcategories, these subcategories would be requested on the existing online form.
DEA estimates the following number of respondents and burden associated with this collection of information:
•
•
•
•
•
Written comments and suggestions from the public and affected entities concerning the proposed collections of information are encouraged. Under the PRA, the DEA is required to provide a notice regarding the proposed collections of information in the
• Whether the proposed collection of information is necessary for the proper performance of the functions of the DEA, including whether the information will have practical utility.
• The accuracy of the DEA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used.
• Recommendations to enhance the quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the burden of the collection of information
All comments concerning collections of information under the Paperwork Reduction Act must be submitted to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for DOJ, Washington, DC 20503. Please state that your comments refer to RIN 1117-AB86/Docket No. DEA-1278. All comments must be submitted to OMB on or before July 20, 2026. The final rule will respond to any OMB or public comments on the information collection requirements contained in this proposed rule.
If you need a copy of the proposed information collection instrument(s) with instructions or additional information, please contact the Regulatory Drafting and Policy Support Section (DPW), Diversion Control Division, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone: (571) 776-3882.
Administrative practice and procedure, Drug traffic control.
Administrative practice and procedure, Chemicals, Drug traffic control, Imports, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, DEA proposes to amend 21 CFR parts 1303 and 1315 as follows:
21 U.S.C. 821, 826, 871(b).
(a)
(1) Quota for domestic commercial sale. This quota category is used to capture bulk API produced by a bulk manufacturer or moving from a bulk manufacturer to other registered manufacturers to support commercial manufacturing for the domestic market. This type of quota may only be used to support commercial manufacturing efforts for the domestic market and may not be used to support the manufacture of products for export or other manufacturing efforts.
(2) Quota for commercial manufacturing for export. This is a quota for the amount of bulk active pharmaceutical ingredients initially produced by the bulk manufacturer or acquired by a registrant that will be manufactured domestically to be exported to another country. This type of quota may only be used to support commercial manufacturing for export activities for the foreign market and may not be used to support the manufacture of products for domestic use or other manufacturing efforts. Such quotas are limited to the purpose of exportation.
(c)
(1) Quota for domestic product development. This will apply to quota used toward the development of finished drug products that will remain in the U.S.
(2) Quota for product development for export. This will apply to quota that will be used toward the development of finished drug products where the approval and distribution will occur outside the U.S.
(e)
(1) Quota for packaging/labeling domestic. This would apply to quota used in the packaging/repackaging and labeling/relabeling of API and/or finished products that will remain in the U.S.
(2) Quota for packaging/labeling for export. This would apply to quota that will be used in the packaging/repackaging and labeling/relabeling of API and/or finished products for lawful export purposes.
In order to determine the estimated needs for, and to insure an adequate and uninterrupted supply of, basic classes of controlled substances listed in schedules I and II (except raw opium being imported by the registrant pursuant to an import permit) the Administrator shall issue procurement quotas authorizing persons to procure and use quantities of each basic class of such substances for the purpose of manufacturing, including manufacturing such class into dosage forms or into other substances. The Administrator may establish a procurement quota in terms of pharmaceutical dosage-forms prepared from or containing the schedule I or II controlled substance, if they determine it will assist in avoiding the
(a) Any person who is registered to manufacture controlled substances listed in any schedule and who desires to use during the next calendar year any basic class of controlled substances listed in schedule I or II (except raw opium being imported by the registrant pursuant to an import permit) for purposes of manufacturing, shall apply in the online Quota Management System on DEA Form 250 for procurement quota and shall state separately for each subcategory, as defined in 21 CFR 1303.04, each quantity of such basic class desired. A separate application must be made for each basic class desired to be procured or used, by filing an application electronically in the online Quota Management System. DEA Form 250 shall be filed on or before April 1 of the year preceding the calendar year for which the procurement quota is being applied.
(b) For each basic class desired to be procured or used for the next calendar year, the applicant must provide the following information:
(1) each purpose for which the basic class is desired, the quantity desired for that purpose during the next calendar year, and the quantities used and estimated to be used, if any, for that purpose during the current and preceding 2 calendar years;
(2) whether the applicant intends to manufacture the basic class themselves or obtain it from another registrant and, if obtaining it from another registrant, the supplier's name;
(3) the length of time it will take to receive the controlled substance after receiving the quota letter from DEA pursuant to § 1303.15;
(4) the length of time it will take to start production after receiving the controlled substance;
(5) the estimated length of time that it will take to perform their portion of the production cycle; and
(6) for quota categories other than product development and transfer, the length of time it will take for the applicant to ship the finished goods to the next registrant in the supply chain after the current registrant's production activity is complete.
(c) If the purpose is to manufacture the basic class into dosage form, the applicant shall state the official name, common or usual name, chemical name, or brand name of that form.
(d) If the purpose is to manufacture another substance, the applicant shall state the official name, common or usual name, chemical name, or brand name of the substance, and, if a controlled substance listed in any schedule, the schedule number and Administration Controlled Substances Code Number, as set forth in part 1308 of this chapter, of the substance.
(e) If the purpose is to manufacture another basic class of controlled substance listed in schedule I or II, the applicant shall also state the quantity of the other basic class which the applicant has applied to manufacture pursuant to § 1303.22 and the quantity of the first basic class necessary to manufacture a specified unit of the second basic class.
(f) The Administrator may require additional information from an applicant which, in the Administrator's judgment, may be helpful in detecting or preventing diversion, including customer identities and amounts of the controlled substance sold to each customer.
(g) The following persons need not obtain a procurement quota:
(1) Any person who is registered to manufacture a basic class of controlled substance listed in schedule I or II and who uses all of the quantity they manufactured in the manufacture of a substance not controlled under the Act;
(2) Any person who is registered or authorized to conduct chemical analysis with controlled substances (for controlled substances to be used in such analysis only); and
(3) Any person who is registered to conduct research with a basic class of controlled substance listed in schedule I or II and who is authorized to manufacture a quantity of such class pursuant to § 1301.13 of this chapter.
(a) The Administrator shall, on or before December 1 of the year preceding the calendar year during which the quota shall be effective, issue to each qualified applicant a procurement quota authorizing them to procure and use:
(1) All quantities of such class necessary to manufacture all quantities of other basic classes of controlled substances listed in Schedules I and II which the applicant is authorized to manufacture pursuant to § 1303.23; and
(2) Such other quantities of such class as the applicant has applied to procure and use and are consistent with their past use, estimated needs, and the total quantity of such class that will be produced.
(b) Any person to whom a procurement quota has been issued, authorizing that person to procure and use a quantity of a basic class of controlled substances listed in schedules I or II during the current calendar year, shall, at or before the time of giving an order to another manufacturer requiring the distribution of a quantity of such basic class, certify in writing to such other registrant that the quantity of such basic class ordered does not exceed the person's unused and available procurement quota of such basic class for the current calendar year. The written certification shall be executed by the same individual who signed the DEA Form 222 transmitting the order. A registrant shall not fill an order from persons required to apply for a procurement quota under § 1303.14 unless the order is accompanied by a certification as required under this section. The certification required by this section shall contain the following: The date of the certification; the name and address of the registrant to whom the certification is directed; a reference to the number of the DEA Form 222 to which the certification applies; the name of the person giving the order to which the certification applies; the name of the basic class specified in the DEA Form 222 to which the certification applies; the appropriate schedule within which is listed the basic class specified in the DEA Form 222 to which the certification applies; a statement that the quantity (expressed in grams) of the basic class specified in the DEA Form 222 to which the certification applies does not exceed the unused and available procurement quota of such basic class, issued to the person giving the order, for the current calendar year; and the signature of the individual who signed the DEA Form 222 to which the certification applies.
Any person to whom a procurement quota has been issued may at any time request an adjustment in the quota by applying to the Administrator with a statement showing the need for the adjustment. Such application shall be filed electronically with the UN Reporting and Quota Section, Diversion Control Division, Drug Enforcement Administration in the online Quota Management System. The Administrator shall increase or decrease the procurement quota of such person if and to the extent that the Administrator finds, after considering the factors
Any manufacturer assigned a procurement quota for any basic class of controlled substance listed in schedule I or II pursuant to § 1303.15 may at any time abandon their right to manufacture all or any part of such quota by filing a notice of such abandonment with the UN Reporting and Quota Section, Diversion Control Division, Drug Enforcement Administration in the online Quota Management System. The Administrator may, in their discretion, allocate such amount among the other manufacturers in proportion to their respective quotas.
(a) Any person who is registered to manufacture any basic class of controlled substance listed in schedule I or II and who desires to manufacture a quantity of such class shall apply in the online Quota Management System on DEA Form 189 for a manufacturing quota and shall state separately for each subcategory, as defined in § 1303.04, each quantity of such class desired. A separate application must be made for each basic class desired to be manufactured by filing an application electronically in the online Quota Management System. DEA Form 189 shall be filed on or before May 1 of the year preceding the calendar year for which the manufacturing quota is being applied.
(b) For the basic class desired to be manufactured the applicant must provide the following information for each of the current and preceding 2 calendar years:
(1) The authorized individual manufacturing quota, if any;
(2) The actual or estimated quantity manufactured;
(3) The actual or estimated net disposal;
(4) The actual or estimated inventory allowance pursuant to § 1303.24; and
(5) The actual or estimated inventory as of December 31.
(c) For each basic class desired to be manufactured for the next calendar year, the applicant must provide the following information:
(1) the desired individual manufacturing quota;
(2) the length of time it will take to start production after receiving the quota letter from DEA pursuant to § 1303.21;
(3) the length of time it will take to perform their portion of the production cycle;
(4) the length of time it will take for the applicant to ship the finished goods to the next registrant in the supply chain after the current registrant's production activity is complete; and
(5) Any additional factors which the applicant finds relevant to the fixing of the individual manufacturing quota, including any of the following:
(i) The trend of (and recent changes in) the applicant's and the national rates of net disposal.
(ii) The applicant's production cycle and current inventory position.
(iii) The economic and physical availability of raw materials for use in manufacturing and for inventory purposes.
(iv) Yield and stability problems.
(v) Potential disruptions to production (including possible labor strikes).
(vi) Recent unforeseen emergencies such as floods and fires.
21 U.S.C. 802, 821, 826, 871(b), 952.
(a)
(1)
(2)
(c)
(1)
(2)
(e)
(1)
(2)
(a) Any person who is registered to manufacture ephedrine, pseudoephedrine, or phenylpropanolamine and who desires to manufacture a quantity of the chemical must apply in the online Quota Management System on DEA Form 189 for a manufacturing quota for the quantity of the chemical desired and shall state separately for each subcategory, as defined in § 1315.07, each quantity of such chemical. A separate application must be made for each chemical desired to be manufactured by filing an application electronically in the online Quota Management System. DEA Form 189 must be filed on or before April 1 of the year preceding the calendar year for which the manufacturing quota is being applied.
(b) For each chemical desired to be manufactured the applicant must provide the following information for each of the current and preceding 2 calendar years,:
(1) The authorized individual manufacturing quota, if any;
(2) The actual or estimated quantity manufactured;
(3) The actual or estimated net disposal;
(4) The actual or estimated inventory allowance pursuant to § 1315.24; and
(5) The actual or estimated inventory as of December 31.
(c) For each chemical desired to be manufactured for the next calendar year, the applicant must provide the following information:
(1) the desired individual manufacturing quota;
(2) the length of time that it will take to start production after receiving the quota letter from DEA pursuant to § 1315.21;
(3) the length of time it will take to perform their portion of the production cycle;
(4) the length of time it will take for the applicant to ship the finished goods to the next registrant in the supply chain after the current registrant's production activity is complete; and
(5) Any additional factors that the applicant finds relevant to the fixing of the individual manufacturing quota, including any of the following:
(i) The trend of (and recent changes in) the applicant's and the national rates of net disposal.
(ii) The applicant's production cycle and current inventory position.
(iii) The economic and physical availability of raw materials for use in manufacturing and for inventory purposes.
(iv) Yield and stability problems.
(v) Potential disruptions to production (including possible labor strikes).
(vi) Recent unforeseen emergencies such as floods and fires.
(a) Any person who is registered to manufacture ephedrine, pseudoephedrine, or phenylpropanolamine, or whose requirement of registration is waived pursuant to § 1309.24 of this chapter, and who desires to use during the next calendar year any ephedrine, pseudoephedrine, or phenylpropanolamine for purposes of manufacturing (including repackaging or relabeling), must apply in the online Quota Management System on DEA Form 250 for a procurement quota for the chemical and shall state separately for each subcategory, as defined in 21 CFR 1315.07, each quantity of such chemical. A separate application must be made for each chemical desired to be procured or used by filing an application electronically in the online Quota Management System. DEA Form 250 shall be filed on or before April 1 of the year preceding the calendar year for which the procurement quota is being applied.
(b) The applicant must state separately all of the following:
(1) Each purpose for which the chemical is desired;
(2) The quantity desired for each purpose during the next calendar year;
(3) The length of time applicant expects it will take to receive the active pharmaceutical ingredient after receiving the quota letter from DEA pursuant to § 1315.35;
(4) The supplier of the chemical;
(5) The length of time it will take to start production after receiving the chemical;
(6) The estimated length of time it will take to perform their portion of the production cycle;
(7) The length of time it will take for the applicant to ship the finished goods to the next registrant in the supply chain after the current registrant's production activity is complete;
(8) The quantities used and estimated to be used, if any, for that purpose during the current and preceding 2 calendar years;
(9) If the purpose is to manufacture the chemical into dosage form, the applicant must state the official name, common or usual name, chemical name, or brand name of that form. If the dosage form produced is a controlled substance listed in any schedule, the applicant must also state the schedule number and National Drug Code Number, of the substance; and
(10) If the purpose is to manufacture another chemical, the applicant must state the official name, common or usual name, chemical name, or brand name of the substance and the DEA Chemical Code Number, as set forth in part 1310 of this chapter.
(a) The Administrator shall, on or before December 1 of the year preceding the calendar year during which the quota shall be effective, issue to each qualified applicant a procurement quota authorizing them to procure and use:
(1) All quantities of the chemical necessary to manufacture products that the applicant is authorized to manufacture pursuant to § 1315.23; and
(2) Such other quantities of the chemical as the applicant has applied to procure and use and are consistent with their past use, estimated needs, and the total quantity of the chemical that will be produced.
(b) Any person to whom a procurement quota has been issued, authorizing that person to procure and use a quantity of ephedrine, pseudoephedrine, or phenylpropanolamine during the current calendar year, must, at or before
(c) The certification required by paragraph (b) of this section must contain all of the following:
(1) The date of the certification.
(2) The name and address of the registrant to whom the certification is directed.
(3) A reference to the purchase order number to which the certification applies.
(4) The name of the person giving the order to which the certification applies.
(5) The name of the chemical to which the certification applies.
(6) A statement that the quantity (expressed in grams) of the chemical to which the certification applies does not exceed the unused and available procurement quota of the chemical, issued to the person giving the order, for the current calendar year.
(7) The signature of the individual authorized to sign a certification as provided in paragraph (b) of this section.
Any person to whom a procurement quota has been issued may at any time request an adjustment in the quota by applying to the Administrator with a statement showing the need for the adjustment. The application must be filed with the UN Reporting & Quota Section, Diversion Control Division, Drug Enforcement Administration in the online Quota Management System. The Administrator shall increase or decrease the procurement quota of the person if and to the extent that the Administrator finds, after considering the factors enumerated in § 1315.35(a) and any occurrences since the issuance of the procurement quota, that the need justifies an adjustment.
Any manufacturer assigned a procurement quota for a chemical pursuant to § 1315.35 may at any time abandon their right to manufacture all or any part of such quota by filing a notice of such abandonment with the UN Reporting and Quota Section, Diversion Control Division, Drug Enforcement Administration in the online Quota Management System. The Administrator may, in their discretion, allocate the amount among the other manufacturers in proportion to their respective quotas.
This document of the Drug Enforcement Administration was signed on May 15, 2026, by DEA Administrator Terrance C. Cole. That document with the original signature and date is maintained by DEA. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DEA Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of DEA. This administrative process in no way alters the legal effect of this document upon publication in the
Department of Veterans Affairs.
Proposed rule.
The Department of Veterans Affairs (VA) proposes to amend its regulation that governs disclosure of information to and querying of State prescription drug monitoring programs (PDMPs). The rule would clarify certain statutory definitions, including the definition of delegate and licensed health care provider. In doing so, VA would eliminate confusion as to who VA would allow to query the PDMP and would better protect these individuals from any possible adverse action by a State, as long as they are acting within the scope of their VA employment or, if applicable, scope of their contract. The rule would also mandate that VA disclose the specified information to State PDMPs to the extent necessary to prevent misuse and diversion of prescription medicines. This proposed rule would promote safe and effective prescribing of controlled substances to covered individuals and patients who receive VA health care.
Comments must be received on or before July 20, 2026.
You may submit comments through
Friedhelm Sandbrink, MD, National Program Director for Pain Management, Opioid Safety and Prescription Drug Monitoring Programs, Veterans Health Administration, (202) 745-8145.
Broadly speaking, this rulemaking would codify in a single regulation and amend 38 Code of Federal Regulation (CFR) 1.515 to include: (1) the general rules and definitions applicable to all activities described in this section; (2) the rules on mandated disclosures of information to PDMPs required by 38 United States Code (U.S.C.) 5701(l) to the extent necessary to prevent misuse and diversion of prescription medicines; and (3) the rules governing querying of State PDMPs under 38 U.S.C. 1730B for covered patients to support the safe and effective prescribing of controlled substances.
These amendments to section 1.515 are driven by relatively recent laws. First, VA proposes to amend section 1.515 to accord with the amendment made to Subsection 5701(l) by section 914 of Title IX, of Public Law 114-198, July 22, 2016, the Comprehensive Addiction and Recovery Act of 2016. Section 901 of Title IX establishes the short title for this Act to be the Jason Simcakoski Memorial and Promise Act
It is also worth noting that records of the identity, diagnosis, prognosis, or treatment of any patient or subject that are maintained in connection with the performance of any program or activity (including education, training, treatment, rehabilitation, or research) relating to drug abuse, alcoholism or alcohol abuse, infection with human immunodeficiency virus, or sickle cell anemia, which is carried out by or for VA, are protected as confidential by 38 U.S.C. 7332, except as provided in subsections (e) and (f) of that section, and (section 5701 to the contrary notwithstanding) such records may be disclosed only for the purposes and under the circumstances expressly authorized under subsection (b) of section 7332. Section 7332(b)(2)(G) authorizes VA to disclose such records, without the consent of the respective patient or subject, to a State PDMP to the extent necessary to prevent misuse and diversion of prescription medicines. While disclosure of information authorized pursuant to subsection 7332(b) is usually permissive, the mandatory nature of subsection 5701(l) requires the disclosure of information that falls within the purview of both subsections.
Section 2 of Public Law 115-86, enacted on November 21, 2017, also amended subsection 5701(l) by replacing the reference to a veteran or the dependent of a veteran with the term covered individual. It further added a definition of covered individual to mean an individual who is dispensed medication prescribed by an employee of the Department or by a non-Department provider authorized to prescribe such medication by the Department. This rulemaking would make these conforming amendments.
In addition to these two laws, section 134 of public law 115-182, June 6, 2018, the John S. McCain III, Daniel K. Akaka, and Samuel R. Johnson VA Maintaining Internal Systems and Strengthening Integrated Outside Networks Act of 2018 (VA MISSION Act of 2018) added new section 1730B to title 38, United States Code. It deems, by operation of law, VA licensed health care providers and delegates to be authorized recipients or users (herein referred to as authorized users) for purposes of querying and receiving data from State-based PDMPs, or any individual State or regional prescription drug monitoring program, to support the safe and effective prescribing of controlled substances to covered patients.
Under section 1730B, the grant of authorized user status is irrespective of any State law, rule, or regulation that would otherwise restrict such access, thereby reducing current impediments to VA access. Without this status, States could deny VA licensed health care providers and their delegates access to their PDMPs based upon individual state-imposed requirements, which may include the need for licensure in the State, even though VA health care providers are not restricted to practice only in the State of their licensure. Section 1730B surmounts this operational hurdle by deeming VA licensed health care providers and their delegates to be authorized users with a right of access, notwithstanding State imposed requirements that would otherwise apply. States are, in turn, obligated to grant access to VA licensed health care providers and their delegates.
Section 1730B also provides that no State may deny or revoke the license, registration, or certification of a licensed health care provider or delegate who otherwise meets that State's qualifications for holding the license, registration, or certification on the basis that the provider or delegate queried or received data or attempted to query or receive data for a covered patient from the national network of State-based PDMPs, or any individual State or regional PDMP, under this section.
Further, although VA licensed health care providers and delegates deemed to be authorized users for covered patients are not subject to an individual State's PDMP requirements insofar as the State requirements conflict with section 1730B, Federal standards still apply to VA's use of State's PDMPs. VA licensed health care providers and delegates would be required by subsection 1730B(a)(2)(A) to query PDMPs, including an individual State or regional prescription drug monitoring program, in accordance with applicable VA regulations and policies. This is in line with VA's previously implemented regulation, 38 CFR 17.419(b)(ii), which states that if a State law or license, registration, certification, or other requirement prevents or unduly interferes with a health care professional's practice within the scope of their VA employment, the health care professional is required to abide by their Federal duties even when a State law, registration, certification, or other requirement conflicts or unduly interferes with such standard.
Subsection 1730B(a)(2)(A) also serves as a check on potential misuse or abuse by providers or delegates of State PDMPs, as VA is only authorized, by 38 CFR 17.38(b), to provide care that is in accord with generally accepted standards of medical practice and needed to promote, preserve, or restore health, and VHA regulations and policies align with these requirements. Therefore, licensed health care practitioners and their delegates could only rely on their authorized user status under section 1730B to check PDMPs when consistent with the standards of section 17.38(b).
Lastly, although section 1730B(b)(2) excludes individuals receiving palliative care or enrolled in hospice care from the definition of covered patients, this authority does not prevent VA licensed health care providers and delegates from accessing State PDMPs for such patients, so long as States allow VA licensed health care providers and delegates access. VA licensed health care providers or delegates would continue to perform this clinical activity for this population, when reasonably possible, as they have previous to the enactment of 1730B on VA's general treatment authority to provide necessary medical care to veterans enrolled in VA's health care system (38 U.S.C. 1710, 1705).
To reflect the inclusion of additional authorities and consequent expanded scope, the short title of 38 CFR 1.515 would be amended to read: Disclosure of Information to and Querying of State Prescription Drug Monitoring Programs.
The proposed rulemaking would renumber current paragraph (b) as new paragraph (a) and provide the definitions applicable to proposed section 1.515.
VA would define the term controlled substance to retain the same definition as found in current section 1.515(b), with no edits.
VA proposes to use the term covered individual to apply to disclosures of information to PDMPs. Covered individual would be assigned the same definition as in 38 U.S.C. 5701(l)(2), upon which the term's usage in this proposed rulemaking is based, as discussed above in the Background/Statutory Authority section.
Covered patient would be clarified with respect to both prongs of its definition in section 1730B. Subsection 1730(b)(1) partially defines a covered patient as one who receives a prescription for a controlled substance. VA proposes to broadly interpret the phrase receives a prescription because, in clinical practice, the prescribing of a medication may refer to the ordering of a medication or to a recommendation for the use of a medication. Before a licensed health care provider orders or recommends the use of any medication, the provider is required by applicable clinical standards of care to determine, based on the exercise of clinical judgment, that the subject medication would not be unsafe or contraindicated for the patient or duplicative of other medications that have been prescribed for the patient outside the VA health care system. Data needed to inform these decisions is particularly important when clinically evaluating the need or dosage of any controlled substance. VA, therefore, proposes to define covered patient to mean a patient who is prescribed, is dispensed, or receives a prescription for a controlled substance, or is being considered for a prescription of a controlled substance when their care satisfies the additional restrictions in 38 U.S.C. 1730B(b)(2). VA does not believe that Congress intended an interpretation in which a patient would not be covered until after a licensed health care provider had already decided to initiate a prescription and such prescription had already been dispensed to the patient, as that would defeat the statute's purpose of facilitating safe and effective prescribing of controlled substances. See, for example, 164 Cong. Rec. H4014-01 (May 16, 2018) (Rep. Dunn stating that “my legislative initiative increases transparency in opioid prescribing at the VA by allowing doctors to identify high users of controlled drugs who are therefore at risk for addiction. My language in the VA MISSION Act instructs the VA to do what most private doctors already do: connect to the prescription drug monitoring databases nationwide so that no one slips through the cracks.”)
Section 1730B(c)(2) defines the term delegate to mean a person or automated system accessing the national network of State-based prescription monitoring programs, or any individual State or regional prescription drug monitoring program, at the direction or under the supervision of a licensed health care provider. VA sometimes relies on licensed independent prescribers to deliver care to our patients pursuant to contractual and other arrangements. Because these individuals are not VA employees, they do not meet the definition of licensed health care providers under section 1730B(c)(3). However, they act at the direction of licensed health care providers, such as the VA medical facility chief of staff. Veterans should benefit from receiving the same high standard of care regardless if delivered by a VA employee or these contracted providers, who practice health care throughout our system. This requires their access to all vital data and systems, including PDMPs. VA provides specific care through contract that VA does not include in the definition of contract providers because such care is neither at the direction nor under the supervision of a VA licensed health care provider in the same manner as the individuals discussed above. Examples include, but are not limited to, 38 U.S.C. 1703 (Veterans Community Care Program), 1720J, and Public Law 118-42 Div. A, Sec. 234 (In vitro fertilization and other fertility counseling and treatment for covered veterans and their spouse).
VA proposes to clarify the statutory definition of the term delegate to mean any of the following, when acting at the direction or under the supervision of a licensed VA health care provider: a VA clinical associate; a VA administrative associate who is involved in technical troubleshooting, quality control, or quality improvement activities; scientific investigators who are investigating issues to support the safe and effective prescribing of controlled substances, and to support the assessment for safe and effective care delivery to covered patients; an individual who conducts research with respect to administering, using in teaching, or chemical analysis a controlled substance in the course of their research as a VA employee; an individual who is contracted by VA to provide health care, and is practicing or researching under their contractual agreement with VA (other than individuals operating pursuant to VA's authority in 38 U.S.C. 1703); or a VA automated system accessing the national network of State-based prescription monitoring programs, or any individual State or regional prescription drug monitoring program. This approach would allow contractors who are licensed independent health care providers to access PDMPs at the direction of a VA licensed health care provider, such as the VA medical facility chief of staff, and to conduct queries in the same manner as their equivalent VA employee counterparts.
VA would further clarify that the term clinical associate includes, but is not limited to, registered nurses, licensed practical nurses, health care technicians, licensed social workers, researchers, and psychologists. VA would also clarify that the term administrative associate includes, but is not limited to, administrative officers, program analysts, and technical support specialists. Lastly, VA would clarify that an automated system accessing a PDMP includes, but is not limited to, automatic queries triggered by the system (such as scheduled appointments, check-ins to emergency rooms) and queries to generate a report on a cohort of covered patients who receive controlled substances (including, but not limited to, patients who are enrolled into a specific primary care panel or other clinical care teams or clinics). VA believes that these clarifications would eliminate confusion as to who VA considers a delegate and thus allows for better protection of the associate from any possible adverse action by a State, provided the delegate is acting within the scope of their VA employment or, if applicable, the scope of their contract.
Section 1730B(c)(3) defines the term licensed health care provider to mean a health care provider employed by VA who is licensed, certified, or registered within any State to fill or prescribe medications within the scope of his or her practice as a VA employee. VA would clarify in proposed paragraph (a) that a licensed health care provider means (a) a physician, dentist, nurse practitioner, physician assistant, or pharmacist employed by VA; or (b) another person licensed, registered, certified, or otherwise permitted by the United States or the jurisdiction in which the individual practices to prescribe or fill a controlled substance in the course of their practice as a VA employee.
Prescription Drug Monitoring Program in proposed paragraph (a) would mean a State or regional prescription drug monitoring program, including a program approved by the Secretary of Health and Human Services under section 399O of the Public Health Service Act (42 U.S.C. 280g-3), or an interconnected nation-wide system that facilitates the transfer of State prescription drug monitoring program data across State lines. This definition is consistent with the inclusive authority in section 1730B(a) that extends the protection and requirements of that subsection to licensed health care providers and delegates accessing State or regional PDMPs. This definition is also inclusive of the current definition of the term PDMP in section 1.515(b), which is based upon the statutory authority set forth in 38 U.S.C. 5701(l)(1) and 7332(b)(2)(G) to disclose information to such PDMPs. While section 5701(l)(1), section 7332(b)(2)(G), and the current definition of PDMP in section 1.515(b) explicitly mention State controlled substance monitoring programs, their references to section 399O of the Public Health Service Act (42 U.S.C. 280g-3), which specifically provides for support of States and localities in establishing, implementing, maintaining, and improving PDMPs, reasonably implies that local (regional) PDMPs are also intended to be included in the statutory authority to disclose information to State PDMPs. This interpretation is also supported by the definition of the term State in section 1730B(c)(5), which specifically includes a political subdivision of a State. It would not make sense from either a policy or practical standpoint that Congress intended for VA to request and receive information from regional PDMPs, but not to share such information with those same PDMPs. Similarly, whereas statutory authority exists to request and receive information from, and to disclose information to, State and regional authorities individually, it logically follows that such authority would also exist to disclose information to a national network made up of those programs.
The proposed rulemaking would combine current paragraphs (a) and (c) and renumber them as new proposed paragraph (b). It would also replace in the new proposed subsection (b) the permissive nature of disclosures to State PDMPs with a requirement (replacing may with will) that VA disclose the specified information to the extent necessary to prevent misuse and diversion of prescription medicines, reflecting the statutory amendments to subsection 5701(l)(1) described in the Background/Statutory Authority section above.
Proposed paragraph (c) would incorporate the authority granted by and the requirements contained in section 1730B. Proposed paragraph (c)(1) would restate 38 U.S.C. 1730B(a)(1) in declaring that any licensed health care provider or delegate is considered an authorized recipient or user for the purpose of querying and receiving data from PDMPs to support the safe and effective prescribing of controlled substances to covered patients.
Proposed paragraph (c)(2) would clarify what VA means by querying and receiving data. VA would state that querying and receiving data includes, but is not limited to, viewing, accessing, processing, and storing the data according to VA's need in a format that is most appropriate to providing the highest quality clinical care. Different States have implemented different PDMP protocols for their usual transactions with non-Federal entities, and VA wants to be inclusive of all accessing methods. It is worth noting that VA does not manipulate or change the data in the PDMP database. VA would access the PDMP databases to obtain the information on the covered patient. Currently, VA receives a report with the PDMP query results and then documents the relevant data into its own records per applicable Federal law and regulations.
Proposed paragraph (c)(3) would state how a licensed health care provider or delegate would access PDMPs and how the data contained within PDMPs would be used by VA. VA wants to ensure that VA is as inclusive as possible with respect to accessing PDMPs for clinical care. Some methods of accessing PDMPs are more automated and technologically driven, as opposed to a clinician manually performing a query. As a result, VA wants to ensure that these options are within the scope of VA's regulations. VA would state that a licensed health care provider or delegate can access PDMPs through manual access to the individual PDMPs or through integrated automated data processing systems, which include, but are not limited to, health information exchanges, electronic health records systems, and e-prescribing. Health information exchanges allow health care providers a secure and sharable access to a patient's health care information electronically. Electronic health records are a real-time digital version of a patient's paper chart that make information available instantly and securely to authorized users. E-prescribing allows a health care provider the ability to electronically generate and send a prescription order directly to a pharmacy. VA would also state that VA information technology systems may have interoperability with other data systems and integrated automated queries. These data systems can be incorporated into clinical workflow to improve the use of such data and analytics by licensed health care providers and delegates. VA would clarify that interoperability means: (a) the integration of PDMP data within electronic health records and health information technology infrastructure; or (b) linking of a PDMP to other data systems within the State, including, but not limited to, the State's Medicare and Medicaid program, workers' compensation programs, medical examiners or coroners, and any other relevant State, national, or regional database. VA would also clarify that clinical workflow includes the physical and mental tasks that are performed in the clinical setting to deliver care to patients. Improvements to workflow can be achieved through the integration of automated queries for PDMPs' data and analytics into health information technologies such as electronic health record systems, health information exchanges, or pharmacy dispensing software systems.
VA understands that certain States generally do not allow delegates to access PDMPs in the same manner as licensed health care providers when such access is across State lines; however, section 1730B(a)(2)(B) expressly authorizes VA delegates to access PDMPs in the same manner as licensed health care providers. For this reason, VA would state in proposed paragraph (c)(4) that delegates would receive the same access to shared data to the same extent as licensed health care providers, including when PDMP data sharing is across State lines. This paragraph would ensure the protection granted to a delegate by section 1730B from any adverse action by a State when such delegate is accessing the PDMP while acting within the scope of the delegate's VA employment or contractual agreement with VA, if applicable.
Proposed paragraph (d) would expressly state the intended preemptive effect of section 1.515, to ensure that conflicting State and local laws, rules, regulations, and requirements related to VA licensed health care providers or
Executive Order 13132 provides the requirements for preemption of State law when it is expressly stated in rulemaking. While 38 U.S.C. 1730B expressly preempts State law, VA's regulations based on section 1730B must be restricted to the minimum level necessary to achieve the objectives of the statute pursuant to the regulations that are promulgated. In this rulemaking, VA licensed health care providers and their delegates may access State PDMPs irrespective of any State law, rule, or regulation that would otherwise restrict such access only to the extent such State laws interfere with the ability of VA health care providers and delegates to access the State PDMPs. Therefore, VA believes that the rulemaking is restricted to the minimum level necessary to achieve the objectives of the Federal statute.
The Executive Order also requires an agency that is publishing a regulation that preempts State law to follow certain procedures. These procedures include: that the agency consult with, to the extent practicable, the appropriate State and local officials in an effort to avoid conflicts between State law and federally protected interests; and that the agency provide all affected State and local officials notice and an opportunity for appropriate participation in the proceedings.
Because this proposed rule would preempt certain State laws, VA consulted with State officials in compliance with sections 4(d) and (e), as well as section 6(c) of Executive Order 13132. VA sent a letter to State PDMP administrators on September 14, 2020. The letter generally advised the States of VA's proposed approach to implementing 38 U.S.C. 1730B, drawing special attention to: allowing for an exception to the restriction on the definition of covered patients concerning patients receiving palliative care or enrolled in hospice care when clinically appropriate and necessary to ensure the safety of the patient or to prevent unlawful diversion (an approach that VA has now reconsidered in favor of pursuing a legislative fix); including a broad interpretation of receives a prescription within the definition of covered patients; and including local, municipal, and regional PDMPs within the definition of State PDMPs. VA received two comments in response to this letter.
The Commonwealth of Virginia Department of Health Professions responded to VA's letter on September 29, 2020. The commenter responded to the four key elements in VA's letter. First, the commenter stated that Virginia's PDMP does not restrict the use of PDMP by health care providers treating or dispensing to patients in palliative care or enrolled in hospice. The commenter added that they believe that access to PDMP information for all patient types is essential so health care providers can make the most informed clinical treatment/dispensing decision possible for their patients. Virginia's PDMP supports allowing for an exception to the restriction on the definition of covered patients.
Second, the commenter stated that Virginia's PDMP does not restrict the use of the PDMP by health care providers who are not prescribing a controlled substance. The commenter cited the State laws pertaining to the requirements of the prescriber and the requirements for the dispenser and supported the allowing for a broad interpretation of receives a prescription within the definition of covered patient.
Third, the commenter indicated that Virginia's PDMP is aware that Missouri does not have a statewide PDMP, but a cooperative collection of cities and counties has created a Prescription Monitoring Program (PMP), which covers around 80 percent of patients. VA notes that Missouri transitioned to a Statewide PDMP in December 2023. The commenter added that Virginia's PDMP supports including local/municipal/regional PDMPs within the definition of state PDMPs.
Lastly, the commenter stated that Virginia's PDMP has the ability to cover costs associated with VHA facilities connecting to Virginia's PDMP and granting access to authorized health care providers. Also, Virginia's PMP vendor, Appriss Health, (now Bamboo Health) reports there is no additional cost to the State for this implementation.
VA also received a letter from the State of Hawaii Department of Public Safety on October 13, 2020. The commenter was in support of increasing access and usage of Hawaii's PDMP information because it is an effective tool towards addressing the nationwide opioid epidemic. However, the commenter had two concerns. The commenter's first concern was that although they appreciate the importance of protecting the privacy of the prescription information contained in the Hawaii PDMP, any effort to mandate that Hawaii's PDMP information be shared with VA should include safeguards to protect confidential medical information and allow for data to be shared only for VA's official purposes. The commenter stressed that Hawaii's confidential PDMP information must not be shared by VA with other entities.
VA agrees with the commenter in that the confidential medical information contained in the PDMP needs to be safeguarded. Federal law and regulations require confidentiality and security of any such records. The Privacy Act (PA) (5 U.S.C. 552a), 38 U.S.C. 5701, and the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules (45 CFR part 160 and subparts A, C, and E of Part 164), are applicable. Additionally, 38 U.S.C. 5705 and 7332 would protect information that falls within their purview. VA will continue to abide by these Federal laws and regulations to continue to protect the privacy of veterans' medical information. VA will only share such information as authorized by those laws and regulations.
The commenter's second concern was regarding the potential costs that the State Narcotics Enforcement Division (NED) may incur to make the required connections between the Hawaii PDMP and VA, especially given the drastic budget crisis facing Hawaii's Department of Public Safety. The commenter added that VA's letter does not describe what the potential costs might be and that VA's independent efforts may create an unfunded mandate that the State NED may incur as a one-time, or worse yet, an ongoing, recurring cost that cannot be absorbed by their agency.
VA agrees that States could incur IT development and connection costs associated with connecting to VA if they were not previously using PMP InterConnect. However, according to Appriss Health, Hawaii is currently connected to the system known as PMP InterConnect, and there are no costs to the State so long as it maintains connectivity to PMP InterConnect. PMP InterConnect is provided by the National Association of Boards of Pharmacy/Appriss Health at no cost to the State. Therefore, it is anticipated that Hawaii will incur no additional cost, as it is already a member of the required network.
In addition, VA met with 82 of the State PDMP administrators and the Technical Training and Assistance Center to address both outgoing PDMP data from VA to the States and the VA new query access. Many of the questions presented at the meeting were regarding VA delegate access to the PDMP. Because VA received so many questions regarding delegates and the related definitions, VA has provided a comprehensive definition in this rulemaking that would clearly state who VA would consider a delegate for purposes of querying the PDMP.
Another question posed was whether the VA provider had to register with the PDMP of the State where they are practicing. VA notes that VHA Directive 1306 requires VA users to register with the PDMP of the State in which their VA medical facility (or more specifically where their assigned Veterans Health Information Systems and Technology Architecture (VistA) division) is located and to remain active within that State.
VA examined the impact of this rulemaking as required by Executive Orders 12866 (Sept. 30, 1993) and 13563 (Jan. 18, 2011), which direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. The Office of Information and Regulatory Affairs has determined that this rulemaking is not a significant regulatory action under Executive Order 12866, as supplemented by Executive Order 13563. This proposed rule is expected to be an Executive Order 14192 deregulatory action.
The Secretary hereby certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. The provisions associated with this rulemaking are not processed by any other entities outside of VA. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking would be exempt from the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604.
This proposed rule would not result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year.
This proposed rule contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).
Administrative practice and procedure, Archives and records, Cemeteries, Claims, Courts, Crime, Flags, Freedom of information, Government contracts, Government employees, Government property, Infants and children, Inventions and patents, Parking penalties, Privacy reporting and recordkeeping requirements, Seals and insignia, Security measures, Wages.
Douglas A. Collins, Secretary of Veterans Affairs, approved this document on April 21, 2026, and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs.
For the reasons set forth in the preamble, the Department of Veterans Affairs proposes to amend 38 CFR part 1 as set forth below:
38 U.S.C. 501, and as noted in specific sections.
Section 1.515 is also issued under 38 U.S.C. 1730B, 5701, and 7332.
(a)
(a) A VA clinical associate (including, but not limited to, registered nurses, licensed practical nurses, health care technicians, licensed social workers, and psychologists);
(b) A VA administrative associate (including, but not limited to, administrative officers, program analysts, and technical support specialists);
(c) Scientific investigators who are investigating issues to support the safe and effective prescribing of controlled
(d) An individual who conducts research with respect to administering, using in teaching, or chemical analysis a controlled substance in the course of their research as a VA employee (unless the researcher is a licensed health care provider, as defined in this regulation);
(e) An individual who is contracted by VA to provide health care and is practicing or researching under their contractual agreement with VA. This provision does not include individuals with whom VA contracts directly or indirectly pursuant to 38 U.S.C. 1703; or
(f) A VA automated system accessing a PDMP, including, but not limited to, automatic queries triggered by the system (
(a) A physician, dentist, nurse practitioner, physician assistant, or pharmacist employed by VA; or
(b) Another person licensed, registered, certified, or otherwise permitted by the United States or the jurisdiction in which the individual practices to prescribe or fill a controlled substance in the course of their practice as a VA employee.
(b)
(1) Demographic information of a covered individual. Examples include name, address, and telephone number.
(2) Information about the dispensed controlled substances. Examples include the identification of the substance by a national drug code number, quantity dispensed, number of refills ordered, whether the substances were dispensed as a refill of a prescription or as a first-time request, and date of origin of the prescription.
(3) Prescriber information. Examples include the prescriber's United States Drug Enforcement Administration-issued identification number authorizing the individual to prescribe controlled substances and United States Department of Health and Human Services-issued National Provider Identifier number.
(c)
(2) Querying and receiving data includes, but is not limited to, viewing, accessing, processing, and storing the data according to VA's need in a format that is most appropriate to providing the highest quality clinical care.
(3) A licensed health care provider or delegate can access PDMPs through manual access to the individual PDMPs or through integrated, potentially automated, information technology solutions. These include, but are not limited to, health information exchanges, electronic health records systems, and e-prescribing. VA information technology systems may have interoperability with other data systems and integrated automated queries. These data systems can be incorporated into clinical workflow to improve the use of such data and analytics by licensed health care providers and delegates.
(i) Interoperability means:
(A) The integration of PDMP data within electronic health records and health information technology infrastructure; or
(B) Linking of a PDMP to other data systems within the State, including, but not limited to, the State's Medicare and Medicaid program, workers' compensation programs, medical examiners or coroners, and any other relevant State, national, or regional database.
(ii) Clinical workflow includes the physical and mental tasks that are performed in the clinical setting to deliver care to patients. Improvements to workflow can be achieved through the integration of automated queries for PDMPs' data and analytics into health information technologies such as electronic health record systems, health information exchanges, or pharmacy dispensing software systems.
(4) Delegates will receive the same access to shared data as licensed health care providers, including when PDMP data sharing is across State lines.
(d)
Environmental Protection Agency (EPA).
Notice of proposed rule; request for public comment; notice of public hearing.
The Environmental Protection Agency (EPA) is proposing to rescind its regulatory determinations to regulate four per- and polyfluoroalkyl substances (PFAS)—perfluorohexane sulfonic acid (PFHxS), perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid and its ammonium salt (HFPO-DA, commonly known as GenX chemicals), and mixtures of these three PFAS plus perfluorobutane sulfonic acid (PFBS)—under the Safe Drinking Water Act (SDWA). The EPA is also proposing to rescind all associated regulatory provisions currently codified in the EPA's 2024 PFAS National Primary Drinking Water Regulations (NPDWR) exclusive to these PFAS that were promulgated pursuant to the regulatory determinations that the EPA is now proposing to rescind, including the final Maximum Contaminant Levels (MCLs) that would have required monitoring, and where necessary, treatment by public water systems (PWSs). This proposed action is necessary to correct the unlawful procedure under which these regulations were promulgated. Under the EPA's prior interpretation, the EPA proposed and finalized regulatory determinations and regulations for these PFAS simultaneously and in tandem. Under the best reading of the statute, the EPA is not authorized to take such actions simultaneously and therefore, the Agency proposes to rescind those regulatory determinations, Maximum Contaminant Level Goals (MCLGs) and associated portions of the 2024 PFAS NPDWR. The EPA is seeking public comment on this proposal.
Comments must be received on or before July 20, 2026.
You may send comments, identified by Docket ID No. EPA-HQ-OW-2025-0654, by any of the following methods:
•
•
•
•
Information related to the virtual hearing can be found at
Nicole Shao, Office of Ground Water and Drinking Water, Standards and Risk Management Division (Mail Code 4601M), Environmental Protection Agency, 1200 Pennsylvania Avenue NW, Washington, DC 20460; telephone number: 202-564-6779; email address:
Entities impacted by this action include PWSs that are community water systems (CWSs) or non-transient non-community water systems (NTNCWSs). A PWS, as defined in 40 CFR 141.2, provides water to the public for human consumption through pipes or “other constructed conveyances, if such system has at least fifteen service connections or regularly serves an average of at least twenty-five individuals daily at least 60 days out of the year.” A PWS is either a CWS or a non-community water system. A CWS, as defined in 40 CFR 141.2, is “a public water system which serves at least 15 service connections used by year-round residents or regularly serves at least 25 year-round residents.” The definition in 40 CFR 141.2 for a NTNCWS is “a public water system that is not a [CWS] and that regularly serves at least 25 of the same persons over 6 months per year.” The following table provides examples of the regulated entities under this rulemaking:
If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the
The EPA is proposing to rescind its determinations to regulate three PFAS individually—PFHxS, PFNA, HFPO-DA—and any mixture containing two or more of PFHxS, PFNA, HFPO-DA, and PFBS through a hazard index (HI) (collectively, the Index PFAS).
In conjunction with this proposed rulemaking, the EPA is also proposing to rescind the MCLGs and the 2024 Final PFAS NPDWR requirements resulting from the regulatory determinations for the contaminants described above. This includes the regulatory text in 40 CFR part 141 setting MCLGs and MCLs for PFHxS, PFNA, HFPO-DA, and the Index PFAS. The proposal includes the removal of entries from the MCL table, compliance provisions, and relevant sections including 40 CFR 141.900 specifically related to regulation of PFHxS, PFNA, HFPO-DA, and the Index PFAS. This action does not impact the MCLGs, MCLs or the regulatory provisions associated with monitoring or reporting from 40 CFR part 141 related to perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS).
The EPA proposes to rescind the relevant regulatory determinations, MCLGs, and MCLs because they were promulgated using an unlawful procedure which resulted in unlawful regulatory determinations, MCLGs and NPDWRs for these contaminants.
The EPA estimates that this proposed action would result in a reduction of previously expected national compliance costs and would relieve regulated entities, particularly PWSs, of specific monitoring, treatment, and reporting obligations related specifically to these drinking water contaminants. Removing the PFHxS NPDWR is estimated to save $11.6 million (in 2022 dollars) in annualized quantified costs per year. There are additional nonquantifiable costs: see section VI of this preamble for further discussion.
This proposed deregulatory action is expected to yield a reduction in previously expected benefits of approximately $6.7 million. There are additional nonquantifiable reductions in previously expected benefits in addition to other potential foregone benefits. See section VI of this preamble for further discussion.
SDWA section 1412 authorizes the EPA to regulate drinking water contaminants through a carefully enumerated and sequential process.
The Act provides a specific process by which the EPA can determine to regulate a new contaminant.
For each contaminant that the EPA “determines to regulate,” the Agency must publish an MCLG and NPDWR for that contaminant through notice-and-comment rulemaking.
The Act imposes express limits on the sequencing of and deadlines for the EPA's regulatory determination and standard-setting processes. It states that the EPA “shall propose the maximum contaminant level goal and national primary drinking water regulation for a contaminant not later than 24 months after the determination to regulate . . . and may publish such proposed regulation concurrent with the determination to regulate.”
The EPA's promulgation of an NPDWR triggers the Agency's ongoing obligation to “review and revise, as appropriate, each [NPDWR] promulgated under this subchapter.” The EPA must conduct the review not less than every six years.
For PFOA and PFOS, the EPA followed the statutorily prescribed sequencing by proposing and finalizing a regulatory determination through notice-and-comment before proposing and finalizing a regulation through a further round of notice-and-comment. The EPA added PFOA and PFOS to the CCL in 2009 for evaluation. 74 FR 51850 (October 8, 2009). In 2020, the EPA proposed affirmative regulatory determinations for PFOA and PFOS after tentatively concluding that both may have an adverse effect on the health of persons, are known to or are substantially likely to occur in PWSs, and that regulation could meaningfully reduce health risks. 85 FR 14098, 14107, 14116 and 14117 (March 10, 2020). In 2021, the EPA finalized the regulatory determinations for PFOA and PFOS after soliciting and responding to public comment. 86 FR 12272 (March 3, 2021).
Although the EPA followed the statutorily required process for PFOA and PFOS, the EPA followed an unlawful procedure to propose and finalize regulatory determinations, MCLGs, and NPDWR for PFHxS, PFNA, HFPO-DA and the Index PFAS. Specifically, the EPA issued five preliminary regulatory determinations for PFHxS, PFNA, HFPO-DA, PFBS, and the mixture of one or more of these four PFAS on March 29, 2023. Simultaneously, the EPA proposed an MCLG and an NPDWR for the mixture of one or more of these four PFAS. 88 FR 18638 (March 29, 2023). On April 26, 2024, after considering public comment, the EPA issued four final regulatory determinations for PFHxS, PFNA, HFPO-DA, and the Index PFAS and simultaneously promulgated a final NPDWR for these four contaminants. 89 FR 32532, April 26, 2024. The EPA deferred its individual regulatory determination to regulate PFBS in drinking water.
The EPA's final regulatory determinations and portions of the EPA's NPDWR issued April 26, 2024 are the subject of pending litigation.
After reconsidering the Agency's rulemaking record, the relevant issues raised in litigation and evaluating the Supreme Court's intervening decision in
SDWA specifically requires the Agency to take a seriatim approach to regulation in which the Agency must first propose to regulate a particular drinking water contaminant and seek public comment on whether regulation is appropriate. SDWA section 1412(b)(1)(E). Only
During its rulemaking process for PFHxS, PFNA, HFPO-DA, PFBS and the Index PFAS, the EPA interpreted the statute for the first time as authorizing the Agency to simultaneously publish a preliminary regulatory determination and a proposed regulation for public comment, and to simultaneously publish a final regulatory determination with a final regulation.
The relevant phrase, “determination to regulate,” only appears twice in this statutory provision, in the same sentence. The first occurrence explicitly cross-references “the determination to regulate under subparagraph (B)” of section 1412. Subparagraph (B) indisputably sets forth the specific steps the EPA must take when issuing the
In its second occurrence of “determination to regulate” in the Act's provision sequencing the regulatory determination and the regulation, the statute provides that the EPA “may publish [a] proposed regulation concurrent with the determination to regulate.”
After further review of the statutory text, the EPA concludes that the best reading of the precise term “determination to regulate”
The EPA's further consideration of the precise language in 1412(b)(1)(B)(ii) also supports its changed interpretation. Subsection 1412(b)(1)(B)(ii)(I) states that, after receiving public comments, the EPA shall make “determinations of whether or not to regulate [particular] contaminants.” Because these determinations are made after notice and comment are completed, it is clear from the context that “determinations” referred to here are final determinations, though they may be determinations either for or against regulation. Subsection 1412(b)(1)(B)(ii)(II) and (III) then use the term “determination to regulate a contaminant” to refer to a final determination—not a preliminary determination—that the statutory criteria are satisfied and that regulation is warranted. Finally, subsection 1412(b)(1)(B)(ii)(IV) states that “[a] determination under this clause not to regulate a [particular] contaminant shall be considered final agency action and subject to judicial review.” That provision also refers to a final determination, made after the Agency has considered public comments, that a particular contaminant should
To support its prior interpretation, the EPA noted that the statute's use of the term “determination” in section 1412(b)(1)(B)(iii) to refer to a preliminary determination elsewhere in the statute demonstrates that Congress did not use the term “determination to regulate” to consistently refer to a final determination. 89 FR 32541. Upon further analysis, the EPA acknowledges the context of that provision obviates
Although SDWA section 1412 sometimes uses the term “determination” to refer to a preliminary determination, it uses the specific phrase “determination to regulate” (as well as the phrase “determination under this clause not to regulate” and the umbrella phrase “determinations of whether or not to regulate”) only to refer to the final determinations that the EPA makes after completing notice and comment on the preliminary determination. Because courts “generally presume differences in language . . . convey differences in meaning,”
By expressly authorizing the EPA to concurrently publish a proposed rule with a final regulatory determination, Congress made clear that it wanted the EPA to act within a certain window—immediately and up to 24 months later—only after determining that the statutory standard for regulation is satisfied. Given the breadth of the EPA's authority to list, evaluate, and regulate drinking water contaminants, this requirement plays a critical role in the statutory scheme and in ensuring that the Agency proceeds stepwise in a transparent and scientifically sound manner. This conclusion is further bolstered by Congress' imposition of a carefully constructed systematic approach to the regulation of contaminants under SDWA.
In addition to previously arguing that Congress was inconsistent in its terminology and that the meaning of “determination” must be inferred from context, the EPA also supported its prior interpretation because: (1) it is the only reading that gives the language independent meaning because no provision in SDWA or general principle of administrative law would otherwise preclude the EPA from issuing a final regulatory determination concurrent with a proposed rule; and (2) this reading best reflects Congress' goal of accelerating the regulatory process for contaminants that present meaningful public health risks, which is the apparent purpose of its allowance for “concurrent” processes. 89 FR at 32540 through 32542.
First, the EPA argued that interpreting the second usage of “determination to regulate” in SDWA section 1412(b)(1)(E) as a final determination would render that clause null because no provision in SDWA would otherwise preclude the EPA from issuing a final determination concurrently with a proposed rule. In support of this argument, the EPA explained that SDWA requirement to propose regulations “not later than 24 months after” a final regulatory determination establishes when the EPA's deadline begins to run; it was not the beginning of an exclusive window for the EPA to propose a NPDWR. 89 FR 32541. After further careful analysis of this subsection, the EPA has now concluded that reading the second usage of “determination to regulate” as the final determination is, in fact, the only reading that gives independent meaning to this phrase when considered as part of subsection 1412(b)(1)(E) as a whole. The best reading of subsection 1412(b)(1)(E) demonstrates that it provides a very specific 24-month window in which a regulation may be proposed. The first usage of subsection 1412(b)(1)(E) provides that the latest the EPA can propose a regulation is 24 months after a final regulatory determination. The second usage provides that the earliest the EPA can propose a regulation is concurrent with a final regulatory determination. Put differently, the statute provides that the EPA has exactly 24 months to propose a regulation starting from the date the final regulatory determination is published. The EPA's prior reading failed to give full effect to this statutorily prescribed window.
Second, reading both the first and second usages of “determination to regulate” as referring to the final regulatory determination effectuates Congress' goal in enacting this provision.
The EPA erred by issuing an MCLG and promulgating an NPDWR without first completing the regulatory determination as a necessary prerequisite to rulemaking. The EPA's legal error was based on an incorrect interpretation of 1412(b)(1)(E) to authorize the EPA to issue a proposed rule simultaneously with a preliminary determination. The EPA now concludes that the best reading of SDWA section 1412(b)(1)(E) is, in adherence to the plain language of the statute, that the soonest the EPA may publish a proposed regulation is with the
The EPA's proposal is solely based on its conclusion that the Agency legally erred for the reasons described in this notice of proposed rulemaking and is seeking comment on those reasons. The EPA's proposal is not based on any reassessment of the substantive findings included in its regulatory determinations or associated NPDWR provisions. As a result, the EPA is not seeking comment on its substantive findings supporting either its regulatory determinations or its associated NPDWR provisions, including any information about health risks associated with PFAS, cost of regulation, or occurrence information.
The EPA's rescission of the regulatory determinations is not in conflict with D.C. Circuit's decision holding that the EPA lacks authority to withdraw a
Similarly, the EPA's proposal to rescind unlawful regulatory determinations, MCLGs and NPDWR for PFHxS, PFNA, HFPO-DA and the Index PFAS does not trigger SDWA's anti-backsliding requirements. Section 1412(b)(9) of the SDWA directs the EPA to “review and revise” each NPDWR “not less often than every 6 years” and that “[a]ny revision of a [NPDWR] . . . shall maintain, or provide for greater, protection of the health of persons” SDWA section 1412(b)(9). The context and structure of this provision makes clear that SDWA section 1412(b)(9) applies to a “revision” of a lawfully promulgated NPDWR made after a “review” of that NPDWR. Section 1412(b)(9) of the SDWA does not govern the rescission of unlawfully promulgated NPDWRs. In the instance where a court vacates an NPDWR for failing to meet SDWA's requirements, vacatur of an unlawful NPDWR does not trigger the SDWA section 1412(b)(9) anti-backsliding requirements. So here too, where the EPA has determined that it unlawfully issued a proposed NPDWR simultaneously with preliminary regulatory determinations for PFHxS, PFNA, HFPO-DA, PFBS and mixtures of the PFAS, and ultimately promulgated a final NPDWR with final regulatory determinations for PFHxS, PFNA, HFPO-DA and the Index PFAS, rescission of unlawful portions of the PFAS NPDWR does not trigger SDWA section 1412(b)(9) anti-backsliding requirements. Even if the EPA's proposal to rescind unlawful portions of the PFAS NPDWR trigger SDWA section 1412(b)(9) requirements, the EPA's proposal “maintain[s] . . . protection of the health of persons.”
As discussed above, this action proposes to rescind the regulatory text in 40 CFR part 141 setting MCLGs and NPDWRs related to PFHxS, PFNA, HFPO-DA, and the Index PFAS regulated through the HI. SDWA requires the EPA to conduct a Health Risk Reduction and Cost Analysis (HRRCA) “[w]hen proposing any national primary drinking water regulation that includes a maximum containment level.” SDWA section 1412(b)(3)(C)(i). SDWA also requires that the Administrator “publish a determination as to whether the benefits of the maximum contaminant level justify, or do not justify, the costs based on the analysis conducted under paragraph 3(C)” when proposing an NPDWR.
The EPA estimates that this proposed action would result in a reduction of national compliance costs and would relieve regulated entities, particularly PWSs, of specific monitoring, treatment, and reporting obligations related specifically to these drinking water contaminants.
The estimation of regulatory cost differences between the April 2024 Final PFAS NPDWR and the regulatory requirements of this proposed rule were calculated using the estimated cost difference between the April 2024 Final PFAS NPDWR, which represents the baseline for this proposed rule and includes PFOA and PFOS MCLs of 4.0 ppt each; PFHxS, PFNA, and HFPO-DA MCLs of 10 ppt each; and an HI of 1 (unitless), and an alternative regulatory option that was considered during the development of the 2024 Final PFAS NPDWR, “Option 1a” which is representative of compliance requirements for this proposed rule setting only PFOA and PFOS MCLs of 4.0 ppt. The estimated costs for both the 2024 Final PFAS NPDWR and Option 1a can be found in the
Given PFAS occurrence data available in USEPA 2024a, the EPA's quantified total national-level annualized costs for the 2024 Final PFAS NPDWR represent only the implementation of PFOA and PFOS MCLs of 4.0 ppt each, and the costs for PFHxS individual MCL (10 ppt) exceedances, and HI MCL exceedances where PFHxS is present
The quantified cost savings are relatively modest for the following reasons: (1) PFHxS is observed to strongly co-occur with PFOA and PFOS; therefore, significantly more systems are estimated to have two or more of these PFAS in concentrations above their respective MCLs than systems with solely PFHxS exceedances; (2) the PFHxS MCL of 10 ppt is 2.5 times higher than either the PFOA or PFOS MCLs of 4.0 ppt; and (3) the PFHxS regulatory thresholds are one significant figure, whereas PFOA and PFOS are two significant figures; therefore, for purposes of estimating compliance, water systems with PFHxS occurrence would not be deemed to be in exceedance of the standard until at or above 15 ppt. The EPA estimated that 3 water systems with 50 entry points will be triggered into corrective action for PFHxS alone while 212 systems (375 entry points) will treat for PFHxS in addition to PFOA and/or PFOS, and the national annualized expected marginal costs of all PFHxS exceedances, including at systems with and without PFOA/PFOS exceedances, was $11.57 million in 2022 dollars, at a two percent discount rate.
Additionally, the EPA developed a sensitivity analysis to determine the national level potential cost impacts of exceedance of the Index PFAS (mixtures of two or more of PFHxS, PFNA, HFPO-DA, and PFBS) and the individual PFNA and HFPO-DA MCLs in addition to exceedances of the PFOA, PFOS and PFHxS MCLs (see the
The primary cost savings stem from avoided capital, and operation and maintenance expenditures for installing and operating treatment technologies, primarily granular activated carbon (GAC) or ion exchange (IX). The EPA anticipated a small number of systems would choose a non-treatment option to comply with the rule, including drilling a new well or interconnecting with another system. Systems that would have otherwise installed a treatment technology or taken a non-treatment action solely to address MCL exceedances of PFHxS, PFNA, and HFPO-DA, or to remain below the HI MCL, would no longer be required to do so. Systems that will install treatment technologies to address exceedances of PFOA and/or PFOS will likely experience some marginal cost savings, as they would not be required to operate those technologies to also remove PFHxS, PFNA, HFPO-DA, and PFBS. The expected value for total annualized treatment costs at PWSs will decrease by $11.3 million in 2022 dollars discounted at two percent. Additionally, monitoring and administrative costs associated with ongoing compliance monitoring, laboratory analysis, and reporting and recordkeeping would be eliminated for those drinking water systems solely exceeding the Trigger Levels and/or MCLs of PFHxS, PFNA, HFPO-DA, and/or the HI. This would result in a reduced number of overall compliance sampling events and therefore expected annual savings of approximately $240,000 in 2022 dollars discounted at two percent. Primacy agencies are also projected to experience annualized cost savings of
The rescission of the PFHxS, PFNA, and HFPO-DA individual MCLs of 10 ppt, and the Index PFAS regulatory standard may lead to forgone benefits. Section XII.F of the
While quantified benefits were not available for PFHxS, PFNA, HFPO-DA, and PFBS due to data limitations, the scientific literature and the EPA's health assessments have identified evidence linking these substances to adverse health effects. These include developmental and reproductive toxicity, immune system suppression, liver damage, and thyroid disruption. See the
In summary, this proposed deregulatory action is expected to yield greater quantified cost savings than quantified forgone benefits. The EPA further recognizes there are additional non-quantified cost savings and forgone benefits.
If the EPA takes final action to rescind portions of the PFAS regulation, under SDWA, states/territories/Tribes will need to submit a primacy program revision application or request an extension for those portions of the PFAS rule that remain in effect following the rescission. If finalized, states will not be required to adopt the rescinded portions of the 2024 PFAS NPDWR. By requesting an extension to submit a primacy revision package, primacy agencies can conserve resources until there is certainty regarding the scope of the PFAS rule that they must adopt. The EPA intends to take final action on this proposed rescission rule in 2026. Those primacy agencies that choose to submit an extension request should consult the extension criteria detailed in 40 CFR 142.12(b)(2). For example, under 40 CFR 142.12(b)(2)(i)(C), a state could request an extension on the premise that it intends “to group two or more program revisions in a single legislative or regulatory action,” such as the original PFAS rule and any revisions to that rule.
The EPA seeks public comment on:
• The legal interpretation of “determination to regulate” as used in SDWA 1412(b)(1)(E);
• The rescission of the regulatory determinations for PFHxS, PFNA, HFPO-DA and the Index PFAS;
• The EPA's economic analysis described in section VI of this preamble and in the associated memorandum (see
• The rescission of associated MCLGs, MCLs and related regulatory provisions from 40 CFR part 141.
This rulemaking is being proposed solely on legal grounds. Any comments not limited to the basis of the EPA's proposal or specific regulatory edits associated with removing requirements related to PFHxS, PFNA, HFPO-DA and the Index PFAS from the Code of Federal regulations are considered beyond the scope of this rulemaking. The EPA is not seeking comment on its substantive findings supporting either its regulatory determinations or its associated NPDWR provisions, including any information about health risks associated with PFAS, cost of regulation, or occurrence information. If the Agency proceeds with making a future regulatory determination on these or other PFAS in the future, the Agency will provide an opportunity for public comment.
The EPA invites feedback from the public on all aspects of this proposed rulemaking. Comments will inform whether the Agency proceeds with finalizing the rescission of the regulatory determinations and associated NPDWR.
Submit your comments, identified by Docket ID No. EPA-HQ-OW-2025-0654, at
The EPA will hold a public hearing on July 7, 2026 to receive public comment and will present the proposed regulatory rescission of the NPDWR for PFHxS, PFNA, HFPO-DA, and any mixtures containing two or more of these PFHxS, PFNA, HFPO-DA, and PFBS as regulated through the HI. The hearing will be held virtually from approximately 11:00 a.m. to 7:00 p.m. eastern time, or at the conclusion of public testimony, whichever is sooner. The EPA will begin pre-registering speakers for the hearing upon publication of this document in the
The EPA will make every effort to follow the schedule as closely as possible on the day of the hearing; however, please plan for the hearings to run either ahead of schedule or behind schedule. Please note that the public hearing may close early if there are no more people awaiting the opportunity to provide comment.
The EPA encourages commenters to provide the EPA with a copy of their oral testimony electronically by emailing it to
The EPA may ask clarifying questions during the oral presentations but will not respond to the presentations at that time. Any person not making an oral statement may also submit a written statement. Written statements and supporting information submitted during the comment period will be considered with the same weight as oral comments and supporting information presented at the public hearing.
Please note that any updates made to any aspect of the hearing are posted online at
If you require any accommodations such as language translation, captioning, or other special accommodations for the day of the hearing, please indicate this as part of your registration and describe your needs by June 30, 2026. The EPA may not be able to arrange accommodations without advance notice. Please contact
Additional information about these statutes and Executive Orders can be found at
This action is a significant regulatory action that was submitted to the Office of Management and Budget (OMB) for review. Any changes made in response to OMB recommendations have been documented in the docket. The EPA prepared an analysis of the potential costs and benefits associated with this action. This analysis can be found in section VI of this
This action is expected to be an Executive Order 14192 deregulatory action. The expected quantified annualized cost savings is $12 million, in 2024 dollars, at a 7 percent discount
This action does not impose any new information collection burden under the PRA. The following is a summary of the information collection activities associated with the existing regulation (
The proposed rule ICR being considered would cover information collection burden and cost associated with the 2024 Final PFAS NPDWR ICR (OMB control number 2040-0307, the EPA ICR #: 2732.02), as modified in response to the proposed rescission of the MCLs for PFHxS, PFNA, HFPO-DA and the Index PFAS, for the three year period from April 2026 to April 2029, or until such time as the burden and costs from the proposed rule are added to the total operational burden and cost of the national drinking water program under the
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9.
Submit your comments on the Agency's need for this information, the accuracy of the provided burden estimates and any suggested methods for minimizing respondent burden to the EPA using the docket identified at the beginning of this rule. The EPA will respond to any ICR-related comments in the final rule. You may also send your ICR-related comments to OMB's Office of Information and Regulatory Affairs using the interface at
The EPA certifies that this action will not have a significant economic impact on a substantial number of small entities under the RFA. In making this determination, the EPA concludes that the impact of concern for this proposed rule is any significant adverse economic impact on small entities and that the agency is certifying that this proposed rule will not have a significant economic impact on a substantial number of small entities because the proposed rule has no new net burden on the small entities subject to the rule. The proposed action alleviates requirements from an existing rule and is deregulatory, as defined in Executive Order 14192, and will result in expected national annualized total cost savings of approximately $11.6 million in 2022 dollars discounted at two percent.
This action does not contain an unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. UMRA does not apply to this action because it is deregulatory, as defined in Executive Order 14192, and will reduce regulatory costs to state, local or Tribal governments or the private sector. The action imposes no
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
This action does not have Tribal implications as specified in Executive Order 13175. The Executive Order defines Tribal implications as “actions that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.” The proposed action is deregulatory, as defined in Executive Order 14192 and will not have a new substantial direct effect on one or more Tribes, change the relationship between the Federal Government and Tribes, or affect the power and responsibilities between the Federal Government and Indian Tribes. Thus, Executive Order 13175 does not apply to this action.
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action solely corrects a legal error, and environmental health and safety risks, including those that present a disproportionate risk to children, are beyond the scope of this action. Therefore, this action is not subject to Executive Order 13045 because it does not concern an environmental health risk or safety risk. Since this specific action does not address human health risks, the EPA's policy on Children's Health also does not apply.
This action is not because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The public and private water systems affected by this action do not, as a rule, generate power. This action does not regulate any aspect of energy distribution as the water systems that are proposed to be impacted by this rule already have electrical service.
This proposed rulemaking does not involve technical standards. The proposed action is deregulatory, as defined in Executive Order 14192, and will not require the implementation of technical standards.
In accordance with SDWA 1412(d), “the Administrator shall consult with . . . the National Drinking Water Advisory Council” prior to proposing and promulgating a regulation under 1412. The Agency consulted with the NDWAC during the Council's July 28, 2025, virtual meeting. A summary of the NDWAC recommendations is available in the docket for this proposed rule (USEPA, 2025b). The EPA considered NDWAC recommendations during the development of this proposed rule.
In accordance with SDWA 1412(d), “the Administrator shall consult with the [HHS] Secretary” prior to proposing and promulgating a regulation under 1412. On March 19, 2026, the EPA consulted with the Department of HHS. The EPA provided information to HHS officials on the draft proposed rule and considered HHS input as part of the interagency review.
Environmental protection, Monitoring and analytical requirement, Per- and polyfluoroalkyl substances, Reporting and recordkeeping requirements, Water supply.
Environmental protection, Monitoring and analytical requirements, Per- and polyfluoroalkyl substances, Reporting and recordkeeping requirements, Water supply.
For the reasons set forth in the preamble, the EPA proposes to amend 40 CFR parts 141 and 142 as follows:
42 U.S.C. 300f, 300g-1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-4, 300j-9, and 300j-11.
(a) * * *
(4) The effective date for § 141.61(c)(2)(i) and (ii) is April 26, 2029.
The revisions read as follows:
(c) The following maximum contaminant levels (MCLs) in paragraphs (c)(1) and (2) of this section for synthetic organic contaminants apply to community water systems and non-transient, non-community water systems.
(2) MCLs for PFAS.
(d) * * *
1. MCLG—Maximum contaminant level goal.
2. MCL—Maximum contaminant level.
The revisions read as follows:
(d) Systems monitoring triennially whose sample result equals or exceeds the trigger level of 2.0 ng/l for either PFOS or PFOA must begin quarterly sampling for all regulated PFAS in the next quarter at the sampling point. Systems monitoring annually whose sample result equals or exceeds the MCL of 4.0 ng/l for either PFOS or PFOA must begin quarterly sampling for all regulated PFAS in the next quarter at the sampling point.
(a) PFAS MCL violations for both the PFOA and PFOS MCL, as listed in § 141.61(c), are based on a running annual average, as outlined under § 141.903.
42 U.S.C. 300f, 300g-1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-4, 300j-9, and 300j-11.
Environmental Protection Agency (EPA).
Notice of proposed rule; request for public comment; notice of public hearing.
In this proposed rulemaking, the U.S. Environmental Protection Agency (EPA) proposes a federal exemption, pursuant to Safe Drinking Water Act (SDWA) 1416(f) and 1450(a)(1), that will extend the dates of compliance with the Maximum Contaminant Levels (MCLs) for perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) from April 26, 2029, to April 26, 2031, for those systems that submit a request. The Agency requests comment on this proposal, including the mechanisms through which the MCL compliance deadlines for PFOA and PFOS can be exempted, and has identified specific areas where public input will be helpful for the EPA in developing the final rule. In addition to seeking written input, the EPA will be holding a public hearing on July 7, 2026.
Comments must be received on or before July 20, 2026. Comments on the information collection provisions of the proposed rule under the Paperwork Reduction Act (PRA) must be received by the Office of Management and Budget's Office of Information and Regulatory Affairs (OMB-OIRA) on or before June 22, 2026. Please refer to the PRA section under “Statutory and Executive Order Reviews” in this preamble for specific instructions.
You may send comments, identified by Docket ID No. EPA-HQ-OW-2025-1742, by any of the following methods:
•
•
•
•
Information related to the virtual hearing can be found at
Alexis Lan, Office of Ground Water and Drinking Water, Standards and Risk Management Division (Mail Code 4607M), Environmental Protection Agency, 1200 Pennsylvania Avenue NW, Washington, DC 20460; telephone number: 202-564-0841; email address:
The EPA proposes a federal exemption pursuant to SDWA 1416, including 1416(f) and 1450(a)(1), that would extend the compliance deadlines for the MCLs for PFOA and PFOS from April 26, 2029, to April 26, 2031, for systems that apply (see section III of this preamble for additional details). The Agency welcomes public comment to inform how the EPA proceeds with finalizing the proposal.
Entities potentially affected by this action include those that are subject to the 2024 Per- and Polyfluoroalkyl Substances (PFAS) National Primary Drinking Water Regulation (NPDWR), namely public water systems (PWSs) and those state and Tribal agencies responsible for drinking water regulatory development and enforcement. These PWSs include community water systems (CWSs) and non-transient non-community water systems (NTNCWSs). 89 FR 32532, April 26, 2024. A PWS, as defined in 40 CFR 141.2, provides water to the public “for human consumption through pipes or . . . other constructed conveyances, if such system has at least fifteen service connections or regularly serves an average of at least twenty-five individuals daily at least 60 days out of the year.” See also SDWA 1401(4)(A). A PWS is either a CWS or a non-community water system (NCWS). A CWS, as defined in 40 CFR 141.2, is “a public water system which serves at least 15 service connections used by year-round residents or regularly serves at least 25 year-round residents.” A NTNCWS is a type of NCWS, and the definition in 40 CFR 141.2 for a NTNCWS is “a public water system that is not a [CWS] and that regularly serves at least 25 of the same persons over 6 months per year.” The following table provides examples of the regulated entities under this rulemaking:
This table is not intended to be exhaustive but rather provides a guide for readers regarding entities likely to be regulated by the proposed rule. This table includes the types of entities that the EPA is now aware could potentially be regulated by this rulemaking. To determine whether your entity is regulated by this rulemaking, this notice of proposed rulemaking should be carefully examined. If you have questions regarding the applicability of this rulemaking to a particular entity, consult the person listed in the
PFAS are a large class of thousands of synthetic chemicals that have been in use in the United States and around the world since the 1940s (USEPA, 2024a). The unique properties of PFAS, including thermal- and chemical-stability and the ability to repel water and stains, are pertinent to a variety of commercial, industrial, and consumer products (USEPA, 2024a). PFAS generally break down slowly due to their strong carbon-fluorine bonds, which contribute to their environmental persistence (USEPA, 2024b). Exposure to certain PFAS, including PFOA and PFOS, can lead to accumulation in tissues, including the liver and kidneys, and blood (ATSDR, 2021; Domingo and Nadal, 2019; Fromme et al., 2009; USEPA, 2024c; USEPA, 2024d). Humans can be exposed to PFAS, including PFOA and PFOS, via ingestion of contaminated food and drinking water, inhalation, and dermal contact. A wide range of consumer products contain PFOA and PFOS, and exposures can occur outdoors and indoors, including occupational settings, among other routes (ITRC, 2023; USEPA, 2024a). Some population groups may be more sensitive to the harmful health effects of certain PFAS include pregnant and lactating woman, children, and infants. Studies indicate that PFOA and PFOS exposure above
This proposal applies to two specific PFAS: PFOA and PFOS. The manufacturing and use of these compounds have largely been voluntarily phased out in the United States; however, small quantities of PFOA may still be produced, imported, and used by some companies, and limited uses of PFOS are ongoing (ITRC, 2023). Due to their use, persistence and physicochemical properties, these compounds are known to be present across different environmental media and existing evidence demonstrates multiple pathways for human exposure (NCSL, 2025; USEPA, 2024a; USEPA, 2024b). Additionally, other PFAS precursors degrade to PFOA and/or PFOS in the environment, further contributing to their persistence and exposure risk (Buck et al., 2011; Conder et al., 2008; Liu and Mejia Avendaño, 2013).
SDWA 1412(b)(1)(B)(i) requires the EPA to publish a Contaminant Candidate List (CCL) every five years. The CCL is a list of contaminants that are known or anticipated to occur in PWSs, are not currently subject to any proposed or promulgated NPDWRs, and that may require future regulation under SDWA. By listing contaminants on the CCL, the EPA may obtain data to better understand their potential occurrence and health impacts, although this listing does not itself impose requirements on PWSs. The EPA listed PFOS and PFOA on the 2009 and 2016 CCLs to identify these contaminants as a priority for regulatory decision making (USEPA, 2009; USEPA, 2016).
The EPA uses the Unregulated Contaminant Monitoring Rule (UCMR) to collect data for contaminants that are anticipated to be present in drinking water and do not have regulations under SDWA. Under the UCMR, PWSs are required to monitor for priority unregulated contaminants every five years, and the Agency makes the results publicly available. As part of the third and fifth UCMR (UCMR 3 and UCMR 5, respectively), water systems collected monitoring data for PFAS, including PFOA and PFOS (USEPA, 2012; USEPA, 2021c).
On February 20, 2020, the EPA made preliminary determinations to regulate PFOA and PFOS. The EPA then made final positive regulatory determinations to regulate PFOA and PFOS in March 2021 (USEPA, 2021d). On March 29, 2023, the EPA proposed an NPDWR for PFOA and PFOS (USEPA, 2023a). On April 26, 2024, the EPA finalized an NPDWR for PFOA and PFOS (USEPA, 2024b).
The 2024 PFAS NPDWR established Maximum Contaminant Level Goals (MCLGs) for PFOA and PFOS at zero (0) and MCLs at 4.0 nanograms per liter or parts per trillion (ng/L or ppt) for both compounds (40 CFR 141.50(a)(24) and (25); 40 CFR 141.61(c)(2)(vi) and (c)(2)(vii)). The 2024 PFAS NPDWR listed feasible treatment technologies for PWSs that can be used to comply with those MCLs (40 CFR 141.61(d) and (e)).
The EPA also finalized public “Right-to-Know” provisions in the 2024 PFAS NPDWR, which include public notification (PN) and Consumer Confidence Report (CCR) requirements (see 40 CFR part 141 subparts O and Q). CWSs are required to prepare and deliver to its customers an annual CCR that reports detectable levels of PFOA and PFOS and provides health effects language in the case of MCL violations (40 CFR 141.151(a) and (d)). Additionally, MCL violations require Tier 2 PN, or notification provided as soon as practicable but no later than 30 days after a system learns of an MCL violation (40 CFR 141.203). Additionally, violations related to monitoring and testing procedures (
To demonstrate compliance with the MCLs, the EPA also finalized monitoring and reporting requirements for PWSs (40 CFR 141.902 and 141.904). PWSs are required to sample each entry point using a monitoring regime based on the EPA's Standard Monitoring Framework for Synthetic Organic Contaminants (SOCs). As part of these requirements, PWSs must complete their initial monitoring, which may include the use of recent, previously acquired monitoring to satisfy some or all of the initial monitoring requirements by April 26, 2027 (40 CFR 141.900(b)(2); 40 CFR 141.902(b)(1)(xi)). To demonstrate that finished drinking water does not exceed the MCLs for PFOA and PFOS, PWSs are required under the 2024 PFAS NPDWR to conduct compliance monitoring for PFOA and PFOS at a frequency based on these sample results. PWSs are required to report to primacy agencies the results of all initial and compliance monitoring results to ensure compliance with the 2024 PFAS NPDWR.
Under the 2024 PFAS NPDWR, the EPA exercised its authority under SDWA 1412(b)(10) to allow a two-year nationwide capital improvement extension to comply with the MCLs. All systems are required to comply with the MCLs by April 26, 2029 (40 CFR 141.900(b)(4); 40 CFR 141.903).
The EPA is proposing to exempt eligible systems from the 2024 NPDWR PFOA and PFOS MCL compliance deadlines, and instead extend these deadlines to provide greater regulatory flexibility and support for addressing these PFAS in drinking water, all while prioritizing both short-term and long-term public health protection. In evaluating the need for these extensions, the Agency considered compounding implementation challenges facing PWSs, including in small, rural, and disadvantaged communities, and other factors that may ease the implementation burden for many systems, and the communities they serve, if they had more time to comply. These include: the time it takes to implement capital improvement projects; certified operator availability to build and operate treatment systems; financial limitations, including the time it takes to determine and secure funding to construct capital improvements; availability of monitoring data to inform capital improvement decisions; broader strategies to address PFAS, such as source water protection, PFAS treatment technology improvements and innovation; and the ability for the EPA to provide a broader number of systems with technical assistance to support rule compliance.
In a separate action, the EPA is proposing to rescind the MCLs and associated provisions for perfluorohexane sulfonic acid (PFHxS), perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid (HFPO-DA) and the Hazard Index that includes these PFAS and perfluorobutane sulfonic acid (PFBS). Accordingly, this proposal only applies to two specific PFAS: PFOA and PFOS.
Since promulgation of the 2024 PFAS NPDWR, the EPA has become aware that many systems may be unable to comply with the MCLs by the current 2029 compliance date and may seek the EPA's approval of an exemption pursuant to SDWA 1416(f) before states have obtained primacy. Considering that similar circumstances are currently impacting the majority of systems seeking to achieve MCL compliance, to streamline the exemptions process and manage the potentially large number of exemption requests, the EPA proposes a national rule to govern the process for systems to request and obtain a two-year federal exemption from compliance with the PFOA and PFOS MCLs in states, territories, and Tribes that have not obtained primacy for those MCLs. An exemption under SDWA 1416 is an appropriate mechanism to provide this additional time to systems that meet the statutory criteria for an exemption. Exemptions can help ensure that systems which are unable to comply with the PFOA and PFOS MCLs by the compliance date will have the opportunity to obtain the technical and financial resources necessary to take the steps needed to comply with the rule “as expeditiously as practicable” but not later than three years after the otherwise applicable compliance date (SDWA 1416(b)(2)(A)). Although the statute allows up to three years, this proposed federal exemption will provide an appropriate federally-implemented bridge for systems to come into compliance as “expeditiously as practicable” while states adopt and begin implementation of the rule. See section III.C of this preamble for more on the EPA's findings. Once states have obtained primacy, they can determine whether to provide additional exemptions, consistent with SDWA 1416(a) and (b), if individual water systems are still unable to comply by the federally extended compliance date.
SDWA 1416(a) and (b) authorizes states with primary enforcement authority to exempt any system that meets specified criteria in SDWA 1416(a) from any requirement respecting any MCL or treatment technique (TT) requirement of an applicable NPDWR. If a state grants an exemption, it must prescribe a schedule for compliance not to exceed three years and may include a schedule for the implementation of control measures, after providing notice and an opportunity for a public hearing on the schedule. SDWA 1416(f) provides that if a state does not have primacy, the Administrator has the same authority to exempt a PWS from any MCL or TT requirement of an applicable NPDWR “under the same conditions and in the same manner” as a state would be authorized to grant exemptions if it had primacy. Additionally, SDWA 1450(a)(1) provides that the Administrator is authorized to prescribe such regulations as are necessary or appropriate to carry out their functions under this title.
While section 1416 has typically been used to authorize exemptions by primacy agencies on a case-by-case basis, nothing in the statute expressly forecloses a more streamlined exemption-by-rule approach, just as permitting requirements under other programs often provide for both individual permits and permits-by-rule. Because it is possible that there will be a large number of requests for additional time for compliance with the PFOA and PFOS MCLs before states obtain primacy, a national rule to streamline the statutory process for providing additional time is appropriate.
The EPA recognizes that the exemption process under SDWA section 1416 requires a number of findings before authorizing additional time for compliance, some of which are amenable to a categorical approach and some of which are not. As a result, the EPA has designed this proposed exemption-by-rule process to provide categorical findings (see section III.C of this preamble), where possible, but also to require water systems to individually request the exemption by providing system-specific information to the EPA in order for the exemption to apply on a case-by-case basis. This combination of categorical findings and system-specific application both meets the statutory requirements for exemption eligibility under SDWA section 1416 and streamlines the process for issuing exemptions to the extent possible. The EPA is seeking public comment on this proposed national framework and the Agency's use of authority under SDWA 1416 in this streamlined fashion.
In accordance with the EPA's authority to grant exemptions under SDWA 1416(f) and to prescribe such regulations as are necessary or appropriate to carry out this authority as provided under SDWA 1450(a)(1), in this rulemaking the EPA proposes an “exemption by rule” for systems in states that have not obtained primacy for 40 CFR part 141 subpart Z under which eligible systems may individually request, submit system-specific information, and obtain a two-year federal exemption from the requirements related to these MCLs until April 26, 2031. As described in section III.B of this preamble, SDWA 1416(f) provides that the Administrator has the same authority to exempt a PWS from any MCL or TT requirement of an applicable NPDWR “under the same conditions and in the same manner” described in SDWA 1416(a) and (b) as a state would be authorized to grant exemptions if it had primacy.
As required under SDWA 1416(a), a water system may be exempt from the requirements of an MCL upon a finding that: (1) Due to compelling factors (which may include economic factors, including qualification of the PWS as a system serving a disadvantaged community pursuant to SDWA 1452(d)), the PWS is unable to comply with such contaminant level or TT requirement, or to implement measures to develop an alternative source of water supply; (2) The PWS was in operation on the effective date of such contaminant level or TT requirement, or, for a system that was not in operation by that date, only if no reasonable alternative source of drinking water is available to such new system; (3) The granting of the exemption will not result in an unreasonable risk to health (URTH); and (4) Management or restructuring changes (or both) cannot reasonably be made that will result in compliance with this title or, if compliance cannot be achieved, improve the quality of the drinking water. For water systems subject to the rule requirements, the EPA evaluated these criteria and proposes to find pursuant to 40 CFR 142.58(a) that any PWS is eligible for the two-year federal PFOA and PFOS MCLs exemption from April 26, 2029 until April 26, 2031 if it meets the proposed information requirements in 40 CFR 142.58(b), is located in a state, territory, or Tribe that does not have primacy for 40 CFR part 141 subpart Z, was in operation on or prior to June 25, 2024, and does not have a variance from the requirements of the PFOA and PFOS MCLs.
Through the inclusion of SDWA 1416 exemption provisions, Congress recognized that PWSs may not be able to achieve compliance with the MCLs by the dates prescribed under SDWA 1412(b)(10). Exemptions provide
The first compelling factor that the EPA evaluated relates to capital improvements for implementing the PFOA and PFOS MCLs. In the 2024 NPDWR, the EPA determined that there are multiple Best Available Technologies (BATs) for PFOA and PFOS that are listed in table 1 to paragraph (a) of 40 CFR 142.62 (USEPA, 2024e); these technologies continue to currently be widely available. Though the EPA does not require treatment technology or any specific action to achieve MCL compliance, and a very small subset of systems may select non-treatment options, the EPA anticipates the majority of systems that will be required to take action to address levels of PFOA and PFOS exceeding the MCLs will need to make capital improvements and install one of these BATs. Both as part of the 2024 PFAS NPDWR and in accordance with 40 CFR 142.5 for this proposed rulemaking, the EPA considered the types of capital improvement activities that could reasonably be undertaken and the time necessary to conduct these activities, consistent with financial consequences to ratepayers, in order to choose and implement one of the PFAS removal BATs. Moreover, in the promulgation of the 2024 PFAS NPDWR, the EPA's evaluation of these capital improvement activities led to a determination that a two-year capital improvement extension, the allowable time provided under SDWA 1412(b)(10), was necessary for water systems to achieve MCL compliance given the information available at that time. Since promulgation of that rule, the EPA has further assessed current circumstances and has found that, in addition to factors that have become evident since the promulgation of the 2024 PFAS NPDWR, many of the capital improvement considerations justifying allowing the additional two years under SDWA 1412(b)(10) are still significant issues for water systems; therefore, there are compelling reasons why some water systems will need additional time for MCL compliance under SDWA 1416(f) exemption authority. Specifically, the record since the 2024 PFAS NPDWR includes current evidence of escalating construction and equipment costs in the intervening years. According to the U.S. Bureau of Labor Statistics (USBLS), inflation in construction materials for PWS equipment increased by over 20 percent between 2024 and 2025 alone (USBLS, 2025). There is also new evidence of ongoing volatility in global steel markets that may create procurement uncertainty and affect the timely ability of water systems to maintain and upgrade treatment facilities to comply with the PFOA and PFOS MCLs (NUCA, 2025; Reuters, 2025). Additionally, supply chain disruptions continue to delay procurement of specialized filtration media for PFAS treatment technologies which leads to longer-than-anticipated development times and higher-than-expected capital cost increases (AWWA, 2025).
Another compelling factor shown by new information available since the 2024 PFAS NPDWR is workforce challenges, specifically related to having a sufficient number of qualified personnel necessary to operate the advanced treatment facilities that remove PFAS in drinking water (AWWA, 2025; NRWA, 2024; USGAO, 2024). The EPA acknowledges that though there are overall workforce issues in the drinking water treatment sector beyond those specific to PFAS, this is only further exacerbated by the need for operators with higher-level qualifications. Without these more advanced operators, even if water systems are able to plan and install the PFAS removal treatment technologies, they may not have an adequate workforce to actually operate the new systems. Moreover, the American Water Works Association's (AWWA's) 2025 State of the Industry Report highlights the critical challenges associated with the water workforce, including retirements, recruitment and retainment difficulties, and specialized skill needs, such as those needed for treating PFAS (AWWA, 2025). Without additional time through the federal exemptions, some systems that exceed the PFOA and PFOS MCLs are unlikely to be able to secure the necessary skilled personnel or enhance the expertise of existing operators by the current compliance date for the PFOA and PFOS MCLs.
Financial limitations are also a compelling factor that many water systems face in achieving MCL compliance. Regulation of PFOA and PFOS in PWSs is estimated to result in significant health benefits, however, the costs, which are likely to be ultimately born by the ratepayers for these systems, are considerable. According to the AWWA's 2025 State of the Water Industry Report, financing of capital improvements for both essential upgrades and new treatment technologies, such as those used for treating PFAS, is the greatest challenge identified by water systems of all sizes. Additionally, less than half of the water systems surveyed in AWWA's 2025 Report are confident in their ability to fund the costs through rates and fees and stated that determining how to fund these improvements will require identifying and evaluating the full range of funding sources while balancing the costs to customers (AWWA, 2025). Therefore, though many water systems are able to fully meet the requirements of the rule, some water systems may face financial hardship and economic challenges and other compelling circumstances in the short-term, making them unable to comply with the regulation by the current compliance date.
The EPA also evaluated a number of other considerations that, when combined with the previously discussed capital improvement, workforce challenges, and financial hardship, are likely to significantly influence water systems' ability to comply with the MCLs by 2029. Moreover, when collectively considering the cumulative effects of these compelling factors and other considerations, water systems are much more likely to effectively and successfully implement and maintain compliance with the PFOA and PFOS MCLs when granted additional time provided through the federal exemptions.
First, exemptions would allow systems more time and flexibility to determine and comprehensively evaluate all of their financial assistance and funding options for capital improvements, making the most cost-effective decisions for their customers and water system financial sustainability. This time will be particularly beneficial for small, rural and disadvantaged systems with less expertise in undertaking these activities. Specific to supporting water systems with these activities, exemptions would also allow the EPA to offer assistance through the Agency's PFAS OUTreach
Another consideration related to the EPA's proposed two-year exemption by rule is treatment technology improvements and innovation after the promulgation of the 2024 PFAS NPDWR, including the current and future availability of more cost-effective PFAS removal technologies. By allowing more time through the exemptions, the EPA expects that emerging technologies not previously designated as BATs will become better understood and may become more widely available. Some of these emerging technologies have been demonstrated at the bench-scale but have not yet been proven at the full scale or are not yet commercially available (AWWA, 2023), while others have been, or are currently being, demonstrated at the full scale and providing more time will facilitate the identification of performance gaps so they can be better implemented. Examples of these promising technologies may include alternative sorbents and exchange media, separation methods such as foam fractionation, and innovative destructive technologies. Advances may also occur in managing treatment residuals (USEPA, 2024b).
Powdered activated carbon (PAC) is another non-BAT technology that has been shown in bench- and pilot-scale testing to be able to effectively remove some PFAS, specifically long chain PFAS such as PFOA and PFOS (up to >99 percent removal) (USEPA, 2023b). Use of this technology may be more cost-efficient for certain systems, particularly in the short-term, as it does not require upfront infrastructure costs and can be integrated into the existing treatment system (Kentucky Energy and Environment Cabinet, 2025). The effectiveness of PAC for PFAS treatment is dependent on case-by-case scenarios at individual PWSs, since percent removal depends on many factors such as PAC dosage, PAC particle size, contact time, and influent water organic carbon (USEPA, 2023b). However, if a water system already has PAC installed for other purposes such as taste and odor, the system may be able to enhance its PAC dose to easily and rapidly reduce PFOA and PFOS concentrations (Nakazawa et al., 2023; Alameddine et al., 2025). In addition, PAC may be particularly effective for systems that require modest percent removals due to marginal MCL exceedances (Crone et al., 2019; USEPA, 2018), and, given that the current results of the UCMR 5 demonstrate that approximately 15 to 20 percent of UCMR 5 systems are exceeding the PFOA and/or PFOS MCLs at levels slightly higher than the MCLs, these systems and other non-UCMR systems with similar levels may specifically benefit from additional time as this alternative technology continues to be investigated for full-scale performance effectiveness and becomes more widely implemented.
Similarly, at the time of the 2024 PFAS NPDWR promulgation in April 2024, the EPA provided that the NSF/American National Standards Institute (NSF/ANSI) standard for PFOA and PFOS removal in point-of-use and point-of-entry (POU and POE) devices did not meet the PFOA and PFOS MCLs set through the 2024 PFAS NPDWR. However, the EPA also stated in the 2024 PFAS NPDWR that it anticipates that POU and POE devices will eventually comply with the MCLs (USEPA, 2024b). Though the NSF/ANSI standard is not yet revised to assure the POE and POU certified devices will consistently reduce PFOA and PFOS levels to below the MCLs, the EPA is aware that the NSF/ANSI Drinking Water Treatment Unit Joint Committee Task Group is currently continuing the process to update their standards to align with the 2024 PFAS NPDWR (NSF, 2024). Therefore, the EPA continues to reasonably expect that allowing more time for MCL compliance through exemptions will result in greater flexibility and the availability of POU and POE devices as both an additional and lower-cost compliance option, specifically for very small water systems and certain NTNCWS such as schools, factories, office buildings, and hospitals that provide their own water. These cost savings could be substantial, with the EPA estimating that the annual cost savings per household for POU treatment instead of centralized granular activated carbon (GAC) treatment for systems serving 500 or fewer, which account for over 60 percent of all water systems subject to the rule requirements, would be a minimum of 40 percent to as much as a 72 percent savings (USEPA, 2024f).
The EPA also considered the availability of initial monitoring data for PFOA and PFOS, which all systems are required to collect by April 2027 under the requirements of the 2024 PFAS NPDWR and will be used to make informed decisions on treatment needs for many PWSs across the country. This includes data collected under UCMR 5, which requires all PWSs serving 3,300 or more people, and a representative sample of smaller systems, to monitor for 29 PFAS, including PFOA and PFOS. Sampling under UCMR 5 concluded in December 2025, with the final dataset available in 2026 (USEPA, 2021c). Systems with previously acquired data through state or other appropriate monitoring, and those that have participated in UCMR 5, are expected to have reduced initial monitoring costs as these systems may use these monitoring results to support implementation of monitoring requirements of the 2024 PFAS NPDWR in accordance with 40 CFR 141.902(b)(1)(vi).
Having access to their initial monitoring data will allow many utilities to have a complete understanding of PFOA and PFOS occurrence in their systems and whether capital improvements are necessary to comply with the MCLs. For systems that will need to make capital improvements, their full individual system results, once collected, will provide systems with information to determine the most efficient technology solution and secure capital improvement funding which can take a
An additional consideration the EPA evaluated relates to the broader strategies announced by the EPA to protect drinking water sources from PFAS before entering PWSs (USEPA, 2025a; USEPA, 2025b). The EPA has announced the development of effluent limitations guidelines (ELGs) for certain PFAS that will help stop PFAS from entering drinking water systems and hold facilities that are discharging these contaminants into surface water accountable. By stopping PFAS from entering source waters, the forthcoming ELGs are expected to minimize the occurrence of PFAS in drinking water sources, as well as other environment matrices, thereby reducing the cost burden for downstream water systems and the cost-of-living for community members served by those systems (USEPA, 2025a; USEPA, 2025b). The additional time for these efforts to be implemented may allow for any decreases in contamination to be realized in response to these source reduction efforts and may ultimately preclude the need for installing costly treatment technologies or impact decisions on the water systems' most effective treatment technology selection.
In this proposed rulemaking, the EPA proposes to find that some PWSs that exceed the MCLs under 40 CFR part 141 subpart Z may be impacted by one or more of the compelling factors identified earlier in this section and, as a result will be unable to comply with the PFOA and PFOS MCLs by April 26, 2029. Under this proposal, any such system must submit a statement that it cannot comply with the PFOA and PFOS MCLs due to compelling factors. For any water systems requesting the two-year federal exemption, the proposed rule requires the submission of such statement in 40 CFR 142.58(b). The EPA requests comment on this proposed finding, as well as these and other compelling factors, and supporting information the Agency should consider in taking final action on this proposal.
The second statutory exemption eligibility criterion for systems requires that a PWS be in operation on the effective date of the maximum contaminant level (
The third statutory exemption eligibility criterion requires that the granting of the exemption will not result in an URTH. Based on Congress including exemption provisions in SDWA with the clear intention that they be used to address systems that may need additional time to achieve compliance, Congress necessarily contemplated that the customers of these systems would be exposed to drinking water above the MCL for the period of the exemption and there would be some risk to health present. The limitation that Congress imposed on this excess exposure is that it will not constitute an “unreasonable” risk to health. SDWA provides no definition of an URTH; nor does it prescribe criteria for making this determination. In contrast, the statute expressly defines health-based MCLGs and feasibility-based MCLs. In particular, an MCLG is defined explicitly as “the maximum level of a contaminant in drinking water at which
While a two-year exemption from the PFOA and PFOS MCLs poses a risk to health, the EPA proposes that, for purposes of implementing SDWA 1416 exemption provisions, this risk is not “unreasonable” for systems with concentrations below 12 ppt for both PFOA and PFOS. However, the EPA notes that this should not create a presumption that concentrations greater than this
For systems seeking an exemption with any most recent PFOA and PFOS sampling result(s) at or above 12 ppt, the EPA proposes to find that a two-year exemption would not present an URTH if, as a condition of the exemption, these systems would have to implement interim control measures during the two-year exemption period to mitigate the additional health risks that may occur as a result of the exemption. These measures, pursuant to 40 CFR 142.59, are intended to reduce and provide information on PFAS exposures for consumers of these water systems. Proposed control measures include installation, operation, and maintenance of POU and/or POE devices, providing alternative water sources, making water filtration pitchers available, implementing source water controls, providing public education materials on reducing PFAS from various sources including drinking water, and conducting community outreach activities. Please see section III.D.1.b.i of this preamble for more information on these proposed control measure actions and exemption requirements. The EPA acknowledges that these mitigation actions may not reduce PFOA and PFOS to either the MCLs or below 12 ppt; however, the EPA expects they can
Under SDWA, as well as the proposed national exemptions rulemaking, an “unreasonable risk” determination applies only to PWSs in the context of evaluating SDWA 1416(a) criteria and their ability to achieve compliance with NPDWRs. The EPA acknowledges that there are risks to human health due to PFOA and PFOS and that holding polluters accountable is a priority. In an April 2024 announcement, the EPA emphasized that it is taking action to “hold polluters accountable” and to “establish a clear liability framework that ensures the polluter pays and passive receivers are protected” (USEPA, 2025b). Accordingly, the EPA announced in May 2024, “Drinking water systems are passive receivers of PFOA and PFOS. Polluters can contaminate the surface waters or aquifers that these systems rely on to provide the drinking water to their communities” (USEPA, 2025a), and the EPA intends to continue to use its regulatory and enforcement tools to hold polluters accountable. Wherever feasible, and particularly in cases where a polluter who caused PFAS contamination can be readily identified, the EPA intends to reduce costs to PWSs by making those responsible for PFAS contamination bear the burden of cleanup, and as needed, provide alternate water to communities, rather than shifting that responsibility to the communities that rely on those systems. The “unreasonable risk” standard under SDWA 1416 governs whether allowing additional time for PWSs to come into compliance will ensure that persons served by PWSs facing risks from ongoing contamination will not be “unreasonably” burdened in light of the costs and feasibilities associated with compliance by water systems with a new drinking water standard. It is not a standard relevant to ensuring that polluters are held accountable or otherwise liable for past or ongoing contamination under enforcement authorities.
Of note, the “unreasonable risk” finding under SDWA 1416 differs fundamentally from a potential “substantial endangerment” finding under SDWA 1431. An “unreasonable risk” in the context of determining whether a water system may qualify for an exemption from compliance under SDWA 1416 assumes a level of risk to the persons served by the PWS but balances that risk with other factors such as feasibility of treatment, cost, and timeline, so that the risk associated with a compliance delay is not deemed unreasonable over the time-limited exemption period. By contrast, SDWA 1431 authority does not require any findings regarding cost or feasibility. Thus, any regulatory interpretation of “unreasonable risk” under SDWA 1416 is limited to PWSs seeking compliance exemptions and is irrelevant to actions already taken or to be taken under potential substantial endangerment findings, including those against polluters. Therefore, this proposed action, including the proposed finding that mitigation measures are not necessary for a two-year exemption to meet the statutory requirement that “granting of the exemption will not result in an unreasonable risk to health” if PFOA and PFOS concentrations are below 12 ppt, does not apply to any PFAS releases or to any EPA enforcement actions taken in the past, nor does it limit any actions the EPA may take against those entities in the future. Indeed, if the Agency finds that contamination within the exemption timeframe may present an imminent or substantial endangerment to immediate and/or long-term health, the EPA does have authority to act as “deem[ed] necessary in order to protect the health of such persons” under SDWA 1431(a). As previously requested, the Agency welcomes public comment on the proposed URTH finding when evaluating SDWA 1416(a)(3) exemption criteria, and whether the risk to human health that may occur due to exposure to PFOA or PFOS at levels less than 12 ppt, over a limited period of time, is unreasonable.
The fourth statutory exemption eligibility criterion under SDWA 1416(a)(4) requires that management and restructuring changes (or both) cannot reasonably be made by the water system that will result in compliance with the MCL or, if compliance cannot be achieved, improve the quality of the drinking water. In evaluating this statutory exemption eligibility criterion, in accordance with 40 CFR 142.20(b)(1)(i), the EPA considered the following measures: (1) Consideration of rate increases, accounting changes, the appointment of a state-certified operator under the State's Operator Certification program, and contractual agreements for joint operation with one or more PWSs; (2) Activities consistent with the State's Capacity Development Strategy to help the PWS acquire and maintain technical, financial, and managerial capacity to come into compliance with the Act; and (3) Ownership changes, physical consolidation with another PWS, or other feasible and appropriate means of consolidation which would result in compliance with the Act.
As described earlier in this section, the EPA forecasts that the large majority of all systems exceeding the PFOA and/or PFOS MCLs will install advanced treatment technologies in order to come into compliance. Therefore, for most systems unable to comply, implementing management and restructuring changes will not be sufficient to result in compliance with the MCLs. Additionally, as previously stated and discussed in the 2024 PFAS NPDWR preamble, the process for new installation of advanced PFAS drinking water treatment technologies, including the procurement, planning, construction, and piloting activities that must be undertaken, takes several years to be completed in the most cost-effective and efficient manner. The EPA proposes to find that, for some water systems that exceed the MCLs, management and restructuring changes supporting the ability of the system to install and use advanced treatment, such as rate increases and new system operators and owners, cannot reasonably be made in time to result in compliance with the MCLs by the current compliance date. Similarly, the state capacity development programs, that small and disadvantaged systems frequently participate in, also can take several years to effect significant results and would not be able to reasonably impact compliance with the MCLs.
To achieve compliance with the PFOA and PFOS MCLs, the EPA anticipates that some water systems will seek to restructure, such as entering into water system partnerships or physically consolidating or connecting with another nearby water system. Though these types of actions and agreements are feasible, they can take many years to be implemented, often involving major infrastructure projects to interconnect, intergovernmental and other business agreements, financing steps, and community engagement activities (California State Water Resources
Pursuant to 40 CFR 142.20(b)(1)(i), the EPA also considered the availability of Drinking Water State Revolving Fund (DWSRF) assistance and other federal and state programs that are reasonably likely to be available within the period of the exemption to implement the measures discussed previously associated with management and restructuring changes and to support compliance with the PFOA and PFOS MCLs. Funding mechanisms provided to states help offset costs borne by ratepayers when systems are forced to adopt more advanced technologies to address emerging contaminants. The EPA finds that in accordance with the regulation, funding for capital improvement projects and other rule compliance activities is likely to be available within the period of the exemption. The EPA notes that funding is also likely to be available prior to the period of the exemption which will support activities and projects continuing to be undertaken within the period of the exemption. More specifically, IIJA funds currently available include billions of dollars to specifically support addressing emerging contaminants, like PFAS, in drinking water, particularly the installation of capital improvements such as treatment facilities. Though the EPA recognizes these funds are already appropriated and will be allotted to states prior to the period of the exemption, given the lengthy time associated with the overall capital improvements process, the use of the funds and the infrastructure projects and activities the funds support is expected to continue to be undertaken during the period of the exemption. Moreover, allotted funds that are not used by a state will be reallotted to eligible states over subsequent years that align with the exemption period. In the case of IIJA funds appropriated for emerging contaminants such as PFAS, this means that additional funding will flow to states with demonstrated need for emerging contaminant funding. For other federal funding sources likely to be available within the period of the exemption, such as those non-IIJA funds available through the DWSRF, EPA grants, and the United States Department of Agriculture (USDA) Rural Development funding program, though the EPA is unable to confirm the future amounts of these other funding sources during the period of the exemption, based on past availability, the EPA anticipates there are likely to be additional available funds during the period of the exemption. The EPA further notes that there have been billions of dollars made available to water systems as part of finalized private liability settlement agreements with PFAS dischargers (USDCSC, 2025). These funds, as well as any others from future settlement agreements, may also be available during the period of the exemption. Therefore, the EPA expects there will be available funding within and prior to the period of the exemption, and the exemptions will support the time necessary for systems to determine and obtain these funds in the best way to lessen financial impacts on their consumers and align with their capital improvement plans and state priorities.
SDWA 1416(b)(2)(B) states that no exemption shall be granted unless the PWS establishes that they are taking all practicable steps to meet the MCL. It also provides that the system must demonstrate at least one of the following three criteria: (1) The system cannot meet the standard without capital improvements which cannot be completed prior to the date established pursuant to SDWA 1412(b)(10); (2) In the case of a system which needs financial assistance for the necessary improvement, the system has entered into an agreement to obtain such financial assistance or assistance pursuant to SDWA 1452, or any other federal or state program is reasonably likely to be available during the period of the exemption; or (3) The system has entered into an enforceable agreement to become part of a regional water system.
As described in section III.C.1 of this preamble, the EPA expects that nearly all water systems exceeding the PFOA and PFOS MCLs will need to make capital improvements to achieve compliance with the standard and, due to compelling factors and other considerations detailed previously, many of these systems will not be able to make these improvements prior to April 26, 2029. According to AWWA's 2025 State of the Industry Report, numerous water systems will need financial assistance to make these improvements (AWWA, 2025). The EPA proposes to find that federal or state funding programs, such as the DWSRF, EPA grant programs, and USDA Rural Development, are reasonably likely to be available for those water systems in need of financial assistance during the period of the exemption, including a significant amount of IIJA funding that is both currently and anticipated to be available prior to the exemption period for the capital improvement projects being undertaken during the exemption period. Therefore, based upon some systems not being able to fully make capital improvements prior to April 26, 2029, the likelihood that many systems that exceed the MCLs will need financial assistance in order to make the required capital improvements, and the known and expected availability of federal and state funding to support rule compliance, under this proposal, a water system that exceeds the PFOA or PFOS MCLs and provides the EPA with the required information under 40 CFR 142.58(b) will meet SDWA 1416(b)(2)(B) criteria and will qualify for the federal exemption.
Under the proposed national exemption framework and process, all systems without a variance from the PFOA and PFOS MCL requirements, those in operation on or before June 24, 2024, and those located in states that do not have primacy for the PFOA and PFOS MCLs are eligible for the two-year exemption upon submission of a request documenting its qualification for the exemption to the EPA. To request the federal exemption, the proposed rule requires a water system to directly notify the EPA that it is seeking an exemption and provide the Agency with information according to the proposed requirements of 40 CFR 142.58(b) by November 16, 2026. The EPA proposes that the exemption would be granted by operation of the rule if the water system meets the proposed requirements and unless the exemption is terminated by the EPA upon a finding that the system has failed to comply with the requirements of the exemption. For systems granted the exemption, PFOA and PFOS MCL compliance must be achieved by April 26, 2031.
As discussed in section III.C.1 of this preamble and in accordance with 40 CFR 142.58(a), the EPA proposes that all water systems within states that do not have primacy for 40 CFR part 141 subpart Z, were in operation as of June 25, 2024, and do not have a variance from the PFOA and PFOS MCL requirements and that meet the other criteria in the rule are eligible for a
In accordance with 40 CFR 142.58(c), only those eligible water systems submitting an exemption request and required information under 40 CFR 142.58(b) would be exempt from PFOA and PFOS MCL requirements. The EPA proposes that an exemption for a water system may be terminated if the system fails to comply with the requirements or conditions of the exemption, including implementation of control measures required for applicable water systems prescribed under 40 CFR 142.59 and detailed in section III.D.1.b.i of this preamble. For all systems that are covered by the federal exemption, the EPA proposes (per 40 CFR 141.58(c)(2)) that the schedule for compliance to meet the PFOA and PFOS MCLs is April 26, 2031. As discussed earlier in this section, the EPA's proposed finding that the exemption would not result in an URTH is based, in part, on the limited effect of a two-year exemption. For all systems without an exemption, MCL compliance is required by April 26, 2029, pursuant to 40 CFR 141.900(b)(4). Water systems that seek to obtain additional exemptions beyond the two-year federal exemption period may request their primacy agency to grant an exemption for up to one additional year under the provisions of SDWA 1416(a). Further, in accordance with SDWA 1416(b)(2)(C), for smaller water systems (those serving ≤3,300 population) that need financial assistance for necessary improvements, primacy agencies may grant renewals of the exemption not to exceed six more years to achieve compliance with the PFOA and PFOS MCLs.
SDWA 1416(a)(3) requires that the granting of an exemption will not result in an URTH. As described in section III.C.1 of this preamble, to evaluate this requirement and ensure that the exemption will not result in an URTH, the EPA proposes that systems with any measured result(s) for PFOA or PFOS equal to or greater than 12 ppt must implement PFOA and PFOS reduction control measures in order to be covered by the exemption.
The EPA proposes six control measure options that applicable water systems could select and implement to reduce PFOA and PFOS concentrations and provide information for consumers to decrease their exposure to PFAS. Control measures are not required to reduce concentrations to levels as low as the MCLs or achieve MCL compliance, rather they are intended to temporarily decrease concentrations of PFOA and PFOS and associated exposure during the period of the exemption until longer term and more effective solutions can be implemented to achieve MCL compliance. In accordance with 40 CFR 142.59, these measures include providing water pitchers and filters certified to reduce PFOA and PFOS concentrations, delivering alternative water supplies with lower levels of PFOA and PFOS, installing, operating, and maintaining POU or POE devices certified to decrease PFOA and PFOS concentrations, implementing actions and plans to decrease PFOA and PFOS levels in sources of drinking water, distributing written public education materials to consumers on PFOA and PFOS exposure sources, and conducting community educational outreach activities on PFOA and PFOS in drinking water. The EPA proposes to require water systems with any PFOA or PFOS result(s) greater than or equal to 12 ppt to select and implement at least two of these control measures during the period of the exemption from April 26, 2029, through April 26, 2031, and make each of the two control measures a water system selects available for all customers. Additionally, the EPA proposes that the two control measures selected cannot solely include public education materials and public outreach activities. In determining which control measures to implement, water systems should seek to implement those with the greatest public health protection based on their site-specific conditions. The EPA is requesting comment on these six control measures and if there are other measures the Agency should consider.
The EPA proposes pitcher filters as a short-term control measure option to reduce PFOA and PFOS. For the purposes of 40 CFR part 142 subpart F, the EPA proposes to define a pitcher filter under 40 CFR 142.2 as a non-plumbed filtration device, which consists of a gravity fed water filtration cartridge and a filtered drinking water reservoir, that is certified by an ANSI accredited certifier to reduce PFAS in drinking water. Pitcher filters are not considered POU or POE devices, which are defined in 40 CFR 141.2. Though there are currently no pitcher filters certified to reduce PFOA and PFOS to the MCLs; there are approximately 20 pitcher devices that have been certified by an ANSI accredited certifying
Additionally, as noted in section III.C.1 of this preamble, NSF/ANSI is currently continuing the process to update their standards to align with the 2024 PFAS NPDWR (NSF, 2024); thus, the EPA anticipates that at the time of the exemption period, devices will likely be able to achieve PFOA and PFOS reduction to levels as low as the PFOA and PFOS MCLs. For systems that elect to implement pitcher filters as a control measure, in accordance with 40 CFR 142.59(c) any devices must be certified by an ANSI accredited certifier to meet the ANSI/NSF standard (currently ANSI/NSF standard 53). Additionally, water systems will be required to provide pitcher devices, two years of replacement filters, and instructions for their use and maintenance to consumers served by the system upon request and make these available at all drinking water tap locations in NTNCWSs.
Another option for systems required to implement control measures is the provision of alternative water supplies. Alternative water supplies may include temporarily switching to a new source with lower levels of PFOA and PFOS or blending of water supplies to reduce PFOA and PFOS concentrations where the source change would not be a change that could “reasonably be made that will result in compliance.” For example, water systems could take these actions to temporarily reduce PFOA and PFOS to lower levels, but it would not achieve lower levels required for long-term MCL compliance. Alternative water supplies may also include the distribution of bottled water. For systems electing to utilize bottled water as a condition of the PFOA and PFOS exemption, the PWS must follow the requirements prescribed in 40 CFR 142.62(g). In summary, this includes either: (1) developing a monitoring program for bottled water, with reasonable assurances that it meets all MCLs; or, (2) obtaining certification from the bottled water company that the product has been taken from an approved source (as defined in 21 CFR 129.3(a)), the bottled water company has conducted monitoring (in accordance with 21 CFR 129.80(g)(1) through (3)), and the bottled water does not exceed other MCLs. Additionally, the water system is responsible for delivering a sufficient amount of bottled water to every person supplied by the water system.
A third option the EPA proposes for water systems to choose as a condition of the exemption is the installation and maintenance of POU or POE devices to reduce PFOA and PFOS concentrations in drinking water. In accordance with 40 CFR 141.2, POE devices are treatment devices applied to the drinking water entering a house or building to reduce contaminants in the drinking water distributed throughout the house or building. A POU device is defined in 40 CFR 141.2 as a water treatment device physically installed or connected to a single fixture, outlet, or tap to reduce or remove contaminants in drinking water.
As discussed in section III.C.1 of this preamble, the NSF/ANSI standard for PFOA and PFOS removal in POU and POE devices does not currently meet the PFOA and PFOS MCLs. However, for the purposes of these PFOA and PFOS exemptions, there are numerous POU and POE devices that have been certified to meet the ANSI/NSF 53/58 standards and reduce PFOA and PFOS concentrations in drinking water to 20 or 70 ppt. Additionally, several of the POU and POE providers or accredited certifying organizations have stated that the devices can achieve PFOA and PFOS reduction lower than 20 ppt (WQA, 2023; USEPA, 2024g). Similar to water pitcher filters discussed earlier in this section, the EPA expects that filters can reduce to levels below 20 ppt during much of their use and also, that during the exemption period, devices will likely be able to achieve PFOA and PFOS reduction to levels as low as the PFOA and PFOS MCLs (NSF, 2024). Accordingly, use of these devices will likely reduce concentrations of PFOA and PFOS in drinking water and associated exposures to consumers during the period of the exemption.
For systems that elect to implement POU or POE devices as one of the control measures, the EPA proposes to apply the requirement of 40 CFR 142.62(h) that any device chosen must be certified by an ANSI accredited certifier to meet the ANSI/NSF standard. PWSs must also meet the requirements of 40 CFR 142.62(h). To summarize, these requirements include: (1) the PWS must operate and maintain the POU and/or POE treatment system; (2) prior to POU and/or POE device installation, the PWS must have an approved monitoring plan to ensure public health protection equivalent to that provided by central water treatment; (3) the PWS must apply effective technology under an approved plan and the microbiological safety of the water must be continuously maintained; (4) certification of performance, field testing, and, if not already included in the certification process, an engineering design review of the POU or POE devices; (5) the design and application of the POU or POE devices must consider the potential for increasing concentrations of heterotrophic bacteria in water treated with activated carbon; and (6) buildings connected to the system also have sufficient POU or POE devices that are properly installed, maintained, and monitored such that all consumers will be protected. The EPA is seeking comment on whether it should not apply some or all of these requirements to POU and POE devices selected as one of the control measures to establish that
Determining the cause(s) of contaminants and reducing their concentrations in sources of drinking water can be more cost-effective and sustainable than installing treatment technologies and continuously treating contaminated drinking water. The EPA has many resources and funding programs that can assist drinking water systems in conducting and updating Source Water Assessments (SWAs) and planning and implementing investigations of PFAS contamination sources during the exemption period. These include the EPA's Drinking Water Mapping Application to Protect Source Water (DWMAPS), the EPA's Funding Integration Tool for Source Water (FITS), EC-SDC grant program, and the EPA's RealWaterTA program described previously in section III.C.1 of this preamble. There may also be resources available at the state level to support these types of source water assessment and funding activities addressing sources of PFAS.
The EPA's DWMAPS can be utilized to help investigate known or potential sources of PFAS contamination (USEPA, 2025c). Specifically, DWMAPS is an online mapping tool that drinking water utilities can employ to update SWAs and protection plans. SWAs involve compiling an inventory of existing/potential sources of contamination within a system's source water area, determining the susceptibility of the system to contamination, determining where source water controls may be necessary, and distributing the results to the local stakeholders for further action (USEPA, 2025d). Although continuous updating of a SWA is not required, some water systems voluntarily update or evaluate their assessment through actions such as delineating their source water protection area with updated geospatial data and utilizing advanced hydrological and hydrogeologic fate and transport models and new data on emerging contaminants (URI, 2022; USEPA, 2025e).
Federal funding for initiatives that protect source water can be identified by using the EPA's FITS tool (USEPA, 2025f). For more information on FITS and examples of previously funded projects, visit
Additionally, drinking water systems are often passive receivers of contaminants discharged by facilities upstream of the water system and can have little control of the quality of their source waters. As discussed in section III.C.1 of this preamble, the EPA is exploring and has announced regulatory strategies, such as ELGs, to protect drinking water sources from PFAS and hold polluters accountable for PFAS contamination. States may also set discharge limits through other regulatory mechanisms, including National Pollutant Discharge Elimination System (NPDES) permits.
Therefore, the EPA proposes that another option water systems may choose as a control measure is to develop actions to reduce PFOA and PFOS in the sources of drinking water. For systems that elect source water controls as a control measure, in accordance with 40 CFR 142.59(d) as proposed, the water system would need to certify one of the following requirements: (1) A direct agreement with an entity directly discharging PFOA and PFOS into the drinking water systems' source water(s) that establishes reduction of the PFOA and PFOS discharges; (2) Source water(s) of the system are subject to the regulations that reduce PFOA and PFOS discharges in the source water(s); (3) A source water assessment to identify and address known and potential non-point and point sources of PFOA and PFOS; or (4) Funding or technical assistance to implement source water assessment planning or activities focused on addressing and reducing PFOA and PFOS.
Public education of the sources and exposure pathways for PFOA and PFOS is a very important component of reducing risk by increasing consumer awareness of the potential health impacts and steps consumers can take to reduce these impacts. While these materials will not directly reduce PFOA and PFOS in drinking water in the same manner as some of the other proposed control measures (
As proposed, PWSs selecting written public education materials as a control measure would be required to ensure the materials include, at a minimum, content covering the following: (1) general explanation of PFAS, including PFOA and PFOS; (2) health effects of PFAS, particularly PFOA and PFOS and including specific information for pregnant people, infants and children that may be impacted during critical life stages; (3) possible sources of PFAS, including PFOA and PFOS, including drinking water, consumer products, environmental and occupational factors, proximity to commercial and industrial sites, among others; (4) consumer steps to reduce PFOA and PFOS exposure from drinking water and other sources of PFAS; (5) analytical results for PFOA and PFOS in the systems' drinking water; and (6) actions the water system is taking to address PFOA and PFOS, and any other PFAS, in drinking water. If the EPA finalizes this requirement, the EPA intends to develop guidance and example public education materials that water systems may use to meet this requirement.
To streamline the process for materials distribution, the EPA proposes that these materials are provided to water system customers concurrent with the delivery and timing requirements for CCRs (40 CFR 141.152) and PNs (40 CFR 141.204(b)(1)). This would include annually or biannually in CCRs, depending on population served by the water system, and annually (for all water system sizes) as part of Tier 3 PN (which may be provided in a CCR pursuant to 40 CFR 141.204(b)(2)). Additionally, to better ensure consumers that may be at greater risk of exposure during the exemption period, including pregnant people and those in critical life stages, are made aware of this educational information, the EPA is also proposing that the materials must be provided to relevant organizations within the water system's service area. Relevant organizations include local public health agencies, Women, Infant, and Children (WIC) and Head Start Programs, public and private hospitals and medical clinics, pediatricians, and obstetricians, gynecologists and midwives.
Similar to written public education materials, public outreach activities are a key mechanism for informing consumers about PFOA and PFOS in drinking water and other sources of
For systems that elect to conduct community outreach activities as a control measure, the EPA proposes that the activities must include a discussion of PFOA and PFOS sampling results at the water system, short-term mitigation steps the system is taking to reduce PFOA and PFOS in drinking water, long-term actions the system is taking to achieve PFOA and PFOS MCL compliance, steps consumers can take to reduce PFOA and PFOS exposure from drinking water and other sources of PFAS, and information on how to obtain a pitcher filter certified to reduce PFOA and PFOS in drinking water as discussed earlier in this section and required under 40 CFR 142.59(c). The types of community outreach activities the water system can choose to conduct include public meetings, participation in community events, contacting customers directly via phone, text, email or door hanger, or social media campaigns. Water systems must conduct at least two of these activities within six months following the beginning of the exemption period (
As part of SDWA and in accordance with the requirements of 40 CFR part 141 subpart Q, the PN Rule establishes requirements that PWSs must follow regarding the form, manner, frequency, and content of a public notice. The requirement to provide PN under certain specified circumstances is an integral part of the public health protection and consumer Right-to-Know provisions of SDWA. Owners and operators of PWSs are required to notify persons served when they fail to comply with the requirements of the NPDWR; have a variance or exemption from the drinking water regulations; or are facing other situations posing a risk to public health. Under the PN Rule, the notification requirements are based on the tier to which a violation or situation is assigned. The EPA specifies three categories, or tiers, of PN requirements, to account for the seriousness of the violation or situation and any potential adverse health effects that may occur.
The PN Rule specifies the NPDWR violations and other situations that require the water systems to provide public notice, including if a system is operating under an exemption issued under SDWA 1416 or a system fails to comply with the requirements of any schedule that has been set under an exemption (table 1 to 40 CFR 141.201, appendix A to 40 CFR part 141 subpart Q). Systems operating under an exemption granted under SDWA 1416, 40 CFR 141.204(a)(3) and (b)(1) require that Tier 3 PN be issued not later than one year after the water system begins operating under the exemption. Following the initial notice, the water system must then repeat the notice annually for as long as the exemption continues. The proposed rule does not treat a federal PFOA and PFOS exemption differently for tiering purposes, consistent with existing PN Rule requirements. The EPA requests comment on whether it should require a Tier 2 notice for systems operating under an exemption of the PFOA and PFOS MCLs and require systems to provide the notice within 30 days of beginning to operate under the exemption.
Public notices for systems operating under an exemption must include specific information required by 40 CFR 141.205(b)(1) including: (1) An explanation of the reasons for the exemption; (2) The date on which the exemption was issued; (3) A brief status report on the steps the system is taking to install treatment, find alternative sources of water, or otherwise comply with the terms and schedules of the exemption; and (4) A notice of any opportunity for public input in the review, or renewal, of the exemption. This information is required to be included in an initial public notice of the PFOA and PFOS exemption issued no later than April 26, 2030, and repeated annually for the period of the exemption. Additionally, for systems required to implement control measures, a status update on those measures must be included according to 40 CFR 141.205(b)(1)(iii). The EPA requests comment on additional content requirements for the Tier 3 PN of PFOA and PFOS exemptions.
When a water system fails to comply with the terms and conditions of an existing exemption, 40 CFR 141.203(a) and (b)(1) require that Tier 2 PN be issued as soon as practicable, but no later than 30 days after the system learns of the violation. As required by 40 CFR 141.205(b)(2), public notices of an exemption violation must contain information according to 40 CFR 141.205(a).
CWSs must prepare and deliver to its customers a CCR annually or biannually (beginning January 1, 2027, for systems serving populations of 10,000 or greater) in accordance with requirements in 40 CFR part 141 subpart O. CCRs provide customers with information about their local drinking water quality as well as information regarding the water system's compliance with drinking water regulations. If a system is operating under the terms of an exemption issued under SDWA 1416, as required by 40 CFR 141.153(c)(2) and (g), the report must include the definition “Variances and Exemptions: State or EPA permission not to meet an MCL or a treatment technique under certain conditions”, and contain the following information: (1) An explanation of the reasons for the exemption; (2) The date on which the exemption was issued; (3) A brief status report on the steps the system is taking to install treatment, find alternative sources of water, or otherwise comply with the terms and schedules of the exemption; and (4) A notice of any opportunity for public input in the review, or renewal, of the exemption. For CWSs that choose to opt-in to the proposed PFOA and PFOS exemptions, this information would be required to be included in CCRs between April 26, 2029, and April 26, 2031. Additionally, for systems required to implement proposed control measures under 40 CFR 142.59, a status update on those measures must be included according to 40 CFR 141.153(g)(3).
As discussed in section III.B of this preamble, SDWA 1416(f) authorizes the EPA Administrator to exempt PWSs from MCL requirements if the state, Tribe, or territory (collectively referred to as “state” for the purposes of this section) does not have primacy for the new or revised NPDWR. To facilitate a streamlined approach for PFOA and PFOS MCL exemptions and to reduce the burden on primacy agencies, the EPA is proposing this national exemption framework that would allow the Agency to provide MCL exemptions to PWSs during the time period prior to when a state obtains primacy.
Once a state obtains primacy for the 2024 PFAS NPDWR, the EPA will no longer be authorized to issue MCL
This section summarizes the Economic Analysis (EA) supporting document (USEPA, 2025h) for this proposed rulemaking. The EA presented here, and in the EA supporting document (USEPA, 2025h), fulfills the Executive Order 12866:
The EPA largely relied on the EA conducted for the 2024 PFAS NPDWR which is described in the
In its
For detailed information on the data and assumptions used to develop the baseline (Option 1a in the 2024 PFAS NPDWR), see the
The annualized quantified national expected value baseline cost is $1,626 million (in 2024 dollars discounted at 3 percent) and $1,636.6 million (in 2024 dollars discounted at 7 percent). These estimates represent costs for both the PWS and primacy agency. The annualized baseline quantified benefit estimate is $1,478.8 million at a 3 percent discount rate and $968.6 million at a 7 percent discount rate. These quantified benefits reflect the avoided future adverse health outcomes attributable to PFOA and PFOS reductions and co-removal of additional
The quantified baseline results in Exhibit IV-1 of this preamble are not representative of all benefits and costs anticipated under the baseline. Due to occurrence, health, and economic data limitations, there are several adverse health effects associated with PFOA and PFOS (and other co-occurring PFAS) exposure and costs associated with treatment that the EPA could not estimate quantitatively. As part of the 2024 PFAS rulemaking, the EPA qualitatively discussed additional adverse health effects, including reproductive effects, such as decreased fertility; increased high blood pressure in pregnant women; developmental effects or delays in children, including accelerated puberty, bone variations, or behavioral changes; increased risk of some cancers, including prostate, kidney, and testicular cancers; reduced ability of the body's immune system to fight infections, including reduced vaccine response; interference with the body's natural hormones; and increased cholesterol levels and/or risk of obesity. With regard to non-quantified costs, baseline cost estimates may be underestimated because the EPA could not estimate the impact of the co-occurrence of other non-regulated PFAS and contaminants that would reduce the useful life of the filter media used for GAC and/or ion exchange treatment. In addition, the EPA could not estimate the degree to which PWSs required to treat would in the future decide to handle the spent filtration media as hazardous waste.
The annualized cost and benefit estimates described in the baseline represent a stream of values which occur over the 84-year period of analysis used for the assessment of the regulatory impacts. This rule proposes to use SDWA 1416 authority to allow all water systems to opt into a federal exemption by rule that would allow systems to delay compliance with the PFOA and PFOS MCLs of 4.0 ppt for two years. In addition, this rule would require systems with PFOA or PFOS monitoring data at or above 12 ppt to implement two of the regulatorily identified control measures
• Certified water filtration pitchers;
• Alternative water supplies;
• Certified POU/POE devices;
• Source water controls;
• Public education materials; and/or
• Community outreach activities.
In the analysis of this proposed rule, all 2024 PFAS NPDWR Option 1a regulatory requirements remain the same except for the shift in the MCL compliance date. Therefore, the time profile for the costs associated with initial administration of the rule, and sampling and report costs remain the same. Only the cost associated with the installation and operation of the PFAS treatment technology are delayed by two years resulting in a reduction in its net present value, which in turn reduces the estimated annualized cost for this proposed rulemaking. Likewise, because the estimated benefits from PFOA and PFOS reductions are dependent on the timing of treatment, all benefits under this proposed rule are shifted into the future by two years resulting in a lower net present value and lower annualized benefits estimates. The EPA also assumes that all systems exceeding either the MCL for PFOA or PFOS will opt into the proposed exemption process. The two-year shift in compliance produced by the proposed exemption scenario (apart from the exemption administrative costs, and the mitigation cost and impact to health endpoints) would result in cost savings and forgone benefits. The EPA also (1) developed primacy agency burden hours and costs associated with reading and understanding the regulatory changes, developing and participating in trainings, and conducting oversight; (2) estimated PWS burden hours and costs associated with reading and understanding the rule, participating in trainings, reviewing PFOA and PFOS sampling data, planning and opting into the exemption program, updating systems' CCRs and issuing exemption PNs; and (3) estimated PWS (with PFOA or PFOS monitoring samples of 12 ppt or above) costs associated with implementing control measures for the two years covered by the exemption. The Agency assumed for costing purposes that all systems implementing control measures would conduct public education and make pitcher filters available to customers. These two control measures are the most likely to be selected by implementing PWSs (apart from system specific circumstances that the EPA has insufficient data to characterize nationally), because they represent the least cost alternatives and are administratively the least complex. As part of the assessment of public education and pitcher filter costs, the EPA used data inputs from the Lead and Copper Rule Improvements (LCRI) EA (USEPA, 2024j). The LCRI rulemaking required similar public education
Because of a lack of national level data regarding the effectiveness of public education activities geared towards the prevention of PFAS exposure, the EPA is not able to quantitatively assess the degree to which this control measure requirement would reduce the potential forgone benefits associated with the two-year exemption delay at PWSs exceeding either the MCLs for PFOA or PFOS. In the case of making pitcher filters available to customers during the two years of the exemption, the EPA was able to estimate a reduction in forgone benefits by relying on two assumptions which in large part drive the estimated results. In the absence of specific data, the EPA used the estimated 20 percent pitcher filter customer use rate from the LCRI EA (USEPA, 2024j), which implicitly assumes drinking water customers are equally concerned about the exposure effects from PFAS and lead. Also, in order to estimate the reduction in drinking water PFOA and PFOS at households, the EPA assumed that 100 percent of drinking water at households using pitcher filters would not exceed 20 ppt of PFOA and/or PFOS.
The quantified incremental national estimated annualized costs and benefits under this proposed rule are shown in Exhibit IV-2.
The expected quantified annualized costs savings resulting from the implementation of this proposed rule is $90.2 million, in 2024 dollars, discounted at 3 percent, and $188.2 million discounted at 7 percent. The estimated quantified forgone benefits are $79.3 million (discounted at 3 percent), and $105.7 million (discounted at 7 percent). The same level of health protection from PFOA and PFOS and co-occurring DBPs is reached when compared to the baseline; however, because of the two-year delay in achieving the health protection, which is only partially offset by the quantified control measure requirements, the net present value of the health improvements is lower, reducing the calculated annualized value.
As discussed in the regulatory baseline section (the 2024 PFAS NPDWR Option 1a), the Agency cannot say with certainty the degree to which the nonquantifiable health endpoint benefits may decrease as a result of this action. Likewise, the Agency cannot say with certainty the degree to which the non-quantified PWS filter media disposal costs would decrease.
In addition to the sources of uncertainty affecting the baseline and the benefit and cost estimates which are discussed in detail in sections 4.5, 5.1.2, 5.7, 6.1.2, and 6.8 of the 2024 PFAS NPDWR EA document (USEPA, 2024e), seven additional sources of uncertainty should be considered as part of a review of SDWA 1416 exemptions proposed rule quantified impacts. These are:
1. The EPA assumes that 100 percent of systems with MCL exceedances opt into the exemption process. Although this assumption overestimates the number of systems opting into the exemption process, the system-specific nature of this decision (being based on treatment in place, capital management planning, financial projections, availability of technology venders, PFOA and PFOS occurrence, and customer preference) and the lack of data prevents the Agency from making a reliable national level estimate as to the number of systems opting into the exemption process. Therefore, the EPA
2. The EPA assumes that treatment technology effectiveness and the cost of implementing treatment technology remain constant over the period covered by the exemptions. By allowing more time through the exemptions, the EPA expects that emerging technologies will become better understood and may become more widely available, improving average treatment efficacy and potentially lowering implementation and operations and maintenance costs. Because the EPA is unable to develop new technology implementation unit cost and efficacy estimates, the calculated cost savings may be underestimated.
3. There may be uncertainty in the estimated number of systems with PFOA and PFOS levels at or above 12 ppt triggering the proposed rule requirement for PFAS control measures during the period of the exemption. This may result in either an under- or over-estimate of the proposed rule's cost savings and forgone benefits.
4. The choice of public education and pitcher filters is assumed for all systems required to conduct control measures. This assumption could result in under- or over-estimates of both cost savings and forgone benefits.
5. The Agency could not provide an estimate of the effectiveness of public education activities in reducing PFAS exposure, underestimating control measure benefits which results in an overestimate of forgone benefits for the proposed rule.
6. The assumption that 20 percent of drinking water system customers will utilize PWS provided pitcher filters for 100 percent of their drinking water needs at home (rates which could be affected by public education control measures), could result in under- or over- estimates in the costs and benefits of the control measure requirements and likewise result in either an under- or over-estimate of total rule cost savings
7. The EPA assumes that when pitcher filters are used in households as a control measure, they only achieve a reduction in PFOA and PFOS to 20 ppt (the 2022 NSF/ANSI Standard 53 limit for PFOA and PFOS). For systems using devices certified under the 2022 NSF/ANSI Standard, assuming a fixed reduction level may underestimate mitigation benefits. The 2022 total PFAS reduction Standard 53 sets a combined limit of 20 ppt for seven PFAS, including PFOA and PFOS. Therefore, it is reasonable to assume PFOA and PFOS concentrations in filtered water will be below 20 ppt considering the other five PFAS as part of the combined limit. The EPA is also allowing the use of pitcher filters that have been certified under the older NSF/ANSI standard requiring PFOA and PFOS to 70 ppt. The EPA believes that even for these filters, the majority will reduce concentrations to below 20 ppt in most cases. This is because pitcher filters have been found to be generally effective in removing PFOA and PFOS, often with removal efficiencies greater than 50 percent and as high as 99+ percent in some cases (Herkert et al., 2020; Mulhern et al., 2021; Teymoorian et al., 2024; and Zarębska et al., 2025). Based on the EPA's 2024 occurrence analyses supporting the EA, and the UCMR 5 data reported through October 2025, the vast majority of PWS samples exceeding 4.0 ppt are below 40 ppt. Hence, even a pitcher filter with only 50 percent average removal efficiency will reduce water consumed to below 20 ppt in most cases. Therefore, assuming that filters reduce PFOA and PFOS only to 20 ppt may understate the protection they actually provide for the majority of time they are used as a short-term control measure and, in turn, may underestimate the control measure benefits under the proposed rule. The EPA requests the submission of additional data and comment on these six new sources of uncertainty, particularly the cost and treatment effectiveness of pitcher filters used to reduce PFAS exposures.
The EPA concludes that the proposed rule should yield annualized cost savings of $90.2 million with forgone benefits of $79.3 million, when discounted at 3 percent, and yield cost savings of $188.2 million with forgone benefits of $105.7 million, when discounted at 7 percent.
The EPA also acknowledges that a number of the long-term forgone benefits of increased PFAS exposure—such as premature mortality, higher medical expenses, lost productivity due to illness, and other reductions in welfare (measured in willingness-to-pay) which are linked to developmental and reproductive toxicity, immune system suppression, liver damage, thyroid disruption, and elevated risk of cancers—remain unquantified.
The EPA seeks public comment on this proposal that provides additional compliance time meet the PFOA and PFOS MCLs for exempted systems. Specifically, the EPA seeks public comment and data on:
• The proposed national PFOA and PFOS exemption framework and the Agency's use of authority under SDWA 1416 in this streamlined fashion.
• The proposed compelling factors, other unidentified factors, and supporting information the Agency should consider when evaluating SDWA 1416(a)(1) exemption criteria.
• If there are any other levels, aside from 12 ppt PFOA or PFOS, the Agency should consider when evaluating SDWA 1416(a)(3) exemption criteria.
• Whether the risk to human health that may occur due to exposure to PFOA or PFOS at levels less than 12 ppt, over a limited period of time, is unreasonable.
• The suitability of the six control measures identified that systems at or exceeding 12 ppt for PFOA or PFOS must select and implement during the exemption period from April 26, 2029, through April 26, 2031. The control measures include providing water pitchers and filters certified to reduce PFOA and PFOS concentrations, delivering alternative water supplies with lower levels of PFOA and PFOS, installing and maintaining POU or POE devices certified to decrease PFOA and PFOS concentrations, implementing actions and plans to decrease PFOA and PFOS levels in sources of drinking water, distributing written public education materials to consumers on PFAS exposure sources, and conducting community educational outreach activities on PFAS in drinking water, as described in section III.D.1.b.i of this preamble.
• For PWSs selecting POU or POE devices as a control measure requirement, whether the requirements of 40 CFR 142.62(h) should apply.
• The proposed Tier 3 PN designation of operating under an exemption of the PFOA and PFOS MCLs and whether a Tier 2 notice should be required.
• Additional information that should be included in the Tier 3 PN of PFOA and PFOS MCL exemptions aside from requirements already specified under section III.D.1.b.ii of this preamble.
• The proposed estimated cost savings and forgone benefits from the EA for this action, including SDWA 1416 exemptions proposal, and possible alternative provisions, for example, other PFOA or PFOS reduction control measures.
• Additional data and comment on the seven additional proposed rule specific sources of uncertainty for this rule's quantified impacts, as described in section IV.B of this preamble. The EPA would particularly appreciate public comment on the cost and treatment effectiveness of pitcher filters used to reduce PFAS exposures. The Agency also asks for comment and relevant data on the assumption, used in the EA, that 20 percent of drinking water system customers would choose to use pitcher filters during the two-year exemption period.
• The assumption used in the EA that all systems exceeding either the MCL for PFOA or PFOS will opt into the proposed exemption process when the relative cost of required mitigation measures (required only for those systems with PFOA or PFOS sample results at or above 12 ppt) and other policy concerns could prompt systems to install long-term compliance technology ahead of required deadlines.
• The anticipated Paperwork Reduction Act burdens associated with this rulemaking.
Submit your comments, identified by Docket ID No. EPA-HQ-OW-2025-1742, at
The EPA will hold a public hearing on July 7, 2026, to receive public comment and present on the proposed rule. The hearing will be held virtually from approximately 11:00 a.m. to 7:00 p.m. eastern time, or at the conclusion of public testimony, whichever is sooner. The EPA will begin pre-registering speakers for the hearing upon publication of this document in the
The EPA will make every effort to follow the schedule as closely as possible on the day of the hearing; however, please plan for the hearings to run either ahead of schedule or behind schedule. Please note that the public hearing may close early if there are no more people awaiting the opportunity to provide comment.
The EPA encourages commenters to provide the EPA with a copy of their oral testimony electronically by submitting it to the public docket. Oral comments will be time limited to allow for maximum participation, which may result in the full statement not being heard. Therefore, the EPA also recommends submitting the text of your oral comments as written comments to the rulemaking docket. Written statements and supporting information submitted during the comment period will be considered with the same weight as oral comments and supporting information presented at the public hearing.
Please note that any updates made to any aspect of the hearing are posted online at
If you require any accommodations such as language translation, captioning, or other special accommodations for the day of the hearing, please indicate this as part of your registration and describe your needs by June 30, 2026. The EPA may not be able to arrange
Additional information about these statutes and Executive Orders can be found at
This action was determined by OMB to be a significant regulatory action as defined under section 3(f)(1) of Executive Order 12866. Accordingly, it was submitted to OMB for review. Any changes made in response to OMB recommendations have been documented in the docket. The EPA prepared an analysis of the potential costs and benefits associated with this action. This analysis,
This action is expected to be an Executive Order 14192 deregulatory action. The expected quantified annualized cost savings is $189 million, in 2024 dollars, at a 7 percent discount rate and an in-perpetuity time horizon. Details on the estimated cost savings of this proposed rule can be found in the EPA's analysis of the potential costs and benefits associated with this action, see Chapter 4 and Appendix A Table A-1 of the
The information collection activities for this proposed rule will be submitted for final approval to OMB under the PRA. The Information Collection Request (ICR) submission is dependent on the requirements of the final rule promulgation. The EPA developed an ICR document for this proposal, assigned the EPA ICR number 7817.01. You can find a copy of the ICR in the docket for this rulemaking; it is also summarized here. Section 7.3 of the EA provides information on the proposed rule collection.
The proposed rule ICR being considered would cover information collection burden and cost associated with the existing 2024 Final PFAS NPDWR ICR (OMB control number 2040-0307, the EPA ICR #: 2732.02), as modified by the proposed rescission rule (
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9.
Submit your comments on the Agency's need for this information, the accuracy of the provided burden estimates and any suggested methods for minimizing respondent burden to the EPA using the docket identified at the beginning of this rule. The EPA will respond to any ICR-related comments in the final rule. You may also send your ICR-related comments to OMB's OIRA using the interface at
The EPA certifies that this action will not have a significant economic impact on a substantial number of small entities under the RFA. In making this determination, the EPA concludes that the impact of concern for this proposed rule is any significant adverse economic impact on small entities and that the agency is certifying that this proposed rule will not have a significant economic impact on a substantial number of small entities because it has no new net burden on the small entities subject to the rule. The proposed rule
This action does not contain an unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no new enforceable duty on any state, local or Tribal governments or the private sector.
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
This action does not have Tribal implications as specified in Executive Order 13175. The proposed actions will not have substantial direct effects on one or more Tribes, change the relationship between the Federal Government and Tribes, or affect the power and responsibilities between the Federal Government and Indian Tribes. The proposed actions only seek to extend the compliance timeframe for the PFOA and PFOS MCLs and the compliance requirements in this proposed rulemaking are not different than those promulgated for PFOA and PFOS in the 2024 PFAS NPDWR. Water systems are only subject to the conditions of the exemption if they request it to be granted. Additionally, Tribes assuming primacy may choose not to allow the federal exemption and/or elect to issue exemptions under their SDWA 1416 authority. Thus, there is no new burden on Tribes or Tribal governments, and Executive Order 13175 does not apply to this action.
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it does not disproportionally diminish protections for children's health. The proposed rule discussed in this document strictly deals with providing more time to comply with the PFOA and PFOS MCL standards; the underlying MCLs and health-based MCLGs remain unchanged. This exemptions proposal, which requires eligible systems at or above a concentration threshold of 12 ppt each for PFOA and PFOS to implement control measures, ensures that the exemption will not result in an URTH over the two-year period. This action is also not subject to the EPA's Policy on Children's Health for these same reasons.
This action is not a “significant energy action” because it is not likely to have a significant adverse effect on the supply, distribution or use of energy. The public and private water systems affected by this action do not, as a rule, generate power. This action does not regulate any aspect of energy distribution as the water systems that are proposed to be impacted by this rule already have electrical service.
This rulemaking does not involve technical standards. Voluntary consensus standards are technical standards utilized in regulatory and procurement activities. Since this rule is procedural and does not establish or involve technical standards, NTTAA requirements are not triggered.
In accordance with SDWA 1412(d), “the Administrator shall consult with . . . the National Drinking Water Advisory Council” prior to proposing and promulgating a regulation under SDWA 1412. Consultation with the NDWAC is not required because this rule is being promulgated under SDWA 1416. Nonetheless, in order to solicit input to inform its decision, the Agency consulted with the NDWAC during the Council's July 28, 2025, virtual meeting. A summary of the NDWAC recommendations is available in the docket for this proposed rule (USEPA, 2025i).
Environmental protection, Per- and polyfluroalkyl substances, Water supply.
For the reasons set forth in the preamble, the EPA proposes to amend 40 CFR part 142 as follows:
42 U.S.C. 300f, 300g-1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-4, 300j-9, and 300j-11.
(a)
(b)
(1) System identifying information, including name, PWSID, contact information, and, if defined as a wholesale system according to 40 CFR 141.2, a list of all consecutive system(s) through which water is distributed, or if defined as a consecutive systems according to 40 CFR 141.2, a list of the wholesale system(s) providing finished water.
(2) The initial date of system operations.
(3) A statement certified by the owner or operator that the system cannot comply with the PFOA and PFOS MCLs by April 26, 2029, due to economic or other compelling factors, that an alternative water source is not available to meet the PFOA and PFOS MCLs, and the system cannot reasonably make management changes or restructure to meet the requirements of the rule.
(4) A statement certified by the owner or operator that the system:
(i) Is taking all practicable steps to meet the standard; and either
(ii) Cannot meet the standard without capital improvements which cannot be completed prior to April 26, 2029; or
(iii) In the case of a system which needs financial assistance for the necessary improvements, the system has entered into an agreement to obtain such financial assistance, or assistance pursuant to section 1452 of the Act or any other Federal or State program is reasonably likely to be available within the period of the exemption; or
(iv) Has entered into an enforceable agreement to become a part of a regional public water system.
(5) Most recent sample result(s) for § 141.61(c)(2)(vi) and (vii), including the locations, number of samples taken at each location, dates, and concentrations reported.
(6) For water systems with any result(s) equal to or exceeding 12 ng/l reported pursuant to paragraph (b)(5) of this section, a statement certified by the owner or operator providing the steps the water system is taking to assure that there is no unreasonable risk to public health from the PFAS in the water it serves during the period of the exemption. The statement must include:
(i) Selection of at least two interim control measures listed in § 142.59; and
(ii) Certification by the owner or operator that the interim control measures selected under paragraph (b)(6)(i) of this section will be implemented throughout the period of the exemption from April 26, 2029 through April 26, 2031.
(c)
(1) Any exemption request that meets the requirements of paragraph (b) of this section is granted. Any exemption may be terminated upon a finding by the Regional Administrator that the system has failed to comply with any requirements of the exemption.
(2) For exemptions granted pursuant to paragraph (c)(1) of this section, the schedule for compliance with §§ 141.61(c)(2)(vi) and (vii), 141.153(d)(6), and entries I.D.35 and 36 of appendix A to subpart Q of part 141 is April 26, 2031.
A public water system with any analytical results submitted according to § 142.58(b)(5) that equal or exceed 12 ng/l shall implement at least two control measures from paragraphs (a) through (f) of this section between April 26, 2029 through April 26, 2031, as a condition of the PFAS exemption granted under § 142.58(c). Each of the two control measures a water system selects must be available for all customers. The control measures selected cannot be only paragraphs (e) and (f) of this section. The control measure options are:
(a)
(b)
(c)
(d)
(1) The water system must have an agreement with an entity directly discharging PFOA and PFOS into the source water(s) of the water system that establishes reduction of PFOA and PFOS discharges.
(2) The source water(s) of the system are subject to regulations that reduce PFOA and PFOS discharges in the source water(s).
(3) The water system has a source water assessment that identifies and addresses known and potential non-point and point sources of PFOA and PFOS.
(4) The water system has funding or technical assistance to implement source water assessment planning or activities focused on addressing and reducing PFOA and PFOS.
(e)
(1) The content of written public education materials must include the information in paragraphs (e)(1)(i) through (vi).
(i) Explanation of what PFAS, including PFOA and PFOS are.
(ii) Health effects of PFAS, specifically PFOA and PFOS, including information for pregnant people, infants, and children.
(iii) Sources of PFAS, specifically PFOA and PFOS, including drinking water, consumer products, environmental and occupational factors, and proximity to commercial and industrial sites.
(iv) Consumer steps to reduce PFOA and PFOS exposure from drinking water and other sources of PFAS.
(v) Levels of PFOA and PFOS in drinking water.
(vi) What the water system is doing to address PFOA and PFOS in drinking water.
(2) The timing, format, and delivery method of public education materials must meet the requirements in paragraphs (e)(2)(i) and (ii) of this section:
(i) Deliver written materials according to the content requirements of paragraph (e)(1) of this section in a manner and time specified by §§ 141.152 and 141.204(b)(1).
(ii) Contact organizations listed in paragraphs (e)(2)(ii)(A) through (E) of this section, who operate within the water system's service area, to deliver educational materials that meet the content requirements of paragraph (e)(1) of this section.
(A) Local public health agencies.
(B) Women, Infants and Children (WIC) and Head Start Programs.
(C) Public and private hospitals and medical clinics.
(D) Pediatricians.
(E) Obstetricians-gynecologists and midwives.
(f)
(1) Conduct a public meeting.
(2) Participate in a community event where the system can make information about ongoing PFOA and PFOS sampling results available to the public.
(3) Contact customers by phone call or voice message, text message, email, or door hanger.
(4) Conduct a social media campaign.
(h) * * *
(7) In requiring the use of a point-of-entry device as a condition for granting an exemption from the treatment requirements for lead and copper under § 141.83 or § 141.84 or the maximum contaminant level requirements for PFOA and PFOS under § 141.61(c)(2)(vi) and (vii), the State must be assured that use of the device will not cause increased corrosion of lead and copper bearing materials located between the device and the tap that could increase contaminant levels at the tap.
Commission on Civil Rights.
Announcement of briefing.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that the New York Advisory Committee to the Commission will hold a public briefing via Zoom. The purpose of the briefing is to hold a public briefing to hear testimony on the committee's topic: Discrimination Against Jews on College and University Campuses Since October 7, 2023.
Tuesday, June 9, 2026, at 12:00 p.m. Eastern Time.
The briefing will be held via Zoom.
David Barreras, Designated Federal Officer at
This virtual committee briefing is available to the public through the registration link above. Any interested member of the public may join at the link to listen to this briefing. An open comment period will be provided to allow members of the public to make a statement as time allows. Pursuant to the Federal Advisory Committee Act, public minutes of the briefing will include a list of people who are present at the briefing. If joining via phone, callers can expect to incur regular charges for calls they initiate over wireless lines, according to their wireless plan. The Commission will not refund any charges incurred. Callers will incur no charge for calls when they initiate over land-line connections to the toll-free telephone number. Closed captioning is available by selecting “CC” in the Zoom meeting platform. To request additional accommodation, please email
Members of the public are entitled to submit written comments; the comments must be received in the regional office within 30 days following the meeting. Written comments may be emailed to
Records generated from this briefing may be inspected and reproduced at the Regional Programs Coordination Unit Office, as they become available, both before and after the briefing. Records of meetings will be available via the file sharing website:
Census Bureau, Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act (PRA) of 1995, invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment on the proposed reinstatement, with change, of the Commodity Flow Survey, prior to the submission of the information collection request (ICR) to OMB for approval.
To ensure consideration, comments regarding this proposed information collection must be received on or before July 20, 2026.
Interested persons are invited to submit written comments by email to
Requests for additional information or specific questions related to collection activities should be directed to Berin Linfors, Branch Chief, at (301) 763-5366 or
The Commodity Flow Survey, a component of the 2027 Economic Census, is the only comprehensive and publicly available source of multimodal,
The Commodity Flow Survey data are used by policy makers and transportation planners in various federal, state, and local agencies to assess the demand for transportation facilities and services, energy use, safety risks, and environmental concerns. Additionally, business owners, private researchers, and analysts use the Commodity Flow Survey data for analyzing trends in the movement of goods, mapping spatial patterns of commodity and vehicle flows, forecasting demands for the movement of goods, and determining the needs for associated infrastructure and equipment.
The survey provides data on the movement of commodities in the United States from their origin to destination. The survey produces summary statistics on value, tons, and average miles by commodity, industry, and mode of transportation. The Census Bureau will publish these shipment characteristics for the nation, census regions and divisions, states, and CFS defined geographical areas.
Primary strategies for reducing respondent burden in the Commodity Flow Survey include: employing a stratified random sample of business establishments; requesting data on a limited sample of shipment records from each establishment with the option to provide all shipments in the week, which simplified reporting for respondents; conducting a pre-canvass survey before the first quarter to inquire about the shipping status of NAICS auxiliary and publisher establishments and to route non-shippers out of the survey; the pre-canvass survey will also be conducted to offer select large companies with multi-unit establishments the ability to create mail groups (which are single points of contact for companies with multiple establishments); and adding the ability to create mail groups within each quarter instead of only at the beginning of each quarter like 2022; removing the supplemental questions from quarters one and four on hazardous materials packaging for companies that ship hazardous materials will decrease the number of establishments from 160,000 in 2022 to 140,000 in 2027; accepting estimates of shipping activity and allowing respondents the option to report their shipment weight in additional units of measurement; applying machine learning to code products based on their descriptions; and providing electronic reporting and including the option for consolidated reporting of multiple locations through a single login for larger companies. In conclusion, the above items will help reduce the burden for the 2027 CFS. There will be a substantial decrease in the number of respondents and the annual burden hours by removing the hazardous materials packaging respondents and their corresponding survey questions from the 2027 CFS. The burden hours will also be reduced by allowing the respondents to submit all their data in a given week instead of having to go through the process of sampling their shipments.
A sample of business establishments classified in Mining, Manufacturing, Wholesale, and select Retail and Service industries (as defined by the North American Industry Classification System, or NAICS) will be selected for the Commodity Flow Survey. The survey will also cover auxiliary establishments (
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include, or summarize, each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Patheon Manufacturing Services LLC submitted a notification of proposed production activity to the FTZ Board (the Board) for its facility in Greenville, North Carolina within FTZ 214. The notification conforming to the
Pursuant to 15 CFR 400.14(b), FTZ production activity would be limited to the specific foreign-status material(s)/component(s) and specific finished product(s) described in the submitted notification (summarized below) and subsequently authorized by the Board. The benefits that may stem from conducting production activity under FTZ procedures are explained in the background section of the Board's website—accessible via
The proposed finished products include: Opdualag (pre-filled syringes containing Relatlimab and Nivolumab in aqueous solution) (duty-free).
The proposed foreign-status materials/components include: Relatlimab (an aqueous solution drug targeting immune checkpoint LAG-3 in melanoma therapy); and Nivolumab-rmbw (an aqueous solution targeting immunotherapy treatment against cancer cells) (duty-free).
The request indicates that certain materials/components are subject to duties under section 301 of the Trade Act of 1974 (section 301), depending on the country of origin. The applicable section 301 decisions require subject merchandise to be admitted to FTZs in privileged foreign status (19 CFR 146.41).
Public comment is invited from interested parties. Submissions shall be addressed to the Board's Executive Secretary and sent to:
A copy of the notification will be available for public inspection in the “Online FTZ Information System” section of the Board's website.
For further information, contact John Frye at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that producers/exporters subject to this administrative review made sales of certain steel nails from the United Arab Emirates (UAE) at less than normal value during the period of review (POR) May 1, 2023, through April 30, 2024.
Applicable May 20, 2026.
Brittany Bauer, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3860.
On September 11, 2025, Commerce published the
Due to the lapse in appropriations and Federal Government shutdown, on November 14, 2025, Commerce tolled all deadlines in administrative proceedings by 47 days.
A summary of the events that occurred since Commerce published the
The products covered by this
We addressed the issues raised in the case and rebuttal briefs in the Issues and Decision Memorandum. A list of the issues addressed in the Issues and Decision Memorandum is included in the appendix to this notice. The Issues and Decision Memorandum is a public document and is on file electronically via ACCESS. ACCESS is available to registered users at
Based on our review of the record and comments received from interested parties, we have made changes to the
Commerce determines that the following estimated weighted-average dumping margins exist for the period May 1, 2023, through April 30, 2024:
Commerce intends to disclose the calculations performed in connection with these final results of review to interested parties within five days after public announcement of the final results or, if there is no public announcement, within five days of the date of publication of this notice in the
Consistent with section 751(a)(2) of the Act and 19 CFR 351.212(b)(1), Commerce shall determine, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries covered by the administrative review.
Because the weighted-average dumping margin for Rich Well is not zero or
For Master, Commerce will instruct, and CBP shall assess, antidumping duties on all appropriate entries of subject merchandise at a rate equal to the weighted-average dumping margin assigned to Master in this review.
Commerce intends to issue assessment instructions to CBP no earlier than 35 days after the date of publication of the final results of this review in the
The following cash deposit requirements will be effective upon publication of this notice for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of these final results, as provided by section 751(a)(2) of the Act: (1) the cash deposit rates for Master and Rich Well will be equal to the weighted-average dumping margins established in the final results of this administrative review; (2) for merchandise exported by producers or exporters not covered in this administrative review but covered in a prior segment of the proceeding, the cash deposit rate will continue to be the company-specific rate published for the most recently completed segment of this proceeding; (3) if the exporter is not a firm covered in this review, a prior review, or the original less-than-fair-value (LTFV) investigation, but the producer has been covered in a prior completed segment of this proceeding, the cash deposit rate will be the company-specific rate established for the most recently completed segment of this proceeding for the producer of the merchandise; and (4) the cash deposit rate for all other producers or exporters will continue to be 4.30 percent, the all-others rate established in the LTFV investigation.
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during the POR. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties has occurred and the subsequent assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to APO of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(5).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) is rescinding the administrative review of the antidumping duty (AD) order on certain freight rail couplers and parts thereof (freight rail couplers) from the People's Republic of China (China). The period of review (POR) is July 1, 2024, through June 30, 2025.
Applicable May 20, 2026.
Joseph Molokwu, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-8043.
On June 30, 2025, Commerce published in the
On August 22, 2025, Commerce published the initiation notice in the
On February 13, 2026, Commerce responded to the petitioner's CBP entry data comments and notified interested parties of its intent to rescind the 2024-2025 administrative review.
Due to the lapse in appropriations and Federal Government shutdown, on November 14, 2025, Commerce tolled all deadlines in administrative proceedings by 47 days.
Pursuant to 19 CFR 351.213(d)(3), it is Commerce's practice to rescind an administrative review of an order when there are no reviewable entries of subject merchandise during the POR for which liquidation is suspended.
Commerce will instruct CBP to assess antidumping duties on all appropriate entries. Antidumping duties shall be assessed at rates equal to the cash deposit of estimated antidumping duties required at the time of entry, or withdrawal from warehouse, for consumption, in the United States, in accordance with 19 CFR 351.212(c)(1)(i). Commerce intends to issue assessment instructions to CBP no earlier than 35 days after the date of publication of this rescission notice in the
As Commerce has proceeded to a final rescission of this administrative review,
This notice serves as the only reminder to parties subject to an APO of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR.351.305, which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of the APO materials, or conversion to judicial protective order is hereby requested. Failure to comply with regulations and terms of an APO is a violation, which is subject to sanction.
This notice is issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.213(d)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable May 20, 2026.
Jun Jack Zhao at (202) 482-1396 (Canada), Charles DeFilippo at (202) 482-3797 (Mexico), AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.
On January 20, 2026, the U.S. Department of Commerce (Commerce) initiated less-than-fair-value (LTFV) investigations of imports of van-type trailers and subassemblies thereof from Canada and Mexico.
Section 733(b)(1)(A) of the Tariff Act of 1930, as amended (the Act), requires Commerce to issue the preliminary determination in an LTFV investigation within 140 days after the date on which Commerce initiated the investigation. However, section 733(c)(1)(A)(b)(1) of the Act permits Commerce to postpone the preliminary determination until no later than 190 days after the date on which Commerce initiated the investigation if: (A) the petitioner makes a timely request for a postponement; or (B) Commerce concludes that the parties concerned are cooperating, that the investigation is extraordinarily complicated, and that additional time is necessary to make a preliminary determination. Under 19 CFR 351.205(e), the petitioner must submit a request for postponement 25 days or more before the scheduled date of the preliminary determination and must state the reasons for the request. Commerce will grant the request unless it finds compelling reasons to deny the request.
On May 13, 2026, the petitioner
For the reasons stated above and because there are no compelling reasons to deny the petitioner's requests, Commerce, in accordance with section 733(c)(1)(A) of the Act, is postponing the deadline for the preliminary determinations by 50 days (
This notice is issued and published pursuant to section 733(c)(2) of the Act and 19 CFR 351.205(f)(1).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) finds that revocation of the antidumping duty (AD) order on certain crepe paper products from the People's Republic of China (China) would be likely to lead to continuation or recurrence of dumping, at the levels indicated in the “Final Results of Sunset Review” section of this notice.
Applicable May 20, 2026.
Walter Ankner, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: 202-482-8374.
On January 25, 2005, Commerce published the
On February 3, 2026, Commerce received a timely and complete notice of intent to participate in the sunset review for domestic interested parties within the deadline specified in the 19 CFR 351.218(d)(1)(i).
On March 3, 2026, pursuant to 19 CFR 351.218(d)(3)(i), the domestic interested party filed a timely and adequate substantive response.
The product covered by this
A complete discussion of all issues raised in this sunset review, including the likelihood of continuation or recurrence of dumping in the event of revocation of the
Pursuant to sections 751(c)(1), 752(c)(1) and (3) of the Act, Commerce determines that revocation of the
This notice also serves as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of the return or destruction of APO materials, or conversion to judicial protective, orders is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
We are issuing and publishing these final results in accordance with sections 751(c), 752(c), and 777(i)(1) of the Act, and 19 CFR 351.218 and 19 CFR 351.221(c)(5)(ii).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) continues to determine that the Vietnam-wide entity made sales of welded stainless steel pressure pipe (WSSP) from the Socialist Republic of Vietnam (Vietnam) at less than normal value (NV) during the period of review (POR) July 1, 2023, through June 30, 2024.
Applicable May 20, 2026.
Luke Caruso, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2081.
On January 14, 2026, Commerce published the
Due to the lapse in appropriations and Federal Government shutdown, on November 14, 2025, Commerce tolled all deadlines in administrative
Commerce conducted this administrative review in accordance with section 751(a) of the Tariff Act of 1930, as amended (the Act).
The merchandise covered by the
Under Commerce's policy regarding the conditional review of the Vietnam-wide entity,
In the
Normally, Commerce discloses to interested parties the calculations of the final results of an administrative review within five days of a public announcement or, if there is no public announcement, within five days of the date of publication of the notice of final results in the
Pursuant to section 751(a)(2)(C) of the Act and 19 CFR 351.212(b), Commerce has determined, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries of subject merchandise covered by this review. The final results of this administrative review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by the final results of this review and for future deposits of estimated duties, where applicable.
Commerce intends to issue assessment instructions to CBP no earlier than 35 days after the date of publication of the final results of this review in the
The following deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of WSSP from Vietnam entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(2)(C) of the Act: (1) for the Vietnam-wide entity, the cash deposit rate will be the margin listed above; (2) for previously investigated or reviewed Vietnamese and non-Vietnamese exporters not listed above that have separate rates, the cash deposit rate will continue to be the exporter-specific rate published for the most recently completed segment of this proceeding in which they were reviewed; (3) for all Vietnamese exporters of subject merchandise that have not been found to be entitled to a separate rate, the cash deposit rate will be equal to the weighted-average dumping margin for the Vietnam-wide entity (
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during the POR. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This notice also serves as a final reminder to parties subject to an APO of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation subject to sanction.
Commerce is issuing and publishing the final results of this review in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(5).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that polypropylene corrugated boxes from the Socialist Republic of Vietnam (Vietnam) are being, or are likely to be, sold in the United States at less than fair value (LTFV). The period of investigation (POI) is July 1, 2024, through December 31, 2024.
Applicable May 20, 2026.
Alex Cipolla, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4956.
On December 31, 2025, Commerce published in the
A summary of the events that occurred since the
The products covered by this investigation are polypropylene corrugated boxes from Vietnam. For a complete description of the scope of this investigation,
In accordance with the preamble to Commerce's regulations,
In accordance with section 782(i) of the Tariff Act of 1930, as amended (the Act), Commerce notified Viet Nam Jia Bao Rui Company Limited (Jia Bao Rui) of its intent to verify the information relied upon in making its final determination in this investigation.
The single issue raised in the case brief submitted by CoolSeal USA, Inteplast Group, SeaCa Packaging, and Technology Container Corp. (collectively, the petitioners) in this investigation is addressed in the Issues and Decision Memorandum. No other interested parties filed case or rebuttal briefs. A list of the topics discussed and the single issue addressed in the Issues and Decision Memorandum is attached to this notice as Appendix II.
Based on our review and analysis of the comments received from interested parties for this final determination, we have determined that Jia Bao Rui is no longer eligible for a separate rate and is part of the Vietnam-wide entity. For a discussion of these changes,
Consistent with the
Commerce preliminarily determined, in accordance with section 733(e) of the Act and 19 CFR 351.206(c)(1), that critical circumstances existed with respect to imports of polypropylene corrugated boxes from Vietnam for the Vietnam-wide entity but did not exist for Jia Bao Rui.
For the final determination, pursuant to sections 735(a)(3)(B) of the Act and 19 CFR 351.206, we are continuing to find that critical circumstances exist for the Vietnam-wide entity, which now includes Jia Bao Rui. In finding that critical circumstances exist for the Vietnam-wide entity, we relied on facts otherwise available, including with adverse inferences, pursuant to sections 776(a) and (b) of the Act. For a full description of the methodology and results of Commerce's critical circumstances analysis,
In the
Commerce determines that the following estimated weighted-average dumping margin exists:
Normally, Commerce will disclose to the parties in a proceeding the calculations performed in connection with a final determination within five days of any public announcement or, if there is no public announcement, within five days of the date of publication of the notice of final determination in the
In accordance with section 735(c)(1)(B) of the Act, Commerce will instruct U.S. Customs and Border Protection (CBP) to continue suspend liquidation of all appropriate entries of subject merchandise, as described in Appendix I of this notice from the Vietnam-wide entity which were entered, or withdrawn from warehouse, for consumption on or after October 2, 2025, which is 90 days before the date of publication of the
Pursuant to section 735(c)(1)(B)(ii) of the Act, Commerce will also instruct CBP to require a cash deposit for estimated antidumping duties for appropriate entries as follows: (1) for all Vietnamese producers/exporters of subject merchandise, including Jia Bao Rui, the cash deposit rate will be equal to the cash deposit rate listed for the Vietnam-wide entity in the table above; and (2) for all third-country exporters of the subject merchandise, the cash deposit rate is the cash deposit rate applicable to the Vietnam-wide entity. These suspension of liquidation instructions will remain in effect until further notice.
In accordance with section 735(d) of the Act, Commerce will notify the ITC of its final affirmative determination of sales at LTFV. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance.
Because the final determination in this proceeding is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of polypropylene corrugated boxes from Vietnam no later than 45 days after our final determination. If the ITC determines that material injury or threat of material injury does not exist, the proceeding will be terminated and all cash deposits will be refunded. If the ITC determines that such injury does exist, Commerce intends to issue an antidumping duty order, in accordance with section 736(a) of the Act, directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise that are entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Continuation of Suspension of Liquidation” section.
In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to an APO of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This determination is issued and published in accordance with sections 735(d) and 777(i) of the Act and 19 CFR 351.210(c).
The merchandise covered by this investigation is polypropylene corrugated boxes. Polypropylene corrugated boxes are boxes, bins, totes, or other load-bearing containers made for holding goods, that are made of corrugated polypropylene sheets, also known as polypropylene hollow core sheets, polypropylene fluted sheets, polypropylene twin wall sheets, or multi wall sheets. Such polypropylene sheets are “corrugated,” “fluted,” or “hollow core,” meaning the inside of the sheet contains channels or pockets of air which make the sheets lightweight, while retaining strength and durability. Polypropylene corrugated boxes are typically produced from a plastic resin consisting of 50 percent or more polypropylene. Polypropylene corrugated boxes are covered by the scope irrespective of the particular mix of polypropylene homo-polymer, polypropylene co-polymer, recycled or virgin polypropylene, or ancillary chemicals such as electrostatic agents or flame retardants. Polypropylene corrugated boxes are formed by corrugated polypropylene sheets cut to length, die-cut into specific box shapes, and may be cut or scored to allow each side of the box to be folded into shape. Polypropylene corrugated boxes may include a tab or attached portion of polypropylene corrugated sheet (commonly referred to as a “manufacturer's joint”) that has been cut, slotted, or scored to facilitate the formation of the box by stapling, gluing, welding, or taping the sides together to form a tight seal. One-piece polypropylene corrugated boxes are die-cut or otherwise formed so that the top, bottom, and sides form a single, contiguous unit. Two-piece polypropylene corrugated boxes are those with a folded bottom and a folded top as separate pieces. Multi-piece polypropylene corrugated boxes are those with separate bottoms and tops that are fitted to a single folded piece comprising the sides
The subject merchandise includes polypropylene corrugated boxes with or without handles, with or without lids or tops, with or without reinforcing wire, whether in a one-piece, two-piece, or multi-piece configuration, and whether folded into shape or in an unfolded form. The subject merchandise includes all polypropylene corrugated boxes regardless of size, shape, or dimension. The subject merchandise also includes polypropylene corrugated box lids or tops when imported separately from polypropylene corrugated boxes.
The products subject to this investigation are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under statistical reporting number 3923.10.9000. Although the HTSUS statistical reporting number is provided for convenience and customs purposes, the written description of the merchandise is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) is postponing the deadline for issuing the final determination in the less-than-fair-value (LTFV) investigation of crystalline silicon photovoltaic cells, whether or not assembled into modules (solar cells) from India until September 10, 2026, and is extending the provisional measures from a four-month period to a period of not more than six months.
Applicable May 20, 2026.
Jonathan Schueler or Noah Wetzel, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-9175 or (202) 482-7466, respectively.
On August 12, 2025, Commerce initiated an LTFV investigation of solar cells from India.
Section 735(a)(2) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.210(b)(2) provide that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by the exporters or producers who account for a significant proportion of exports of the subject merchandise, or in the event of a negative preliminary determination, a request for such postponement is made by the petitioners. Further, 19 CFR 351.210(e)(2) requires that such postponement requests by exporters be accompanied by a request for extension of provisional measures from a four-month period to a period of not more than six months, in accordance with section 733(d) of the Act.
On April 22, 2026, Mundra Solar Energy Limited and Mundra Solar PV Limited (collectively, Mundra Solar), two mandatory respondents in this investigation, requested that Commerce postpone the deadline for the final determination until no later than 135 days from the publication of the
In accordance with section 735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii), because: (1) the
This notice is issued and published pursuant to 19 CFR 351.210(g).
National Institute of Standards and Technology, U.S. Department of Commerce.
Notice of intent (NOI).
The Hollings Manufacturing Extension Partnership (MEP) at the National Institute of Standards and Technology (NIST) is initiating a competitive pilot program for existing MEP center(s) to accelerate the adoption and commercialization of advanced manufacturing technologies that enhance the competitiveness of the domestic industrial base. This program will target key sectors where MEP center(s) will lead the development and validation of shared technology frameworks to substantially accelerate the acceptance of advanced manufacturing methods or transform fragmented supply chains into a robust ecosystem. These frameworks will provide a foundation for small- and
All inquiries may be directed to Jyoti Malhotra or Jessie Zhang (301-975-5020) via email to
MEP intends to announce a pilot program to accelerate the adoption and commercialization of advanced manufacturing technologies that enhance the competitiveness of the domestic industrial base. This competition will focus on two goals: (1) accelerating the use of additive manufacturing for aerospace components; and (2) accelerating the establishment of a domestic critical minerals supply chain.
The pilot program will be established and will operate in accordance with 15 U.S.C. 278k-1. For general planning purposes, the expected NIST commitment will be approximately $20 million per pilot project over a 2-year period using available funds appropriated in 2025 and 2026. The competition will be open only to current MEP Center primary awardees and to consortiums of current MEP Center primary awardees.
This NOI is provided to allow potential applicants time to begin developing proposal strategies and establishing collaborations among industry, academic, Federal laboratory, and state/local government partners. Details in this NOI should also inform discussions at two planned events: (1) a virtual public meeting to fulfill the requirements of 15 U.S.C. 278k-1(c)(1); and (2) a planned MEP Pilot Industry Day where NIST will share information about the opportunity and landscape, convey timeline and next steps, and promote teaming. NIST expects to announce the competition via a Notice of Funding Opportunity (NOFO) on
The proposed pilot program will not reduce the number of active MEP centers.
The MEP National Network
Transformative technologies such as artificial intelligence, automation, and additive manufacturing are driving leaps in productivity that improve America's standing in both global economic competitiveness and national security. This pilot program aims to leverage the MEP National Network
Applicants for this pilot program are expected to lead the development and validation of shared technology frameworks that can substantially accelerate the acceptance of advanced manufacturing methods or transform fragmented supply chains into a robust ecosystem. These frameworks can help small and medium-sized manufacturers establish capabilities for future production needs and enter new markets. This competition will focus on two goals in furtherance of the interlinked national priorities: (1) accelerating the use of additive manufacturing for aerospace components; and (2) accelerating the establishment of a domestic critical minerals supply chain. The goal of this pilot program is to identify pathways for technology demonstration and transition to market to revolutionize industrial supply chains in the United States. This will reduce our dependency on foreign industrial capabilities, spur domestic competitiveness, and enable U.S. leadership in these critical areas of interest, thus meeting economic and national security priorities set forth by the Administration.
This pilot program will form hubs where government agencies, industry leaders, and academic researchers collaborate to deliver technical platforms that accelerate the adoption of manufacturing technologies, securing our nation's leadership position into the future.
Once the competition has been announced, further information may be found at
This NOI does not constitute a solicitation. No applications may be submitted in response to this NOI. In the future, NIST will post a NOFO on
The statutory authority for the MEP Technology Accelerator Pilot Program is found at 15 U.S.C. 278k-1.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of incidental harassment authorization.
In accordance with regulations implementing the Marine Mammal Protection Act (MMPA) as amended, notification is hereby given that NMFS has issued an incidental harassment authorization (IHA) to the Port of San Francisco (PSF) to take marine mammals incidental to construction activities for the Mission Bay Ferry Landing (MBFL) Project in San Francisco Bay (SFB), California (CA).
This authorization is effective for 1 year from the date of notification by the IHA-holder, not to exceed 1 year from the date of issuance (May 14, 2026).
Electronic copies of the application and supporting documents, as well as a list of the references cited in this document, may be obtained online at:
Carter Esch, Office of Protected Resources, NMFS (301) 427-8401.
The MMPA prohibits the “take” of marine mammals, with certain exceptions. Among the exceptions is section 101(a)(5)(D) of the MMPA (16 U.S.C. 1361
Specifically, NMFS will issue an IHA if it finds that the taking will have a negligible impact on the species or stock(s) and will not have an unmitigable adverse impact on the availability of the species or stock(s) for taking for subsistence uses (where relevant). Further, NMFS must prescribe the permissible methods of taking and other “means of effecting the least [practicable] adverse impact” on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stocks for taking for certain subsistence uses (referred to here as “mitigation”). NMFS must also prescribe requirements pertaining to the monitoring and reporting of such takings. The definitions of key terms, such as “take,” “harassment,” and “negligible impact,” can be found in the MMPA and the NMFS' implementing regulations (see 16 U.S.C. 1362; 50 CFR 216.103).
On April 3, 2026, a notice of NMFS' proposal to issue an IHA to PSF for the taking of marine mammals incidental to construction of the MBFL Project within PSF's Mission Bay/Central Waterfront area of San Francisco, CA, was published in the
No substantive or relevant comments were received during the public comment period. No new information that would change any of the preliminary analyses, conclusions, or determinations in the proposed IHA notice has become available since that notice was published, and therefore, the preliminary analyses, conclusions, and determinations included in the proposed IHA are considered final.
To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321
These actions are consistent with categories of activities identified in Categorical Exclusion B4 (IHAs with no anticipated serious injury or mortality) of the Companion Manual for NAO 216-6A, which do not individually or cumulatively have the potential for significant impacts on the quality of the human environment and for which we have not identified any extraordinary circumstances that would preclude this categorical exclusion. Accordingly, NMFS has determined that the issuance of the IHA qualifies to be categorically excluded from further NEPA review.
Section 7(a)(2) of the ESA of 1973 (16 U.S.C. 1531
No incidental take of ESA-listed species is authorized or expected to result from this activity. Therefore, NMFS has determined that formal consultation under section 7 of the ESA is not required for this action.
Accordingly, consistent with the requirements of section 101(a)(5)(D) of the MMPA, NMFS has issued an IHA to PSF for the taking of marine mammals incidental to construction activities supporting the MBFL Project in San Francisco, CA.
U.S. Integrated Ocean Observing System (IOOS®), National Ocean Service (NOS), National Oceanic
Notice of open meeting; opportunity for public comment.
Notice is hereby given of a virtual meeting of the U.S. IOOS® Advisory Committee (Committee). The meeting is open to the public and an opportunity for oral and written comments will be provided.
The meeting will be held virtually on June 16, 2026 from 11 a.m. to 1 p.m. Eastern Daylight Time (EDT) and June 17, 2026 from 2 p.m. to 4 p.m. EDT. Registration is required; please register online at
The meeting will be held virtually. To register for the meeting and/or submit public comments, use this link
Krisa Arzayus, Designated Federal Official, U.S. IOOS Advisory Committee, U.S. IOOS Program, 240-533-9455,
The Committee was established by the NOAA Administrator as directed by section 12304(d) of the Integrated Coastal and Ocean Observation System Act (the Act) as amended by Section 103 of the Coordinated Ocean Observations and Research Act of 2020 (COORA) (Pub. L. 116-271, Title I). 33 U.S.C. 3603(d). The Committee advises the NOAA Administrator and the Interagency Ocean Observation Committee (IOOC) on matters related to the responsibilities and authorities set forth in the Act and other appropriate matters as the Administrator, the Ocean Policy Committee described at 33 U.S.C. 3603(c)(1), and IOOC may refer to the Committee for review and advice. The charter and summaries of prior meetings can be found online at
The meeting will focus on: (1) updates from NOAA and key NOAA partners, and (2) finalizing recommendations from the current work plan. The latest version of the agenda will be posted at
The meeting will be open to public participation (check agenda on website to confirm time). The Committee expects that public statements presented at its meetings will not be repetitive of previously submitted verbal or written statements. In general, each individual or group making a verbal presentation will be limited to a total time of three (3) minutes. Written comments should be received by June 8, 2026 11:59 p.m. EDT, to provide sufficient time for Committee review. Written comments received after June 8, 2026 11:59 p.m. EDT, will be distributed to the Committee, but may not be reviewed prior to the meeting date. To submit written comments, please fill out the brief form at
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Krisa Arzayus, Designated Federal Official by phone (240-533-9455) or email (
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; selection of an authorized distributor.
NMFS announces the renewal of two prohibited species donation (PSD) permits to SeaShare, a non-profit and tax-exempt organization, authorizing this organization to distribute Pacific salmon (salmon) and Pacific halibut (halibut) to hunger relief agencies, food bank networks, or food bank distributors under the PSD program. Salmon and halibut are caught incidentally during directed fishing in the exclusive economic zone off Alaska for groundfish with trawl gear. This action is necessary to comply with provisions of the PSD program.
May 20, 2026 through May 21, 2029.
Electronic copies of the PSD permits for salmon and halibut prepared for this action may be obtained from the NMFS Alaska Region website at
Maggie Chan, 907-586-7228.
Fishing for groundfish by U.S. vessels in the exclusive economic zone of the Bering Sea and Aleutian Islands management area and Gulf of Alaska is managed by NMFS in accordance with the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area
Amendments 26 and 29 to the BSAI and GOA FMPs, respectively, authorize a salmon donation program and were approved by NMFS on July 10, 1996; a final rule implementing this program was published in the
Section 679.26 authorizes the voluntary distribution of salmon and halibut taken incidentally in the groundfish trawl fisheries in the exclusive economic zone off Alaska to hunger relief agencies, food bank networks, or food bank distributors by tax-exempt organizations through an authorized distributor. The NMFS Administrator for the Alaska Region (Regional Administrator) may select one or more tax-exempt organizations to be authorized distributors, as defined at § 679.2, based on the information submitted by applicants under § 679.26. An applicant seeking to become an authorized distributor must submit to the Regional Administrator all of the information required by § 679.26(b)(1) and must submit a separate application for each species (salmon or halibut) that the applicant seeks to distribute. After reviewing qualified applicants, NMFS must announce the selection of each authorized distributor in the
Currently, SeaShare, a tax-exempt organization founded to help the seafood industry donate to U.S. hunger relief efforts, is the sole authorized distributor of salmon and halibut taken incidentally in the groundfish trawl fisheries off Alaska. SeaShare's current salmon and halibut PSD permits became effective May 18, 2023 and authorize SeaShare to participate in the PSD program through May 25, 2026 (88 FR 31701, May 18, 2023).
On March 20, 2026, the Regional Administrator received applications from SeaShare to renew its salmon and halibut PSD permits. The Regional Administrator reviewed the applications and determined that both applications are complete and include all of the information required by § 679.26(b)(1), and that SeaShare continues to meet the requirements for an authorized distributor of salmon and halibut under the PSD program. Because SeaShare is the only applicant for PSD permits at this time, the Regional Administrator does not need to determine how many total authorized distributors to select using the criteria at § 679.26(b)(2).
These permits may be suspended, modified, or revoked under 15 CFR part 904 for violation of § 679.26 or other regulations in 50 CFR part 679.
This action is taken under § 679.26.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notification of fee percentage for vessels participating in the full coverage category of the Trawl Electronic Monitoring Program.
NMFS publishes this notice to announce the 2025 fee percentage of 0.12 percent applicable to participants in the full coverage category of the Trawl Electronic Monitoring Program (Trawl EM Program). NMFS used this fee percentage to calculate fee liabilities for the 2025 fishing season. Annually, NMFS issues invoices to vessel owners subject to the fee. Fees for the 2025 fishing season are due to NMFS on or before May 31, 2026.
The fee percentage is valid on May 20, 2026.
Additional information about the Trawl EM Program is available on NMFS Alaska Region's website at
For general questions about this fee, contact Amy Hadfield at (907) 586-7376. For questions about the fee billing process, contact Tristan Mandeville at (907) 586-7231.
On July 29, 2024, NMFS published a final rule to implement the Trawl EM Program for pelagic trawl pollock catcher vessels and tender vessels delivering to shoreside processors and stationary floating processors in the Bering Sea, Aleutian Islands, and Gulf of Alaska (89 FR 60796). Under the Trawl EM Program regulations at 50 CFR 679.51(g), a vessel owner or operator of a catcher vessel or tender vessel can request to be placed in the Trawl EM Program each year and, therein, to use an EM system in place of an observer in most cases. Placement in the Trawl EM Program reduces overall monitoring costs for fishery participants and increases data quality necessary for fishery management. A vessel placed in the Trawl EM Program remains in the
Vessels in the Trawl EM Program are either in the partial coverage category or the full coverage category based on their assigned level of observer coverage. Only participants in the full coverage category are subject to the trawl EM fee announced in this notice. Participants in the partial coverage category pay their fee through the North Pacific Observer Program fee as calculated from the standard prices published in the
Pursuant to section 313 of the Magnuson-Stevens Fishery Conservation and Management Act, NMFS established a process for calculating and administering the trawl EM fee for the full coverage category as specified at § 679.56. Activities directly related to NMFS's administration of the trawl EM full coverage category are funded by the trawl EM fee. These activities include EM data collection, EM data review, vessel monitoring plan (VMP) approval, and trawl EM category data. The fee liability is based on the ex-vessel value of pollock harvested by vessels in the full coverage trawl EM category. This notice announces the fee percentage in the
For purposes of calculating the trawl EM fee percentage, NMFS uses a standard ex-vessel price (standard price) for pollock. A standard price is determined under § 679.66(b) using information on landings purchased (volume) and ex-vessel value paid (value). NMFS annually receives information used to calculate the pollock standard price in the existing First Wholesale Volume and Value Report, which is submitted in early November of each year. NMFS published the standard price of $0.15 per pound for pollock for 2025 in the
Annually, NMFS calculates the total costs directly related to the EM data collection, EM data review, VMP approval, and trawl EM category data maintenance (direct program costs). For 2025, direct program costs were tracked from January 1, 2025 through December 31, 2025. A more detailed explanation will be provided in the North Pacific Observer Program Annual report, which will be published in June of 2026.
NMFS calculates the applicable fee percentage according to the factors described at § 679.56(c)(2). NMFS determined the fee percentage which applies to full coverage trawl EM landings made in 2025 by dividing the direct program costs by the value of the catch subject to the trawl EM fee.
Under the fee percentage formula described generally above, the percentage of direct program costs to fishery value for the 2025 calendar year is 0.12 percent. For 2025, NMFS applied the calculated trawl EM fee percentage to all pollock landings in the full coverage trawl EM category made between January 1 and December 31 to calculate the trawl EM fee liability for each vessel owner in the full coverage trawl EM category. A Trawl EM Program vessel owner's 2025 fee payment must be submitted to NMFS on or before May 31, 2026. Payment must be made in accordance with the payment methods set forth at § 679.56(a)(4)(ii).
Consumer Financial Protection Bureau.
Notice of a modified system of records.
In accordance with the Privacy Act of 1974, the Consumer Financial Protection Bureau (CFPB or Bureau) proposes to modify a current Privacy Act System of Records Notice (SORN) titled “CFPB.009-Employee Administrative Records System.” This modification introduces a new routine use to permit the disclosure of records to the news media and the public under specific circumstances. The new routine use adopts the same standard applied under the Freedom of Information Act for determining whether information relating to personal privacy interests must be released to the public. In addition, the new routine use is consistent with routine uses adopted by other Federal agencies for systems of records concerning employee personnel files. This SORN enables the CFPB to manage and administer human capital functions related to current and former Bureau employees, volunteers, detailees, applicants, and persons who work at the Bureau, and their named dependents and/or beneficiaries, their named emergency contacts, and individuals who have been extended offers of employment.
Comments must be received no later than June 22, 2026. The modified system of records will be effective June 22, 2026 unless the comments received result in a contrary determination.
You may submit comments, identified by the title and docket number (
•
•
•
All submissions must include the agency name and docket number for this notice. In general, all comments received will be posted without change to
Kathryn Fong, Chief Privacy Officer, Consumer Financial Protection Bureau, 1700 G Street NW, Washington, DC
In accordance with the Privacy Act of 1974, 5 U.S.C. 552a, the CFPB is modifying a system of records titled, “CFPB.009-Employee Administrative Records System.” This modified system of records introduces a new routine use to enable the disclosure of records pertaining to individuals covered by this system to the news media and public under certain limited circumstances. Specifically, it would allow such disclosures when there is a legitimate public interest in the information sought (
The report of the revised system of records has been submitted to the Committee on Oversight and Government Reform of the U.S. House of Representatives, the Committee on Homeland Security & Governmental Affairs of the U.S. Senate, and the Office of Management and Budget, pursuant to Circular A-108, “Federal Agency Responsibilities for Review, Reporting, and Publication under the Privacy Act” (Dec. 2016) and the Privacy Act of 1974, 5 U.S.C. 552a(r). The modified SORN titled, “CFPB.009-Employee Administrative Records System” is published in its entirety below.
CFPB.009—Employee Administrative Records System.
Unclassified.
Consumer Financial Protection Bureau, 1700 G Street NW, Washington, DC 20552.
Consumer Financial Protection Bureau, Chief Operating Officer, 1700 G Street NW, Washington, DC 20552.
12 U.S.C. 5492-93, 5511; 31 U.S.C. 3721; 42 U.S.C. 2000e-16; 42 U.S.C. 1981 note.
The purpose of the system is to enable the Bureau to manage and administer human capital functions, including personnel actions, payroll, human resources, time and attendance, leave, insurance, tax, retirement and other employee benefits, employee claims for loss or damage to personal property, alternative dispute resolution processes, and to prepare related reports to other Federal agencies. The information will also be used for administrative purposes to ensure quality control, performance, and improving management processes, and prevent improper payment of funds.
Current and former Bureau employees, volunteers, detailees, applicants, and persons who work at the Bureau (collectively employees), and their named dependents and/or beneficiaries, their named emergency contacts, and individuals who have been extended offers of employment.
Records in this system may contain identifiable information about individuals including, without limitation: (1) identification and contact information, including name, address, email address, phone number and other contact information; (2) employee emergency contact information, including name, phone number, relationship to employee or emergency contact; (3) Social Security number (SSN), employee ID number, organization code, pay rate, salary, grade, length of service, and other related pay and leave records including payroll data; (4) biographic and demographic data, including date of birth and marital or domestic partnership status; (5) employment-related information such as performance reports, training, professional licenses, certification, and memberships information, alternative dispute resolution processes, fitness center membership information, union dues, employee claims for loss or damage to personal property, and other information related to employment by the Bureau; (6) benefits data, such as health, life, travel, and disability insurance information; (7) retirement benefits information and flexible spending account information; and (8) time and attendance records.
General personnel and administrative records contained in this system are covered under the government-wide systems of records notice published by the Office of Personnel Management (OPM/GOVT-1). This system complements OPM/GOVT-1 and this notice incorporates, by reference, but does not repeat all the information contained in OPM/GOVT-1.
Information in this system is obtained from individuals and entities associated with benefits, retirement, human resources, and payroll systems administration.
In addition to those disclosures generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, and consistent with the CFPB's Disclosure of Records and Information Rules, promulgated at 12 CFR part 1070, all or a portion of the records or information contained in this system may be disclosed outside the CFPB as a routine use to:
(1) Appropriate agencies, entities, and persons when (a) the Bureau suspects or has confirmed that there has been a breach of the system of records; (b) the Bureau has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, the Bureau (including its information systems, programs, and operations), the Federal Government, or national security; and (c) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the Bureau's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
(2) Another Federal agency or entity, when the Bureau determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (a) responding to a suspected or confirmed breach or (b) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
(3) Another Federal or State agency to (a) permit a decision as to access, amendment, or correction of records to be made in consultation with or by that agency, or (b) verify the identity of an individual or the accuracy of information submitted by an individual who has requested access to or amendment or correction of records.
(4) The Executive Office of the President in response to an inquiry from that office made at the request of the subject of a record or a third party on that person's behalf.
(5) Congressional offices in response to an inquiry made at the request of the individual to whom the record pertains.
(6) Contractors, agents, or other authorized individuals performing work on a contract, service, cooperative agreement, job, or other activity on behalf of the Bureau or the U.S. Government and who have a need to access the information in the performance of their mission, including duties or activities.
(7) The Department of Justice (DOJ) for its use in providing legal advice to the Bureau or in representing the Bureau in a proceeding before a court, adjudicative body, or other administrative body, where the use of such information by the DOJ is deemed by the Bureau to be relevant and necessary to the advice or proceeding, and such proceeding names as a party in interest:
(a) The CFPB;
(b) Any employee of the Bureau in their official capacity;
(c) Any employee of the Bureau in their individual capacity where DOJ has agreed to represent the employee; or
(d) The United States, where the CFPB determines that litigation is likely to affect the Bureau or any of its components.
(8) A grand jury pursuant either to a Federal or State grand jury subpoena, or to a prosecution request that such record be released for the purpose of its introduction to a grand jury, where the subpoena or request has been specifically approved by a court. In those cases where the Federal Government is not a party to the proceeding, records may be disclosed if a subpoena has been signed by a judge.
(9) A court, magistrate, or administrative tribunal in the course of an administrative proceeding or judicial proceeding, including disclosures to opposing counsel or witnesses (including expert witnesses) in the course of discovery or other pre- hearing exchanges of information, litigation, or settlement negotiations, where relevant or potentially relevant to a proceeding, or in connection with criminal law proceedings.
(10) Appropriate agencies, entities, and persons to the extent necessary to obtain information relevant to current and former Bureau employees' benefits, compensation, and employment.
(11) Appropriate Federal, State, local, foreign, Tribal, or self-regulatory organizations or agencies responsible for investigating, prosecuting, enforcing, implementing, issuing, or carrying out a statute, rule, regulation, order, policy, or license if the information may be relevant to a potential violation of civil or criminal law, rule, regulation, order, policy, or license.
(12) National, State, or local income security and retirement agencies or entities involved in administration of employee retirement benefits programs (
(13) An executor of the estate of a current or former employee, a government entity probating the will of a current or former employee, a designated beneficiary of a current or former employee, or any person who is responsible for the care of a current or former employee, where the employee has died, has been declared mentally incompetent, or is under other legal disability, to the extent necessary to assist in obtaining any employment benefit or working condition for the current or former employee.
(14) The Internal Revenue Service (IRS) and other governmental entities that are authorized to tax employees' compensation with wage and tax information in accordance with a withholding agreement with the Bureau pursuant to 5 U.S.C. 5516, 5517, and 5520, for the purpose of furnishing employees with IRS Forms W-2 that report such tax distributions.
(15) Unions recognized as exclusive bargaining representatives under the Civil Service Reform Act of 1978, 5 U.S.C. 7111, 7114.
(16) Carriers, providers, and other Federal agencies involved in administration of employee retirement and benefits programs and such agencies' contractors or plan administrators, when necessary to determine employee eligibility to participate in retirement and benefits programs, process employee participation in those programs, process claims with respect to individual employee participation in those programs, audit benefits paid under those programs, or perform any other administrative function in connection with those programs and Federal agencies that perform payroll and personnel processing and employee retirement and benefits plan services under interagency agreements or contracts, including the issuance of paychecks to employees, the distribution of wages, the administration of deductions from paychecks for retirement and benefits programs, and the distribution and receipt of those deductions. These agencies include, without limitation, the Department of Labor, the Department of Veterans Affairs, the Social Security Administration, the Federal Retirement Thrift Investment Board, the Department of Defense, OPM, the Board of Governors of the Federal Reserve System, the Department of the Treasury, and the National Finance Center at the U.S. Department of Agriculture.
(17) The U.S. Department of the Treasury when disclosure of the information is relevant to review payment and award eligibility through the Do Not Pay Working System for the purpose of identifying, preventing, or recouping improper payments to an applicant for, or recipient of, Federal funds, including funds disbursed by a State (meaning a State of the United States, the District of Columbia, a territory or possession of the United States, or a federally recognized Indian tribe) in a State-administered, federally funded program.
(18) To the news media and the public, with the approval of the Bureau Director or delegate, in consultation with the Chief Privacy Officer and legal counsel, when there exists a legitimate public interest in the disclosure of the information (
The records are maintained in paper and electronic media. Access to electronic records is restricted to authorized personnel who have been issued non-transferable access codes and passwords. Other records are maintained in locked file cabinets or rooms with access limited to those personnel whose official duties require access.
Records are retrievable by a variety of fields including, without limitation, the individual's name, SSN, address, account number, transaction number, phone number, date of birth, or by some combination thereof.
The Bureau will manage these Federal records in accordance with the National Archive and Records Administration (NARA) General Records Schedules (GRS): GRS 1.1, GRS 1.2, GRS 2.1, GRS 2.2, GRS 2.3, GRS 2.4, GRS 2.5, GRS 2.7, GRS 5.6, GRS 5.7, and GRS 6.4 depending on the record type and the corresponding disposition of that record type.
Access to electronic records is restricted to authorized personnel who have been issued non-transferable access codes and passwords. Other records are maintained in locked file cabinets or rooms with access limited to those personnel whose official duties require access.
Individuals seeking notification and access to any record contained in this system of records may inquire in writing in accordance with instructions in 12 CFR 1070.50
See “Access Procedures” above.
See “Access Procedures” above.
None.
90 FR 59805 (Dec. 22, 2025); 85 FR 48510 (Aug. 11, 2020); 83 FR 23435 (May 21, 2018); 81 FR 27104 (May 5, 2016); 78 FR 67340 (Nov. 12, 2013); 76 FR 71327 (Nov. 17, 2011).
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
60-Day information collection notice.
In compliance with the
Consideration will be given to all comments received by July 20, 2026.
You may submit comments, identified by docket number and title, by any of the following methods:
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to Under Secretary of War for Personnel and Readiness, Office of the Executive Director, 4000 Defense Pentagon, Washington, DC 20301, Jessica Levin, (703) 697-2121.
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to OMB for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by June 22, 2026.
Written comments and recommendations for the proposed information collection should be sent
Reginald Lucas, 571-372-7574,
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to OMB for clearance the following proposal for collection of information under the provisions of the
Consideration will be given to all comments received by June 22, 2026.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Reginald Lucas, 571-372-7574, or
The Status of Forces Active Component Survey (SOFS-A) is a DoW-wide annual survey of active component members that is used to evaluate existing policies and programs, establishing baseline measures before implementing new policies and programs and monitoring the progress of established policies/programs. The survey assesses topics such as financial well-being, satisfaction, readiness, stress, retention intention.
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
60-Day information collection notice.
In compliance with the
Consideration will be given to all comments received by July 20, 2026.
You may submit comments, identified by docket number and title, by any of the following methods:
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to Department of War, Office of the Assistant Secretary of War Strategic Readiness (Warfighter Development), Pentagon Room 1E525, Washington, DC 20301, Melora McVicker, 571-372-5395.
Respondents for this information collection include service members, veterans, and members of the general public who are interested in exploring customized career and credentialing pathways. The goal is to support informed decision-making as individuals navigate their unique career trajectories.
Respondents voluntarily provide personal and professional information as part of the process to establish a user account within the MilGears platform. These accounts are designed to support data continuity and a more tailored user experience as individuals explore career and credentialing opportunities aligned with their goals, experiences, and interests. All data is collected online via the MilGears platform.
Users may learn about MilGears and this data collection through a variety of channels, including the Transition Assistance Program, Credentialing Assistance application forms, career counselors, or through online search. Once aware of the platform, users can access it at:
The data collected through the MilGears platform will be used to generate personalized recommendations for careers, credentials, and training opportunities; link military occupations to civilian career pathways and industry-recognized competencies; evaluate user engagement and satisfaction to guide ongoing platform improvements; support the development of Learning and Employment Records; provide DoW leadership with actionable insights on user trends to inform workforce planning; enable users to create persistent accounts for storing information and building individualized career pathways; and promote interoperability across DoW human resource systems and data sources.
The information collection for the MilGears platform is designed to support service members, veterans, the military-connected community, and other users in exploring career and credentialing opportunities based on their military training, education, and experience. While data input and storage on the platform remains entirely voluntary, the creation of a user account requires users to enter and verify an email address and review relevant documentation outlining terms of use and privacy protections. Beyond this initial account setup, all additional personal or professional information shared with the platform is optional when creating a user account and provided at the user's discretion to enhance the accuracy of personalized career exploration and credentialing recommendations.
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
60-Day information collection notice.
In compliance with the
Consideration will be given to all comments received by July 20, 2026.
You may submit comments, identified by docket number and title, by any of the following methods:
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection of instruments, Office of the Under Secretary of Defense (Personnel and Readiness) (Military Personnel Policy), ATTN: Mr. Kent Bauer, 1500 Defense Pentagon, Washington, DC 20301-1500 or call (703) 693-4204.
Office of the Secretary (OS), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act (PRA) of 1995, the Department is proposing an extension without change of a currently approved information collection request (ICR).
Interested persons are invited to submit comments on or before July 20, 2026.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Kelly Terpak, (202) 205-5231.
The Department, in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. The Department is soliciting comments on the proposed information collection request (ICR) that is described below. The Department is especially interested in public comment addressing the following issues: (1) is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Department of Education, Department of Labor.
Notice.
The Employment and Training Administration at the U.S. Department of Labor (DOL) is soliciting applications in support of the administration of the Fiscal Year (FY) 2026 National Professional Development (NPD) program, Assistance Listing Number 84.365Z, on behalf of the U.S. Department of Education (ED).
Complete proposals must be submitted electronically through the
Cynthia Hunter. Telephone: (202) 987-1670. Email:
The NPD program provides grants to public and private nonprofit institutions of higher education and public and private entities with relevant experience and capacity, in consortia with State educational agencies and/or local educational agencies to implement pre-service and in-service professional development activities intended to improve instruction for English learners (ELs) and assist education personnel working with ELs to meet high professional standards. The FY 2026 competition includes one absolute priority, two competitive preference priorities, an invitational priority, selection criteria, and requirements. The absolute priority is: Providing Professional Development to Improve Instruction for ELs. The competitive preference priorities are: Promoting Evidence-Based Literacy and Returning Education to the States. The invitational priority is: Development of a Collaborative Framework for Measuring Teacher Pedagogical Practices to Enhance Student Outcomes.
Henry Maklakiewicz signs this notice in furtherance of DOL's role in providing support to ED.
In concurrence
Federal Student Aid, U.S. Department of Education.
Notice of a new matching program.
Pursuant to the Privacy Act of 1974, as amended by the Computer Matching and Privacy Protection Act of 1988 and the Computer Matching and Privacy Protection Amendments of 1990 (Privacy Act), and Office of Management and Budget (OMB) guidance on the conduct of matching programs, notice is hereby given of the re-establishment of the matching program between the U.S. Department of Education (Department or ED) (recipient agency) and the U.S. Department of Veterans Affairs (VA) (source agency). The current 18-month Computer Matching Agreement (CMA) between ED and VA was recertified for an additional 12 months on June 27, 2025, and will automatically expire on June 26, 2026. The matching program allows ED to receive information from VA to assist the Secretary of Education (Secretary) in the Secretary's obligation to verify the status of applicants for financial assistance under title IV of the Higher Education Act of 1965, as amended, who claim to be veterans.
Submit your comments on the proposed re-establishment of the matching program on or before June 22, 2026.
The matching program will become effective on the later of the following two dates: (1) June 27, 2026, or (2) 30 days after the publication of this notice, on May 20, 2026, unless comments have been received from interested members of the public requiring modification and republication of the notice. The matching program will continue for 18 months after the effective date and may be renewed for up to an additional 12 months if, within 3 months prior to the expiration of the 18 months, the respective Data Integrity Boards of the Department and the VA determine that the conditions specified in 5 U.S.C. 552a(o)(2)(D) have been met.
Comments must be submitted via the Federal eRulemaking Portal at
Corinne Sauri, Management and Program Analyst, Office of Operations and Governance, Federal Student Aid, U.S. Department of Education, 400 Maryland Avenue SW, Washington, DC 20202. Telephone: (202) 245-5612.
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
In accordance with the Privacy Act of 1974, as amended (Privacy Act) (5 U.S.C. 552a); Office of Management and Budget (OMB) Final Guidance Interpreting the Provisions of Public Law 100-503, the Computer Matching and Privacy Protection Act of 1988, published in the
The U.S. Department of Education and the U.S. Department of Veterans Affairs.
The Department's legal authority to enter into the matching program and to disclose information thereunder is sections 480(c)(1) and 480(d)(4) of the Higher Education Act of 1965, as amended (HEA) (20 U.S.C. 1087vv(c)(1) and (d)(4)). VA's legal authority to enter into this matching program is 38 U.S.C. 523.
The purpose of this matching program is to assist the Secretary of Education (the Secretary) with verification of a veteran's status during the processing and review of applications for financial assistance under title IV of the HEA.
The Secretary is authorized by the HEA to administer programs under title IV of the HEA and to enforce the terms and conditions of the HEA.
Section 480(c)(1) of the HEA defines the term “veteran” to mean “any individual who—(A) has engaged in the active duty in the United States Army, Navy, Air Force, Marines, or Coast Guard; and (B) was released under a condition other than dishonorable.” 20 U.S.C. 1087vv(c)(1). Under section 480(d)(1)(D) of the HEA, an applicant who is a veteran (as defined in section 480(c)(1) of the HEA) is considered an independent student for purposes of title IV, HEA program assistance eligibility, and, therefore, does not have to provide parental income and asset information to apply for title IV, HEA program assistance. 20 U.S.C. 1087vv(d)(1)(D).
This matching program covers Individuals who have completed the Free Application for Federal Student Aid (FAFSA®) and have indicated that they are veterans.
ED will disclose to the VA the Social Security number (SSN), first and last name, and date of birth (DOB) of each applicant for financial assistance under title IV of the HEA who indicates veteran status in their application.
VA will compare these data elements against the first and last name, SSN, and DOB of veterans. As a result of the match, VA will assign one of four values to the applicant records: (1) veteran status confirmed; (2) record found on database, but not a qualifying veteran; (3) record not found on database; or (4) record found on database, but applicant on active duty. VA then will transmit applicant records back to ED.
VA will use the VA system of records entitled “Compensation, Pension, Education, and Vocational Rehabilitation and Employment Records—VA” (58VA21/22/28), last published in full in the
ED will disclose data from records in the FPS, which are covered by the system of records notice (SORN) entitled “Aid Awareness and Application Processing” (18-11-21), which was most recently published in the
You may also access documents of the Department published in the
On January 9, 2026, Trans-Foreland Pipeline Company LLC (Trans-Foreland) filed an application in Docket No. CP26-61-000 requesting an Authorization pursuant to Section 3 of the Natural Gas Act to construct and operate certain natural gas facilities. The proposed project is known as the Kenai LNG Cool Down Expansion Project (Project) and would expand facilities at the Kenai LNG Terminal to receive up to 0.4 million metric tons per annum of liquified natural gas (LNG) and achieve a send-out capacity of up to 20 billion cubic feet per year.
On January 21, 2026, the Federal Energy Regulatory Commission (Commission or FERC) issued its Notice of Application for the Project. Among other things, that notice alerted agencies issuing federal authorizations of the requirement to complete all necessary reviews and to reach a final decision on a request for a federal authorization within 90 days of the date of issuance
This notice identifies Commission staff's intention to prepare an environmental assessment (EA) for the Project and the planned schedule for the completion of the environmental review.
If a schedule change becomes necessary, additional notice will be provided so that the relevant agencies are kept informed of the Project's progress.
Trans-Foreland states its proposal to amend the previously authorized Kenai LNG Cool Down Project would expand capacity to meet the natural gas demands of the Southcentral Alaska market. The project would include substituting the installation of the electric powered trim LNG vaporizer and the associated feed pump with the installation of six high-pressure cryogenic vertical turbine pumps and two submerged combustion vaporizers, each rated at 100 million standard cubic feet per day. Trans-Forland would also substitute the previously authorized new boil-off gas (BOG) booster compressor unit with five new BOG compressors and three BOG aftercoolers to avoid routine venting. The BOG units would be housed in a new compressor building that was authorized under the previous Kenai Cool Down Project. A new power distribution center building and power transformers would also be part of this project. All construction and operations would occur within the existing 76-acre fenced operating footprint and the marine terminal of the Kenai LNG Terminal. Further, Trans-Foreland states that it may use vessels with up to a 174,000 cubic meter capacity to service its project.
On March 27, 2026, the Commission issued a
The U.S. Coast Guard and the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration are cooperating agencies in the preparation of the EA.
In order to receive notification of the issuance of the EA and to keep track of formal issuances and submittals in specific dockets, the Commission offers a free service called eSubscription. This service provides automatic notification of filings made to subscribed dockets, document summaries, and direct links to the documents. Go to
For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, contact the Office of Public Participation at (202) 502-6595 or
Additional information about the Project is available from the FERC website (
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, contact the Office of Public Participation at (202) 502-6595 or
a.
b.
c.
d.
e.
f.
g. Intervenors in the referenced proceeding may attend the meeting; however, participation will be limited to representatives of the Advisory Council, Missouri State Historic Preservaiton Office, Osage Nation, Delaware Nation, and Commission staff. If tribal representatives decide to disclose information about a specific location which could create a risk or harm to an archaeological site or Native American cultural resource, attendees other than Tribal representatives and Commission staff will be excused for that portion of the meeting and can return to the meeting after such information is disclosed. A summary of the meeting will be placed in the public record of this proceeding. As appropriate, the meeting summary will include both a public, redacted version that excludes any information about the specific location of the archeological site or Native American cultural resource and an unredacted privileged version. Intervenors planning to attend the meeting should notify Michael Davis at (202) 502-8339 or
On March 6, 2026, Kinder Morgan Louisiana Pipeline LLC (KMLP) filed an application in Docket No. CP26-136-000 requesting a Certificate of Public Convenience and Necessity pursuant to Section 7(c) of the Natural Gas Act to construct and operate certain natural gas pipeline facilities. The proposed project is known as the Texas Access Project (Project) and would enable KMLP to transport up to 1,300,000 dekatherms per day (Dth/d) of natural gas from new Texas interconnections for delivery to various points on the KMLP system.
On March 19, 2026, the Federal Energy Regulatory Commission (Commission or FERC) issued its Notice of Application for the Project. Among other things, that notice alerted agencies issuing federal authorizations of the requirement to complete all necessary reviews and to reach a final decision on a request for a federal authorization within 90 days of the date of issuance of the Commission staff's environmental document for the Project.
This notice identifies Commission staff's intention to prepare an environmental assessment (EA) for the Project and the planned schedule for the completion of the environmental review.
If a schedule change becomes necessary, additional notice will be provided so that the relevant agencies are kept informed of the Project's progress.
The project includes a 3.05-mile-long, 48-inch-diameter mainline extension in Jefferson County, Texas, and Cameron Parish, Louisiana (Mainline Extension), along with two aboveground pig launcher/receiver facilities. Additionally, the project involves 540 feet of 42-inch-diameter pipeline connecting the Trident Intrastate Pipeline to the Mainline Extension, 70 feet of 42-inch-diameter pipeline connecting the Texas Header to the Mainline Extension, and 250 feet of 42- and 36-inch-diameter pipeline connecting the Mainline Extension to KMLP's existing Leg 1 and Leg 2 pipelines. Furthermore, KMLP plans to modify existing regulator and metering facilities at the Sabine Pass Metering Facility and establish a new interconnection and gas measurement building at Louisiana LNG Gas Management, LLC's Woodside LNG Terminal in Calcasieu Parish, Louisiana.
On April 17, 2026, the Commission issued a
In order to receive notification of the issuance of the EA and to keep track of formal issuances and submittals in specific dockets, the Commission offers a free service called eSubscription. This service provides automatic notification of filings made to subscribed dockets, document summaries, and direct links to the documents. Go to
For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, contact the Office of Public Participation at (202) 502-6595 or
Additional information about the Project is available from the FERC website (
Federal Energy Regulatory Commission, DOE.
Notice of information collection and request for comments.
In compliance with the requirements of the Paperwork Reduction Act of 1995, the Federal Energy Regulatory Commission (Commission or FERC) is soliciting public comment on the currently approved information collection FERC-725S: (Emergency Preparedness and Operations (EOP) Reliability Standards). There are no proposed changes to the reporting requirements.
Comments on the collection of information are due July 20, 2026.
Please submit comments via email to
•
•
Kayla Williams may be reached by email at
These Reliability Standards enhance reliability by:
(1) providing accurate reporting of events to NERC's event analysis group to analyze the impact on the reliability of the bulk electric system, staff estimates that for EOP-004-4, fifty percent of the applicable entities will have an annual reporting burden, and this is captured in the associated table below.
(2) delineating the roles and responsibilities of entities that support system restoration from blackstart resources which generate power without the support of the bulk electric system (Reliability Standard EOP-005-3).
(3) clarifying the procedures and coordination requirements for reliability coordinator personnel to execute system restoration processes (Reliability Standard EOP-006-3).
(4) refining the required elements of an operating plan used to continue reliable operations of the bulk electric system in the event that primary control center functionality is lost (Reliability Standard EOP-008-2).
(5) addressing the effects of operating Emergencies by ensuring each Transmission Operator and Balancing Authority has developed Operating Plan(s) to mitigate operating Emergencies, and that those plans are coordinated within a Reliability Coordinator Area (EOP-010-1).
(6) streamlining the requirements for Emergency operations of Bulk Electric System. Attachment 1, which is incorporated into Requirements R2 and R6, provides the process and descriptions of the levels used by the Reliability Coordinator when communicating the condition of a Balancing Authority that is experiencing an Energy Emergency (EOP-011-4).
(7) addressing the effects of operating in extreme cold weather by ensuring each Generator Owner has developed and implemented plan(s) to mitigate the reliability impacts of extreme cold weather on its applicable generating units (EOP-012-3).
The applicable entities for different standards within the EOP family of standards include balancing authorities (BA, distribution providers (DP), distribution providers-underfrequency load shed (DP-UFLS), generator operators (GOP), generator owners (GO), reliability coordinators (RC), transmission operators (TOP) and transmission owners (TO). Estimate entity counts are taken from April 20, 2026, NERC Compliance Registration information.
Federal Energy Regulatory Commission, DOE.
Notice of information collection and request for comments.
In compliance with the requirements of the Paperwork Reduction Act of 1995, the Federal Energy Regulatory Commission (Commission or FERC) is soliciting public comment on the currently approved information collection FERC-919, (Refinements to Policies and Procedures for Market-Based Rates for Wholesale Sales of Electric Energy, Capacity and Ancillary Services by Public Utilities), and FERC-919A, (Data Collection for Analytics and Surveillance and Market-Based Rate Purposes).
Comments on the collections of information are due July 20, 2026.
Please submit comments via email to
•
•
Kayla Williams may be reached by email at
In order to analyze the capability and efficiency of horizontal market power (demonstrates what is lacking), the Commission uses two indicative market power screens: the uncommitted pivotal supplier screen (which is based on the annual peak demand of the relevant market) and the uncommitted market share screen applied on a seasonal basis. The Commission presumes sellers that fail either screen to have market power, and such sellers may submit a delivered price test analysis or alternative evidence to rebut the presumption of horizontal market power. If a seller fails to rebut the presumption of horizontal market power, the Commission sets the
To demonstrate a lack of vertical market power, a public utility with market-based rates, or any of its affiliates owns, operates or controls transmission facilities, that public utility must:
○ Intrastate natural gas transportation, intrastate natural gas storage or distribution facilities
○ Physical coal supply sources and ownership or control over who may access transportation of coal supplies
In addition to the market power analyses, a seller must submit an asset appendix in the relational database with its initial application for market-based rate authorization or updated market power analysis, and all relevant changes in status filings. The asset appendix must:
• List, among other things, all affiliates that have market-based rate authority
• List all generation assets owned (clearly identifying which affiliate owns which asset) or controlled (clearly identifying which affiliate controls which asset) by the corporate family by balancing authority area, and by geographic region, and provide the in-service date and nameplate and/or seasonal ratings by unit
• Must reflect all electric transmissions and natural gas interstate pipelines and/or gas storage facilities owned or controlled by the corporate family and the location of such facilities.
• List all long-term power purchases and sales agreements attributed to a seller and its affiliates by the corporate family by balancing authority area, and by geographic region, and provide the start date and end date.
Sellers are required to file updated market power analyses every three years if they meet any of the following conditions: own or control 500 megawatts or more of generation and/or that own, operate or control transmission facilities, are affiliated with any entity that owns, operates or controls transmission facilities in the same region as the seller's generation assets, or with a franchised public utility in the same region as the seller's generation assets. The updated market power analyses must demonstrate that a seller does not possess horizontal market power.
Concerning changes in status filings, the Commission requires that sellers file notices of such changes no later than each quarter after the change in status occurs. The Commission also requires that each seller must include an appendix in the relational database identifying specified assets with each pertinent change in status notification filed.
A Seller must report monthly about any change to its previously submitted relational database information, excluding updates to the horizontal market power screens. These submissions must be made by the 15th day of the month following the change. These submissions include the asset appendix information described above, as well as other market-based information concerning seller category, operating reserves authorization, identification of its ultimate upstream affiliate(s), mitigation, and other limitations.
Wholesale power marketers and wholesale power producers are not required to submit updated market power analyses if they: are not affiliated with franchised public utilities or transmission owners, do not own transmission, and do not, together with all of their affiliates, own or control 500 megawatts or more of generation in a relevant region. The Commission determines which sellers are in this category through information filed by the utility either when the seller files its initial application for market-based rate authorization or through a separate filing made to request such a determination.
Economist (Occupation Code: 19-3011), $77.04.
Electrical Engineer (Occupation Code: 17-2071), $71.19.
Legal (Occupation Code: 23-0000), $140.76.
The average hourly cost (salary plus benefits), weighting all of these skill sets evenly, is $96.33. The Commission rounds it to $96/hour.
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
Take notice that the Commission received the following electric securities filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, contact the Office of Public Participation at (202) 502-6595 or
Federal Communications Commission.
Notice.
In this document, the Federal Communications Commission (Commission) announces the third meeting of the current term of its Consumer Protection and Accessibility Advisory Committee (CPAAC or Committee).
Wednesday, June 10, 2026. The meeting will come to order at 1:00 p.m. Eastern Time.
The CPAAC meeting will be held remotely at
David M. Pérez or Joshua Mendelsohn, Designated Federal Officers, Federal Communications Commission, via email:
This meeting is open to members of the general public. The meeting will be webcast with sign language interpreters and open captioning at:
Requests for other reasonable accommodations or for materials in accessible formats for people with disabilities should be submitted via email to:
Federal Deposit Insurance Corporation (FDIC).
Notice and request for comment.
The FDIC, as part of its obligations under the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to take this opportunity to comment on the revision of the existing information collection described below (OMB Control No. 3064-0072). The notice of proposed revision for this information collection was previously published in the
Comments must be submitted on or before June 22, 2026.
Interested parties are invited to submit written comments to the FDIC by any of the following methods:
•
•
•
•
All comments should refer to the relevant OMB control number. A copy of the comments may also be submitted to the OMB desk officer for the FDIC: Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Washington, DC 20503.
Robert Meiers, Regulatory Attorney,
1.
Further, the FDIC is revising its use of these forms to ensure consistency across contracting in the federal government. In alignment with the guidance set forth by the FAR Council, the FDIC will include a new clause to require contractors to report potential discrimination and comply with all applicable nondiscrimination and equal employment opportunity standards as a performance requirement for new contracts. The clause is available at FAR 55.222-90.
Federal Deposit Insurance Corporation (FDIC).
Notice and request for comment.
The FDIC, as part of its obligations under the Paperwork Reduction Act of 1995, invites the general public and other Federal agencies to take this opportunity to comment on the renewal of the existing information collection described below (OMB Control No. 3064-0153). The FDIC is seeking a one-year extension of this information collection. The FDIC, with the other federal banking agencies,
Comments must be submitted on or before July 20, 2026.
Interested parties are invited to submit written comments to the FDIC by any of the following methods:
•
•
•
•
All comments should refer to the relevant OMB control number. A copy of the comments may also be submitted to the OMB desk officer for the FDIC: Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Washington, DC 20503.
Robert Meiers, Regulatory Attorney,
Proposal to renew the following
1.
There is no change in the method, substance, or burden of the collection
Board of Governors of the Federal Reserve System.
The Board of Governors of the Federal Reserve System (Board) is adopting a proposal to extend for three years, with revision, the Capital Assessments and Stress Testing Reports (FR Y14A/Q/M; OMB No. 7100-0341).
The revisions are effective December 31, 2026, unless otherwise noted below.
Federal Reserve Board Clearance Officer—Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System,
Office of Management and Budget (OMB) Desk Officer for the Federal Reserve Board, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503, or by fax to (202) 395-6974.
On June 15, 1984, OMB delegated to the Board authority under the Paperwork Reduction Act (PRA) to approve and assign OMB control numbers to collections of information conducted or sponsored by the Board. Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. The OMB inventory, as well as copies of the PRA Submission, supporting statements (which contain more detailed information about the information collections and burden estimates than this notice), and approved collection of information instrument(s) are available at
Following the initial notice, the Board received six comment letters. Three comment letters were from financial industry groups, one comment letter was from a banking organization, and two comment letters were from organizations associated with small business investment companies (SBICs).
Following the comment period, Federal Reserve staff met with representatives from banking organizations, banking industry advocacy groups, and a law firm regarding the comment letters received on the initial notice. During the meeting, representatives noted their support for certain aspects of the proposed changes and also reiterated their concerns with certain elements of the proposal.
The Board has adopted the proposed revisions, except as discussed below.
The Board proposed to implement revisions to the FR Y-14Q and FR Y-14M effective for the September 30, 2024, as-of date, and revisions to the FR Y-14A effective for the December 31, 2024, as-of date. Commenters expressed concern with the proposed timeline and requested that the Board revise the implementation dates to provide firms with sufficient time to make the required system changes, perform testing, and confirm reporting accuracy. For most proposed revisions, a commenter noted that implementation time of four quarters from the publication of the final notice would be adequate.
The Board recognizes the burden associated with regulatory reporting and the importance of providing firms sufficient time to update reporting systems and perform testing following the final notice. However, ensuring that data is received in a timely fashion is critical to conduct supervision and address emerging risks. Notably, several revisions noted as burdensome by commenters have not been adopted or have been otherwise modified to ease operational burden, as discussed below. The Board has adopted certain minor revisions or burden reducing revisions effective for the first reporting quarter following this notice, and the remaining revisions effective for the December 31, 2026, as-of date.
To address relevant unaddressed questions on the FR Y-14, the Board encouraged the submission of comments regarding any aspects of the FR Y-14 instructions that may be unclear. Additionally, the Board noted that it intended to retire unanswered questions in the Q&A system that were submitted prior to the publication of the initial notice. One commenter requested further guidance as to the Board's intentions with FR Y-14 Q&As in general. The commenter pointed out that it will continue to be critical for firms to be able to submit questions to the Board regarding the FR Y-14 and receive timely responses. Additionally, another commenter suggested that the Board consider changes to its FR Y-14 Q&A process to improve responsiveness and that the Board consider providing factors for firms to prioritize responses so urgent questions receive prompt responses.
The Board received 89 outstanding questions related to FR Y-14 reporting. The Board has since provided responses to 76 of these questions. The Board will consider adopting additional clarifications related to these questions in future updates to the FR Y-14. Q&As #Y140001594, #Y140000960, and #Y140001592 have been returned to the firms for clarification, and the Board expects to address these questions once clarifications have been received. The remainder of the questions were withdrawn by the firm or were addressed outside of the FR Y-14 Q&A system due to the nature of the question.
Additionally, the FR Y-14 Q&A system is not the appropriate channel for questions that do not pertain to an interpretation of reporting requirements. Firms should work with their Reserve Bank Analyst for questions related to edit checks.
As firms' relevant previously unaddressed questions have been addressed and this notice provides additional instructional clarifications, the Board will retire all outstanding questions that were submitted prior to the initial notice. Unanswered questions submitted since the initial notice will remain active. The Board understands the importance of providing responses to questions on FR Y-14 reporting requirements and is committed to improving the timeliness of these responses. In the absence of a response, firms should report according to their best understanding of the instructions. At this time, no further process changes will be made to the FR Y-14 Q&A system and firms will continue to be able to submit questions on the FR Y-14 to the Federal Reserve. After submitting a question to the Q&A system, firms should notify the Federal Reserve via email (
The Board proposed to modify the FR Y-14Q historical reporting requirement such that new reporters, or existing reporters that must begin filing a Retail schedule, would be required to provide PPNR and Retail historical reports for only the five years preceding the first quarter that the firms is subject to reporting. One commenter supported this revision and stated that five years of historical data is appropriately calibrated. Therefore, the Board has adopted this revision effective for the first reporting period following the publication of this notice.
The Board proposed to revise the FR Y-14 instructions to require firms to submit relevant data with respect to all market shocks that the Board may conduct in a given year, including exploratory shocks. One commenter noted that the proposed requirements were unclear and recommended that the Board align this collection with a 2024 supplemental data collection. Specifically, the commenter stated that firms should not be required to apply exploratory market shocks to FR Y-14A, Schedule A.1.a, line item 62 (“Total Trading and Counterparty Losses”) with respect to trading activity as this line item is dependent on FR Y-14Q, Schedule F (Trading), which falls outside the scope of the exploratory market shocks. Further, the commenter asked that the Board conduct no more than two exploratory market shocks per year given the operational burdens of providing the data and ensure that the as-of date for the exploratory market shock is the same as for the global market shock (GMS). Lastly, the commenter stated that the FR Y-14Q, Schedule L (Counterparty) data should not be due until April 30.
The Board is cognizant of the burden associated with exploratory market shocks and has determined that the proposed revision to the FR Y-14 related to exploratory market shocks is not needed at this time. Therefore, the Board has not adopted this revision.
Consistent with ASU 2022-02, the Board proposed to retire fields that captured troubled debt restructurings on FR Y-14Q, Schedules H.1 and H.2 and FR Y-14M, Schedules A and B, and replace them with fields to capture loan modifications to borrowers experiencing financial difficulty (LMBEFDs). A commenter noted that the FR Y-14 instructions for reporting LMBEFDs does not align with the FR Y-9C and asked that the Board align the definitions. The commenter also requested that the revisions related to LMBEFDs are effective for the December 31, 2024, as-of date, to align with the FR Y-9C.
For alignment between reports, the Board has revised the FR Y-14 fields related to LMBEFDs to direct firms to report consistent with the FR Y-9C glossary entry for LMBEFDs. The Board has adopted this revision for the first reporting period following the publication of this notice.
The Board has received questions as to the materiality threshold calculation for reporting certain FR Y-14Q and FR Y-14M schedules as respondents have stated there is ambiguity as to whether the four-quarter average applies to both asset balances and asset balances as a percent of Tier 1 capital. The Board clarifies that the FR Y-14Q and FR Y-14M materiality thresholds are determined by the four-quarter average of (1) asset balances or (2) the ratio of asset balances to Tier 1 capital. The four-quarter average is calculated using the asset balances or ratio of asset balances to Tier 1 capital as of the end of each of the four most recent quarters. If either threshold is met, the firm would be required to report the applicable schedule in the following quarter for the FR Y-14Q. For the FR Y-14M, the firm would be required to report the applicable schedule starting with the last month of the following quarter.
For example, for a firm that is subject to Category I standards, if its asset balances exceed $5 billion based on a four-quarter average, or if the ratio of its asset balances to Tier 1 capital exceeds 5 percent based on a four-quarter average, as of June 30, then the firm must file the applicable schedule for the September reporting date. Firms are responsible for ensuring that reporting expectations are being met. For existing FR Y-14 filers, the Board does not contact firms when it must begin reporting a new schedule.
To address questions raised by firms approaching materiality thresholds, the Board has clarified the calculation in the FR Y-14Q and FR Y-14M instructions.
The Board proposed to update the instruction for FR Y-14A, Schedule A.7.a, item 36 (“Provisions for Unfunded Off-Balance Sheet Credit Exposures”) to reference FR Y-9C, Schedule HI-B, part II, item M7 (“Provisions for credit losses on off-balance sheet credit exposures”). A commenter noted that there is a difference in presentation between the FR Y-14A, FR Y-14Q, and FR Y-9C as to the reporting of provisions for unfunded off-balance sheet credit exposures, which it recommended the Board address. The commenter also asked that the Board update the FR Y-9C reference included in FR Y-14Q, Schedule G.1, item 36 (“Provisions for Unfunded Off-Balance Sheet Credit Exposures”). To ensure consistent reporting, the Board has moved the reporting of the provisions for unfunded off-balance sheet credit exposures to Schedule A.1.a (Income Statement) to be a component of item 91 (“Total provisions during the quarter”) on the FR Y-14A. Additionally, the Board has updated item 36 of Schedule G.1 to reference FR Y-9C, Schedule HI-B, part II, item M7. The Board has adopted this revision effective for the December 31, 2026, as-of date.
The Board did not propose changes related to numeric formatting across the FR Y-14 reports. However, a commenter noted that fields related to loss given defaults and zip codes have different numeric formatting across schedules. The Board recognizes this inconsistency and will take this feedback under consideration when determining any future revisions.
Effective for the March 31, 2024, as-of date, the Board revised the FR Y-14 reports to reflect full CECL implementation. Due to the timing of the initial notice, these changes were not reflected in the proposed forms and instructions. A commenter noted this and requested that they be removed. The Board confirms that these changes will remain reflected on the official FR Y-14 forms and instructions moving forward.
The Board proposed to require an unstressed Schedule L submission as of the last calendar date of the fourth quarter, in addition to the four submissions currently required. A commenter asked that this revision not be implemented given the associated burden and because there is no meaningful change in the data as of quarter-end as compared to the GMS as-of date submission.
The Board acknowledges the operational burden concerns raised by the commenter and limited difference in submissions between the GMS as-of date and quarter-end. Therefore, the
The Board proposed to require the reporting of a firm's top 25 counterparties and related exposures under the firm-generated scenario on FR Y-14Q, Schedule L.5 (Derivatives and Securities Financing Transactions Profile). A commenter stated that clarification was needed as to the population of counterparties; specifically, the commenter asked if a counterparty that is already captured by one of the two existing ranking methodologies must also be included under the new ranking methodology. The Board confirms that a counterparty is only required to be reported under one Schedule L.5 ranking methodology. The Board has clarified the instructions to reduce ambiguity and has adopted this revision effective for the December 31, 2026, as-of date.
The Board proposed to require the reporting of FR Y-14Q, Schedule L.4 (Aggregate and Top 10 CVA Sensitivities by Risk Factor) under certain Board-provided assumptions (margin period of risk of 10 business days, keeping CSA thresholds flat, no gains from netting, and no credit downgrade triggers). A commenter requested that the Board clarify the definitions of “no gains from netting” and “keeping CSA thresholds flat” and provide an illustrative example. Additionally, the commenter asked that the Board include these details in a separate proposal for an appropriate opportunity for firms to provide feedback, given the potential impact to stress testing due to these changes.
The Board recognizes the ambiguity of the proposed assumptions “no gains from netting” and “keeping CSA thresholds flat,” as they do not currently exist elsewhere in the Schedule L instructions. However, “margin period of risk of 10 days” and “no credit downgrade triggers” are currently used in reporting certain FR Y-14Q, Schedule L.2 (Expected Exposure Profile by Counterparty) fields. The Board has determined that implementing just these two assumptions will achieve the intended outcome of consistent reporting and not require additional clarification. Lastly, the Board confirms that there are no stress testing methodology changes associated with this revision. By implementing consistent assumptions, the Board will receive comparable and higher-quality data from all firms.
The Board has revised the instructions to specify that the CVA sensitivities on Schedule L.4 are to be reported under the assumptions “margin period of risk of 10 days” and “no gains from netting.” The Board has adopted this revision effective for the December 31, 2026, as-of date.
The Board proposed to clarify the instructions to describe how a firm can net exposures when calculating net current exposure for SFTs. The initial notice stated that this would address questions and issues raised in FR Y-14 Q&As #Y140001627 and #Y140001614. A commenter pointed out that Q&A #Y140001627 has not been published and therefore commenters cannot verify if the proposed revision adequately addresses the question. In September 2024, the Board published the content of #Y140001627 in FR Y-14 Q&A #Y140001698.
The Board proposed to clarify that firms should use the International Swaps and Derivatives Association, Inc., publication of the 2013 Standard Credit Support Annex for the basis of classifying derivatives as SCSA and use Old-CSA for agreements made prior to this publication. A commenter stated that the proposed instruction language was ambiguous and that clarification was required as to the relevant date to be used for reporting. To address this possible ambiguity, the Board has clarified the instructions to reflect that firms should use the date when the contractual terms become binding. The Board has adopted this revision effective for the December 31, 2026, as-of date.
The Schedule L form that was included in the initial proposal contained two fields related to the variable payoff of credit default swaps (CDS). A commenter pointed out that the
A commenter reiterated concerns over the reporting of client cleared derivatives exposures on Schedules L.1-L.4 and requested that they remain out of scope. Additionally, the commenter stated that FR Y-14 Q&A #Y14001503 has created conflicting guidance regarding the treatment of client cleared derivatives. The initial notice did not contemplate any revisions related to the reporting of client cleared derivatives and the Board does not believe #Y14001503 creates conflicting guidance, as it restates the FR Y-14Q instruction's distinction for reporting the two types of client-cleared derivative exposures, back-to-back derivatives (considered a direct exposure) and guaranteed derivatives (an indirect exposure). Only direct exposures for which a firm computes CVA for its public financial statements should be reported in Schedule L.1-L.4 regular/unstressed submissions. Direct exposures should be reported in Schedule L.1-L.4 for CCAR/stressed submissions irrespective of the firm's accounting practice for financial reporting. Firms should continue to report these exposures in accordance with the FR Y-14 instructions. The Board will consider if additional clarifications are required in the future and would propose any changes in a
The Board proposed to require the reporting of fields 52 through 82 on FR Y-14Q, Schedule H.1 (Corporate), the “Obligor Financial Data Section,” for NDFIs. The Board received several comment letters on this proposed revision. One commenter noted that the Obligor Financial Data section may be overly broad and that there are obligors for which financial data is not used in the underwriting process or collected from NDFIs on an ongoing basis. The commenter suggested that the Board add clarifying language to Schedule H.1 such that financial data is not required in situations in which it is not used in underwriting and credit risk monitoring. Similarly, the commenter requested that the Board exclude special purpose entities, special purpose vehicles, and fronting risk facilities from obligor financial data reporting as it would be burdensome to provide and of minimal supervisory benefit. Another commenter suggested that the obligor financial data for fronting risk facilities be based on the primary credit facility obligor to better reflect underwriting practices and ensure consistent reporting.
One commenter stated that the FR Y-14Q collection of NDFI financial data should only require firms to report financial data that is collected during the underwriting and credit risk management process to reflect existing market practices. Otherwise, the
Another commenter expressed strong support for the proposed revisions related to the collection of NDFI data and, in the spirit of financial stability, that the Board make the data publicly available and maintain regulatory awareness of possible risks attributable to NDFIs at banks with total assets below $100 billion.
As the Obligor Financial Data section was constructed to cover a range of obligors and financial data, the Board understands that every field of the financial data section may not be pertinent to underwriting and credit risk monitoring for all NDFI obligors. The Board notes that Section C (“Technical Details”) of the FR Y-14Q General Instructions states, “If information is not available or not applicable and no such options are offered, the field should be left blank.” As such, the Board acknowledges certain fields may not be populated but expects firms to report as complete data as possible and would engage firms through the supervisory process if pertinent data is omitted. This language also obviates the need for materiality thresholds, as suggested by another commenter. Recognizing the commenter's statements that the items in the financial data section is generally not applicable for loans to special purpose entities, special purpose vehicles, and fronting credit facilities, the Board has modified the instructions to exclude these entities from obligor financial data reporting. Lastly, the Board reiterates that the FR Y-14 reports are confidential supervisory information, and the Board does not expect to disclose information reported on the FR Y-14Q regarding an individual NDFI's activities, given the sensitive nature of this information. The Board has adopted this revision effective for the December 31, 2026, as-of date.
To balance regulatory burden and risk coverage, the FR Y-14 respondent panel is firms with $100 billion or more in total consolidated assets. However, the Board can monitor smaller firms' NDFI exposures through the supervisory process and other regulatory reports, such as the FR Y-9C. If additional data is deemed necessary, the Board may request it from the relevant firms.
Additionally, the Board proposed to add a “NDFI Entity Type” field to Schedule H.1 in which firms would have had multiple options to specify the NDFI type to which the facility was extended. To ease operational burden, several commenters requested that the Board align the proposed NDFI categories on the FR Y-14 with those proposed for the Call Report.
The Board understands the value in aligning regulatory reports and aims to do so whenever possible. To ensure that the FR Y-14 aligns with the FR Y-9C, the Board proposed revisions that would add the five proposed FR Y-9C NDFI categories as options to Schedule, H.1, item 26 (“Line Reported on FR Y-9C”).
The Board proposed to add three fields to Schedule H.1 to capture whether an obligor is controlled by a financial sponsor, and, if so, that financial sponsor's name and legal entity identifier. The Board received several comments on this revision stating that the proposed fields are overly broad and suggesting clarifications to improve the consistency of reporting. First, commenters stated that the proposed instructions are unclear as to whether entities can be financial sponsors, as opposed to individuals. Second, commenters asserted that the definition of financial sponsor is overly broad and suggested that the Board adopt a minimum ownership percentage or narrow the definition to reflect only financial sponsors that have legal authority over the policies of the obligor. Additionally, a commenter stated that the Board should clarify how to report an obligor that has more than one financial sponsor and whether financial sponsor reporting is required for all obligors with a financial sponsor or only for NDFI obligors. Lastly, a commenter asked whether there are masking considerations for individual financial sponsors as currently exist elsewhere on the FR Y-14.
The Board confirms that entities as well as individuals can be considered financial sponsors, and has revised the instructions for clarity. Relatedly, the Board has revised the instructions to ensure that information on individuals is masked, consistent with practice in other portions of the FR Y-14Q. The Board recognizes the ambiguity of the proposed financial sponsor fields and has implemented a 25 percent minimum ownership threshold, consistent with the Shared National Credit report, for the purposes of reporting a financial sponsor to address commenters' concerns. The Board modified the instructions to reflect that financial sponsor reporting applies to all corporate obligors, not just NDFIs, and that firms should report the financial sponsor with the greatest ownership percentage in the case of multiple sponsors. Finally, the Board modified the instructions to clarify that firms should provide the financial sponsor as of the reporting date. With these adjustments, the Board has adopted this revision effective for the December 31, 2026, as-of date.
The Board proposed to add twelve options to Schedule H.1, item 36 (“Security Type”) covering an array of known collateral types. Commenters stated that the Board should provide definitions for these new options or introduce alternative granularity. The Board understands that providing additional guidance can be valuable where ambiguity may exist. As with the existing item 36 options, the Board believes that the proposed options are clear as to their applicability and instructs firms to report this field to their best understanding. If ambiguity persists, firms should submit questions with specific details to the FR Y-14 Q&A system. The Board has adopted this revision effective for the December 31, 2026, as-of date.
The Board proposed to add five fields to each FR Y-14Q, Schedule H.1 and Schedule H.2 (Commercial Real Estate) to capture facility fee structure. A
In light of the comments, the Board has not adopted the proposed items related to fees collected (as opposed to assessed). However, the Board believes there to be a strong supervisory benefit to collecting data on assessed closing fees, facility fees, and unused commitment fees as these can be an important element of a loan's pricing and economics. If fees are material, the loan's interest rate provides an incomplete view of the loan's compensation structure; therefore, fee information is critical for supervisors to comprehensively understand a loan's riskiness. In addition, information on loan fee structures may help the board improve the accuracy of its projection of PPNR on loans. As suggested by a commenter, the Board has clarified that the reporting of renewal and amendment fees as closing fees should be based on major modifications. The Board has adopted this revision effective for the December 31, 2026, as-of date.
The Board proposed to modify the instructions of Schedule H.1, item 93 (“Collateral Market Value”) to require the reporting of collateral valuations for all facilities with commitments based on collateral. A commenter stated that the proposed revision did not include sufficient information regarding required reporting and that further guidance should be provided as to the scope of reporting and how to report for facilities that do not require periodic valuations of collateral. The Board has clarified the instructions such that the “Collateral Market Value” field is required for all facilities that are not reported as “Unsecured” in line item 36 (“Security Type”). Additionally, the Board has added guidance to instruct firms to report the value assessed at origination for facilities that do not undergo ongoing evaluations. The Board has adopted this revision effective for the December 31, 2026, as-of date.
The Board proposed to add an item to Schedule H.1 to capture if a loan covenant exists, whether the covenant has been violated, and, if so, whether the agreement has been amended. A commenter asked that the reporting of covenant information not be adopted as it may not be reflected in firm financial systems and that ambiguities exist regarding the definition of loan covenant violations, particularly for non-financial covenants, which could minimize the data's benefits. To ensure consistent reporting, another commenter requested that definitions be provided for each allowable value.
Collecting data on covenants is important as covenant violations can serve as an early warning signal for loan distress and credit default. By conferring contractual rights to creditors, covenant violations function similarly to payment defaults but are more frequent and occur well before actual payment default. Therefore, this information is valuable for credit risk monitoring and modeling. However, the Board recognizes the commenter's points on the ambiguity of non-financial covenants and associated violations, and has modified the field from what was proposed to exclude non-financial covenants. The Board has adopted the proposed revision with this modification, and has added additional guidance on financial covenants and violations to the instructions to ensure consistent reporting across firms.
The Board proposed to collect data on loan amortization in Schedule H.1. Citing the burden and minimal benefit of amortization data for corporate loans, a commenter requested that the Board not adopt this revision. Recognizing the burden and amortization structure of corporate loans, the Board has determined that this proposed item is not necessary and has not adopted this revision.
The Board proposed to clarify that square feet should be used when reporting Schedule H.2, item 39 (“Property Size”) for healthcare properties. A commenter stated that number of beds is the industry standard for measuring healthcare properties and suggested that this be reflected on the FR Y-14. To align with industry standards, the Board has revised the instructions to require “Property Size” to be reported in number of beds for healthcare properties. The Board has adopted this revision effective for the December 31, 2026, as-of date.
The Board proposed to update the Schedule H language to clarify which commitments must be reported. A commenter stated that commitments where the lender is not under any legal obligation to extend credit or purchase assets should be out of scope for Schedule H. The proposed revision aimed to align the FR Y-14 language regarding unused commitments with that of the FR Y-9C, and did not change the scope of the reported commitments. The Board will consider if changes are necessary to either the FR Y-14 and FR Y-9C and would propose such changes in a
The Board did not propose any changes to the population of loans that should be reported on Schedule H.1. However, a commenter requested that the Board exclude non-purpose margin loans to be consistent with proposed revisions to the Call Report.
The Board did not propose any Schedule H revisions related to CDS hedging. However, a commenter suggested that the Board add items to Schedule H.1 and Schedule H.2 to indicate if a loan is hedged via a CDS derivative and the percentage of the loan that is hedged. As indicated by recent supplemental data collections on synthetic securitizations, the Board is committed to exploring the impact of risk-mitigating activities and may as a result propose changes to the FR Y-14 in the future. At this time, the Board is not adopting any revisions to Schedule H that would capture CDS hedge positions.
The Board proposed to add the fields “Total Debt from Loans Involuntarily Terminated,” “Total Net Recoveries,” and “Total Credit Enhancements Received” to FR Y-14M, Schedule A.2 (Domestic First Lien Closed-end 1-4 Family Residential Portfolio Level Table). Commenters noted that the proposed fields instruct firms to include real estate owned (REO) loans, but the general instructions for Schedule A instruct firms to exclude REO loans from Schedule A.2, which the commenters suggested the Board resolve. A commenter also asked that the Board address the discrepancy between Schedule A.2 and Schedule A.1 (Domestic First Lien Closed-end 1-4 Family Residential Loan Level Table) as to the applicable reporting period for the new fields.
The Board recognizes that, given the exclusion of REO balances from Schedule A.2, most liquidated loans would not be captured by the proposed additional fields, limiting their utility. Therefore, in light of the burden associated with reporting additional fields, the Board has not adopted this proposed revision.
The Board proposed to specify that scored or delinquency managed owner-occupied nonfarm nonresidential (NFNR) loans, as reported in FR Y-9C, Schedule HC-C, line item 1.3.(1), should be reported on FR Y-14Q, Schedule A.9 (U.S. Small Business). The Board also proposed to specify that scored owner-occupied NFNR loans be reported as small business loans (line item 2.b) on FR Y-14Q, Schedule M.1 (Quarter-end Balances) and to add a line item to FR Y-14Q, Schedule M.2 (FR Y-9C Reconciliation) for scored owner-occupied NFNR loans. For consistency, the Board proposed to enable the reporting of FR Y-14Q, Schedule K, Column F (Scored Loans) for line item 7.d.1 (“Domestic Owner Occupied NFNR”) and clarify that Column F only applies to owner-occupied NFNR loans. A commenter noted that the proposed revisions appear to be duplicative and burdensome, while another commenter asked that the Board clarify whether both scored and delinquency managed loans are to be included in Schedule A.9, as the proposed instructions only mentioned delinquency managed loans.
The Board confirms that both scored and delinquency managed owner-occupied NFNR loans should be reported on Schedule A.9 and has revised the instructions to add a reference to scored loans. Consistent with the nature of Schedule K to address data gaps, the Board confirms that Column F is only required if the firm does not already report Schedule A.9; therefore, this revision does not introduce duplicative reporting requirements. The Board has revised the Schedule K instructions to clarify this expectation. If a firm meets the Schedule A.9 reporting threshold, it should report its owner-occupied NFNR loans on Schedule A.9 in the same manner as other small business loans. If the firm does not meet the Schedule A.9 reporting threshold, it must report its owner-occupied NFNR balances on Schedule K, Column F.
The Board agrees that opening line item 7.d.1 is duplicative, as the same population of loans is collected by the “No loan category specific line.” To maintain current reporting processes, the Board has removed this duplication such that firms should continue to report these loans in the “No loan category specific” row, as applicable. The Board has adopted this revision effective for the December 31, 2026, as-of date.
The Board proposed to define all credit card loans by office location, not borrower domicile, and to revise the FR Y-14Q retail schedule instructions to clarify that only loans held in foreign offices should be reported on the international sub-schedules. To avoid confusion, the Board also proposed to add “United States” to Region 1 of the “Geography” field for all international retail sub-schedules. Given these revisions, a commenter suggested that a corresponding definition be implemented on the domestic retail sub-schedules and requested clarification as to how to report international domiciles on FR Y-14Q, Schedule A.2 (U.S. Auto Loan). Similarly, a commenter noted that the FR Y-14M instructions should be revised to address loans with respect to property located outside the United States.
To address the commenter's concerns and accurately capture loans held by domestic offices to international domiciles, the Board has added an “Other Regions” option to the “Geography” field of the FR Y-14Q domestic retail sub-schedules. The Board has also clarified that loans should be classified by office location for purposes of reporting the FR Y-14M and provided guidance as to how to report international domiciles in the geography fields. The Board has adopted this revision effective for the December 31, 2026, as-of date.
Upon implementation of this revision, FR Y-14 Q&As #Y140000700, #Y140001258, #Y140001176, and #Y140000994 are no longer relevant and will be updated accordingly.
The Board proposed to implement the collection of private credit card revenue- and loss-sharing agreements (RLSAs) to FR Y-14M, Schedule D (Domestic Credit Card). A commenter requested that the Board clarify if item 70 (“Loss Sharing”) on Schedule D.1 only requires the reporting of accounts that are part of loss-sharing agreements and that item 70 captures the type of loss sharing agreement to which the account is subject. The commenter also asked that the Board clarify whether revenue-sharing agreements should be reported in item 45 (“All Other Noninterest Income”) on Schedule D.2 and whether dollar amounts reported in item 48 (“Other Loss Share Credits”) should include credit losses associated with both loss-sharing agreements and profit-sharing agreements for which losses are included as part of the calculated profit. The commenter recommended a new line item be added to Schedule D.2 for purposes of reporting the dollar amount paid or received with respect to PPNR associated with revenue- or profit-sharing agreements. Additionally, the commenter asked that the Board make Schedule D.1 and D.2 consistent with respect to reporting RLSA credits and asked whether amounts should be gross, not net, of sharing credits or payments received. Another commenter asked that the Board clarify if revenue-sharing agreements are also to be reported, as the proposed instructions only mention loss-sharing agreements.
The Board has subsequently proposed additional revisions to better capture credit card revenue and loss sharing agreements for use in the supervisory stress test.
The Board proposed to revise the FR Y-14 to remove and replace all references to LIBOR. Commenters noted that certain fields impacted by this change are origination fields that are not expected to change, and therefore asked if firms can continue to report LIBOR options for historical loans that originated with a LIBOR rate. The Board has modified the instructions to retain
The Board proposed to clarify that the “Workout Type” fields on FR Y-14M, Schedule A.1 and B.2 should be left blank if the loan has never been in loss mitigation. A commenter asked that the Board clarify the difference between reporting “0” and “Null” for these fields. The Board has clarified the instructions such that “0” is to be used in the month following completion of a workout plan and that “Null” is to be used in following months or when a loan has never been subject to loss mitigation. The Board has adopted this revision effective for the December 31, 2026, as-of date.
The Board did not propose to retire fields from FR Y-14M, Schedule C (Address Matching), but a commenter requested that certain fields related to mailing information be retired. The Board has proposed to retire these fields in a subsequent proposal.
The Board did not propose changes to FR Y-14M, Schedule B.1, item 95 (“Unpaid Principal Balance (Net)), but a commenter pointed out that the current instructions do not reflect a FR Y-14 Q&A. Specifically, the commenter noted the Q&A indicated the Board would remove the language stating that the unpaid principal balance should equal the book value on regulatory filings. The Board has proposed to remove this language from item 95 in a subsequent proposal.
The Board proposed to create a new FR Y-14Q, Schedule M (Balances) sub-schedule to collect data on loans and leases covered by shared-loss agreements (SLAs) with the FDIC. A commenter initially asked that this sub-schedule not be adopted given the time required for implementation. However, after further consideration, the commenter clarified that they do not object to the adoption of this sub-schedule. The commenter also stated that the Board should provide guidance as to how to report unfunded commitments covered by SLAs with the FDIC.
To expand the scope of SLA data, the Board has modified the instructions and template to collect data on the committed balance (funded plus unfunded balance) of loans covered by SLAs with the FDIC. The Board also confirms that the sub-schedule is only required from firms that have SLAs with the FDIC as of the reporting date, as indicated in the instructions. The Board has adopted this revision effective for the December 31, 2026, as-of date.
The Board proposed to add “SBIC Interests” to FR Y-14Q, Schedule F (Trading) as an industry group to capture funded and unfunded equity interests in SBICs. Commenters generally expressed support for capturing SBIC exposures separate from other forms of private equity; however, commenters also suggested that the Board broaden the scope of what is considered an “SBIC Interest” for Schedule F reporting purposes. Specifically, one commenter argued that all SBIC interests other than “Participating Security SBICs” be reported in the SBIC industry group, as opposed to only “Standard Debenture” SBICs. Another commenter stated that the proposed revision should incorporate non-leveraged SBICs in addition to “Standard Debenture” SBICs. Additionally, a commenter asked that the Board consider a further adjustment to the SBIC loss rate in the supervisory stress test, and, to do so, collect the percentage of underlying SBIC investments that are equity and debt.
Based on the feedback and data provided by the commenters, the Board has determined that it is appropriate to collect data on all SBIC types, other than “Participating Security SBICs.” The Board has added an “SBIC Interests—Other” industry group to Schedule F.24 to capture exposures to SBICs other than Standard Debenture SBICs and Participating Security SBICs. The proposed “SBIC Interests” industry group has been renamed “SBIC Interests—Standard Debenture.” As in all areas of the stress test, the Board will continually monitor and analyze the data to determine if the SBIC loss rate is appropriately calibrated in the supervisory stress test. If supplementary data is required in the future, the Board may request it from firms, including the debt-to-equity split of the fund's underlying assets. The Board has adopted this revision effective for the December 31, 2026, as-of date.
The Board did not propose any changes to the reporting of non-fair value private equity investments or seed capital invested in mutual funds and exchange traded funds (ETFs). However, a commenter stated that the Board should exclude non-fair value private equity investments from FR Y-14Q, Schedule F.24 (Private Equity) as the macroeconomic scenario is more appropriate for estimating the stressed losses of these exposures. Similarly, the commenter asked that seed capital invested in mutual funds and exchange traded funds be excluded from Schedule F.24, as these funds generally invest in liquid marketable securities and therefore should not be treated as private equity when estimating stressed loss.
As discussed in the 2025 Supervisory Stress Test Methodology document, private equity exposures are stressed using the severely adverse macroeconomic scenario. If the Board determines that additional information is needed to conduct the supervisory stress test, it may request supplemental data from firms.
The Board will research and monitor the risks posed by seed capital investments in mutual funds and ETFs and consider the value of any reporting or methodology changes.
The Board proposed to clarify that a FR Y-14A, Schedule C (Regulatory Capital Instruments) “Incremental” submission is required if a firm makes a distribution such that the dollar amount exceeds the firm's final planned capital distribution, as measured on an aggregate basis beginning in the fourth quarter of the planning horizon through the quarter at issue, even if that change is not reflected on Schedule C. A commenter suggested that the Board clarify the scope of payments to be reported and the process envisioned for Incremental submissions. The commenter also noted that tracking certain interest expenses or other payments that are immaterial and establishing a process for reporting may present a burden to firms.
Per the Schedule C instructions, an Incremental submission is required at the time the firm seeks approval for additional capital distributions pursuant to 12 CFR 225.8(j) or within 15 days after making any capital distribution pursuant to that section, or a capital distribution in excess of the firm's final planned capital distribution. Consistent with FR Y-14 Q&A #Y140001459, the
The Board proposed to revise FR Y-14Q, Schedule B.2, item 15 (ASU 2017-12 ASU Hedge Designations) to reflect the updated portfolio layer method (PLM) of hedge accounting. Additionally, the Board proposed to retire Schedule B.2, item 11 (Hedged Cash Flow). A commenter stated that FR Y-14Q, Schedule B (Securities) does not comprehensively capture PLM hedges and suggested that the Board introduce a new Schedule B sub-schedule to collect this information. As mentioned in FR Y-14 Q&A #Y140001696, the current data collection used to support the securities modeling was designed to capture more traditional hedges and does not consistently and comprehensively capture PLMs. The Board has since proposed revisions to Schedule B that would more comprehensively capture data on hedges, including PLMs.
In accordance with the Paperwork Reduction Act of 1995, the Centers for Disease Control and Prevention (CDC) has submitted the information collection request titled “The Maternal Mortality Review Information Application (MMRIA)” to the Office of Management and Budget (OMB) for review and approval. CDC previously published a “Proposed Data Collection Submitted for Public Comment and Recommendations” notice on January 13, 2026 to obtain comments from the public and affected agencies. CDC received 105 comments related to the previous notice. This notice serves to allow an additional 30 days for public and affected agency comments.
CDC will accept all comments for this proposed information collection project. The Office of Management and Budget is particularly interested in comments that:
(a) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(b) Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(c) Enhance the quality, utility, and clarity of the information to be collected;
(d) Minimize the burden of the collection of information on those who are to respond, including, through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(e) Assess information collection costs.
To request additional information on the proposed project or to obtain a copy of the information collection plan and instruments, call (404) 639-7570. Comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
The Maternal Mortality Review Information Application (MMRIA) (OMB Control No. 0920-1294, Exp. 05/31/2026)—Revision—National Center for Chronic Disease Prevention and Health Promotion (NCCDPHP), Centers for Disease Control and Prevention (CDC).
The Centers for Disease Control and Prevention (CDC) seeks a Revision to continue to collect information through the Maternal Mortality Review Information Application (MMRIA) for three additional years. MMRIA is a standardized data system that allows Maternal Mortality Review Committees (MMRCs) across the United States to abstract relevant data (clinical and nonclinical) about pregnancy-associated deaths identified from a variety of sources, create case narratives to facilitate review of data, and document committee decisions such as pregnancy relatedness of the death, contributing factors, and recommendation efforts to prevent future deaths.
Deaths during pregnancy or in the year after the end of pregnancy are a tragedy for families and for society as a whole. Sadly, for over a decade, deaths in the United States resulting from pregnancy or delivery complications, a chain of events initiated by pregnancy, or the aggravation of an unrelated condition by the physiologic effects of pregnancy have remained unacceptably high. However, findings from MMRCs indicate that four of five pregnancy related deaths are preventable. Maternal Mortality Review is a process by which a multidisciplinary committee at the jurisdiction level identifies and reviews cases of deaths occurring within one year of pregnancy. Members of MMRCs typically represent public health, obstetrics and gynecology, maternal fetal medicine, nursing, midwifery, forensic pathology, mental health, and behavioral health. Members might also include social workers, patient advocates, and other relevant multidisciplinary stakeholders. Through a partnership among the MMRC, the state vital records office, and epidemiologists, deaths among women of reproductive age are examined to determine if they occurred during pregnancy or within a year of the end of pregnancy (
The MMRIA is a standardized data system that MMRCs use to collect timely, accurate, and standardized information about deaths to women during pregnancy and the year after the end of pregnancy, including opportunities for prevention, within and across jurisdictions. Data will be abstracted and entered into MMRIA from various sources, including death certificates, autopsy reports, birth certificates, prenatal care records, emergency room visits records, hospitalization records, records for other medical office visits, medical transport records, social and environmental profiles, mental health profiles, and informant interviews. Case narratives are auto-populated from the abstracted data for committee review, and subsequent committee decisions are also documented in MMRIA.
Burden estimates presented here are for 52 jurisdictions that receive funding through CDC-RFA-DP24-0053. As part of this cooperative agreement, these jurisdictions are required to compile in MMRIA, a defined set of information about deaths that occur during pregnancy or the year after the end of pregnancy. It is estimated that information will be collected for a total of 2,832 pregnancy-associated deaths on average, annually, among the 52 jurisdictions with funding support through CDC-RFA-DP24-0053. It is estimated that on average, 15 hours of abstraction are required for each death entered into MMRIA. CDC has established a process that reduces the burden related to abstraction of vital records into MMRIA that is currently applicable to 41 of the 52 funding recipients. The estimated average is 14 hours of abstraction for each death entered into MMRIA for these 41 funding recipients. For all jurisdictions with funding support through CDC-RFA-DP24-0053, an additional 24 minutes on average is needed to enter the committee decisions into MMRIA. This Revision reflects an increase in the burden from an overall total of 33,482 (last approval) to 41,789, for a total increase of 8,307 hours. The explanation for this increase is that in the prior approval, deaths were estimated indirectly because actual counts were not available. The numbers of deaths used in this Revision are based on actual case counts among CDC-RFA-DP24-0053 funding recipients.
CDC requests OMB approval for an estimated 41,789 annual burden hours. There is no cost to respondents other than their time to participate.
In accordance with the Paperwork Reduction Act of 1995, the Centers for Disease Control and Prevention (CDC) has submitted the information collection request titled “Developmental Studies to improve the National Health Care Surveys” to the Office of Management and Budget (OMB) for review and approval. CDC previously published a “Proposed Data Collection Submitted for Public Comment and Recommendations” notice on February 24, 2026 to obtain comments from the public and affected agencies. CDC received two comments related to the previous notice. This notice serves to allow an additional 30 days for public and affected agency comments.
CDC will accept all comments for this proposed information collection project. The Office of Management and Budget is particularly interested in comments that:
(a) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(b) Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(c) Enhance the quality, utility, and clarity of the information to be collected;
(d) Minimize the burden of the collection of information on those who are to respond, including, through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(e) Assess information collection costs.
To request additional information on the proposed project or to obtain a copy of the information collection plan and instruments, call (404) 639-7570. Comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Developmental Studies to improve the National Health Care Surveys (OMB Control No. 0920-1030)—Reinstatement—National Center for Health Statistics (NCHS), Centers for Disease Control and Prevention (CDC).
Section 306 of the Public Health Service (PHS) Act (42 U.S.C. 242k), as amended, authorizes the Secretary of Health and Human Services (DHHS), acting through the Division of Health Care Statistics (DHCS) within the National Center for Health Statistics (NCHS), shall collect statistics on the extent and nature of illness and disability of the population of the United States. The DHCS conducts the National Health Care Surveys, a family of nationally representative surveys of encounters and health care providers in inpatient, outpatient, ambulatory, and post-acute and long-term care settings. This information collection request (ICR) is for the Reinstatement of a Generic Clearance to conduct developmental studies to improve this family of surveys. This three-year clearance period will include studies to evaluate and improve upon existing survey design and operations, as well as to examine the feasibility of, and address challenges that may arise with, future expansions of the National Health Care Surveys.
Specifically, this request covers developmental research with the following aims: (1) to explore ways to refine and improve upon existing survey designs and procedures; and (2) to explore and evaluate proposed survey designs and alternative approaches to data collection. The goal of these research studies is to further enhance DHCS existing and future data collection protocols to increase research capacity and improve health care data quality for the purpose of monitoring public health and well-being at the national, state and local levels, thereby informing health policy decision-making processes. The information collected through this Generic ICR will not be used to make generalizable statements about the population of interest or to inform public policy; however, methodological findings may be reported.
This Generic ICR would include studies conducted in person, via telephone or web surveys, and by postal or electronic mail. Methods covered would include qualitative (
To explore and evaluate proposed survey designs and alternative approaches to collecting data, especially with the nationwide adoption of electronic health records, studies may expand the evaluation of data extraction of electronic health records and submission via continuity of care documentation to small/mid-size/large medical providers and hospital networks, managed care health plans, retail health clinics, and other inpatient, outpatient, ambulatory, and long-term care settings that are currently either in-scope or out-of-scope of the National Health Care Surveys. Research on feasibility, data quality and respondent burden also may be carried out in the context of developing new surveys of health care providers and establishments that are currently out-of-scope of the National Health Care Surveys.
Specific motivations for conducting developmental studies include: (1) within the National Ambulatory Medical Care Survey (NAMCS), new clinical groups may be expanded to include dentists, psychologists, podiatrists, chiropractors, optometrists), mid-level providers, and allied-health professionals (
The National Health Care Surveys collect critical, accurate data that are used to produce reliable national estimates—and in recent years, state-level estimates—of clinical services and of the providers who delivered those services in inpatient, outpatient, ambulatory, and long-term care settings. The data from these surveys are used by providers, policy makers and researchers to address important topics of interest, including the quality and disparities of care among populations, epidemiology of medical conditions, diffusion of technologies, effects of policies and practice guidelines, and changes in health care over time. Research studies need to be conducted to improve existing and proposed survey design and procedures of the National Health Care Surveys, as well as to evaluate alternative data collection approaches particularly due to the expansion of electronic health record use, and to develop new sample frames of currently out-of-scope providers and settings of care.
The average burden on respondents for the individual projects under this Generic Clearance are designed to cover 15-40 min interviews as well as 90-minute focus groups, longer on-site visits, and situations where organizations may be preparing electronic data files. CDC requests OMB approval for a total estimated annual burden of 3,000 hours. There is no cost to respondents other than their time to participate.
Centers for Medicare & Medicaid Services, Health and Human Services (HHS).
Notice.
On May 28, 2010, the Office of Management and Budget (OMB) issued Paperwork Reduction Act (PRA) guidance related to the “generic” clearance process. Generally, this is an expedited process by which agencies may obtain OMB's approval of collection of information requests that are “usually voluntary, low-burden, and uncontroversial collections,” do not raise any substantive or policy issues, and do not require policy or methodological review. The process requires the submission of an overarching plan that defines the scope of the individual collections that would fall under its umbrella. On October 23, 2011, OMB approved our initial request to use the generic clearance process under control number 0938-1148 (CMS-10398). It was last approved on April 26, 2021, via the standard PRA process which included the publication of 60- and 30-day
Comments must be received by June 3, 2026.
When commenting, please reference the applicable form number (CMS-10398 #__) and the OMB control number (0938-1148). To be assured consideration, comments and recommendations must be submitted in any one of the following ways:
1.
2.
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, please access the CMS PRA website by copying and pasting the following web address into your web browser:
William N. Parham at 410-786-4669.
Following is a summary of the use and burden associated with the subject information collection(s). More detailed information can be found in the collection's supporting statement and associated materials (see
1.
2.
Centers for Medicare & Medicaid Services, Health and Human Services (HHS).
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (PRA), federal agencies are required to publish notice in the
Comments must be received by July 20, 2026.
When commenting, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be submitted in any one of the following ways:
1. Electronically. You may send your comments electronically to
2. By
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, please access the CMS PRA website by copying and pasting the following web address into your web browser:
William N. Parham at (410) 786-4669.
This notice sets out a summary of the use and burden associated with the following information collections. More detailed information can be found in each collection's supporting statement and associated materials (see
Under the PRA (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA requires federal agencies to publish a 60-day notice in the
1.
2.
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice.
In compliance with the requirement for opportunity for public comment on proposed data collection projects of the Paperwork Reduction Act of 1995, HRSA announces plans to submit an Information Collection Request (ICR), described below, to the Office of Management and Budget (OMB). Prior to submitting the ICR to OMB, HRSA seeks comments from the public regarding the burden estimate, below, or any other aspect of the ICR.
Comments on this ICR should be received no later than July 20, 2026.
Submit your comments to
To request more information on the proposed project or to obtain a copy of the data collection plans and draft instruments, email
When submitting comments or requesting information, please include the ICR title for reference.
The travel approval process is initiated when an NHSC scholar or S2S participant notifies the NHSC of an impending interview at one or more NHSC-approved practice sites. The Travel Request Worksheet is also used to initiate the relocation reimbursement process, in accordance with the Public Health Service Act, section 331(c)(3), after an NHSC scholar or S2S participant has successfully been matched to an approved practice site. Upon receipt of a completed Travel Request Worksheet, the NHSC will review and approve or disapprove the request and promptly notify the NHSC scholar or S2S participant and the NHSC logistics contractor regarding travel arrangements and authorization of the funding for the site visit or relocation.
HRSA specifically requests comments on (1) the necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice.
In compliance with the Paperwork Reduction Act of 1995, HRSA submitted an Information Collection Request (ICR) to the Office of Management and Budget (OMB) for review and approval. Comments submitted during the first public review of this ICR will be provided to OMB. OMB will accept further comments from the public during the review and approval period. OMB may act on HRSA's ICR only after the 30-day comment period for this notice has closed.
Comments on this ICR should be received no later than June 22, 2026.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To request a copy of the clearance requests submitted to OMB for review, email Samantha Miller, the HRSA Information Collection Clearance Officer, at
A 60-day notice published in the
Information provided is used by the program staff to regularly assess overall progress of program requirements and analyze data to monitor award recipient compliance and track progress against proposed targets and goals. Information gathered allows an improved and more efficient method for identifying whether projects' goals are being advanced or achieved, as set forth in 2 CFR 200.329. Program staff also use information provided over the period of performance to see emerging trends and to assess whether an award recipient requires technical assistance to address challenges that the award recipient may be experiencing with the implementation of the project. Seeking OMB approval of this revision comports with the regulatory requirement imposed by 2 CFR 200.207(a) and 200.329(b).
Office of the National Coordinator for Health Information Technology, Department of Health and Human Services.
Notice.
The EHIgnite Challenge addresses data usability challenges in single patient electronic health information (EHI) exports. This challenge seeks to incentivize the development of tools, platforms, and workflows that transform single patient EHI exports into usable, readable, and actionable information that supports clinical care, patient engagement, and informed decision-making.
This challenge includes two phases. Only the participants selected to receive a Phase 1 prize may participate in Phase 2.
Adam Wong,
Dr. Thomas Keane, National Coordinator for Health Information Technology.
The EHIgnite Challenge, a program managed by the Office of the National Coordinator for Health Information Technology (ONC), addresses data usability challenges in single patient electronic health information (EHI) exports. This challenge seeks to incentivize the development of tools, platforms, and workflows that transform single patient EHI exports into usable, readable, and actionable information that supports clinical care, patient engagement, and informed decision-making.
While health IT developers of a certified Health IT Module that is part of a health IT product that electronically stores EHI (“health IT developers of certified health IT”) are required to provide EHI export functionality, variability in implementation and the sheer volume of data have made these exports difficult for clinicians and patients to effectively use. Although the ONC Health IT Certification Program specifies functional requirements as part of the certification criteria at 45 CFR 170.315(b)(10), it does not mandate specific transport methods, data standards, or implementation strategies. The EHI export file required for Health IT Modules certified to that criterion must be in an electronic and computable format and accessible via hyperlink.
These requirements are designed to offer health IT developers of certified health IT flexibility in their approach to conformance with the certification criterion and to foster innovation, transparency, and best practices for data sharing. While beneficial for innovation, this has created inconsistencies in how exports are structured, formatted, and made accessible. Clinicians, patients, and other stakeholders have reported that EHI exports are often overwhelming, difficult to interpret, and challenging to integrate into existing workflows.
These challenges limit the ability of healthcare teams to provide seamless care, particularly in care transitions (
EHIgnite Challenge participants are asked to develop solutions that leverage single patient EHI exports to improve data usability and value. To incentivize wide adoption, submissions are encouraged to make use of standards adopted as part of the ONC Health IT Certification Program. Such standards could include FHIR Release 4, US Core Implementation Guide v6, and SMART App Launch Framework 2.0.
Submissions must create a usable, readable summary of relevant health information based on the user and/or a particular scenario. For example, if a patient is being transferred to a rehab or acute care facility after a complex surgery, what information does the place of care and care team need to know to provide the best possible care to this patient? If an individual is moving out of state, what information does their new primary care provider need before their first visit?
Submissions must additionally address at least one of the following five scenarios:
1.
2.
3.
4.
5.
Use of AI is encouraged but must be transparent, explainable, and compliant with all applicable civil rights and privacy and security laws and policies.
As defined in 45 CFR 170.102, EHI (electronic health information) includes individually identifiable health information that is stored or transmitted electronically and would be included in a designated record set, but excludes psychotherapy notes and certain other information as specified in regulation. Health IT developers of certified Health IT are required to support two use cases as set forth in 45 CFR 170.315(b)(10):
• How effectively does the solution address the usability challenges, including summarization, of single patient EHI exports?
• Does it clearly solve a real-world problem for patients, clinicians, or care teams in line with the scenarios identified (patient interaction, clinical domain queries, integration across EHRs, or streamlined payer use)?
• Novelty of the approach to making EHI data actionable, readable, and interpretable.
• Use of user-centered design principles to create intuitive tools or interfaces.
• Ease of use for intended end users, including patients, clinicians, and care teams.
• Creative approaches to summarization, integration, or interaction with EHI data.
• Potential to improve care coordination, patient engagement, or clinical decision-making.
• Practicality of implementation and ability to integrate into existing clinical workflows.
• Use of consensus-based standards, such as those adopted by ONC, to enhance implementation and adoption.
• Scalability to multiple patients, providers, and EHR systems.
• Interoperability across multiple EHR systems.
• Adherence to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) rule, Privacy, Security, and Breach Notification Rules (45 CFR parts 160 and 164), and other applicable privacy, security, and consent laws is required.
• Effectiveness and innovation in enabling users to customize data sharing settings when sharing data and information with others.
• Use of transparent, explainable AI or other advanced methods in compliance with privacy standards and civil rights laws.
Phase 2 judging criteria will reflect the Phase 1 judging criteria, adapted for judging of Phase 2 submissions.
To enter this Challenge, participants must:
(1) register by completing the “Challenge Registration Form” found on the challenge website at
(2) submit your Challenge submission on the challenge website,
Registration is required to be eligible to win a cash prize. When you register using the “Challenge Registration Form,” you will need to decide whether you are registering as:
(1) an individual (on behalf of yourself);
(2) a team (on behalf of a group of individuals competing together, but
(3) an entity (on behalf of a legally established organization, institution, or corporation).
Your decision to register as an individual, team, or entity on the “Challenge Registration Form” will determine who HHS pays any winning prize money from this Challenge. Please see “Prize Payment Rules” in the “Rules” section. Before registering, you may wish to consider any potential tax consequences of registering as an individual, team, or entity.
HHS reserves the right, in its sole discretion, to grant or deny any request to update registration information on the “Challenge Registration Form.”
The following components are requirements for a complete submission package:
The Submission Narrative must include the following sections:
1.
2.
3.
4.
5.
6.
The sections of the Submission Narrative (above) must address the following questions/statements:
• How effectively does the solution address the usability challenges, including summarization, of single patient EHI exports?
• Does it clearly solve a real-world problem for patients, clinicians, or care teams in line with the scenarios identified (patient interaction, clinical domain queries, integration across EHRs, or streamlined payer use)?
• Novelty of the approach to making EHI data actionable, readable, and interpretable.
• Use of user-centered design principles to create intuitive tools or interfaces.
• Ease of use for intended end users, including patients, clinicians, and care teams.
• Creative approaches to summarization, integration, or interaction with EHI data.
• Potential to improve care coordination, patient engagement, or clinical decision-making.
• Practicality of implementation and ability to integrate into existing clinical workflows.
• Use of consensus-based standards, such as those adopted by ONC to enhance implementation and adoption.
• Scalability to multiple patients, providers, and EHR systems.
• Interoperability across multiple EHR systems.
• Adherence to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) rule, Privacy, Security, and Breach Notification Rules (45 CFR parts 160 and 164),and other applicable privacy, security, and consent laws is required.
• Effectiveness and innovation in enabling users to customize data sharing settings when sharing data and information with others.
• Use of transparent, explainable AI or other advanced methods in compliance with privacy standards and civil rights laws.
The Submission Narrative must be:
• In PDF format;
• No longer than 10 pages with one-inch margins;
• In Calibri font, 11-point or larger;
• In English.
• Participants may not use HHS, ONC, or other federal logos or imply federal endorsement.
The registration form must be submitted, and the complete submission package uploaded by the Phase 1 submission deadline.
Details on the Phase 2 Submission package will be communicated after Phase 1, but will involve the following elements:
• Working prototype.
• Technical documentation.
• Demonstration video (5-10 minutes).
• Usability test results, if available.
• Optional: evidence of performance with exports from multiple EHR systems.
For Phase 1, HHS may select up to 9 submissions to each receive up to $10,000.
For Phase 2, HHS may select submissions to receive:
HHS may award up to a total cash prize pool of $490,000 to the Challenge winners, to be paid by the program contractor.
Cash prizes (not grants or contracts) may be awarded under this Challenge announcement. HHS does not limit how winners may use prize money awarded to them. Therefore, winners may use prize money from one phase of this Challenge toward submissions for future phases, but they are not required to do so.
(1) To be eligible to win a prize under this Challenge, a Participant (whether an individual, team, or entity)—
a. Shall have registered to participate in the Challenge as an individual, team, or entity under the rules and instructions promulgated by HHS as published in this announcement, including but not limited to, the “Prize Payment Rules” and the “How to Enter” section of this announcement.
b. Shall have complied with all the requirements set forth in this announcement;
c. In the case of a private entity, shall be incorporated in and maintain a primary place of business in the United States, and in the case of an individual, whether participating singly or in a group (team), shall be a citizen or permanent resident of the United States;
d. Shall not be a Federal entity or Federal employee acting within the scope of their employment;
e. Shall not be an employee of the U.S. Department of Health and Human Services (HHS, or any other component
f. Who is employed by a Federal agency or entity other than HHS (or any component of HHS), shall consult with an agency Ethics Official to determine whether the Federal ethics rules will limit or prohibit the acceptance of a prize under this Challenge;
g. Shall not be a judge of the Challenge, or any other party involved with the design, production, execution, or distribution of the Challenge or the immediate family of such a party (
h. Shall be 18 years of age or older at the time of submission.
(1) Participants (whether individuals, teams, or entities) may not use Federal funds from a grant award or cooperative agreement to develop their Challenge submissions or to fund efforts in support of their Challenge submissions.
(2) Federal contractors may not use Federal funds from a contract to develop Challenge submissions or to fund efforts in support of Challenge submissions. Costs associated with such activities are unallowable and are not allocable to Government contracts.
(3) By participating in this Challenge, each Participant (whether an individual, team, or entity) agrees to assume any and all risks and waive claims against the Federal government and its related entities, except in the case of willful misconduct, for any injury, death, damage, or loss of property, revenue, or profits, whether direct, indirect, or consequential, arising from participation in this Challenge, whether the injury, death, damage, or loss arises through negligence or otherwise.
(4) Based on the subject matter of the Challenge, the type of activities that it will possibly involve, as well as an analysis of the likelihood of any claims for death, bodily injury, property damage, or loss potentially resulting from Challenge participation, no Participant (whether an individual, team, or entity) participating in the Challenge is required to obtain liability insurance, or demonstrate financial responsibility, or agree to indemnify the Federal government against third party claims for damages arising from or related to Challenge activities in order to participate in this Challenge.
(5) A Participant (whether an individual, team, or entity) shall not be deemed ineligible because the Participant used Federal facilities or consulted with Federal employees during the Challenge if the facilities and employees are made available to all Participants participating in the Challenge on an equitable basis.
(6) By participating in this Challenge, each Participant (whether an individual, team, or entity) warrants that they are the sole author or owner of, or has the right to use, any copyrightable works that the submission comprises, that the works are wholly original with the Participant (or is an improved version of an existing work that the Participant has sufficient rights to use and improve), and that the submission does not infringe any copyright or any other rights of any third party of which the Participant is aware.
(7) By participating in this Challenge, each Participant (whether an individual, team, or entity) grants to HHS an irrevocable, paid-up, royalty-free nonexclusive worldwide license to reproduce, publish, post, link to, share, and display publicly the submission on the web or elsewhere, and a nonexclusive, nontransferable, irrevocable, paid-up license to practice, or have practiced for or on its behalf, the solution throughout the world. Each Participant will retain all other intellectual property rights in their submissions, as applicable. By participating in this Challenge, each Participant warrants that there are no legal obstacles to providing the above-referenced nonexclusive licenses of the Participant's rights to the Federal government. To receive an award, Participants will
(8) Each Participant (whether an individual, team, or entity) agrees to follow all applicable Federal, state, and local laws, regulations, and policies.
(9) Each Participant (whether an individual, team, or entity) participating in this Challenge must comply with all rules and requirements included in this announcement, and participation in this Challenge constitutes each Participant's full and unconditional agreement to abide by the rules and requirements. Winning is contingent upon fulfilling all requirements herein.
(10) As a condition for receiving a cash prize in this Challenge, each Participant (whether an individual, team, or entity) that has been selected as a winner must complete and submit all required winner verification and payment documents to HHS. Failure to return all required verification and payment documents by the date specified in the formal winner notification may be a basis for disqualification of a cash prize winning submission.
(11) By participating in this Challenge, each Participant (whether an individual, team, or entity) agrees that HHS may disqualify its submission if, in HHS' judgment, the submission is inconsistent with HHS' public health mission, may be ineffective or harmful, or any other reason deemed necessary.
(1) For each eligible Participant under the “Eligibility Rules,” HHS will use that Participant's registration as an individual, team, or entity on the “Challenge Registration Form” to determine who receives payment of any HHS prize money.
(a) For an eligible winning Participant registered as an individual, HHS will pay the individual.
(b) For a winning Participant registered as a team with an eligible Team Leader, HHS will pay the entire prize for that team to the Team Leader, and division of the prize money is at the discretion of the Team Leader. HHS will not arbitrate, intervene, advise on, or resolve any matters among team members.
(c) For an eligible winning Participant registered as an entity, HHS will pay the entity.
(2) Entities participating in this Challenge are encouraged, but not required, to request and obtain a free Unique Entity ID (UEI), if they have not already done so, via
HHS reserves the right, in its sole discretion, to (a) cancel, suspend, or modify the Challenge, or any part of it, for any reason, and/or (b) not award any prizes if no submissions are deemed worthy.
This Challenge is authorized by the America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science (COMPETES) Reauthorization Act of 2010, as amended (15 U.S.C. 3719).
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the Advisory Council on Parkinson's Research, Care, and Services (ACPRCS).
This is the inaugural meeting of the ACPRCS, which was established by the Dr. Emmanuel Bilirakis and Honorable Jennifer Wexton National Plan to End Parkinson's Act of 2024 (Pub. L. 118-66). The Advisory Council is charged with providing advice to the HHS Secretary on Parkinson's-related issues, including the creation of a national plan. During the inaugural meeting of the Council, NIH/HHS will introduce and swear in a slate of Advisory Council members; federal agencies will provide an overview of Parkinson's programs; and the Advisory Council will strategize on their initial workplan.
The meeting will be open to the public to attend virtually via HHS Live Streaming:
Submissions are accepted in writing via email addressed to
For any given meeting, priority for comment slots will be assigned to individuals and organizations that have not previously provided comments in the current calendar year. This will help ensure that as many individuals and organizations as possible have an opportunity to share comments. Commenters going over their allotted 3-minute slot may be asked to conclude immediately in order to allow other comments and the rest of the meeting to proceed on schedule.
Public comment submissions received by 5:00 p.m. ET on June 22nd will be provided to the Council prior to the meeting for their consideration. The Council is not able to respond individually to comments. All public comments become part of the public record. Attachments of copyrighted publications are not permitted, but web links or citations for any copyrighted works cited may be provided.
Meeting schedule subject to change.
United States International Trade Commission.
Notice.
On March 27, 2026, the Department of Commerce published notice in the
March 27, 2026.
Douglas Corkran ((202) 205-3057) or Sharon Fisher ((202) 205-2431), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired individuals are advised that information on this matter can be obtained by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office
By order of the Commission.
Drug Enforcement Administration, Justice.
Notice of application.
Organix Chemistry Solutions, LLC has applied to be registered as a bulk manufacturer of basic class(es) of controlled substance(s). Refer to Supplementary Information listed below for further drug information.
Registered bulk manufacturers of the affected basic class(es), and applicants, therefore, may submit electronic comments on or objections to the issuance of the proposed registration on or before July 20, 2026. Such persons may also file a written request for a hearing on the application on or before July 20, 2026.
The Drug Enforcement Administration requires that all comments be submitted electronically through the Federal eRulemaking Portal, which provides the ability to type short comments directly into the comment field on the web page or attach a file for lengthier comments. Please go to
In accordance with 21 CFR 1301.33(a), this is notice that on April 28, 2026, Organix Chemistry Solutions, LLC, 32 Cabot Road, Woburn, Massachusetts 01801-1004, applied to be registered as a bulk manufacturer of the following basic class(es) of controlled substance(s):
The company plans to synthesize the listed controlled substance for distribution to its customers. No other activity for this drug code is authorized for this registration.
Drug Enforcement Administration, Justice.
Notice of application.
Amneal Pharmaceuticals, LLC has applied to be registered as an importer of basic class(es) of controlled substance(s). Refer to
Registered bulk manufacturers of the affected basic class(es), and applicants, therefore, may submit electronic comments on or objections to the issuance of the proposed registration on or before June 22, 2026. Such persons may also file a written request for a hearing on the application on or before June 22, 2026.
The Drug Enforcement Administration requires that all comments be submitted electronically through the Federal eRulemaking Portal, which provides the ability to type short comments directly into the comment field on the web page or attach a file for lengthier comments. Please go to
In accordance with 21 CFR 1301.34(a), this is notice that on May 4, 2026, Amneal Pharmaceuticals, LLC, 47 Colonial Drive, Piscataway, New Jersey 08854, applied to be registered as an importer of the following basic class(es) of controlled substance(s):
The company plans to import the above listed controlled substance as finished unit formulations for internal development and research purposes only. No other activity for this drug code is authorized for this registration.
Approval of permit applications will occur only when the registrant's business activity is consistent with what is authorized under 21 U.S.C. 952(a)(2). Authorization will not extend to the import of Food and Drug Administration- approved or non approved finished dosage forms for commercial sale.
Drug Enforcement Administration, Department of Justice.
Order with opportunity for comment.
The applications for exempt chemical preparations received by the Drug Enforcement Administration between July 1, 2025, and March 31, 2026, as listed below, were accepted for filing and have been approved or denied as indicated. This publication addresses preparations through March 31, 2026, that were not included in previous
Comments must be submitted electronically or postmarked on or before July 20, 2026.
Interested persons may file written comments on this order in accordance with 21 CFR 1308.23(e). The electronic Federal Docket Management System will not accept comments after 11:59 p.m. Eastern Time on the last day of the comment period. To ensure proper handling of comments, please reference “Docket No. DEA-372” on all correspondence, including any attachments.
•
•
•
Terrence L. Boos, Ph.D., Diversion Control Division, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone: (571) 362-8201.
Please note that all comments received in response to this docket are considered part of the public record. The Drug Enforcement Administration (DEA) will make comments available for public inspection online at
Commenters submitting comments which include personal identifying information (PII), confidential, or proprietary business information that the commenter does not want made publicly available should submit two copies of the comment. One copy must be marked “CONTAINS CONFIDENTIAL INFORMATION” and should clearly identify all PII or business information the commenter does not want to be made publicly available, including any supplemental materials. DEA will review this copy, including the claimed PII and confidential business information, in its consideration of comments. The second copy should be marked “TO BE PUBLICLY POSTED” and must have all claimed confidential PII and business information already redacted. DEA will post only the redacted comment on
For easy reference, an electronic copy of this document and supplemental information to this proposed scheduling action are available at
Section 201 of the Controlled Substances Act (CSA) (21 U.S.C. 811) authorizes the Attorney General, by regulation, to exempt from certain provisions of the CSA certain compounds, mixtures, or preparations containing a controlled substance, if he finds that such compounds, mixtures, or preparations meet the requirements detailed in 21 U.S.C. 811(g)(3)(B).
DEA received applications between July 1, 2025, and March 31, 2026, requesting exempt chemical preparation status detailed in 21 CFR 1308.23. This publication addresses preparations through March 31, 2026, that were not included in previous
Accordingly, pursuant to 21 U.S.C. 811(g)(3)(B), 21 CFR 1308.23, and 21 CFR 1308.24, the Assistant Administrator has determined that each of the chemical preparations or mixtures generally described in Chart I below and specifically described in the application materials received by DEA is exempt, to the extent described in 21 CFR 1308.24, from application of sections 302, 303, 305, 306, 307, 308, 309, 1002, 1003, and 1004 (21 U.S.C. 822-823, 825-829, and 952-954) of the CSA, and 21 CFR 1301.74, as of the date that was provided in the approval letters to the individual requesters.
The exemptions are applicable only to the precise preparation or mixture described in the application submitted to DEA in the form(s) listed in this order and only for those above-mentioned sections of the CSA and the CFR. In accordance with 21 CFR 1308.24(h), any change in the quantitative or qualitative composition of the preparation or mixture, or change in the trade name or other designation of the preparation or mixture after the date of application requires a new application. The requirements set forth in 21 CFR 1308.24(b)-(e) apply to the exempted materials. In accordance with 21 CFR 1308.24(g), DEA may prescribe requirements other than those set forth in 21 CFR 1308.24(b)-(e) on a case-by-case basis for materials exempted in bulk quantities. Accordingly, in order to limit opportunities for diversion from the larger bulk quantities, DEA has determined that each of the exempted bulk products listed in this order may only be used in-house by the manufacturer, and may not be distributed for any purpose, or transported to other facilities.
Additional exempt chemical preparation requests received between January 1, 2026, and March 31, 2026, and not otherwise referenced in this order or in prior orders, may remain under consideration until DEA receives additional information required, pursuant to 21 CFR 1308.23(d), as detailed in separate correspondence to individual requesters. DEA's order on such requests will be communicated to the public in a future
DEA also notes that these exemptions are limited to exemption from only those sections of the CSA and the CFR that are specifically identified in 21 CFR 1308.24(a). All other requirements of the CSA and the CFR apply, including registration as an importer as required by 21 U.S.C. 957.
The Assistant Administrator has found that each of the compounds, mixtures, and preparations described in Chart II, below, is not consistent with the criteria stated in 21 U.S.C. 811(g)(3)(B) and in 21 CFR 1308.23. Accordingly, the Assistant Administrator has determined that the chemical preparations or mixtures generally described in Chart II, below, and specifically described in the application materials received by DEA, are not exempt from application of any part of the CSA or from application of any part of the CFR, with regard to the requested exemption pursuant to 21 CFR 1308.23, as of the date that was provided in the determination letters to the individual requesters.
Pursuant to 21 CFR 1308.23(e), any interested person may submit written comments on or objections to any chemical preparation in this order that has been approved or denied as exempt. If any comments or objections raise significant issues regarding any finding of fact or conclusion of law upon which this order is based, the Assistant Administrator will immediately suspend the effectiveness of any applicable part of this order until she may reconsider the application in light of the comments and objections filed. Thereafter, the Assistant Administrator shall reinstate, revoke, or amend his original order as she determines appropriate.
A list of all current exemptions, including those listed in this order, is available on DEA's website at
This document of the Drug Enforcement Administration was signed on May 14, 2026, by DEA Assistant Administrator Cheri Oz. That document with the original signature and date is maintained by DEA. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DEA Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of DEA. This administrative process in no way alters the legal effect of this document upon publication in the
Criminal Division, Department of Justice.
30-Day notice.
The Criminal Division, Department of Justice (DOJ), will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995.
Comments are encouraged and will be accepted for 30 days until June 22, 2026.
If you have comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact: Patrick Gushue, 1499 New York Ave. NW, Washington, DC 20005, phone: (202) 578-5219 or email:
The proposed information collection was previously published in the
Written comments and recommendations for this information collection should be submitted within 30 days of the publication of this notice on the following website
DOJ seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years
1.
2.
3.
This collection will assist the Criminal Division in achieving mission-critical law enforcement priorities by collecting voluntary information regarding potential criminal activity. The collection will make the Division faster and more efficient when: (1) responding to tips regarding potential criminal activity submitted by members of the public; (2) issuing monetary awards to individuals whose information has assisted in the investigation and prosecution of such activity; and (3) answering general inquiries from the public regarding the Corporate Whistleblower Awards Pilot Program.
4.
5.
6. Depending on the size of the submission, a submitter's reason for completing the collection, and the level of detail a submitter voluntarily chooses to provide, the Division estimates that completing the collection will take anywhere from five to forty-five minutes. This does not include the time that submitters may voluntarily spend preparing materials to include in the submission.
7.
8.
9.
10.
If additional information is required, contact: Darwin Arceo, Department Clearance Officer, Enterprise Portfolio Management, Justice Management Division, United States Department of Justice, Two Constitution Square, 145 N Street NE, 4W-218, Washington, DC 20530.
Executive Office for Immigration Review, Department of Justice.
30-Day notice.
The Executive Office for Immigration Review (EOIR), Department of Justice (DOJ), will be submitting the following information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995.
Comments are encouraged and will be accepted for 30 days until June 22, 2026.
If you have comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact: Justine Fuga, Associate General Counsel, Office of the General Counsel, Executive Office for Immigration Review, 5107 Leesburg Pike, Suite 2600, Falls Church, VA 22041, telephone: (703) 305-0265,
The proposed information collection was previously published in the
Written comments and recommendations for this information collection should be submitted within 30 days of the publication of this notice on the following website
DOJ seeks PRA authorization for this information collection for three (3)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
If additional information is required, contact: Darwin Arceo, Department Clearance Officer, Enterprise Portfolio Management, Justice Management Division, United States Department of Justice, Two Constitution Square, 145 N Street NE, 4W-218, Washington, DC 20530.
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting this Employment and Training Administration (ETA)-sponsored information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that the agency receives on or before June 22, 2026.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Michael Howell by telephone at 202-693-6782, or by email at
Job Corps enrollees may elect to have a portion of their readjustment allowance/transition payment sent to a dependent biweekly. Form ETA 658 provides the information necessary to administer these allotments. For additional substantive information about this ICR, see the related notice published in the
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless the OMB approves it and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid OMB Control Number.
DOL seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years without renewal. The DOL notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
The Legal Services Corporation (LSC) Board of Directors will meet virtually on May 26, 2026. The meeting will begin at 3:30 p.m. Eastern Time and will continue until the conclusion of the Board's agenda.
Public Notice of Virtual Meeting. LSC will conduct its May 26, 2026, meeting virtually via videoconference.
Open.
Matters to be discussed include a briefing by the Inspector General; considering and acting on the Board of Directors' transmittal letter to accompany the Inspector General's Semiannual Report to Congress for the period of October 1, 2025 through March 31, 2026; and considering and acting on the resolution to accept the draft audited financial statements for fiscal years 2025 and 2024.
Kimberly Little, Board and Executive Coordinator, at (202) 295-1500. Questions may also be sent by electronic mail to the Office of the Corporate Secretary at
Nuclear Regulatory Commission.
Draft report; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) is issuing for public comment a draft report on the Level 3 Probabilistic Risk Assessment (PRA) project; specifically, “Volume 1: Summary Report.”
Submit comments by July 20, 2026. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods; however, the NRC encourages electronic comment submission through the Federal rulemaking website:
•
•
For additional direction on obtaining information and submitting comments, see “Obtaining Information and
Alan Kuritzky, Office of Nuclear Regulatory Research, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-1552; email:
Please refer to Docket ID NRC-2026-1453 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
•
•
•
The NRC encourages electronic comment submission through the Federal rulemaking website (
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
As directed in SRM-SECY-11-0089, “Options for Proceeding with Future Level 3 Probabilistic Risk Assessment (PRA) Activities,” the staff conducted a full-scope multi-unit site Level 3 PRA (Level 3 PRA project) that addresses all internal and external hazards; all plant operating modes; and all reactor units, spent fuel pools, and dry cask storage. The reference site for this study contains 2 four-loop Westinghouse pressurized water reactors with large dry containments. The objectives of the Level 3 PRA project are to (1) develop a Level 3 PRA, generally based on current state-of-practice methods, tools, and data, that (a) reflects technical advances since the last NRC-sponsored Level 3 PRAs (NUREG-1150), which were completed over 30 years ago, and (b) addresses scope considerations that were not previously considered (
The work performed under this project is being documented as a multi-volume report, commensurate with the depth and scope of this seminal research program. Over the last several years, the staff has publicly released 21 draft reports that document the various PRA models developed for the Level 3 PRA project. The current draft report (Volume 1) represents the completion of the Level 3 PRA project and provides a summary of the entire Level 3 PRA project. This includes the project scope and objectives, a brief overview of the project technical approach, and a summary of the principal project results, observations, and insights. This report also identifies existing and potential future uses of the project information, as well as a set of candidate areas for future research.
The Level 3 PRA project represents a significant research effort by the NRC and was completed in a manner consistent with the overall project objectives. The project documentation provides a complete record of project assumptions, modeling approaches, and results, which was a significant project goal. This study addressed several PRA modeling gaps, piloted newly developed approaches for expert elicitation, and included extensive peer reviews supported by the Advisory Committee on Reactor Safeguards, the Pressurized Water Reactor Owners Group, and an internal technical advisory group. Stakeholder comments received during the public comment periods for the previously released project reports further enhanced the quality of the documentation. Insights related to this work have supported regulatory decision-making in several areas and the knowledge management aspects of conducting the study have prepared the agency to address emerging PRA challenges in support of risk-informed decision-making.
The documents identified in the following table are available to interested persons through ADAMS, as indicated.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Notice; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is issuing an environmental assessment (EA) and finding of no significant impact (FONSI) regarding the NRC's consideration of issuance of a construction permit (CP) to Long Mott Energy, LLC (LME) for the proposed Long Mott Generating Station (LMGS) located in Calhoun County, Texas. If approved, the CP would authorize the construction of four Xe-100 small modular, high-temperature reactors that use solid tri-structural isotropic fuel and a helium gas cooling system. In addition, the NRC is issuing exemptions from certain NRC requirements which state that the NRC staff shall prepare and issue an environmental impact statement (EIS) to support the issuance of a CP for a nuclear power reactor facility. The NRC is granting the exemptions, and issuing the environmental assessment (EA) and FONSI concurrently to satisfy its obligations under the National Environmental Policy Act of 1969 (NEPA) and requirements under NRC regulations, related to the proposed action.
The EA and FONSI referenced in this document were available on May 18, 2026. The exemption was issued on May 18, 2026.
Please refer to Docket ID NRC-2025-0079 when contacting the NRC about the availability of information regarding this document. You may obtain publicly available information related to this document using any of the following methods:
•
•
•
Adrian Muñiz, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-4093; email:
On March 31, 2025, LME submitted, pursuant to part 50 of title 10 of the
If approved, the LMGS reactor facility would be located in Seadrift, Texas, and would contain four Xe-100 small modular, helium gas cooled, high-temperature reactors that use solid tri-structural isotropic fuel. The LMGS site is adjacent to an industrial facility, known as Seadrift Operations (SDO). SDO produces various chemical products.
Section 103 of the Atomic Energy Act of 1954, as amended, and its implementing regulations authorize the NRC to issue CPs for commercial power facilities. To issue a CP, the NRC is required to consider the environmental impacts of the proposed action under NEPA. The NRC's environmental protection regulations that implement NEPA in 10 CFR part 51 identify actions for which the NRC prepares an EIS. CPs for commercial nuclear power reactors are an action identified as requiring an EIS.
Based on an initial review of the ER submitted as part of the CP application for LMGS, the NRC staff concluded that it would be prudent to prepare an EA to determine whether preparation of an EIS would be necessary or whether a FONSI could be issued. The decision to consider an EA was based upon the staff's initial evaluation of the environmental impacts described in the ER, which indicated that a FONSI was possible and that preparation of an EA was appropriate.
The NRC staff has prepared an EA for the LMGS CP application in accordance with the requirements in 10 CFR 51.30, “Environmental assessment.” In the EA, the NRC staff analyzed the environmental impacts of the requested CP and alternatives, as appropriate, and concluded “that the potential impacts from Long Mott Generating Station would be SMALL for each potentially affected environmental resource.”
Based on this EA and in accordance with 10 CFR 51.31(a), “Determinations based on environmental assessment,” the NRC staff has determined that preparation of an EIS is not necessary for the Long Mott Generating Station CP application and has prepared a FONSI in accordance with 10 CFR 51.32, “Finding of no significant impact.” The FONSI is detailed in Section III of this document.
The NRC staff determined that exemptions from the regulations in 10 CFR 51.20(b)(1), 10 CFR 51.25, and 10 CFR 51.75(a) are necessary to issue an EA and FONSI instead of an EIS to meet the staff's obligations under NEPA and the NRC's regulations for the environmental review of the LMGS CP application. Pursuant to 10 CFR 51.6, the NRC staff concluded that the exemptions are authorized by law and are otherwise in the public interest. Accordingly, the NRC is issuing exemptions from the requirements in 10 CFR 51.20(b)(1), 10 CFR 51.25, and 10 CFR 51.75(a). The exemptions are discussed in Section V of this document.
The proposed action is for the NRC to issue a CP to LME authorizing construction of four Xe-100 modular reactors. The NRC issuance of a CP would constitute authorization for LME to proceed with the construction of the four Xe-100 reactors at a site at Seadrift Operations in Seadrift, Texas. The proposed action also includes the granting of exemptions from the requirements in 10 CFR 51.20(b)(1), 10 CFR 51.25, and 10 CFR 51.75(a).
The issuance of a CP is a separate licensing action from the issuance of an operating license (OL). If the NRC issues the CP, LME would have to submit a separate application to operate the facility pursuant to the NRC's regulations, and obtain NRC approval before it could operate the LMGS reactors. The NRC staff would review any application for an OL for LMGS for new and significant information related to the environmental impacts of operating and decommissioning LMGS that might alter the staff's conclusions made in the EA for the CP application.
LME stated that the need for the LMGS is to replace the existing fossil fuel facility which provides steam and electricity to SDO. Electrical power and steam for SDO is currently provided by an adjacent natural-gas fired cogeneration plant and associated gas turbines and heat generators, which are reaching the end of their operational life. LME also stated there is a need to demonstrate the Xe-100 reactor in support of the U.S. Department of Energy's Advanced Reactor Demonstration Program.
In the EA, the NRC staff assessed the potential environmental impacts from the proposed action associated with the following relevant resource areas: land use and visual resources; air quality and noise; hydrogeology and water resources; ecological resources; historic and cultural resources; socioeconomics and human health; nonradiological waste management; uranium fuel cycle and radiological waste management; transportation of radioactive material; and postulated accidents.
In the EA, the NRC staff determined that the environmental impacts of the proposed action would be SMALL for each potentially affected environmental resource, meaning that the environmental effects are not detectable or are so minor that they will neither destabilize nor noticeably alter any important attribute of the resource. In addition, the NRC staff determined that the projected effects of climate change would not alter any of the impact determinations described in the EA. The NRC staff also determined that there would be no additional environmental impacts resulting from the issuance of the exemptions.
The NRC staff identified a range of reasonable alternatives to the proposed action and the environmental impacts of the alternatives as appropriate. Because part of the purpose and need for the proposed Federal action is to demonstrate the Xe-100 reactor, the NRC did not consider energy alternatives to the proposed action. The NRC staff did consider three alternative sites adjacent to or near the SDO meeting the purpose and need, but determined that none of these sites would substantially differ with respect to environmental impacts. In addition, the NRC staff's EA analyzed the impacts of the no-action alternative in which the NRC would not issue a CP to LME.
The proposed action before the NRC is whether to issue a CP to LME to authorize construction of the four modular reactors making up the LMGS. The proposed action also includes whether to grant exemptions from the requirements in 10CFR 51.20(b)(1), 10 CFR 51.25, and 10 CFR 51.75(a). The NRC has conducted an environmental review of the application for the CP for the LMGS project as well as the proposed exemptions and prepared an EA. This FONSI incorporates by reference the EA summarized in Section II of this notice and referenced in Section IV of this notice. Based on the NRC staff's determinations in the EA that the environmental impacts would be SMALL for each potentially affected resource area and there would be no additional environmental impacts resulting from the issuance of the exemptions, the NRC staff has determined that the proposed action would not have a significant effect on the quality of the human environment. Accordingly, the NRC staff has made a determination that preparation of an EIS is not required for the proposed action and that a FONSI is warranted. This finding and the related environmental documents referenced throughout the EA are available for public inspection as discussed in the EA and Section IV of this notice.
The EA, FONSI, and other related documents are accessible online in the ADAMS Public Documents collection at
On March 31, 2025, LME submitted a CP application and ER for the proposed LMGS reactor facility in Seadrift, Texas. On May 12, 2025, the NRC staff determined that the application was acceptable for docketing. The NRC's regulations in 10 CFR part 51 implement NEPA, and in accordance with 10 CFR 51.20(b)(1), the NRC staff is required to develop an EIS for the issuance of the CP for a nuclear power reactor.
The regulations in 10 CFR part 51 implement NEPA in a manner that is consistent with NRC's domestic licensing and related regulatory authority under the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974, as amended. The NRC's environmental protection regulations that implement NEPA in 10 CFR part 51 identify actions for which the NRC prepares an EIS. Issuance of CPs for nuclear power reactors are the type of action identified as requiring an EIS.
Based on a review of the ER submitted as part of the CP application for LMGS, the NRC staff concluded that it would be prudent to prepare an EA to determine whether preparation of an EIS would be necessary or whether a FONSI could be issued. The NRC staff finalized the EA for the LMGS CP application, which is summarized in Section II of this document. Based on the EA, the NRC staff has determined that preparation of an EIS is not necessary for the LMGS CP application and has prepared a FONSI, which is detailed in Section III of this document.
The NRC staff determined that exemptions from the regulations in 10 CFR 51.20(b)(1), 10 CFR 51.25, and 10 CFR 51.75(a) are necessary to issue an EA and FONSI instead of an EIS to meet the staff's obligations under NEPA and the NRC's regulations for the environmental review of the LMGS CP application. The regulation in 10 CFR 51.20(b)(1) requires an EIS or a supplement to an EIS for the issuance of a permit to construct a nuclear power reactor. Based on the EA, which is summarized in Section II of this document, and in accordance with 10 CFR 51.31(a), the NRC staff has determined that preparation of an EIS is not necessary for the LMGS CP application and has prepared a FONSI, which is detailed in Section III of this document. Since the NRC staff is issuing a FONSI instead of an EIS for the LMGS CP environmental review, an exemption from 10 CFR 51.20(b)(1) is needed.
The regulation in 10 CFR 51.25 requires that the appropriate NRC staff director determine on the basis of the criteria and classifications of types of actions in 10 CFR 51.20, “Criteria for and identification of licensing and regulatory actions requiring environmental impact statements,” whether an EIS or EA should be prepared. The NRC staff did not use the criteria in 10 CFR 51.20 to determine whether an EIS or EA should be prepared for the LMGS CP environmental review. Instead, based on factors unique to the LMGS CP application, and in accordance with 10 CFR 51.31, the NRC staff prepared an EA to determine whether preparation of an EIS would be necessary or whether a FONSI could be issued. Therefore, an exemption from 10 CFR 51.25 is needed.
The regulation in 10 CFR 51.75(a) requires preparation of an EIS related to the issuance of a CP for a production or utilization facility. The NRC staff prepared an EA for the LMGS CP environmental review in accordance with 10 CFR 51.31, to determine whether preparation of an EIS would be necessary or whether a FONSI could be issued. Since the LMGS CP application is for a utilization facility, an exemption from 10 CFR 51.75(a) is needed.
Pursuant to 10 CFR 51.6, “Specific exemptions,” the Commission may, upon application of any interested person, or upon its own initiative, grant exemptions from the requirements of 10 CFR part 51 that it determines are (1) authorized by law and (2) otherwise in the public interest.
The exemptions allowing the NRC staff to issue an EA and FONSI instead of an EIS are authorized by law because the NRC will satisfy its NEPA obligations by issuing an EA and FONSI for the LMGS, and the issuance of this EA and FONSI will not violate any other applicable statute or NRC regulation. NEPA provides flexibility for how the NRC can satisfy its statutory obligations. Section 102(2)(C) of NEPA, 42 U.S.C. 4332(2)(C), as amended by the Fiscal Responsibility Act of 2023, states that agencies must provide a “detailed statement” for “major Federal actions significantly affecting the quality of the human environment.” Section 106(b)(1) of NEPA states that any agency shall issue an EIS for an action “that has a reasonably foreseeable significant effect on the quality of the human environment.” Section 106(b)(2) states that an agency shall prepare an EA for an action “that does not have a reasonably foreseeable significant effect on the quality of the human environment, or if the significance of such effect is unknown,” unless the agency finds that the proposed action is excluded pursuant to, among other things, another provision of law. Further, Section 106(b)(2) provides that the EA shall be a concise public document prepared by a Federal agency to set forth the basis of such agency's finding of no significant impact or determination that an environmental impact statement is necessary.
The EA for LMGS evaluated the potential impacts to 16 environmental resources relevant to the construction, operation, and decommissioning of LMGS. The EA concluded that the environmental impacts would be SMALL for each of the 16 potentially affected resource areas, and that the proposed action would not have a significant effect on the quality of the human environment.
Based on this EA and in accordance with 10 CFR 51.31(a), the NRC staff has determined that preparation of an EIS is not necessary for the LMGS CP application and has prepared a FONSI in accordance with 10 CFR 51.32. A summary of the EA and the detailed FONSI are located in Section II and III of this document respectively. As such, the NRC staff concludes that its statutory obligations under NEPA will be satisfied by issuance of the EA and FONSI.
As previously noted, 10 CFR 51.6 allows the NRC to grant exemptions from the requirements of 10 CFR part 51. The NRC has determined that granting the proposed exemptions will not result in a violation of the Atomic Energy Act of 1954, as amended, NEPA, other applicable statutes, or the NRC's regulations. Accordingly, the NRC finds that the exemptions are authorized by law.
The NRC staff has determined that the exemptions are in the public interest because they allow the Commission to regulate with efficiency in accordance with the NRC's “Principles of Good Regulation.”
The NRC describes the “Efficiency” principle, in part, as follows: “Regulatory activities should be consistent with the degree of risk reduction they achieve. Where several effective alternatives are available, the option which minimizes the use of
In accordance with 10 CFR 51.31(a), the Commission has determined that the granting of these exemptions will not have a significant effect on the quality of the human environment, as discussed in the NRC staff's EA and FONSI. A summary of the EA and the detailed FONSI are located in Sections II and III of this document, respectively.
Accordingly, the NRC has determined that pursuant to 10 CFR 51.6, that the exemptions are authorized by law and are otherwise in the public interest. Therefore, the NRC hereby grants one-time exemptions from the requirements in 10 CFR 51.20(b)(1), 10 CFR 51.25, and 10 CFR 51.75(a) to allow the NRC to issue an EA and FONSI instead of an EIS to meet its obligations under NEPA and the NRC's regulations for the environmental review of the LMGS CP application.
The exemptions are effective on May 18, 2026.
For the Nuclear Regulatory Commission.
Postal Service.
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), it filed with the Postal Regulatory Commission the following requests:
Documents are available at
Social Security Administration (SSA).
Notice of a new matching program.
In accordance with the provisions of the Privacy Act, as amended, this notice announces a re-establishment of a matching program with the Bureau of the Fiscal Service (Fiscal Service), Department of the Treasury (Treasury). Under this matching program, Fiscal Service, Treasury will disclose savings security data to SSA. SSA will use the data to determine continued eligibility for Supplemental Security Income (SSI) applicants and recipients, or the correct benefit amount for recipients and deemors who either did not report or who incorrectly reported their ownership of savings securities.
The deadline to submit comments on the proposed matching program is June 22, 2026.
The matching program will be applicable on June 26, 2026, or once a minimum of 30 days after publication of this notice has elapsed, whichever is later. The matching program will be in effect for a period of 18 months.
You may submit comments by any one of three methods—internet, fax, or mail. Do not submit the same comments multiple times or by more than one method. Regardless of which method you choose, please state that your comments refer to Docket No. SSA-2025-0288 so that we may associate your comments with the correct regulation.
1.
2.
3.
Interested parties may submit general questions about the matching program to Andrea Huseth, Division Director, Privacy and Disclosure Policy, Law and Policy, Social Security Administration, 6401 Security Boulevard, Baltimore, MD 21235-6401, at telephone: (410) 608-9675, or send an email to
This is the re-establishment of a matching program that is set to expire between SSA and Fiscal Service, Treasury which supports SSA's efficient administration of its Title XVI Supplemental Security Income Program.
SSA and Fiscal Service, Treasury.
The matching agreement between SSA and Fiscal Service, Treasury is executed in compliance with the Privacy Act of 1974 (5 U.S.C. 552a), as amended by the Computer Matching and Privacy Protection Act of 1988, and the regulations and guidance promulgated thereunder.
Legal authority for the disclosure under the agreement for SSA to conduct this matching activity is contained in section 1631(e)(1)(B) and (f) of the Social Security Act (42 U.S.C. 1383(e)(1)(B) and (f)).
Under this matching program Fiscal Service, Treasury will disclose savings security data to SSA. SSA will use the data to determine continued eligibility for SSI applicants and recipients, or the correct benefit amount for recipients and deemors who either did not report or who incorrectly reported their ownership of savings securities.
The individuals whose information is involved in this matching program are SSI applicants, recipients, and deemors who either did not report or incorrectly reported ownership of savings securities.
SSA will provide a finder file to Fiscal Service with approximately 10 million records containing the SSN and name of individuals for whom SSA requests data for the administration of the SSI program. Fiscal Service will provide a response file containing the purchase amount, account number and confirmation number, the series, issue date of the security, current redemption value, and return date of the finder file.
The relevant SSA system of records (SOR) is “Supplemental Security Income Record and Special Veterans Benefits,” 60 0103. The SOR Notice (SORN) was fully published on January 11, 2006 at 71 FR 1830 and updated on December 10, 2007 at 72 FR 69723; July 3, 2018 (83 FR 31250-31251), November 1, 2018 (83 FR 54969), January 5, 2024 (89 FR 825), February 27, 2024 (89 FR 14554) and November 25, 2025 (90 FR 225). The relevant Fiscal Service SOR is Fiscal Service SORN .014 (United States Securities and Access). This SORN was last published on February 27, 2020 at 85FR 11776.
Federal Transit Administration (FTA), Department of Transportation (DOT).
Notice of withdrawal of guidance.
By this notice, the Federal Transit Administration (FTA) withdraws guidance document Circular 4704.1A, Equal Employment Opportunity (EEO) Requirements and Guidelines for Federal Transit Administration Recipients.
The applicable date of this notice is May 20, 2026.
Mark Montgomery, Assistant Chief Counsel for Legislation and Regulations Office, Federal Transit Administration, phone: (202) 684-5301, or email,
In 2016, FTA published Circular 4704.1A, Equal Employment Opportunity (EEO) Requirements and Guidelines for Federal Transit Administration Recipients. 81 FR 67047 (Sep. 29, 2016). Circular 4704.1A consolidated and clarified Equal Employment Opportunity-related requirements from Titles VI and VII of the Civil Rights Act of 1964, Title II of the Genetic Information Nondiscrimination Act of 2008 (GINA), 49 U.S.C. Chapter 53, other Federal civil rights statutes, and the U.S. Department of Transportation (DOT) regulations in 49 CFR part 21.
FTA's predecessor agency, the Urban Mass Transportation Administration, issued Circular 4704.1—the first document requiring that recipients submit documentation of their employment practices to ensure workplace nondiscrimination—in 1988. FTA updated this circular in 2016 with Circular 4704.1A, which requires recipients with 50 or more employees to maintain a program plan documenting their nondiscrimination efforts. Recipients with 100 or more employees that received more than $1 million in Federal funding in the previous fiscal year must submit comprehensive EEO programs to FTA every four years. FTA maintains a public list of when recipients falling into one of these categories must submit their EEO programs. This administrative requirement predates the consolidation of Federal employment discrimination oversight under the Equal Employment Opportunity Commission (EEOC) and is now redundant due to the established authorities of the EEOC and the Department of Justice (DOJ).
The EEOC serves as the primary oversight and enforcement agency of Federal employment discrimination laws, including Title VII of the Civil Right Act of 1964, as amended by the Equal Employment Opportunity Act of 1972. DOJ holds exclusive authority to litigate EEO cases against state and local governments.
In early 2025, President Trump issued Executive Orders expressing the policy of the Administration to “alleviate unnecessary regulatory burdens placed on the American people” and “deconstruct[ ] . . . the overbearing and burdensome administrative state.” Executive Order 14192, Unleashing Prosperity Through Deregulation, 90 FR 9065 (Jan. 31, 2025); Executive Order 14219, Ensuring Lawful Governance and
In accordance with these Executive Orders, FTA evaluated its External EEO Program and the corresponding Circular 4704.1A and determined that revoking this Circular will relieve an administrative burden for recipients by terminating the requirement that recipients submit EEO documentation to FTA. The requirements included in Circular 4704.1A are redundant of existing regulations promulgated by EEOC, DOL, and DOJ, and revoking Circular 4704.1A will reduce reporting requirements for recipients. FTA hereby revokes Circular 4704.1A, including its requirements for agencies to submit EEO documentation to FTA.
This notice is strictly a revocation of FTA's Circular 4704.1A and does not affect recipient obligations to comply with nondiscrimination requirements under Titles VI and VII of the Civil Rights Act of 1964, Title II of the Genetic Information Nondiscrimination Act of 2008 (GINA), 49 U.S.C. Chapter 53, other Federal civil rights statutes, or the DOT regulations in 49 CFR part 21. Recipients must comply with all Federal requirements pertaining to nondiscrimination, including 49 U.S.C. 5332(b), which provides that no person may be “excluded from participating in, denied a benefit of, or discriminated against under, a project, program, or activity receiving financial assistance under this chapter because of race, color, religion, national origin, sex, disability, or age.”
Office of the Comptroller of the Currency (OCC), Treasury.
Notice and request for comment.
The OCC, as part of its continuing effort to reduce paperwork and respondent burden, invites comment on a continuing information collection, as required by the Paperwork Reduction Act of 1995 (PRA). In accordance with the requirements of the PRA, the OCC may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OCC is soliciting comment concerning the renewal of its information collection titled, “Margin and Capital Requirements for Covered Swap Entities.” The OCC also is giving notice that it has sent the collection to OMB for review.
Comments must be received by June 22, 2026.
Commenters are encouraged to submit comments by email, if possible. You may submit comments by any of the following methods:
•
•
•
•
Written comments and recommendations for the proposed information collection should also be sent within 30 days of publication of this notice to
You may review comments and other related materials that pertain to this information collection following the close of the 30-day comment period for this notice by the method set forth in the next bullet.
•
• For assistance in navigating
Shaquita Merritt, Clearance Officer, (202) 649-5490, Chief Counsel's Office, Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.
Under the PRA (44 U.S.C. 3501
Sections 731 and 764 of the Dodd-Frank Act require the registration and regulation of swap dealers and major swap participants and security-based swap dealers and major security-based swap participants, respectively (collectively, “swap entities”). For certain types of swap entities that are prudentially regulated by one of the Agencies,
Section 45.2 defines terms referenced in part 45. Under the definition of “eligible master netting agreement,” a covered swap entity that relies on such agreement for purpose of calculating required margin must (1) conduct sufficient legal review of the agreement to conclude with a well-founded basis that the agreement meets specified criteria and maintain sufficient written documentation of that legal review and (2) establish and maintain written procedures for monitoring relevant changes in law and to ensure that the agreement continues to satisfy the requirements of the definition. To demonstrate compliance with this section, records must be retained for as long as the covered swap entity relies on such agreement. The term “eligible master netting agreement” is used elsewhere in the rule to specify instances in which a covered swap entity may (1) calculate variation margin on an aggregate basis across multiple non-cleared swaps and security-based swaps and (2) calculate initial margin requirements under an initial margin model for one or more swaps and security-based swaps.
Section 45.7 generally requires a covered swap entity to ensure that any initial margin collateral that it collects or posts is held at a third-party custodian. Section 45.7(c) requires the custodian to act pursuant to a custody agreement that: (1) prohibits the custodian from rehypothecating, repledging, reusing, or otherwise transferring (through securities lending, securities borrowing, repurchase agreement, reverse repurchase agreement or other means) the collateral held by the custodian except that cash collateral may be held in a general deposit account with the custodian if the funds in the account are used to purchase certain assets, such assets are held in compliance with § 45.7, and such purchase takes place within a time period reasonably necessary to consummate such purchase after the cash collateral is posted as initial margin; and (2) is a legal, valid, binding, and enforceable agreement under the laws of all relevant jurisdictions, including in the event of bankruptcy, insolvency, or a similar proceeding. A custody agreement may permit the posting party to substitute or direct any reinvestment of posted collateral held by the custodian, provided that, with respect to collateral collected by a covered swap entity pursuant to § 45.3(a) or posted by a covered swap entity pursuant to § 45.3(b), the agreement requires the posting party to substitute only funds or other property that would qualify as eligible collateral under § 45.6, and for which the amount net of applicable discounts described in appendix B would be sufficient to meet the requirements of § 45.3 and direct reinvestment of funds only in assets that would qualify as eligible collateral under § 45.6, and for which the amount net of applicable discounts described in appendix B would be sufficient to meet the requirements of § 45.3.
Section 45.8 sets forth standards for the use of initial margin models. These standards include: (1) a requirement that the covered swap entity receive prior approval from the OCC based on demonstration that the initial margin model meets specific requirements (§ 45.8(c)(1)); (2) a requirement that a covered swap entity notify the OCC in writing 60 days before extending use of the model to additional product types, making certain changes to the initial margin model, or making material changes to modeling assumptions (§ 45.8(c)(3)); and (3) a requirement that the covered swap entity demonstrate to the satisfaction of the OCC that the omission of any risk factor from the calculation of its initial margin is appropriate, prior to omitting such risk factor (§ 45.8(d)(10)), and demonstrate to the satisfaction of the OCC that the incorporation of any proxy or approximation used to capture the risks of the covered swap entity's non-cleared swaps or non-cleared security-based swaps is appropriate, prior to incorporating such proxy or approximation (§ 45.8(d)(11)). Also, if the validation process reveals any material problems with the initial margin model, the covered swap entity must promptly notify the OCC of the problems, describe to the OCC any remedial actions being taken, and adjust the initial margin model to ensure an appropriately conservative amount of required initial margin is being calculated (§ 45.8(f)(3)).
Section 45.8 also sets forth requirements for the ongoing review and documentation of initial margin models. These standards include a requirement that the covered swap entity adequately document all material aspects of its initial margin model (§ 45.8(g)) and that the covered swap entity must adequately document internal authorization procedures, including escalation procedures, that require review and approval of any change to the initial margin calculation under the initial margin model, demonstrable analysis that any basis for any such change is consistent with the requirements of § 45.8, and independent review of such demonstrable analysis and approval (§ 45.8(h)).
Section 45.9 addresses the treatment of cross-border transactions and, in certain limited situations, will permit a covered swap entity to comply with a foreign regulatory framework for non-cleared swaps (as a substitute for compliance with the prudential regulators' rule) if the prudential regulators jointly determine that the foreign regulatory framework is comparable to the requirements in the prudential regulators' rule. Section 45.9(e) allows a covered swap entity to request that the prudential regulators make a substituted compliance determination and provides that the covered swap entity must provide the reasons for the request and other required supporting documentation. A request for a substituted compliance determination must include a description of the scope and objectives of the foreign regulatory framework for non-cleared swaps and non-cleared security-based swaps; the specific provisions of the foreign regulatory framework for non-cleared swaps and security-based swaps (scope of transactions covered; determination of the amount of initial and variation margin required; timing of margin requirements; documentation requirements; forms of eligible collateral; segregation and re-hypothecation requirements; and approval process and standards for models); the supervisory compliance program and enforcement authority exercised by a foreign financial regulatory authority or authorities in such system to support its oversight of the application of the non-cleared swap and security-based swap regulatory framework; and any other descriptions and documentation that the prudential regulators determine are appropriate. A covered swap entity may make a request under § 45.9 only if it is directly supervised by the authorities administering the foreign regulatory framework for non-cleared swaps and non-cleared security-based swaps.
Section 45.10 requires a covered swap entity to execute trading documentation with each counterparty that is either a swap entity or financial end user
(a) Whether the collection of information is necessary for the proper performance of the functions of the OCC, including whether the information has practical utility;
(b) The accuracy of the OCC's estimate of the burden of the collection of information;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of the collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Internal Revenue Service (IRS), Treasury.
Notice of information collection; request for comments.
In accordance with the Paperwork Reduction Act of 1995, the IRS is inviting comments on the information collection request outlined in this notice.
Written comments should be received on or before July 20, 2026 to be assured of consideration.
Direct all written comments to Andres Garcia, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or by email to
Requests for additional information or copies of this collection should be directed to Marcus W. McCrary, 470-769-2001.
The IRS, in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the IRS assess the impact and minimize the burden of its information collection requirements. Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. All comments will become a matter of public record, and viewable on relevant websites. For this reason, please do not include in your comments information of a confidential nature, such as sensitive personal information. Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
The Department of Veterans Affairs (VA) gives notice under the Federal Advisory Committee Act, 5 U.S.C. Ch. 10, that Cooperative Studies Scientific Evaluation Committee (Committee) will hold its virtual meeting on May 29, 2026, via Microsoft Teams, from 1:00 p.m.-3:30 p.m. Eastern Standard Time.
The Committee provides expert advice on VA cooperative studies, multi-site clinical research activities, and policies related to conducting and managing these efforts. The first 30 minutes of the meeting (approximately) will open to the public as the Committee discusses administrative matters and the general status of the program. The remaining portion of the meeting will be closed to the public as the Committee reviews, discusses, and evaluates research and development applications.
During the closed portion of the meeting, the Committee's discussions and recommendations will address the
The Committee will not accept oral comments from the public for the open portion of the meeting. Members of the public who wish to attend the open teleconference should call 872-701-0185, conference ID 319 653 829#. Those who plan to attend, would like additional information, or would like to submit written comments should contact David Burnaska, Program Manager, Cooperative Studies Program (14RD), Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, at
Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS).
Final rule.
This final rule contains provisions to improve implementation of the Patient Protection and Affordable Care Act, 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 final rule also includes provisions related to civil money penalties (CMPs) for noncompliant issuers and other responsible entities; standards governing agents, brokers, and web-brokers; the expansion and codification of hardship exemption eligibility; implementation of the State Exchange Improper Payment Measurement (SEIPM); provider access standards 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); requirements related to defrayal for the cost of any State-required benefits in addition to the EHB; cost-sharing flexibilities for catastrophic and individual market bronze plans; establishment of catastrophic plans with plan terms of up to 10 consecutive plan years; QHP issuer quality improvement strategies (QISs); and revisions affecting which enrollees are included in Federal Basic Health Program (BHP) payment calculations to States. This final rule also includes amendments to implement certain provisions of the Working Families Tax Cut (WFTC) legislation.
These regulations are effective on July 20, 2026.
Jeff Wu, (301) 492-4305, Rogelyn McLean, (410) 786-1524, Grace Bristol, (410) 786-8437, for general information.
Ayesha Anwar, (301) 448-3625, or Joshua Paul, (301) 492-4347, for matters related to HHS-operated risk adjustment and HHS-operated risk adjustment data validation.
Aaron Franz, (410) 786-8027 for matters related to user fees.
Brian Gubin, (410) 786-1659, for matters related to agent, broker, and web-broker guidelines.
Zarin Ahmed, (301) 492-4400, for matters related to enrollment of qualified individuals into QHPs and termination of Exchange enrollment or coverage for qualified individuals.
Hannah Armbruster Hill, (301) 492-4343, for matters related to certification standards for QHPs, cost-sharing requirements, and the Actuarial Value Calculator.
Kelly Carda, (312) 886-5210, or Cassandra Thompson, (667) 414-0870, for matters related to Provider Access standards.
Ariana Koenitzer, (410) 786-0724, or Samantha Nguyen Kella, (816) 426-6339, for matters related to Essential Community Provider Standards.
Ariana Koenitzer, (410) 786-0724, or Cassandra Thompson, (667) 414-0870, for matters related to QHP Certification of Non-Network Plans.
Nikolas Berkobien, (667) 290-9903, for matters related to standardized plan options, non-standardized plan option limits and exceptions.
Jenny Chen, (301) 492-5156, or Shilpa Gogna, (301) 492-4257, for matters related to State Exchange and State Exchange Blueprint requirements.
Rebecca Braun-Harrison, (667) 290-8846, or Nia Blasingame, (470) 890-4178, for matters related to civil money penalties of issuers and non-Federal governmental group health plans.
Preeti Hans, (301) 492-5144, for matters related to the Quality Improvement Strategy.
Mary Beth Hance, 410-786-4299, for matters related to the Basic Health Program.
Christina Whitefield, (301) 492-4172, for matters related to the medical loss ratio (MLR) program.
David Mlawsky, (410) 786-6851, for matters related to catastrophic plans with multi-year plan terms.
Jessica Veffer, (301) 492-4827, for matters related to expanding hardship exemptions for individuals ineligible for APTC or CSRs due to projected household income.
We are finalizing changes to the provisions and parameters implemented through prior rulemaking to implement the Patient Protection and Affordable Care Act and are also finalizing updates to implement new provisions.
Title I of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) added a new title XXVII to the PHS Act to establish various reforms to the group and individual health insurance markets. These provisions of the PHS Act were later augmented by other laws, including the Affordable Care Act. Subtitles A and C of title I of the Affordable Care Act reorganized, amended, and added to the provisions of part A of title XXVII of the PHS Act relating to group health plans and health insurance issuers in the group and individual markets. The term “group health plan” includes both insured and self-insured group health plans.
In the upcoming sections, we summarize sections of the PHS Act,
Section 1301(a)(1)(B) of the Affordable Care Act directs all issuers of qualified health plans (QHPs) to cover the Essential Health Benefit (EHB) package described in section 1302(a) of the Affordable Care Act, including coverage of the services described in section 1302(b) of the Affordable Care Act, adherence to the cost-sharing limits described in section 1302(c) of the Affordable Care Act, and meeting the Actuarial Value (AV) levels established in section 1302(d) of the Affordable Care Act. Section 2707(a) of the PHS Act, which is effective for plan or policy years beginning on or after January 1, 2014, extends the requirement to cover the EHB package to non-grandfathered individual and small group health insurance coverage, irrespective of whether such coverage is offered through an Exchange. In addition, section 2707(b) of the PHS Act directs non-grandfathered group health plans to ensure that cost sharing under the plan does not exceed the limitations described in section 1302(c)(1) of the Affordable Care Act.
Section 1302 of the Affordable Care Act provides for the establishment of an EHB package that includes coverage of EHB (as defined by the Secretary), cost-sharing limits, and AV requirements. The law directs that EHB be equal in scope to the benefits provided under a typical employer plan, and that they cover at least the following 10 general categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
Section 1302(b)(4)(A) through (D) of the Affordable Care Act establish that the Secretary must define EHB in a manner that: (1) reflects appropriate balance among the 10 categories; (2) is not designed in such a way as to discriminate based on age, disability, or expected length of life; (3) takes into account the health care needs of diverse segments of the population; and (4) does not allow denials of EHB based on age, life expectancy, disability, degree of medical dependency, or quality of life.
Section 1302(e) of the Affordable Care Act establishes standards for catastrophic plans to be offered in the individual market and states that the only individuals who are eligible to enroll in catastrophic coverage are individuals who: (1) are under the age of 30 before the beginning of the plan year; (2) have been certified as exempt from the individual responsibility requirement because coverage is unaffordable; or (3) have been certified as experiencing a hardship for obtaining coverage under a qualified health plan (QHP).
Section 1311(c) of the Affordable Care Act provides the Secretary the authority to issue regulations to establish criteria for the certification of QHPs. Among the criteria for certification that the Secretary must establish by regulation is that QHPs ensure a sufficient choice of providers (section 1311(c)(1)(B) of the Affordable Care Act) and include essential community providers that serve predominately low-income, medically underserved individuals (section 1311(c)(1)(C) of the Affordable Care Act). Section 1311(d)(4)(A) of the Affordable Care Act requires the Exchange to implement procedures for the certification, recertification, and decertification of health plans as QHPs, consistent with guidelines developed by the Secretary under section 1311(c) of the Affordable Care Act. Section 1311(e)(1) of the Affordable Care Act grants the Exchange the authority to certify a health plan as a QHP if the health plan meets the Secretary's requirements for certification issued under section 1311(c) of the Affordable Care Act, and the Exchange determines that making the plan available through the Exchange is in the interests of qualified individuals and qualified employers in the State. Section 1311(c)(6)(C) of the Affordable Care Act directs the Secretary to require an Exchange to provide for special enrollment periods (SEPs) and section 1311(c)(6)(D) of the Affordable Care Act directs the Secretary to require an Exchange to provide for American Indians and Alaska Natives (AI/AN), as defined by section 4 of the Indian Health Care Improvement Act.
Section 1311(d)(3)(B) of the Affordable Care Act permits a State, at its option, to require QHPs to cover benefits in addition to EHB. This section also requires a State to make payments, either to the individual enrollee or to the issuer on behalf of the enrollee, to defray the cost of these additional State-required benefits.
Section 1312(c) of the Affordable Care Act generally requires a health insurance issuer to consider all enrollees in all health plans (except grandfathered health plans) offered by such issuer to be members of a single risk pool for each of its individual and small group markets. States have the option to merge the individual and small group market risk pools under section 1312(c)(3) of the Affordable Care Act.
Section 1312(e) of the Affordable Care Act provides the Secretary with the authority to establish procedures under which a State may allow agents or brokers to (1) enroll qualified individuals and qualified employers in QHPs offered through Exchanges and (2) assist individuals in applying for advance payments of the premium tax credit (APTC) and cost-sharing reductions (CSRs) for QHPs sold through an Exchange.
Sections 1313 and 1321 of the Affordable Care Act provide the Secretary with the authority to oversee the financial integrity of State Exchanges, their compliance with HHS standards, and the efficient and non-discriminatory administration of State Exchange activities. Section 1313(a)(5)(A) of the Affordable Care Act provides the Secretary with the authority to implement any measure or procedure that the Secretary determines is appropriate to reduce fraud and abuse in the administration of the Exchanges. Section 1321 of the Affordable Care Act provides for State flexibility in the operation and enforcement of Exchanges and related requirements.
Section 1321(a) of the Affordable Care Act provides broad authority for the Secretary to establish standards and regulations to implement the statutory requirements related to Exchanges, QHPs and other components of title I of the Affordable Care Act, including such other requirements as the Secretary determines appropriate. When operating an FFE under section 1321(c)(1) of the Affordable Care Act, HHS has the authority under sections 1321(c)(1) and 1311(d)(5)(A) of the Affordable Care Act to collect and spend user fees. Office of Management and Budget (OMB) Circular No. A-25 Revised establishes Federal policy regarding user fees and specifies that a user charge will be assessed against each identifiable recipient for special benefits derived from Federal activities beyond those received by the public.
Section 1321(d) of the Affordable Care Act provides that nothing in title I of the Affordable Care Act must be construed to preempt any State law that does not prevent the application of title I of the Affordable Care Act. Section 1311(k) of the Affordable Care Act specifies that Exchanges may not establish rules that
Section 1331 of the Affordable Care Act provides States with an option to establish a BHP. In the States that elect to operate a BHP, the BHP makes affordable health benefits coverage available for individuals under age 65 with household incomes between 133 percent and 200 percent of the FPL who are not otherwise eligible for Medicaid, the Children's Health Insurance Program (CHIP), or affordable employer-sponsored coverage, or for noncitizens whose income is equal to or below 200 percent of FPL but are ineligible for Medicaid benefits that at a minimum consist of the EHB described in section 1302(b) of the Affordable Care Act. For those States that have expanded Medicaid coverage under section 1902(a)(10)(A)(i)(VIII) of the Social Security Act (the Act), the lower income threshold for BHP eligibility is effectively 138 percent of the FPL due to the application of a required 5 percent income disregard in determining the upper limits of Medicaid income eligibility (section 1902(e)(14)(I) of the Act).
Section 1343 of the Affordable Care Act establishes a permanent risk adjustment program to provide payments to health insurance issuers that attract higher-than-average risk enrollees, such as those with chronic conditions, funded by charges collected from those issuers that attract lower-than-average risk enrollees, thereby reducing incentives for issuers to avoid higher-risk enrollees. Section 1343(b) of the Affordable Care Act provides that the Secretary, in consultation with States, shall establish criteria and methods to be used in carrying out the risk adjustment activities under this section. Consistent with section 1321(c) of the Affordable Care Act, the Secretary is responsible for operating the HHS risk adjustment program in any State that fails to do so.
Section 1401(a) of the Affordable Care Act added section 36B to the Internal Revenue Code (the Code), which, among other things, requires that a taxpayer reconcile APTC for a year of coverage with the amount of the premium tax credit (PTC) the taxpayer is allowed for the year.
Section 1402 of the Affordable Care Act provides for, among other things, reductions in cost sharing for EHB for qualified low- and moderate-income enrollees in silver-level QHPs offered through the individual market Exchanges. This section also provides for reductions in cost sharing for American Indians and Alaska Natives (AI/AN) enrolled in QHPs at any metal level.
Section 1411(f) of the Affordable Care Act requires the Secretary, in consultation with the Secretary of the Treasury and the Secretary of Homeland Security, and the Commissioner of Social Security, to establish procedures for hearing and making decisions governing appeals of Exchange eligibility determinations. Section 1411(f)(1)(B) of the Affordable Care Act requires the Secretary to establish procedures to redetermine eligibility on a periodic basis, in appropriate circumstances, including eligibility to purchase a QHP through the Exchange and for APTC and CSRs.
Section 1411(g) of the Affordable Care Act allows the use of applicant information only for the limited purpose of, and to the extent necessary for, ensuring the efficient operation of the Exchange, including by verifying eligibility to enroll through the Exchange and for APTC and CSRs, and limits the disclosure of such information.
Section 1413 of the Affordable Care Act directs the Secretary to establish, subject to minimum requirements, a streamlined enrollment process for enrollment in QHPs and all insurance affordability programs.
Section 2718 of the PHS Act, as added by the Affordable Care Act, generally requires health insurance issuers to submit an annual medical loss ratio (MLR) report to HHS and provide rebates to enrollees if the issuers do not achieve specified MLR thresholds.
Section 5000A of the Code, as added by section 1501(b) of the Affordable Care Act, requires individuals to have minimum essential coverage (MEC) for each month, qualify for an exemption, or make an individual shared responsibility payment. Under the Tax Cuts and Jobs Act, which was enacted on December 22, 2017, the individual shared responsibility payment is reduced to $0, effective for months beginning after December 31, 2018. Notwithstanding that reduction, certain exemptions are still relevant to determine whether individuals aged 30 and above qualify to enroll in catastrophic coverage under §§ 155.305(h) and 156.155(a)(5).
Section 5000A(e) of the Code defines exemptions from the individual shared responsibility penalty. Section 5000A(e)(5) of the Code defines a hardship exemption as a situation in which an individual experiences difficulty obtaining QHP coverage and provides the HHS Secretary the authority to determine whether an individual has experienced a hardship.
Section 71301 of the WFTC legislation amends 26 U.S.C. 36B(e), effective for plan years beginning on or after January 1, 2027, to provide that a PTC is allowed for the coverage of a lawfully present non-citizen only if the non-citizen is an “eligible alien.”
Section 71302 of the WFTC legislation removes subparagraph (B) of 26 U.S.C. 36B(c)(1), eliminating PTC eligibility for lawfully present individuals with income below 100 percent of the FPL who are ineligible for Medicaid due to their immigration status. Section 71302 is effective for taxable years beginning after December 31, 2025.
Section 71303 of the WFTC legislation, effective to taxable years beginning after December 31, 2027, amends the definition of coverage month such that it would be imprudent to maintain a 2-year failure to file and reconcile (FTR) policy for 2028 and beyond, but it would not be legally prohibited to do so.
Section 71304 of the WFTC legislation amends section 36B of the Code, effective for plan years beginning after December 31, 2025, such that a plan is not considered a QHP, and therefore no PTC is allowed for coverage under the plan, if the plan is enrolled in through a special enrollment period (SEP) that is based solely on the relationship of an individual's expected income to the FPL and not on a change in circumstance (an “income-based SEP”). This provision is effective January 1, 2026.
Section 71305 of the WFTC legislation eliminates, effective for taxable years beginning after December 31, 2025, APTC repayment limits and requires individuals whose APTC exceeds their PTC to increase their tax liability by the amount of the excess.
Section 71307 of the WFTC legislation amends the definition of “high deductible health plan” in section 223(c)(2) of the Code to include bronze and catastrophic plans available as individual coverage through an Exchange, effective for months beginning after December 31, 2025.
The premium stabilization programs refer to the risk adjustment, risk corridors, and reinsurance programs established by the Affordable Care Act.
• In the March 23, 2012
• In the March 11, 2013
• In the October 30, 2013
• In the November 6, 2013
• In the March 11, 2014
• In the May 27, 2014
• In the February 27, 2015
• In the March 8, 2016
• In the December 22, 2016
• In the April 17, 2018
• In the May 11, 2018
• On July 27, 2018, consistent with 45 CFR 153.320(b)(1)(i), we updated the 2019 benefit year final HHS risk adjustment model coefficients to reflect an additional recalibration related to an update to the 2016 enrollee-level EDGE data set.
• In the July 30, 2018
• In the December 10, 2018
• In the April 25, 2019
• On May 12, 2020, consistent with § 153.320(b)(1)(i), we issued the 2021 Benefit Year Final HHS Risk Adjustment Model Coefficients on the CCIIO website.
• In the May 14, 2020
• In the December 1, 2020
• In the May 5, 2021
• On July 19, 2021, consistent with § 153.320(b)(1)(i), we released Updated 2022 Benefit Year Final HHS Risk Adjustment Model Coefficients on the CCIIO website, announcing some minor revisions to the 2022 benefit year final HHS risk adjustment adult model coefficients.
• In the May 6, 2022
• In the April 27, 2023
• In the April 15, 2024
• In the January 15, 2025
We have finalized program integrity standards related to the Exchanges and premium stabilization programs in two rules: the “first Program Integrity Rule” issued in the August 30, 2013
In the May 6, 2022
In the 2025 Payment Notice, issued in the April 15, 2024
In the February 27, 2013
In that rule, we also codified that a health plan is a catastrophic plan if it: (1) meets all applicable requirements for health insurance coverage in the individual market; (2) does not offer coverage at the bronze, silver, gold, or platinum levels of coverage (3) does not provide coverage of essential health benefits until the enrolled individual reaches the annual limitation in cost sharing; and (4) covers at least three primary care visits per year before reaching the deductible. A catastrophic plan may not impose any cost-sharing requirements for preventive services identified in section 2713 of the PHS Act. We also codified the statutory eligibility criteria identified in section 1302(e)(2) of the Affordable Care Act.
We amended requirements related to index rates under the single risk pool provision in a final rule issued in the July 2, 2013
In the May 23, 2011
We requested comment relating to Exchanges in the August 3, 2010
In the 2014 Payment Notice and the Amendments to the HHS Notice of Benefit and Payment Parameters for 2014 interim final rule, issued in the March 11, 2013
In the 2016 Payment Notice, we also set forth the ECP certification standard at § 156.235, with revisions in the 2017 Payment Notice in the March 8, 2016
In the 2018 Payment Notice, issued in the December 22, 2016
In an interim final rule, issued in the May 11, 2016
We finalized these in the 2018 Payment Notice, issued in the December 22, 2016
In the Market Stabilization final rule, issued in the April 18, 2017
In the May 14, 2020
In the January 19, 2021
In the May 6, 2022
In the 2024 Payment Notice, issued in the April 27, 2023
In the 2025 Payment Notice, issued in the April 15, 2024
In the 2026 Payment Notice, published in the January 15, 2025
We established requirements relating to EHB in the Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation Final Rule, which was issued in the February 25, 2013
In the 2025 Payment Notice, issued in the April 15, 2024
In the 2026 Payment Notice, published in the January 15, 2025
We issued regulations in § 155.200(d) to direct Exchanges to evaluate quality improvement strategies, and § 156.200(b) to direct QHP issuers to implement and report on a quality improvement strategy or strategies consistent with section 1311(g) standards as QHP certification criteria for participation in an Exchange. In the 2016 Payment Notice, issued in the February 27, 2015
We published a request for comment on section 2718 of the PHS Act in the April 14, 2010
The regulations outlined in this final rule will be codified in 42 CFR part 600, and 45 CFR parts 150, 153, 155, and 156.
We are finalizing updates in 42 CFR 600.5 to align BHP regulations with section 71301 of the WFTC legislation. Section 71301 of the WFTC legislation amended section 36B of the Code to provide that a PTC is allowed for the QHP coverage of a lawfully present noncitizen only if he or she is an “eligible alien,” effective for plan years beginning on or after January 1, 2027. Because Federal BHP payments to States are based in part on the amount of PTC an individual enrolled in the BHP is eligible for and would have qualified for had he or she been enrolled in a QHP through an Exchange, only lawfully present noncitizens who are considered to be “eligible aliens” will generate Federal BHP payments to the State. We are finalizing a new definition of “eligible noncitizen” at 42 CFR 600.5, cross-referencing 45 CFR 155.20.
In accordance with the OMB Report to Congress on the Joint Committee Reductions for Fiscal Year 2026, the HHS-operated risk adjustment program is subject to fiscal year 2026 sequestration.
We are finalizing our proposal to recalibrate the 2027 benefit year HHS risk adjustment models using the 2021, 2022, and 2023 benefit year enrollee-level EDGE data. We are also finalizing a risk adjustment user fee rate for the 2027 benefit year of $0.18 per member per month (PMPM).
We are finalizing our proposal to modify one intermediate step of the HHS-RADV error estimation methodology starting with 2025 benefit year HHS-RADV to add an additional scaling factor to appropriately estimate the proportion of the issuer's total plan liability risk score (PLRS) that is HCC-related after the removal of no-HCC enrollees from the IVA sample beginning with 2025 benefit year HHS-RADV, as finalized in the 2026 Payment Notice (90 FR 4424).
We are finalizing our proposal to require issuers that intend to load rates to account for unpaid CSRs for the applicable rating year to submit certain information related to CSR loading in their Unified Rate Review Templates (URRTs) and the Actuarial Memoranda for each filing year in which CSRs are not funded beginning with PY 2027 rate filings.
We are finalizing our proposal to remove the requirement at § 155.105(b)(4) that a State seeking to operate a State Exchange must first operate an SBE-FP for at least one plan year.
We are finalizing our proposal to amend § 155.106(a)(2) to rescind the requirement that as part of a State's activities for its establishment of a State Exchange, the State must provide supporting documentation demonstrating progress toward meeting or implementing State Exchange Blueprint requirements, given preexisting processes per the State Blueprint Application
We are finalizing our proposal to amend § 155.170 with a modification to provide that beginning with PY 2028, a State-required benefit will be considered “in addition to EHB” (and thus not EHB) if it is required by a State action taking place after December 31, 2011; applicable to the small group and/or individual markets; specific to required care, treatment, or services; and not required by State action for purposes of compliance with Federal requirements. Under this finalized policy, such State-required benefits will be considered in addition to EHB regardless of whether the required benefits are embedded in the State's EHB-benchmark plan. Further, we finalize that States must make payments in accordance with § 155.170(b) to defray the cost of any State-required benefits in addition to the EHB. We are also finalizing revisions to the regulatory text at § 156.115(a) to align with this finalized policy.
We are not finalizing amendments to § 155.205(b) to amend the requirement that a State Exchange operate a centralized eligibility and enrollment consumer interface on the Exchange's website for an individual to submit a single streamlined eligibility application and subsequently select a QHP following a determination of eligibility. However, we may consider finalizing this proposal, with or without modifications, in the 2028 Payment Notice rulemaking cycle or another appropriate rulemaking vehicle, and, if so, will respond to comments then.
We are not finalizing our proposal at § 155.221(k) that State Exchanges may elect a new EDE option (SBE-EDE option), in which a State Exchange could seek HHS approval to allow web-brokers to operate enrollment websites as the exclusive pathway through which consumers can apply, receive an eligibility determination from the Exchange, and purchase an individual market QHP offered through the Exchange with APTC and CSRs, if otherwise eligible. However, we may consider finalizing this proposal, with or without modifications, in the 2028 Payment Notice rulemaking cycle or another appropriate rulemaking vehicle.
We are finalizing changes to the existing regulatory authority under § 155.220(j)(2)(ii) and (iii) to require agents, brokers, and web-brokers to use an HHS-approved and -created consumer consent form to meet the eligibility application review requirements and consumer consent documentation requirements.
We are finalizing several new provisions at § 155.220(j)(3) to establish more robust standards of conduct related to the marketing practices of agents, brokers, and web-brokers which would include examples of prohibited marketing practices. Furthermore, we are finalizing our proposal to require agents, brokers, and web-brokers to provide HHS marketing documentation in response to monitoring, audit, and enforcement activities. We also are finalizing our proposal to notify agents, brokers, and web-brokers that they may be held responsible for marketing content created, written, released, or otherwise produced by an entity on their behalf.
We are finalizing our proposal to discontinue the vendor program, which allows for certain training and information verification functions to be provided by HHS-approved vendors. To accomplish this, we are removing § 155.222.
We are finalizing updates in §§ 155.20, 155.305(f)(1), and 155.320 to align Exchange regulations with section 71301 of the WFTC legislation. Section 71301 of the WFTC legislation amended section 36B of the Code to provide that PTC is allowed for the QHP coverage of a lawfully present noncitizen only if such noncitizen is an “eligible alien.” It also makes conforming amendments to section 1411 of the Affordable Care Act requiring Exchanges to verify applicants' “eligible alien” status effective for plan years beginning on or after January 1, 2027. We are finalizing a new definition in § 155.20, updating our APTC eligibility regulations at § 155.305(f)(1), and adding to our verification regulations in § 155.320 to align Exchange eligibility and verification rules with section 71301 of the WFTC legislation. This finalized policy will also impact Federal payments to States effective January 1, 2027, for individuals enrolled in the BHP who are lawfully present noncitizens but are not “eligible aliens,” as Federal BHP payments attributable to these enrollees will cease beginning January 1, 2027.
To align Exchange regulations with section 71302 of the WFTC legislation, we are finalizing our proposal to remove § 155.305(f)(2) and make conforming updates to §§ 155.320(c)(3)(iii)(A) and 155.420(d)(13). Section 71302 of the WFTC legislation amended section 36B(c) of the Code to provide that PTC is no longer allowed for noncitizens lawfully present in the United States who were ineligible for Medicaid due to their immigration status and have household income below 100 percent of the FPL. Removing § 155.305(f)(2) and updating § 155.320(c)(3)(iii)(A) will align Exchange APTC eligibility and verification rules with section 71302 of the WFTC legislation. This finalized policy will also impact Federal payments to States for individuals enrolled in the BHP who are ineligible for Medicaid due to their immigration status and with household income below 100 percent of the FPL, for whom Federal payments to States are also no longer allowed.
We are finalizing our proposal to revise the failure to file and reconcile process at § 155.305(f)(4) such that Exchanges on the Federal platform will conduct the 1-year policy beginning in PY 2027. State Exchanges will have the option to conduct either the 1-year or 2-year policy in PY 2027 but will be required to conduct the 1-year policy beginning in PY 2028. Under the 1-year policy, an Exchange must determine a tax filer ineligible for APTC if: (1) HHS notifies the Exchange that the tax filer (or their spouse if the tax filer is a married couple) received APTC for a prior year for which tax data will be utilized for verification of income, and (2) the tax filer or tax filer's spouse did not comply with the requirement to file a Federal income tax return and reconcile APTC for that year. This finalized policy, which Exchanges on the Federal platform plan to adopt a year early, will align with the statutory requirement in section 71303 of the WFTC legislation that effectively requires Exchanges to follow the 1-year policy as a requirement for a month to be a coverage month under section 36B of the Code as of PY 2028. We are also finalizing our proposal to remove the notice requirement at § 155.305(f)(4)(ii) for PY 2027 to conform with the notice policy under the PY 2026 policy.
We sought comment on considerations for future policy development and implementation under section 71303 of the WFTC legislation, which imposes new requirements on Exchanges related to eligibility verification. Specifically, we sought comment on: operational considerations for interested parties; effective rollout and communications; required timelines for interested parties to comply with the law; anticipated complexity, costs, burden, enrollment impacts; and any State-specific considerations. We will take comments we received into consideration for any potential guidance or rulemaking.
We are finalizing our proposal to revise § 155.320(c) such that all Exchanges are required to continue conducting the income verifications changes introduced in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074) in PY 2027 and beyond, effectively removing the requirement to stop both income verification policies starting in PY 2027. Specifically, we are updating § 155.320(c)(3)(iii) and § 155.320 (c)(3)(vi)(C)(2) to extend the requirement indefinitely to create income data matching issues (DMIs) when trusted data sources indicate that projected consumer household income is under 100 percent of the FPL. Additionally, we are removing § 155.320(c)(5), which outlines the requirement to accept the annual household income attestation when no tax data is returned for a household.
We sought comment on whether we should regulate the option for issuers to implement the fixed-dollar and/or gross percentage-based premium payment thresholds in § 155.400(g) for PY 2027 and beyond. Currently, issuers are only able to implement a net premium percentage-based premium threshold for PY 2026, and effective January 1, 2027, issuers will be able to implement the fixed-dollar and/or either net or gross premium percentage-based thresholds, which was finalized in the 2025 Marketplace Integrity and Affordability final rule. After consideration of public comments and for reasons outlined in the proposed and final rule, we are finalizing for all Exchanges the removal of the fixed-dollar and gross-premium threshold flexibilities.
We are finalizing our proposal to remove § 155.420(d)(16) such that Exchanges will continue to be prohibited from offering the 150 percent FPL SEP in PY 2027 and beyond, in alignment with section 71304 of the WFTC legislation. We are finalizing our proposal to make conforming amendments at §§ 155.420(a)(4)(ii)(D), 155.420(b)(2)(vii), and 155.420(a)(4)(iii).
We are finalizing our proposal to revise § 155.420(g) to remove the restriction for Exchanges on the Federal platform to only conduct Special Enrollment Period Verification (SEPV) for Loss of Minimum Essential Coverage (MEC). We also are finalizing our proposal to require Exchanges on the Federal platform to conduct SEPV for at least 75 percent of new enrollments. These policies were finalized in the 2025 Marketplace Affordability and Integrity final rule but were stayed in
We are finalizing our proposal to amend § 155.605 to codify and expand hardship exemption eligibility. Specifically, this finalized policy will 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 under § 155.605(d)(1)(iii). This change will allow individuals aged 30 and older who receive this hardship exemption to enroll in catastrophic coverage, if otherwise eligible.
We are finalizing, for plan years beginning on or after January 1, 2027, our proposal to amend § 155.1050(a)(2) to remove the requirements at § 155.1050(a)(2)(i) and (ii) that State Exchanges and SBE-FPs establish and impose quantitative time and distance network adequacy standards that are at least as stringent as standards for QHPs participating on the FFEs and to no longer require State Exchanges and SBE-FPs to conduct quantitative network adequacy reviews to evaluate a plan's compliance with certain network adequacy standards under § 156.230 prior to certifying any plan as a QHP. Instead, we are finalizing our proposal to restore the requirement at § 155.1050(a)(2) that State Exchanges and SBE-FPs ensure that each QHP provides sufficient access to providers in a manner that meets applicable standards consistent with § 156.230(a)(1)(ii) and (a)(1)(iii) for network plans, or for plan years beginning on or after January 1, 2027, § 156.236(a) for non-network plans if such plans are allowed to be offered through the Exchange, as applicable.
We also are finalizing, with minor modification, at new § 155.1050(d) our proposal to defer provider access reviews of QHP issuers, with or without a provider network, applying for certification as a QHP to be offered through the FFE, to the FFE States that elect to conduct such reviews, should the FFE State demonstrate 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 under § 155.1050(d)(2) through (d)(4). We note that provisions related to non-network plans will be implemented beginning January 1, 2028.
We are finalizing, with modification, our proposal to implement new requirements for an Effective Essential Community Provider (ECP) Review Program by adding § 155.1051. Under this finalized policy, FFE States may elect to conduct their own ECP certification reviews of issuers, with or without a provider network, that are applying for certification to be offered as a QHP through an FFE, including in States performing plan management. To conduct their own reviews, we are finalizing that FFE States will be required to demonstrate that they have sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria to be considered to have an Effective ECP Review Program under § 155.1051. We note that provisions related to non-network plans will be effective beginning on or after January 1, 2028.
We are finalizing our proposal to amend § 155.1200(d) and add new paragraph (e) to permit State Exchanges to satisfy certain requirements of the independent external programmatic audit, as outlined in paragraph (d), by completing the SEIPM process that will be established at 45 CFR 155, subpart Q.
We are finalizing our proposal to add new subpart Q (§§ 155.1600 through 1650) to establish the SEIPM program. The Payment Integrity Information Act of 2019 (PIIA) requires Federal agencies to annually review, measure, and report on the programs they administer that have been determined to be susceptible to significant improper payments. To satisfy the requirements of the PIIA, we are finalizing our proposal to measure improper payments of APTC that are administered by State Exchanges and to annually report statistically valid improper payment estimates in the HHS Agency Financial Report.
We are finalizing 2027 benefit year FFE and SBE-FP user fee rates of 1.9 percent and 1.5 percent of total monthly premiums, respectively.
We paused review of State applications to select EHB-benchmark plans in accordance with § 156.111. We are reviewing section 1302 of the Affordable Care Act and are considering future rulemaking to revise § 156.111 and EHB standards more broadly.
We are finalizing our proposal to revise § 156.115(d) to prohibit issuers from including routine non-pediatric dental services as an EHB.
We are finalizing, with modification, our proposals to amend the requirements for catastrophic plans in § 156.155. We specify that, effective for plan years beginning on or after January 1, 2027, a catastrophic plan has a plan term of either 1 plan year, or of multiple consecutive plan years not to exceed 10 plan years, and that catastrophic plans with terms of at least 2 consecutive plan years may utilize value-based insurance designs to provide benefits before reaching the deductible, pursuant to guidelines issued by the Secretaries of HHS, Labor, and the Treasury under section 2713(c) of the PHS Act. We are not finalizing our proposal to amend § 156.80 to permit issuers of multi-year catastrophic plans to make a plan-level adjustment to the index rate that reflects the length of the entire plan term. We also are not finalizing our proposal to amend § 156.130 to specify that, in the case of a catastrophic plan with a consecutive multi-year term, the annual limitation on cost sharing for the initial plan year of the contract may apply on an annual basis, or on average over the life of the contract.
To address an issue that has arisen in the implementation of section 1302(c) through (e) of the Affordable Care Act, we are finalizing changes to (1) the permissible cost-sharing parameters for individual market bronze plans through new § 156.136 effective beginning PY 2027, with modification to specify that such plans are permitted to exceed the standard annual limitation on cost sharing by up to 130 percent of the standard annual limitation on cost sharing, and (2) the required cost-sharing parameters for catastrophic plans through revisions to § 156.155(a)(3) with a modification to have the revisions to § 156.155(a)(3) be effective beginning PY 2028.
We are finalizing our proposal to remove the following from our regulations effective beginning in PY 2027: the definition of “standardized options” at § 155.20; all requirements pertaining to standardized plan options at § 156.201; the differential display of standardized plan options on
We are finalizing our proposal to revise the network adequacy and ECP standards at §§ 156.230 and 156.235 to make clear that these sections contain the provider access standards for all individual market QHPs and stand-alone dental plans (SADPs) and all
Additionally, we are finalizing our proposal to revise § 156.230 to provide that HHS will continue to conduct network adequacy reviews using standards described at § 156.230 for QHP issuers that use a provider network in FFE States that do not elect to conduct such reviews, or in FFE States that HHS has determined do not satisfy the criteria to be considered to have an Effective Provider Access Review Program, as described at § 155.1050(d). We also are finalizing our proposal to add new § 156.236 to allow plans that do not use a network (non-network plans) to receive QHP certification, effective beginning in PY 2028, by demonstrating that they ensure a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full, and reasonable and timely access to ECPs that accept the plan's benefit amount as payment in full. As finalized, § 156.236 will set forth provider access and ECP requirements for assessing whether non-network plans provide sufficient choice of providers.
For PY 2027 and subsequent plan years, we are finalizing, with modification, our proposed changes to the QHP certification requirements for ECPs included within a network plan issuer's provider network. First, we are not finalizing our proposal to reduce the minimum percentage requirement from 35 to 20 percent for both medical QHP and SADP issuers. Second, we are finalizing our proposal to modify the narrative justification requirements at §§ 156.235(a)(3) and 156.235(b)(3) to be consistent with systems changes and existing QHP issuer ECP data submission requirements as part of ECP certification reviews.
We are finalizing our proposal to modify § 156.480(c) to clarify HHS' authority to audit or conduct a compliance review of an issuer that offers a QHP through an Exchange for the purposes of administering and providing oversight of the APTC, CSR, and user fee programs. We are also finalizing that HHS may conduct a compliance review to assess issuers' compliance with requirements related to these programs as needed or on an annual basis rather than only on an ad hoc basis.
We are finalizing our proposal to amend § 156.805(b) to reiterate in § 156.805(b) that in determining the amount of CMPs, in addition to the factors HHS takes into account when determining a CMP amount listed in § 156.805(b)(1) through (3), HHS will identify the lawful purpose or purposes of the CMP. We are also finalizing our proposal to amend the introductory text of § 150.317 to make corresponding edits for the factors HHS, through CMS, considers when determining the amount of CMPs as enforcement remedies against issuers more broadly or other responsible entities, such as a non-Federal governmental plan sponsor that is subject to applicable PHS Act requirements. In addition, we are finalizing our proposal to amend § 156.805(f) to reiterate that HHS has the authority to impose CMPs against issuers in a State Exchange or SBE-FP for an identified violation 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 HHS determines that a State is failing to substantially enforce these requirements.
We are finalizing our proposal to amend § 156.903 to provide the option for an administrative law judge (ALJ) to issue subpoenas, upon his or her own motion or at the request of a party, if reasonably necessary for the full presentation of a case and to add procedures governing the process for issuing subpoenas. We are also finalizing our proposal to amend § 156.935 to ensure that the discovery provisions set forth therein do not apply to administrative appeals of proposed CMPs for violations identified through audits of the APTC, CSR, or user fee programs conducted in accordance with § 156.480(c).
We are finalizing our proposal to require QHP issuers to submit QISs addressing any two of the five topic areas listed in section 1311(g)(1) of the Affordable Care Act, without mandating which specific topics areas a QHP issuer will be required to address to meet the QIS statutory certification requirement, beginning with PY 2027.
We are finalizing our proposal to amend § 156.1215(b) to provide that CMPs assessed against health coverage issuers and their affiliates under the same taxpayer identification (TIN) number will be subject to netting as part of HHS' integrated monthly payment and collection cycle. We are also finalizing our proposal to amend § 156.1215(c) to provide that any amount owed to the Federal Government by an issuer and its affiliates for unpaid CMP amounts, after HHS nets amounts owed by the Federal Government, will be the basis for calculating the debt.
We are finalizing a technical correction to update a cross reference in § 156.1220.
We sought comment on the impact of the Federal MLR standard on individual market stability and whether HHS should use its authority under section 2718(b)(1)(A)(ii) of the PHS Act and § 158.301 to adjust the Federal MLR standard in a State to promote individual market stability. We also solicited comment on whether and how to amend regulations allowing States to request an adjustment to the MLR standard in their individual market to reduce burden and encourage States to request adjustments, as appropriate, in their State markets. We will take comments we received into consideration as we continue to consider potential adjustments to the Federal MLR standard for particular States' individual health insurance markets.
In the 2027 Payment Notice proposed rule (91 FR 6292, 6327), to align with the proposal discussed in section III.E.14. of the proposed rule, which would reiterate in § 156.805(b) what factors HHS considers when determining the amount of CMPs as enforcement remedies against QHP issuers in Exchanges, we proposed a conforming amendment to § 150.317 introductory text to clarify that HHS, through CMS, will identify the lawful purpose or purposes of the penalty, and take into account the enumerated factors as appropriate for the circumstances. In proposing the conforming edits to § 150.317, we did not propose other changes to the legal bases and procedural processes for imposing CMPs.
We requested comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and section III.E.14. of this final rule, including our responses to comments, we are finalizing as proposed an amendment to the introductory text of § 150.317 to make
In subparts A, B, D, G, and H of part 153, we established standards for the administration of the risk adjustment program. The risk adjustment program is a permanent program created by section 1343 of the Affordable Care Act that transfers funds from issuers of risk adjustment covered plans that have lower-than-average risk enrollees to issuers of risk adjustment covered plans that have higher-than-average risk enrollees, which includes issuers with plans in the individual, small group, or merged markets, inside and outside the Exchanges. In accordance with § 153.310(a), a State that is approved or conditionally approved by the Secretary to operate an Exchange may establish a risk adjustment program or have HHS do so on the State's behalf.
In accordance with the OMB Report to Congress on the Joint Committee Reductions for Fiscal Year 2026, the HHS-operated risk adjustment program is subject to the fiscal year 2026 sequestration.
HHS, in coordination with OMB, has determined that, under section 256(k)(6) of the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA),
Additionally, we note that the Infrastructure Investment and Jobs Act
We summarize and respond to public comments received on the HHS-operated risk adjustment program's sequestration rate of 5.7 percent for payments made from fiscal year 2026 resources (that is, funds collected during the 2026 fiscal year).
Additionally, we appreciate the recommendation regarding ongoing monitoring of solvency and market participation and note that HHS conducts ongoing monitoring of solvency and market participation each year across issuers of various sizes, including consulting with our actuaries and States.
For reasons outlined in the proposed rule and this final rule, the HHS-operated risk adjustment program will sequester payments made from fiscal year 2026 resources (that is, funds collected during the 2026 fiscal year) at a rate of 5.7 percent.
The HHS risk adjustment models predict plan liability for an average enrollee based on that person's age, sex, and diagnoses (also referred to as hierarchical condition categories (HCCs)), producing a risk score. The State payment transfer formula
In the adult and child models, the relative risk assigned to an individual's age, sex, and diagnoses are added together to produce an individual risk score. Additionally, to calculate enrollee risk scores in the adult models, we added enrollment duration factors beginning with the 2017 benefit year,
Infant risk scores are determined by inclusion in one of 25 mutually exclusive groups, based on the infant's maturity and the severity of diagnoses. If applicable, the risk score for adults, children, or infants is multiplied by a cost-sharing reduction (CSR) adjustment factor.
In the 2027 Payment Notice proposed rule (91 FR 6327), we proposed to recalibrate the 2027 benefit year HHS risk adjustment models with the 2021, 2022, and 2023 benefit years' enrollee-level EDGE data. Consistent with the approach outlined in the 2020 Payment Notice (84 FR 17454 through 17464), we proposed to recalibrate the HHS risk adjustment models for the 2027 benefit year using only enrollee-level EDGE data, and to continue to use blended, or averaged, coefficients from 3 years of separately solved models for the 2027 benefit year model recalibration. Additionally, in the 2027 Payment Notice proposed rule (91 FR 6327), and as outlined in the 2022 Payment Notice (86 FR 24140, 24152), we proposed to use the 3 most recent consecutive years of enrollee-level EDGE data that are available at the time we estimate the draft recalibrated coefficients published in the final rule for the applicable benefit year.
Consistent with our prior approach when a new benefit year of enrollee-level EDGE data becomes available,
We sought comment on the proposal to determine 2027 benefit year coefficients for the HHS risk adjustment models based on a blend of separately solved coefficients from the 2021, 2022, and 2023 benefit year enrollee-level EDGE data.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing the 2027 benefit year
We recognize that it is important to carefully consider the impact of using a benefit year of enrollee-level EDGE data in the annual recalibration of the HHS risk adjustment models in situations where a benefit year of data could have significant changes that differentially impact certain conditions or populations relative to others or is sufficiently anomalous relative to expected future patterns of care.
Likewise, when we conducted recalibration of the 2025 and 2026 benefit year risk adjustment models, we conducted similar analyses on the 2021 and 2022 benefit year enrollee-level EDGE data as we did to the 2020 benefit year enrollee-level EDGE data to examine the potential impact of the COVID-19 PHE. We did not find any notable anomalous trends and determined that deviations identified in the 2020 through 2022 benefit year data were within the expected level for any individual data year. As described in the proposed rule (91 FR 6304), we repeated this analysis with the 2023 benefit year enrollee-level EDGE data and did not find any notable anomalous trends. In addition, the blending of the coefficients from the separately solved models further stabilizes any differences across years. As the underlying 2021 and 2022 benefit years' enrollee-level EDGE data used to recalibrate the 2026 benefit year risk adjustment models are identical to the 2021 and 2022 benefit year enrollee-level EDGE data used to recalibrate the 2027 benefit year risk adjustment models, and only differ in that they are trended forward one more year to capture projected 2027 benefit year medical expenditures, the analyses and conclusions discussed in prior rulemaking for those benefit years of data equally apply to the recalibration of the HHS risk adjustment models for the 2027 benefit year.
With respect to the comment about the impact of SEPs available between 2021 and 2023 on enrollment duration factors, we conducted an analysis to examine to what extent changes in the enrollment duration factors could be attributed to these SEPs, including the SEP for enrollees at or below 150 percent FPL, and did not find cause for concern related to the impact of expanded SEP eligibility. Additionally, we note that as currently specified in the HHS risk adjustment models,
Furthermore, we note that in our annual recalibration of the HHS risk adjustment models, we use blended, or averaged, coefficients from 3 years of separately solved models to provide stability for the risk adjustment coefficients year-to-year, while reflecting the most recent years' claims experience available. We believe that this approach continues to provide stability for all risk adjustment model coefficients, including those of the HCC-contingent enrollment duration factors. However, we also note that the purpose for recalibrating the risk adjustment models on annual basis is to reflect changes in claims experience over time. As such, the mere increase or decrease of a coefficient between benefit years of the risk adjustment models is not necessarily indicative of an issue with the factor or the data.
For these reasons, HHS did not propose and is not finalizing any changes to the HCC-contingent enrollment duration factors as part of this rule. However, as more data years become available, we will continue to
Additionally, we note that the commenter who requested a narrative explanation of substantial changes in the HHS risk adjustment model coefficients did not specify any particular factors that they believe rise to the level of substantial change or otherwise offer a definition of what they viewed as qualifying as “substantial” changes, impeding our ability to provide such a narrative. However, at the same time, we reiterate that the purpose for recalibrating the risk adjustment models on an annual basis is to reflect changes in claims experience over time. As such, the mere increase or decrease of a coefficient between benefit years of the risk adjustment models is not necessarily indicative of an issue with the model factors or the enrollee-level EDGE data. Because changes in the value of coefficients are highly dependent on the context particular to the benefit years of enrollee-level EDGE data used to recalibrate the models, we do not believe that it is feasible to develop a single definition of “substantial” changes that could be applicable to all types of model factors for all benefit years.
Furthermore, with regard to the request for a State payment transfer simulation reflecting the recalibrated coefficients for the proposed HHS risk adjustment models for the 2027 benefit year, we have historically released State payment transfer simulations only when we are proposing or contemplating major model changes, such as in the case of the 2021 Risk Adjustment Technical Paper,
The 2027 benefit year HHS risk adjustment model factors resulting from the equally weighted (averaged) blended factors from separately solved models using the 2021, 2022, and 2023 benefit year enrollee-level EDGE data are shown in Tables 1 through 7. The HHS risk adjustment adult, child, and infant models are truncated to account for the high-cost risk pool payment parameters by removing 60 percent of costs above the $1 million threshold.
We received several comments requesting additional changes to the HHS risk adjustment models that we did not consider or propose in the proposed rule. We respond to these comments below.
As an alternative to creating separate HHS risk adjustment models for the individual and small group markets, we previously considered
We also note that under the State payment transfer formula, we calculate HHS risk adjustment transfers separately for the individual and small group markets (except for in States with merged markets). As such, HHS risk adjustment transfers largely reflect differences in risk between individual and small group market plans separately, partially mitigating the potential for differences between the individual and small group markets to influence HHS risk adjustment transfers. Nevertheless, we intend to continue to analyze the differences in costs and utilization between the individual and small group markets to consider whether these types of changes would be necessary or appropriate in future benefit years.
Regarding the request to modify how the HHS risk adjustment models account for autism spectrum disorder, GLP-1 drugs, and other emerging and expensive therapies such as cellular and gene therapies, we note that in comments on the 2026 Payment Notice (90 FR 4445), some commenters previously identified that it may be appropriate to address treatments associated with autism spectrum disorder (that is, adaptive behavior services), GLP-1 drugs for weight loss,
For the underprediction for autism spectrum disorder alleged by commenters and the potential remedy of adding adaptive behavior services for autism spectrum disorder and disorders with similar behavioral characteristics to the HHS risk adjustment models, we note that, unlike obesity/overweight, there is a payment HCC for autism spectrum disorder (HCC 102) presently included as a payment HCC in the HHS risk adjustment models. As such, some reflection of the risk associated with autism spectrum disorder is already included. We continue to explore whether adding a model factor for adaptive behavior services to the HHS risk adjustment models is appropriate. Finally, for emerging and expensive therapies such as cellular and gene therapies, we are limited from incorporating many of these treatments into the HHS risk adjustment models due primarily to inadequate data for developing appropriate model variables. Specifically, many of the gene therapies HHS reviewed while considering this issue were completely absent from the claims data for any enrollee in the currently available benefit years of enrollee-level EDGE data. Of those therapies that did appear, sample sizes were extremely low. Without cost data and sufficient sample size in the enrollee-level EDGE data, we are unable to estimate reliable coefficients for potential model factors associated with these therapies. Nevertheless, we reiterate that many of these drugs will be covered to some extent under the high-cost risk pool, which provides a coinsurance rate of 60 percent when an individual or small group market enrollees' claims exceed $1 million.
If we determine that model changes are necessary in regard to GLP-1 drugs, adaptive behavior services/treatments for autism spectrum disorder, or emerging and expensive therapies such as cellular and gene therapies, we would propose to make such changes through future notice-and-comment rulemaking.
In response to the comments raising discretionary coding and gaming concerns, we note that there are risk adjustment model specifications to mitigate the potential for upcoding. For example, we group subsets of payment HCCs into larger aggregate clusters, or HCC coefficient estimation groups.
As we consider potential refinements to the HHS risk adjustment models in the future, we will also continue to monitor the specific conditions and treatments identified by commenters, along with the structure of related model factors (including those that may be subject to discretionary coding and related gaming concerns), and the impact of recent interacted HCC counts and HCC-contingent enrollment duration model specification updates finalized in the 2023 Payment Notice (87 FR 27224 through 27230). As always, as part of our ongoing efforts to continually improve the precision of the HHS risk adjustment models, if we were to pursue changes to the risk adjustment models in the future, we would seek input from interested parties through notice-and-comment rulemaking or other appropriate vehicles.
We have similarly worked with the Arkansas Department of Insurance to understand the structure of the funding for Medicaid-expansion plans in Arkansas, using this information to identify what CSR adjustment factors are appropriate for these unique State-specific Medicaid-expansion plans. The CSR adjustment factor of 1.12 will continue to apply for both the 94 percent and 100 percent AV Arkansas Medicaid-expansion plans because these plans are identical in their degree of plan liability to Federal CSR plan variants offered on the Exchange for which the CSR adjustment factor of 1.12 is applied. We will continue to align the CSR adjustment factor for both the 94 and 100 percent Medicaid-expansion plans in Arkansas with the 94 percent silver plan variant CSR adjustment factor for the 2027 benefit year and beyond unless changes occur to the Arkansas program. Furthermore, it would not be appropriate to assign Arkansas's 94 percent or 100 percent AV Medicaid-expansion plans the higher CSR adjustment factor for the AI/AN zero cost sharing (-02 variant) or limited cost sharing CSR plan variant (-03 variant) enrollees because the CSR adjustment factors for AI/AN plans are calibrated to reflect the increased plan liability for enrollees in these specific CSR plan variants in the absence of a Federal appropriation for CSRs. In particular, regardless of plan AV, enrollees in AI/AN CSR plans defined at § 156.420(b)(1) and (2) do not experience cost sharing on any item or service that is an EHB furnished directly by the Indian Health Service, an Indian Tribe, Tribal Organization, or Urban Indian Organization (each as defined in 25 U.S.C. 1603), or through referral under contract health services. This feature and other unique characteristics of AI/AN CSR plans do not apply to the 94 and 100 percent Medicaid-expansion plans in Arkansas.
We therefore do not agree that the current State-specific CSR adjustment factors for Massachusetts' ConnectorCare Plan Type 1 and Type 2 are too low, nor do we agree that Arkansas 100 percent AV Medicaid-wrap plans should receive a CSR adjustment factor of 1.46 instead of the CSR adjustment factor of 1.12 that we have deemed appropriate for these plans. As such, we do not believe any State-specific CSR adjustment factors need further adjustment at this time.
As noted in the 2027 Payment Notice proposed rule (91 FR 6327), each benefit year, to evaluate HHS risk adjustment model performance, we examine each model's R-squared statistic and predictive ratio (PR). The R-squared statistic, which calculates the percentage of individual variation explained by a model, measures the predictive accuracy of the model overall. The PR for each of the HHS risk adjustment models is the ratio of the weighted mean predicted plan liability for the model sample population to the weighted mean actual plan liability for the model sample population. The PR represents how well the model does on average at predicting plan liability for that subpopulation.
A subpopulation that is predicted perfectly would have a PR of 1.0. For each of the final 2027 HHS risk adjustment models, the R-squared statistic and the PRs are in the range of published estimates for concurrent HHS risk adjustment models.
We received public comments on the R-squared statistics for the 2027 benefit year HHS risk adjustment models. We respond to these comments below.
In part 2 of the 2022 Payment Notice (86 FR 24183 through 24186), we finalized the proposal to continue to use the State payment transfer formula finalized in the 2021 Payment Notice for the 2022 benefit year and beyond, unless changed through notice-and-comment rulemaking. We did not propose changes to the formula in the 2027 Payment Notice proposed rule (91 FR 6327). We therefore will continue to apply the formula as finalized in the 2021 Payment Notice (86 FR 24183 through 24186) in the States where HHS operates the risk adjustment program in the 2027 benefit year.
Additionally, as finalized in the 2020 Payment Notice (84 FR 17466 through 17468), we will maintain the high-cost risk pool parameters for the 2020 benefit year and beyond, unless amended
The high-cost risk pool is a budget neutral aspect of the HHS-operated risk adjustment program in which payments are funded by a percent of premium charge on all risk adjustment covered plans within the respective national high-cost risk pool (one for the individual market and merged market plans, including catastrophic and non-catastrophic plans, and another for the small group market). In the 2018 Payment Notice (81 FR 94082), we estimated that the percentage of premium charge, which funds high-cost risk pool payments, would most likely not exceed 0.5 percent. When aggregating across the national risk pool markets, this statement has held true. For example, for the 2024 benefit year, the individual market high-cost risk pool charge as a percent of premium was 0.39 percent
With these considerations, we continue to believe a $1 million threshold and 60 percent coinsurance rate are appropriate to incentivize issuers to control costs while improving risk prediction under the HHS risk adjustment models. However, we continue to monitor the high-cost risk pool parameters to consider whether adjustments are needed and would propose such changes for future benefit years through notice-and-comment rulemaking if necessary. Comment Solicitation on Retaining Separate Risk Adjustment Transfer Calculations for Individual Catastrophic Plans and Individual Non-Catastrophic Plans under the State Payment Transfer Formula.
In the 2027 Payment Notice proposed rule (91 FR 6327), we solicited comment on whether we should retain separate risk adjustment transfer calculations under the State payment transfer formula for individual catastrophic plans and individual non-catastrophic plans or whether we should calculate State transfers for these plans together in light of the September 4, 2025 guidance entitled “
HHS conducts HHS-RADV under §§ 153.350 and 153.630 in any State where HHS is operating risk adjustment on the State's behalf.
In the 2027 Payment Notice proposed rule (91 FR 6327), we proposed to modify one intermediate step of the HHS-RADV error estimation methodology starting with 2025 benefit year HHS-RADV. In the 2026 Payment Notice (90 FR 4449 through 4452), we finalized excluding enrollees without
The formula for the existing scaling factor
Therefore, we proposed to introduce an additional scaling factor,
We proposed to apply the scaling factor
The numerator in the formula for the scaling factor
Without adding this additional scaling factor to the error estimation methodology beginning with 2025 benefit year HHS-RADV, the error rate would adjust elements of issuers' total PLRSs that are associated with enrollees without HCCs and are not intended to be adjusted during error estimation.
We sought comments on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed addition of a scaling factor to the HHS-RADV error estimation methodology below.
As noted in the 2027 Payment Notice proposed rule (91 FR 6327), we proposed an HHS risk adjustment user fee for the 2027 benefit year of $0.20 per member per month (PMPM). Under § 153.310, if a State is not approved to operate, or chooses to forgo operating, its own risk adjustment program, HHS will operate risk adjustment on its behalf. For the 2027 benefit year, HHS will operate risk adjustment in every State and the District of Columbia. As described in the 2014 Payment Notice (78 FR 15416 through 15417), HHS' operation of the risk adjustment program on behalf of States is funded through a risk adjustment user fee. Section 153.610(f)(2) provides that, where HHS operates a risk adjustment program on behalf of a State, an issuer of a risk adjustment covered plan must remit a user fee to HHS equal to the product of its monthly billable member enrollment in the plan and the PMPM risk adjustment user fee specified in the annual HHS notice of benefit and payment parameters for the applicable benefit year.
OMB Circular No. A-25 established Federal policy regarding user fees, and specifies that a user charge will be assessed against each identifiable recipient for special benefits derived from Federal activities beyond those received by the general public.
For the 2027 benefit year, HHS proposed to calculate the Federal administrative expenses of operating the HHS risk adjustment program. This calculation resulted in a risk adjustment user fee rate of $0.20 PMPM based on our estimated costs for HHS risk adjustment operations and estimated billable member months (BMM) for individuals enrolled in risk adjustment covered plans. As noted in the 2027 Payment Notice proposed rule (91 FR 6324), these costs cover development of the models and methodology, collections, payments, account management, data collection, data validation, program integrity and audit functions, operational analytics, interested parties training, operational support, and administrative and personnel costs dedicated to HHS-operated risk adjustment program activities. To calculate the risk adjustment user fee, we divided HHS' projected total costs for administering the program on behalf of States by the expected number of BMM in risk adjustment covered plans in States where the HHS-operated risk
We estimated that the total cost for HHS to operate the risk adjustment program on behalf of all States and the District of Columbia for the 2027 benefit year would be slightly more than $65 million, which is similar to the 2026 benefit year budget.
Similar to prior benefit years, we projected risk adjustment enrollment scenarios for the 2027 benefit year. Based on our estimates, for the 2027 benefit year, we noted that we do not expect enrollment changes to significantly impact collections under this user fee rate.
We stated in the 2027 Payment Notice proposed rule (91 FR 6327) that our intention was to reconsider the enrollment estimates for this final rule. If these newer enrollment estimates are too low in comparison to our proposed user fee estimates, we noted that the final user fee may be higher. We also noted that if these enrollment estimates are higher in comparison to our proposed user fee estimates, the final user fee may be lower. In addition, we noted that if any events result in a deviation from our expectations of current conditions that would significantly change our estimates around costs, enrollment projections, or the finalization of proposed risk adjustment policies between the proposed rule and this final rule, we may modify the proposed HHS risk adjustment user fee rate in the final rule. Because we projected a similar budget to operate the HHS-operated risk adjustment program for the 2027 benefit year as for the 2026 benefit year, we proposed an HHS risk adjustment user fee of $0.20 PMPM for the 2027 benefit year. We sought comment on the proposed HHS risk adjustment user fee rate of $0.20 PMPM for the 2027 benefit year.
As in all years, we consider updated information regarding estimates of costs, enrollment projections, and finalization of risk adjustment policies between the proposed rule and the final rule to determine the final risk adjustment user fee rate. Specifically, between the proposed and final rules, we updated our enrollment projections based on the availability of interim 2025 risk adjustment data, and our projections in enrollment in the off-Exchange individual and small group markets are higher than the estimates that we used for proposed rule.
Because some of our enrollment estimates were higher than previously anticipated, and the costs for the HHS-operated risk adjustment program for the 2027 benefit year have not changed, the PMPM cost of the HHS-operated risk adjustment program for the 2027 benefit year is lower than the proposed HHS risk adjustment user fee rate.
After consideration of comments and our additional data analyses between the proposed and final rules, and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing an HHS risk adjustment user fee rate for the 2027 benefit year of $0.18 PMPM. We summarize and respond to public comments received on the 2027 HHS risk adjustment user fee rate below.
Section 1402 of the Affordable Care Act requires issuers to provide cost-sharing reductions (CSRs) to increase the actuarial value of coverage for consumers with incomes between 100 and 250 percent of Federal Poverty Level (FPL) who enroll in silver-level QHPs in the individual market, as well as eligible American Indian/Alaska Native consumers who enroll in QHPs at any metal level. Section 1402 of the Affordable Care Act also states that HHS will reimburse issuers for the cost of providing CSRs to eligible enrollees but does not include a valid appropriation to make such payments.
On October 11, 2017, the Attorney General of the United States provided a legal opinion stating that HHS and the Department of the Treasury could no longer use the permanent appropriation at 31 U.S.C. 1324 to fund CSR reimbursements to issuers. In accordance with that opinion, HHS directed CMS to discontinue CSR reimbursements to issuers until Congress provides an appropriation.
There are several ways that issuers have determined the CSR load factor. For example, issuers have loaded silver plans offered on-Exchange to recover expected lost CSRs based on experience, they have loaded silver plans on-Exchange based on an assumed distribution of enrollment and enrollee utilization (sometimes a set amount mandated by the State), or they have loaded all plans at all metal levels by the same amount to spread lost CSRs across the entire individual market (broad loading). These differing approaches may result in loads that produce additional revenue collected from the applied CSR load that exceeds the amount of unreimbursed CSRs by assuming an enrollment and claims distribution that significantly diverges from what actually occurs. Based on our review of actuarial memoranda submitted by issuers for PY 2026, HHS believes these excessive loads on silver plans in particular (and in some cases as mandated by State law) lead to inflated premiums for silver plans, further distort pricing for bronze and
Section 2794 of the PHS Act directs the Secretary, in conjunction with the States, to establish a process for the annual review of premium increases for health coverage prior to the implementation of the increase. HHS has historically interpreted this requirement for premiums as referring to the underlying rates that are used to develop premiums. Section 154.215 requires issuers to submit rate filing justifications to CMS and the applicable State (76 FR 29964, 29969).
Under § 154.215(b)(1) through (3), the rate filing justification has three parts. The Unified Rate Review Template (URRT) (Part I of the rate filing justification) is required for all single risk pool products, including new products. It is intended to capture information needed to monitor premium increases of health insurance coverage offered through and outside the Exchanges in the individual and small group markets and ensure compliance with the single risk pool methodology, including allowable market level index rate adjustments to reflect risk adjustment payments and charges, and other Federal rating requirements.
Part II of the rate filing justification is the Written Description Justifying the Rate Increase (Consumer Justification Narrative). Part II is required only for rate increases in single risk pool products that are subject to review (that is, a plan within the product that has a rate increase of 15 percent or greater or a State-specific threshold). Part II is a consumer-friendly narrative that provides the justification for the rate increase, describes the relevant Part I data, the assumptions used to develop the rate increase, and an explanation of the most significant factors causing the rate increase.
An actuarial memorandum (Part III of the rate filing justification) is required for any rate increase in a single risk pool plan. It is also required for any rate filing containing QHPs or whenever a State requires it to be submitted. Further, an actuarial memorandum is required for all plans in States that do not have an Effective Rate Review Program and for which CMS is responsible for reviewing the rate filing.
In a Bulletin issued on May 2, 2025 (PY26 Rate Filing Guidance),
Specifically, through the PY26 Rate Filing Guidance, and under our authority under § 154.215(a)(2) and (3), we directed issuers that loaded for unreimbursed CSRs to: (1) specify the actual CSRs the issuer paid on behalf of enrollees for PY 2024 (in dollars); (2) specify the CSR load factor for PY 2026 and explain how it was determined; and (3) explain how the additional revenue to be collected from the applied CSR load compares to the expected amount of CSRs that will be provided to enrollees in PY 2026.
Following issuance of the PY26 Rate Filing Guidance, CMS issued additional guidance entitled, “Frequently Asked Questions on Plan Year 2026 Individual Market Rate Filing Instructions,” on May 27, 2025.
As noted in the 2027 Payment Notice proposed rule (91 FR 6327), starting with rate filings for the 2027 plan year, we proposed to continue to require issuers that load premiums to submit certain information as specified in the PY26 Rate Filing Guidance in their URRTs and actuarial memoranda for each plan year in which CSRs are not funded. Specifically, in the URRT for the upcoming plan year, issuers would report actual CSR amounts paid on behalf of enrollees and the additional revenue collected from the previously applied CSR load using the most recent annual data that is available prior to the applicable filing year, using the standard methodology set forth in § 156.430(c)(2). In most cases, the most recent annual CSR data would reflect the plan year that is two years before the upcoming plan year (for example, CSRs paid for eligible enrollees and the additional revenue collected from the CSR load applied in PY 2025 would be reported during the 2026 filing year for PY 2027 rate filings).
As described by the Secretary in applicable guidance,
We note that although CMS proposed that issuers use the standard methodology to calculate CSR amounts paid on behalf of enrollees and to submit an aggregate amount of CSRs provided at the plan level on the URRT, this data submission would not require issuers to use the CSR reconciliation process implemented by CMS, as described in § 156.430(c)(2). We believe this proposal would result in a lower burden on issuers as compared to the burden that would be associated with submitting policy-level CSR data to CMS through the CSR reconciliation process. Submission of policy-level CSR data would require direct electronic submissions of data that must conform to our business rules, data element validations, and required file formats. When HHS previously collected such data, it resulted in issuers attempting submissions multiple times before the submission could be accepted by the system. The proposed process will leverage the existing URRT submission process and be much less burdensome.
We also proposed that issuers would include in the URRT the applicable CSR load factor for each plan that would be applied to the market adjusted index rate to calculate the calibrated plan adjusted index rate for the upcoming plan year. We proposed to collect the CSR load factor, if any, to fulfill our responsibility to ensure compliance with § 156.80(d), which requires all permitted plan-level adjustments to be “actuarially justified.” In addition, we proposed that issuers would include in the actuarial memorandum an explanation of the methodology used to determine the load factor. We proposed that issuers would also include in the URRT the additional revenue expected to be collected from the applied CSR load factor and the expected amount of CSRs that will be paid for enrollees for the upcoming plan year. We also proposed that issuers would include in the actuarial memorandum an explanation comparing these amounts. This explanation would allow the State or CMS, as applicable, to determine whether the load factor is actuarially justified and not excessive in relation to the amount expected to be paid for unreimbursed CSRs.
In the 2026 Payment Notice, we stated our expectation that CSR loading practices, to the extent permitted by State regulators, are intended to account for unpaid CSRs. We also noted that, while there is no requirement that a State permit CSR loading, in States that have an Effective Rate Review Program, the State has the responsibility to determine whether an issuer's adjustments to the market-wide index rate for plan-specific factors (including accounting for CSR amounts) are actuarially justified.
While we recognize the additional burden on issuers to provide this information, given the significant impact of CSR loading on Federal expenditures through additional premium tax credit (PTC) spending, we believe collection of this information is an important program integrity measure that will help ensure that CSR loads are appropriate to recover lost CSR payments and are not inappropriately inflating Federal expenditures or undermining Federal rating rules.
Therefore, we proposed to collect information on adjustments to the index rate to account for unreimbursed CSRs as described above. We did not propose changes to any regulation text as the collection of these data is already captured under § 154.215(d)(1), which states that historical and projected claims experience must be included in the URRT. Additionally, § 156.80(d)(2)(i) states that plan-level adjustments to account for unreimbursed CSR payments provided to eligible enrollees are permissible only if actuarially justified and permitted by the applicable State authority. We requested comment on all aspects of our proposal to require issuers that intend to load premium rates to account for unpaid CSRs for the upcoming plan year to submit this information in their URRTs and the actuarial memoranda for each plan year in which CSRs are not funded, beginning with PY 2027 rate filings.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. As we stated in the proposed rule, we intend to release guidance on the submission of the required URRT and actuarial memoranda information as part of revised Unified Rate Review Instructions, as we have historically provided detailed guidance to issuers on how to complete each field of the URRT and satisfy the criteria for the actuarial memorandum in the Unified Rate Review Instructions.
States with an Effective Rate Review Program are responsible for reviewing proposed rate increases subject to review to determine whether those increases are unreasonable by, in part, examining the reasonableness of the assumptions used by the health insurance issuer to develop the proposed rate increase and the validity of the historical data underlying the assumptions.
A loading practice that results in additional premium that materially exceeds what is projected to account for the impact of unreimbursed CSRs does not appropriately account for CSRs provided to eligible enrollees as required for permitted plan-specific adjustments to the index rate under § 156.80(d)(2)(i).
We intend to review the submitted CSR data. If issuers provide a State with proposed rate increases which include a CSR load that does not appear to be developed based on a methodology that reasonably accounts for the amount of unpaid CSRs and the State does not deem such rate increases as “unreasonable,” CMS may use its authority under § 154.301(d) to evaluate whether the State has ceased to satisfy the criteria set forth § 154.301(a) and (b) and no longer has an Effective Rate Review Program.
The regulations at § 155.1000 provide Exchanges with broad discretion to certify QHPs that otherwise meet the QHP certification standards specified in Part 156 and afford Exchanges discretion to deny certification of QHPs that meet minimum QHP certification standards, but are nonetheless not in the interest of qualified individuals. As stated earlier in this preamble and in the proposed rule, CSR loading practices that result in QHP premium adjustments that materially exceed the projected revenue loss from unreimbursed CSR payments, or excessively load plans at the silver metal tier beyond expected unreimbursed CSR payments to lower premiums for other metal tiers, do not align with requirements for actuarially justified plan-level adjustments to the index rate permitted under § 156.80(d). Such loading practices can result in significantly higher premiums that harm unsubsidized consumers enrolled in Exchange plans. Accordingly, CMS may determine that denial of an issuer's request for certification on the FFE is warranted if an issuer engages in CSR loading practices that result in premiums that are significantly higher than would reasonably be expected
We appreciate that American Indian/Alaska Native populations and Tribal health programs are especially reliant on stable silver plan pricing. We affirm that CMS engages in tribal consultation for all rulemakings and has worked with the appropriate parties to ensure that any such potential impact is mitigated.
For the comments recommending communication to consumers about how CSR loading affects premiums and subsidies, these comments are out of scope for this final rule because they do not relate to the specific proposals included in the proposed rule. We note, however, that
As stated in the proposed rule, the approach of collecting an aggregate amount of CSRs provided at the plan level on the URRT is less burdensome than the collection of policy-level CSR data through the CSR reconciliation process that was required for all issuers that received advance payment of CSRs prior to the cessation of these payments in October 2017. Therefore, while issuers may incur some additional costs for actuarial analysis, issuers are generally already familiar with the process of calculating the actual amount of CSRs provided using the standard methodology, and the limited additional burden issuers might incur does not warrant a delayed implementation.
We acknowledge that in some States initial rate filings must be submitted in April. We note, however, that those are proposed rate changes, and States typically provide issuers with the opportunity to adjust their rate filings before finalizing them several months later. Likewise, the deadlines for submitting proposed rate changes to CMS are June 1 (for States without an Effective Rate Review Program) or July 15 (for States that have an Effective Rate Review Program). Final rate filings are not due to CMS until August 12 (for filings that contain a QHP in States with Exchanges served by the
In the 2027 Payment Notice proposed rule (91 FR 6383), we proposed to exercise our authority under sections 1311(c)(1) and 1321(a)(1)(B) of the Affordable Care Act to discontinue the full suite of standardized plan option policies effective beginning in PY 2027. As discussed in greater detail in the preamble section of this final rule addressing § 156.201, we proposed to remove the following from our regulations: the definition of “standardized option” at § 155.20; all requirements pertaining to standardized plan options at § 156.201 (the requirements for FFE and SBE-FP QHP issuers in the individual market to offer these plans at paragraphs (a) and (b) as well as the requirement for these plans to meaningfully differ from one another at paragraph (c)); the differential display of standardized plan options on
We refer readers to section III.E.8. of this final rule for discussion of our proposals and final policies related to standardized plan options (including proposed amendments to §§ 155.20, 155.205(b)(1), 155.220(c)(3)(i)(H), 156.201, and 156.265(b)(3)(iv)) as well as summaries of and responses to public comments received on those proposals. We did not receive any comments in response to our proposal to redesignate paragraphs (c)(3)(i)(I) through (M) of § 155.220 as paragraphs (c)(3)(i)(H) through (L), respectively. For the reasons outlined in the proposed rule and this final rule, we are finalizing these redesignations as proposed.
In the 2027 Payment Notice proposed rule (91 FR 6327), we proposed to remove § 155.105(b)(4) to rescind a requirement made in the 2025 Payment Notice (89 FR 26259 through 26261), that a State seeking to operate a State Exchange must first operate, for at least 1 plan year, a State-based Exchange on the Federal platform (SBE-FP). The original amendment was intended to give States sufficient time to create, staff, and structure a State Exchange. However, in the proposed rule, we recognized that requiring States to first operate as an SBE-FP for at least 1 plan year could potentially create unnecessary barriers for States that are well prepared to implement a State Exchange more immediately.
Sections 1311(b) and 1321(b) of the Affordable Care Act allow States to elect to operate their own health insurance Exchanges to provide individuals and employers with health insurance coverage. Every State that has implemented a State Exchange after 2014—the year the initial 13 State Exchanges began operation—first operated an SBE-FP for at least 1 plan year, before codification of the current requirement in the 2025 Payment Notice. This history shows how first operating an SBE-FP has been the preferred approach. However, in the proposed rule, we stated that we recognize that States may have existing infrastructure, relationships, and expertise that could support a State's successful operation of a State Exchange, without first operating an SBE-FP. For example, FFE States are permitted to elect to perform plan management functions similar to the plan management functionality required of all SBE-FPs.
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposal to rescind a requirement that a State seeking to operate a State Exchange must first operate, for at least 1 plan year, an SBE-FP below.
A State that is deficient in any of the State Exchange functional requirements would not be approved to implement a State Exchange for its intended plan year and would be given the choice to continue demonstrating operational readiness to HHS for a future plan year. Notably, we do not require a maximum number of months required for a State to demonstrate operational readiness to HHS to implement a State Exchange. However, we do require that a State submit its first State Exchange blueprint application to HHS at least 15 months prior to a State's first intended open enrollment as a State Exchange, and the review process with HHS generally begins at that time. This means that HHS review process for a State Exchange implementation could take longer than 15 months, until HHS determines that a State is fully ready to meet the requirements of a State Exchange and adequately support its consumers.
Moreover, as discussed in the proposed rule, the technology infrastructure available today to States for implementation of State Exchanges has become more compatible, such that the technology used to support one State Exchange implementation could be leveraged by another State Exchange. For example, there may be State vendor-supported informational technology platforms, such as call center technology, developed for one State Exchange that can be leveraged for another State Exchange, which could reduce upfront implementation time. Our proposal aims to be supportive of evolving technology growth that could factor into a State's ability to more easily implement a State Exchange that meets all of the required functionality and meets HHS operational readiness review requirements
In the 2027 Payment Notice proposed rule (91 FR 6327), we proposed to amend § 155.106(a)(2) to rescind a requirement we made in the 2025 Payment Notice (89 FR 26261 through 26263) that, as part of a State's activities for its establishment of a State Exchange, the State must provide, upon request, supporting documentation demonstrating progress toward meeting or implementing State Exchange Blueprint requirements. Section 155.106(a)(2) requires that States electing to operate a State Exchange submit a State Exchange Blueprint Application to HHS for approval. The current State Exchange Blueprint application provides that we may require live demonstrations of Exchange functionality on the State Exchange's platform, as well as supporting documentation, as evidence of the State's progress toward meeting State Exchange Blueprint application requirements. For clarity, we had finalized in the 2025 Payment Notice to codify that as part of the State's submission of a State Exchange
The State Exchange Blueprint continues to serve as a vehicle for a State to document its progress toward implementing its intended Exchange operational model. HHS approves a State's Exchange Blueprint Application and subsequently provides approval for a State to operate a State Exchange, based upon a State meeting State Exchange implementation requirements noted in the Blueprint Application. The current Blueprint Application requires a State to sign and agree that HHS may require supporting documentation from a State as evidence of its progress toward meeting State Exchange Blueprint Application requirements, which is part of the overall process for providing a State with approval to operate a State Exchange. Notably, in our experience, States recognize the need for HHS to request supplemental documentation for HHS to assess a State's readiness to operate a State Exchange, which supports a State's successful State Exchange operation. States have provided such supplemental documentation upon HHS request both before and after this requirement was originally codified. Given this preexisting process, we stated in the proposed rule that we do not believe deregulation in this instance is harmful, nor would it lead to burden on States. Therefore, we proposed to rescind the requirement that a State provide, upon request, supporting documentation demonstrating progress toward meeting or implementing State Exchange Blueprint requirements from § 155.106(a)(2).
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposal that a State provide, upon request, supporting documentation demonstrating progress toward meeting or implementing State Exchange Blueprint requirements below.
In the 2027 Payment Notice proposed rule (91 FR 6328), we proposed to revise § 155.205(b)(4) and (5) to remove the requirement that all State Exchanges operate a consumer-facing centralized eligibility and enrollment platform on the State Exchange's website such that a State Exchange could choose to rely entirely on web-brokers (a type of non-Exchange entity) for implementing and operating consumer-facing websites that facilitate the eligibility and enrollment process in a State Exchange pursuant to the proposal in section III.D.4.b. of this final rule. We stated in the proposed rule that these consumer-facing websites operated by web-brokers would facilitate the online submission of eligibility applications by individuals seeking coverage through a State Exchange and facilitate the selection and enrollment into QHPs on a State Exchange for qualified individuals. Further, we stated that these consumer-facing websites operated by web-brokers would also interface with the State Exchange website, which the State would still be required to operate broadly under § 155.205(b), in such a manner as to transmit information from the non-Exchange website to the State Exchange website. We stated that this would facilitate the State Exchange meeting the requirements at §§ 155.205(b)(4) and (5) which requires an Exchange to maintain a website that allows an individual to submit a single streamlined eligibility application to the State Exchange and enroll in coverage through the State Exchange. Operationally, we stated that such consumer-facing websites operated by web-brokers would be required to interface with the information technology platform that the State Exchange would still need to operate to appropriately process applicant eligibility determinations and process enrollment transactions with QHP issuers (that is, the State Exchange's `back-end' eligibility and enrollment
When HHS finalized the requirement at § 155.205(b) that Exchanges operate a centralized eligibility and enrollment platform on the Exchange's website in the 2025 Payment Notice (89 FR 26271), HHS' intent was to tie together regulatory requirements throughout part 155 regarding the integrated nature of online, real-time automated eligibility functions that Exchanges were intended to perform. This included the intent to clearly affirm the close integration that exists and is necessary between Exchange-operated websites, the online consumer-facing single streamlined eligibility application, and the back-end eligibility system that performs automated eligibility verifications and eligibility determination functions that return real-time, online results to the consumer.
While in the proposed rule we affirmed that State Exchanges are responsible for making all eligibility determinations for QHP coverage and related insurance affordability programs through a centralized eligibility processing system and enrollment records system, requiring State Exchanges to operate a consumer-facing, centralized eligibility and enrollment consumer website that interfaces with the State Exchange's back-end eligibility processing and enrollment records system may prohibitively restrict Exchange flexibility and innovation. While all State Exchanges that do not use the Federal platform currently operate their own eligibility and enrollment consumer interface on the State Exchange's website, we believe that maintaining this requirement in regulation could discourage State Exchanges from pursuing innovative approaches that might better serve their specific populations and enhance the consumer experience, including private sector-focused consumer engagement and enrollment strategies. We believe that providing State Exchanges with flexibility in how they offer their online eligibility and enrollment consumer interface may allow State Exchanges to develop solutions that address the unique needs of their residents and markets. Removing the requirement for an Exchange to operate an eligibility and enrollment consumer interface on its website is a necessary step in order to codify the SBE-EDE option we proposed at § 155.221(k), as described in section III.D.4.b. and previously in this section. Under this option, the ability for State Exchanges to exclusively utilize web-brokers to operate consumer-facing websites that facilitate eligibility and enrollment is the key component.
We noted that sections 1311(c)(5) and (d)(4)(C) of Affordable Care Act do not require Exchanges to operate a centralized consumer-facing eligibility and enrollment website that supports both eligibility determinations for, and enrollments in, QHPs.
In the context of operating an internet website, we interpret the statutory language at section 1311(c)(5) and (d)(4)(C) of Affordable Care Act to require that Exchanges minimally operate an informational website that provides consumers with the ability to view comparative information on QHP options, but that the Exchange may direct consumers to other entities or resources for purposes of facilitating the submission of applications for eligibility
The State Exchanges that are currently operating have had to engage with private entities in a manner that would similarly translate to what a State Exchange would be doing under the SBE-EDE model, in terms of relying on the services of private entities to develop and operate a consumer-facing website (that is, online eligibility and enrollment portal) that facilitates consumers applying for and enrolling in QHPs through the State Exchange. Most State Exchanges currently in operation have competitively-procured services from a private entity to develop and operate an online eligibility and enrollment portal (including through which an applicant can submit a single, streamlined application for insurance subsidy programs) and consumer-facing QHP enrollment portal on their respective State Exchange website. These online, consumer-facing eligibility and enrollment portals on State Exchange websites facilitate the online submission of consumer eligibility applications and QHP selection and enrollments, and through web interfaces that are seamless to consumers, transmit that information to the State Exchange's back-end eligibility and enrollment processing information system. In the proposed rule, we stated that we believe that in the absence of a centralized consumer facing website for eligibility and enrollment operating on a State Exchange's website under the proposed SBE-EDE approach, web-brokers may provide that service to a State Exchange in a manner that is similar to that which currently exists between State Exchanges and the private entities they have contracted with to operate their centralized consumer-facing online eligibility and enrollment portal on the State Exchange's website. In both approaches, whether a web-broker provides the online eligibility and enrollment portal to consumers outside of the State Exchange's website, as we stated would be the case under this proposal, or a private entity has developed and operates the consumer-facing online eligibility and enrollment portal on the State Exchange's website in a centralized fashion, the State Exchange maintains responsibility for meeting all other Federal requirements for their online consumer assistance functions. As such, we stated that the State Exchange would still need to maintain a website that meets all other website requirements for State Exchanges under § 155.205(b), in the same manner that SBE-FPs are currently required to maintain an informational website for consumers while relying on the Federal eligibility and enrollment platform for eligibility and enrollment functions. In particular, we stated that State Exchanges that elect the SBE-EDE option would be required to meet the minimum Exchange function requirement under section 1311(d)(4)(C) of the Affordable Care Act to maintain a website providing standardized comparative information on such plans to enrollees and prospective enrollees of QHPs.
In the 2025 Payment Notice (89 FR 26271), we amended § 155.302(a) to codify the Exchange's responsibility for conducting eligibility determinations and maintaining records of all QHP enrollments on the Exchange. In the proposed rule, we stated that State Exchanges would still maintain this responsibly if it elects to pursue the new SBE-EDE option and exclusively utilize web-brokers for operating consumer websites that facilitate the eligibility and enrollment process in a State Exchange. Additionally, we stated that enrollment through such a consumer website would still be considered enrolling in a QHP through the State Exchange per § 155.220(c)(3) and proposed § 155.221(k)(2).
We noted in the proposed rule that this proposed amendment would not affect other regulatory requirements throughout 45 CFR part 155 that govern State Exchange eligibility and enrollment functions. For instance, per § 155.405, we stated that State Exchanges would still be required to obtain HHS approval for the eligibility application used on the consumer websites. HHS' review of the State Exchange's eligibility application would follow the currently established processes, including requiring that the State Exchanges demonstrate appropriate functionality to make accurate determination. As such, State Exchanges that do not rely on the Federal eligibility and enrollment platform can continue to meet these obligations without operating a singular, centralized consumer-facing eligibility and enrollment website.
We recognized in the proposed rule that allowing State Exchanges to take this approach would create different consumer experiences in applying for and enrolling in coverage through State Exchanges as compared to an approach where a State Exchange implements and operates a centralized eligibility and enrollment infrastructure. We sought comment on how State Exchanges that implement such an approach can create comparable consumer experience, in addition to comments on HHS oversight and the approval requirements proposed in section III.D.4.b. of this final rule. We sought comment on this proposal.
We received a substantial number of thoughtful and substantive comments on this proposal, reflecting significant stakeholder interest in and engagement with this important policy area. The agency continues to strongly support the goals of the proposal and remains committed to creating flexibility that would allow States to better serve their residents' needs. However, given the volume and complexity of the comments received, we are unable to give those comments the thorough and careful consideration they deserve within the timeframe required to publish this final rule that provides States, health insurance issuers, and other interested parties benefit parameters and other rules they need for the PY 2027 rate setting, plan approval, and QHP certification processes. Rather than address the proposal without the benefit of a complete and deliberate review of the public record, we believe it is in the best interest of interested parties and the public to address this proposal, including all public comments
We encourage interested parties to continue engaging with us on this important issue.
To build on the success of the EDE pathways and enhance the consumer enrollment experience, in the 2027 Payment Notice proposed rule (91 FR 6330), we proposed to offer additional flexibility to State Exchanges to leverage the benefits of EDE through a private sector-supported consumer engagement and enrollment strategy that is tailored to the needs of local markets. Accordingly, we proposed to add a new paragraph (k) to § 155.221 to establish a process for State Exchanges that do not rely on the Federal eligibility and enrollment platform to elect a new SBE-EDE option, in which the applicable State Exchange could seek HHS approval for web brokers to serve as the exclusive enrollment pathways for operating consumer-facing websites that facilitate the eligibility and enrollment process in a State Exchange. In the proposed rule, we stated that these consumer-facing websites operated by web-brokers will facilitate the online submission of eligibility application by individuals seeking an eligibility determination for, and enrollment in, a QHP offered through the Exchange with APTC and CSRs, if otherwise eligible. Previously, the Exchange DE option was finalized in part 1 of the 2022 Payment Notice Final Rule (86 FR 6151) and later repealed in part 3 of the 2022 Payment Notice (86 FR 53429). We proposed to codify this policy again and to also allow Exchanges to offer their consumers a form of EDE in which the Exchanges rely exclusively on web-brokers to implement and operate the consumer-facing websites through which consumers select and enroll in a QHP without requiring that the Exchanges also operate a centralized consumer-facing eligibility and enrollment website. The proposal applied exclusively to State Exchanges so that, if finalized, the experience and insights of State Exchanges that implement this model could be leveraged by other Marketplaces. We stated in the proposed rule that this would help inform operational considerations were we to expand this model to the FFEs and State Exchanges that use the Federal eligibility and enrollment platform, both of which were included in the previous policy. We stated that since the repeal of the Exchange DE option, many of the policy and operational priorities, as well as then-new Federal laws cited at that time to justify the repeal, are no longer competing for agency resources, and this has created bandwidth to codify a version of the DE option once again.
We stated in the proposed rule that a State Exchange electing to implement the SBE-EDE option will continue to be responsible for meeting and ensuring that all approved EDE partners meet all applicable statutory and regulatory requirements governing application for and enrollment in QHPs. Additionally, we stated that the State Exchange will also continue to be responsible for sharing eligibility determination and enrollment information in coordination with issuers and HHS in accordance with §§ 155.340, 155.400, and 155.430. We stated that the State Exchange will continue to provide HHS enrollment data to ensure accurate APTC payments are made to issuers on behalf of qualified individuals and in support of reconciliation of APTC on individual income tax returns.
In connection with the SBE-EDE option, we stated in the proposed rule that the State Exchange will still be required to make available a website listing basic QHP information for comparison,
In the proposed rule, we stated that HHS would maintain oversight authority over State Exchanges under § 155.1200, which would enable enforcement of Federal requirements associated with the SBE-EDE option and would allow HHS to take necessary actions to mitigate program integrity risks inherent in this model. To ensure ongoing compliance and reduce program integrity risks under the SBE-EDE option, we stated that HHS would rely on the State-based Marketplace Annual Reporting Tool (SMART), as a key oversight mechanism. Under § 155.1200(b), we stated that State Exchanges would be required to complete SMART submissions annually, attesting to their compliance with relevant Exchange operational requirements under part 155. Additionally, under § 155.1200(c), we stated that State Exchanges would need
Beyond the SMART process, we stated in the proposed rule that HHS would employ additional oversight mechanisms to mitigate program integrity risks. These include formal technical assistance opportunities tailored to SBE-EDE implementation efforts and challenges, as well as ongoing informal communications with State Exchange leadership and staff for proactive, real-time issue identification and resolution. In the proposed rule, we stated that together, these oversight tools—anchored by the SMART compliance monitoring process—would enable HHS to exercise its enforcement authority and ensure that State Exchanges implementing the SBE-EDE option maintain program integrity and meet all Federal requirements.
In the proposed rule, we proposed to modify § 155.221(k) such that, subject to HHS approval, a State Exchange that does not rely on the Federal eligibility and enrollment platform may elect to engage one or more web-brokers described in paragraph § 155.221(a) to facilitate QHP enrollments through its Exchange. We stated that such approved entities would enroll qualified individuals in a QHP in a manner that constitutes enrollment through the Exchange
At § 155.221(k), we proposed requirements for a State Exchange to become an SBE-EDE. We proposed that a newly-transitioning or approved State Exchange must submit an Exchange Blueprint application, or Blueprint revision, to HHS for review at least 15 months prior to the targeted open enrollment launch date as an SBE-EDE.
Additionally, in accordance with § 155.105(c)(2), we proposed at § 155.221(k)(1) that a State Exchange that wants to implement the SBE-EDE option would be required to demonstrate to HHS operational readiness for the State Exchange to enroll qualified individuals in a QHP in a manner that constitutes enrollment through the Exchange and to enable individuals to apply for APTC and cost sharing for QHPs, as well as receive assessments or determinations of Medicaid and CHIP eligibility from the Exchange as described in § 155.302, using the eligibility application described in § 155.405. We proposed a new requirement at § 155.221(k)(2) that the State also would receive approval only if it provides HHS with an implementation plan and timeline that details the key activities, milestones, and its communications and outreach strategy to support the transition of enrollment operations to EDE entities. We stated that this is to ensure that HHS and the State have an opportunity to coordinate these details to maximize the chances of a successful transition. We stated that State Exchanges that elect to implement the SBE-EDE option would retain the flexibility to determine their own business controls while complying with § 155.220(n) and § 155.221(j), which outline the applicability of Federal web-broker and EDE requirements to State Exchanges, including requirements related to standardized website disclaimers, web-broker operational readiness, business audit and security and privacy documentation, and display of website changes. We proposed at § 155.221(k)(3) that HHS would not approve a State Exchange to implement the SBE-EDE option unless the State Exchange demonstrates to HHS that at least one EDE entity selected by the State is capable of enrolling all consumers in the State. In particular, we stated that we believe it is critical that State Exchanges that elect to implement the SBE-EDE option establish that at least one EDE entity meets the minimum Federal requirements to participate in the Federally-facilitated Exchange enhanced direct enrollment program, including requirements at §§ 155.220 and 155.221, particularly § 155.220(c)(3)(i)(A) and (D),
For the same reasons we will not finalize the proposal discussed under section III.D.4.a. earlier in this preamble, we are not addressing finalization of this proposal in this final rule. We intend to consider finalizing this proposal, with or without modifications, in the 2028 Payment Notice rulemaking cycle or in another appropriate rulemaking vehicle in which we would address and respond to all comments received in response to the proposal.
We remind States that State Exchanges can still implement EDE programs regardless of whether we finalize these policies, subject to Federal requirements, including those at §§ 155.200 and 155.221. We remain available to provide technical assistance to State Exchanges interested in working with EDE partners to improve their operations and the experiences of consumers who engage with the Exchange.
In the 2027 Payment Notice proposed rule (91 FR 6332), we proposed to revise § 155.170(a) to provide that any State-required benefits would be considered “in addition to EHB” (and thus not an EHB) if they are: required by a State action taking place after December 31, 2011; applicable to the small group and/or individual markets; specific to required care, treatment, or services; and not required by State action for purposes of compliance with Federal requirements. Under this proposal, we stated that such State-required benefits would be considered in addition to EHB regardless of whether the mandated benefits are embedded in the State's EHB-benchmark plan. We proposed that this change would be effective beginning with PY 2027. We also proposed revisions to the regulatory text at §§ 155.170(a)(2) and 156.115(a) to align with this proposal and to have State and issuer responsibilities for State-required benefits appear in a more logical reading order in the CFR.
Section 1311(d)(3)(B) of the Affordable Care Act permits a State to require QHPs offered in the State to offer benefits in addition to the EHB, but requires the State to make payments, either to the individual enrollee or to the QHP issuer on behalf of the enrollee, to defray the cost of these additional State-required benefits.
In the 2013 EHB final rule (78 FR 12838), we finalized a standard at § 155.170(a)(2) that specified that State-required benefits enacted on or before December 31, 2011, even if not effective until a later date, are considered EHBs and therefore the costs of these benefits are not required to be defrayed by the State. The 2017 Payment Notice (81 FR 12242 through 12244) revised § 155.170(a)(2) to make clear that benefits required by State action taking place on or before December 31, 2011 are considered EHB, regardless of whether required benefits were established through legislative action, regulation, guidance, or other State action. We also amended § 155.170(a)(2) to provide that benefits required by State action taking place on or after January 1, 2012, other than for purposes of compliance with Federal requirements, are considered in addition to EHB.
Most recently in the 2025 Payment Notice (81 FR 26264 through 26268), we finalized that, beginning in PY 2025, covered benefits in a State's EHB-benchmark plan are considered an EHB under § 155.170(a)(2) and thus, do not require defrayal by the State. However, we noted that if at a future date the State updates its EHB-benchmark plan under § 156.111 and removes the mandated benefit from its EHB-benchmark plan, the State may have to defray the costs of the benefit under the factors set forth at § 155.170 as it will no longer be an EHB after its removal from the EHB-benchmark plan. Additionally, we noted that beginning in PY 2025, a State that is defraying the costs of a benefit required by a mandate that is in addition to the EHB under § 155.170 will be permitted to cease defraying the costs of that benefit if the benefit was included in its EHB-benchmark plan or upon updating its EHB-benchmark plan to include such benefit coverage. We further clarified that because any covered benefits in a State's EHB-benchmark plan are considered to be an EHB, such benefits are subject to the various rules applicable to EHB, including the prohibition on discrimination in accordance with § 156.125, the annual limitation on cost sharing in accordance with § 156.130, and restrictions on annual or lifetime dollar limits in accordance with § 147.126. We supported the revision to § 155.170(a)(2) finalized in the 2025 Payment Notice in part based on our understanding of States' struggle to understand and operationalize the policy that previously required States to
We have since reevaluated this position and in the proposed rule, stated that we believe we should not jeopardize the affordability of premiums, particularly for unsubsidized enrollees, for an intangible improvement to States' understanding of Federal defrayal requirements. We noted that when States enact benefit mandates, plan premiums must generally increase to account for the additional coverage. In the individual market (in which QHPs are sold), if State-required benefits are EHB, the associated premium increases will be entirely offset for consumers receiving APTC by higher APTC expenditures because the amount of APTC is tied directly to the premium amount. Over time, the accumulation of new State-required benefits that are EHB could substantially increase Federal APTC costs, undermining the purpose of the statutory defrayal policy. While premium increases associated with the accumulation of State-required benefits that are EHB will be offset for subsidized consumers, they are not offset for unsubsidized enrollees because they do not receive APTC. As a result, we stated in the proposed rule that we are concerned that the policy finalized in the 2025 Payment Notice that any covered benefits in a State's EHB-benchmark plan are considered EHB has an outsized impact on unsubsidized enrollees who do not receive APTC, which threatens to disincentivize enrollment amongst this population.
We stated in the proposed rule that our current policy incentivizes States to enact additional State-required benefits and then to select an EHB-benchmark plan under § 156.111 that includes such State-required benefits such that these benefits are considered to be EHB. We stated that this approach drives up premiums, which, in turn, increases Federal APTC expenditures, negatively impacts unsubsidized enrollees, and exacerbates low enrollment amongst this population.
Therefore, we proposed to revise § 155.170(a)(2) to revert to the standard that was in place prior to the 2025 Payment Notice, which required States to defray the cost of applicable State-required benefits at § 155.170(a)(1) taken by State action after December 31, 2011, even if such benefits are included in the State's EHB-benchmark plan beginning with PY 2027. Specifically, we proposed to revise § 155.170(a)(1) to provide that a State mandated benefit will be considered “in addition to EHB” (and thus not EHB) if it is: (i) required by a State action taking place after December 31, 2011; (ii) applicable to the small group and/or individual markets; (iii) specific to required care, treatment, or services; and (iv) not required by State action for purposes of compliance with Federal requirements.
We noted in the proposed rule that the proposed revisions at § 155.170(a)(1)(i) through (iv) would explicitly add into the regulatory text four conjunctive elements that determine when State-required benefits require defrayal. These four elements have long been included as part of a State's defrayal analysis but have not all been included in the regulatory text at § 155.170.
We stated in the proposed rule that if finalized as proposed, a State would be required to defray the costs of any benefit that does not satisfy the proposed standard at § 155.170(a)(1) by making payments to individual enrollees or to the QHP issuer on behalf of enrollees. We stated that we expect this would better mitigate premium increases and better support unsubsidized enrollees because States would be required to defray the cost of a wider array of State-required benefits than under the existing policy, such that both subsidized and unsubsidized enrollees alike would be shielded from the increase to premiums resulting from State-required benefits.
We stated in the proposed rule that starting in PY 2027, a State that is not defraying the costs of a State-required benefit because of the policy finalized in the 2025 Payment Notice, which designated any benefit covered in the State's EHB-benchmark plan as EHB, would be required to begin defraying the costs of those benefits regardless of whether the benefit is included in its EHB-benchmark plan. We stated that if this proposal is finalized and a State begins defraying costs associated with a State-required benefit and making payments to QHP issuers because it is no longer considered EHB, QHP issuers would be required to update their plan filings accordingly beginning in PY 2027 to reflect that the benefit is no longer covered as an EHB and should not be included in the percentage of premium attributable to coverage of EHB for the purpose of calculating APTC. We clarified in the proposed rule that we would not require States with any such benefits in their EHB-benchmark plans to update their EHB-benchmark plan under § 156.111 to remove the benefit; the proposed revision to § 155.170 would simply render the benefit's inclusion in the
In the proposed rule, we acknowledged that this proposal, a reversion to the standard that was in place prior to the 2025 Payment Notice, constitutes a change in policy for the treatment of State-required benefits under the Affordable Care Act. We stated that we understand that a small number of States and issuers have taken significant action based on current § 155.170, including that some States have sought or are seeking EHB-benchmark plan changes under § 156.111 to add certain State-required benefits as EHB based on the understanding that such EHB additions would be effective indefinitely absent any further EHB-benchmark plan changes under § 156.111 and that the cost of these additions would not require defrayal by the State. We stated that if finalized, any State-required benefit that fulfills the four proposed conjunctive elements at proposed § 155.170(a)(1)(i) through (iv) would require defrayal, regardless of whether the benefit is included in the State's EHB-benchmark plan.
In turn, we stated in the proposed rule that State-required benefits that are in addition to EHB under this proposed policy would not be subject to the rules applicable to EHB, including the prohibition on discrimination in accordance with § 156.125, limitations on cost sharing in accordance with § 156.130, and restrictions on annual or lifetime dollar limits in accordance with § 147.126. We stated that although we do not take these impacts lightly, these changes are necessary to return to the longstanding read of section 1311(d)(3)(B) of the Affordable Care Act and better balance the cost of the EHB for unsubsidized enrollees. We established our longstanding read of section 1311(d)(3)(B) of the Affordable Care Act in the EHB Rule (78 FR 12838) when we finalized that State-required benefits enacted after December 31, 2011, are not considered EHBs and therefore the costs of these benefits are required to be defrayed by the State. We stated that we believe reverting to this foundational read is warranted to remove the incentive from States to enact more benefit mandates that could in turn increase premiums and negatively impact unsubsidized enrollees to the detriment of overall enrollment by this population. The defrayal requirement in section 1311(d)(3)(B) of the Affordable Care Act prevents States from shifting costs to the Federal government through increased Federal expenditures. Over time, the accumulation of new State-required benefits being treated as EHB (without corresponding defrayal by States) could increase Federal outlays and undermine the purpose of section 1311(d)(3)(B) of the Affordable Care Act. While the availability of such benefits as EHB (with the associated protections) is a consideration, so is the overall affordability of coverage and the impact on overall enrollment. If such coverage is so expensive that it is unaffordable, particularly for unsubsidized enrollees, then the entire market suffers and those that cannot afford to enroll do not enjoy any benefits of coverage whatsoever. Our proposal sought to mitigate that risk.
We stated in the proposed rule that we are aware that this proposed policy reversal, if finalized, could also impact health plans that are not directly impacted by EHB requirements. This includes self-insured group health plans and large-group market fully insured plans that must follow the annual and lifetime dollar-limit restrictions on EHB and annual cost-sharing limitation requirements under §§ 147.126 and 156.130.
Finally, we noted in the proposed rule that we are aware of State legislation that includes clauses stating that the requirement to defray the costs associated with State-required benefits is precluded if HHS fails to respond to the State's request for confirmation of whether new mandates require defrayal within a certain time. Such provisions are inconsistent with § 155.170, as they inappropriately put the onus on HHS to decide whether the State-required benefit is in addition to EHB. Failure by HHS to respond to a State's request for a determination of whether new mandates require defrayal by the State does not relieve a State from its defrayal obligation. Under § 155.170, it is the State's responsibility to identify which State-required benefits require defrayal. While States are encouraged to reach out to us concerning State defrayal questions in advance of passing and implementing benefit mandates, HHS does not provide determinations of whether the cost of a State-required benefit requires defrayal by the States.
In summary, we proposed to revise § 155.170(a) to provide that any State-required benefits would be considered “in addition to EHB” (and thus not EHB) if they are: required by a State action taking place after December 31, 2011; applicable to the small group and/or individual markets; specific to required care, treatment, or services; and not required by State action for purposes of compliance with Federal requirements. We also proposed revisions to the regulatory text at §§ 155.170(a)(2) and 156.115(a) to align with this proposal and to have State and issuer responsibilities for State-required benefits appear in a more logical reading order in the CFR. We proposed that these changes would be effective beginning in PY 2027.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our
We summarize and respond to public comments received on the proposed State mandate defrayal policy at § 155.170 below.
Commenters supporting the proposal also highlighted that State benefit mandates can increase premiums, specifically for unsubsidized enrollees who bear the full cost of those increases because they do not receive APTC. These commenters noted that the proposal would help curb this premium growth, improve affordability for unsubsidized individuals, and ensure that Federal subsidies are limited to EHB rather than State mandated benefits.
We acknowledge that the policy finalized in the 2025 Payment Notice did resolve the prior classification overlap by providing that a State-mandated benefit incorporated into a State's EHB-benchmark plan would be treated as EHB and therefore not subject to defrayal. However, we do not agree that the 2025 Payment Notice policy was consistent with the underlying statute. Section 1311(d)(3)(B)(ii)(II) of the Affordable Care Act operates independently from the EHB framework at section 1302(b) of the Affordable Care Act. Allowing States to undermine a statutory defrayal obligation through State EHB-benchmark plan design choices conflates the classification of a benefit for EHB purposes with the separate question of whether that benefit triggers defrayal. The four conjunctive elements we are finalizing at § 155.170(a)(2)(i) through (iv) restore the best reading of section 1311(d)(3)(B)(ii)(II) of the Affordable Care Act by ensuring a clear standard for when a benefit requires defrayal, independent from the State's EHB-benchmark plan.
We also do not believe the policy will contribute to consumer confusion or potential consumer harm. The finalized policy does not eliminate or restrict any benefit that States choose to mandate. To the extent States choose to repeal or adjust existing State-required benefits, States will have until PY 2028 to communicate with affected consumers and issuers regarding any changes to how those benefits are classified. As discussed in further detail below, we are finalizing this delayed effective date to better support a smooth transition that minimizes disruption to consumers and States. We also anticipate that States choosing to repeal applicable mandates will most likely do so in circumstances where the benefit is otherwise already covered as EHB under the State's existing EHB-benchmark plan. In such cases, the repeal of the State mandate would not result in any loss of coverage for consumers, as the benefit would continue to be provided as EHB under the State's EHB-benchmark plan.
However, we agree with commenters that Federal defrayal policy can influence State decisions to adopt benefit mandates. To the extent commenters are concerned that the proposal may reduce incentives for States to enact new mandates, we note that this is an intended effect. The existing policy
We believe these outcomes outweigh the concerns raised by commenters. When State-required benefits are classified as EHB so long as they are in the State's EHB-benchmark plan, the associated premium increases are offset for subsidized consumers through higher APTC but are not offset for unsubsidized enrollees who bear the full cost of those increases. Over time, the accumulation of State-required benefits treated as EHB could substantially increase Federal APTC expenditures and threaten the affordability of coverage in the individual market, particularly for unsubsidized enrollees who do not receive APTC. If coverage becomes so expensive that it is unaffordable for this population, those consumers may exit the market entirely, forgoing any benefits of coverage whatsoever. The policy we are finalizing is designed to address this dynamic by ensuring that the costs of State-required benefits in addition to EHB are defrayed by States, consistent with the statutory defrayal requirement in section 1311(d)(3)(B) of the Affordable Care Act, rather than passed on to consumers through higher premiums or to the Federal Government through increased APTC outlays.
Moreover, we note that the policy we are finalizing neither prohibits States from mandating benefits nor weakens consumers' access to valuable coverage. States retain the authority to mandate benefits that address the health needs of their consumers so long as the State defrays any such benefits in addition to EHB. The defrayal framework determines only who bears the cost of those benefits, not whether States may require them.
For commenters' concerns that this policy could reduce financial assistance available to Exchange enrollees, we note that the policy we are finalizing is designed to achieve the opposite effect. When costs of State-mandated benefits are reflected in premiums, as the policy in the 2025 Payment Notice permitted when a State-mandated benefit was also in the State's EHB-benchmark plan, those higher premiums increase APTC and Federal outlays. For unsubsidized enrollees, this risked directly increasing out-of-pocket premium costs. The policy we are finalizing at § 155.170(a)(2) better helps to moderate premiums and supports the affordability of coverage for subsidized and unsubsidized enrollees alike.
We also do not agree that this policy shifts costs to consumers. To the contrary, the defrayal requirement itself is in part a consumer protection mechanism in that the enrollee is spared the cost in their premiums of State-mandated benefit in addition to EHB that the State defrays. The policy we are finalizing ensures that when a State mandates a benefit that satisfies the four conjunctive elements at § 155.170(a)(2)(i) through (iv), those costs will not be passed through to consumers in the form of higher premiums. This policy ensures that the party responsible for mandating the benefit (the State) is also responsible for defraying its costs.
In addition, though States relied on the current EHB defrayal policy, we have taken steps to mitigate that reliance. Specifically, we announced in the 2027 Payment Notice proposed rule (91 FR 6368) that we were pausing review of EHB-benchmark plan applications because we are actively conducting a comprehensive review of section 1302 of the Affordable Care Act and considering future rulemaking to revise § 156.111 and other regulations relating to the EHBs. Our notice related to pausing review of EHB-benchmark plan applications in the 2027 Payment Notice proposed rule prevented States from making further updates to their EHB-benchmark plans that would increase reliance on the policy finalized in the 2025 Payment Notice. Any State reliance on the 2025 Payment Notice defrayal policy will also be mitigated by the delayed PY 2028 implementation date of the policy finalized in this final rule. Further, we note that State reliance on the current policy, as is evidenced by State efforts to update EHB-benchmark plans to incorporate State-required benefits, supports the rationale for returning to the longstanding interpretation of section 1311(d)(3)(B) of the Affordable Care Act through the policy we are finalizing. This pattern of State behavior confirms that the 2025 Payment Notice policy created incentives for States to shift the costs of State-required benefits to the Federal government through increased high premiums and increased APTC expenditures. We encourage States to use the period prior to PY 2028 to assess their State-required benefits, identify those that require defrayal under the policy we are finalizing in this final rule, and take any necessary steps to comply with the defrayal framework beginning with PY 2028.
We decline to establish safe harbors or exemptions for specific State-required benefits, exemptions for State-mandated benefits enacted prior to the adoption of the policy in this final rule, or further limits on the scope of this policy. First, we continue to be of the view that a State's ability to avoid defrayal obligations under section 1311(d)(3)(B)(ii)(II) of the Affordable Care Act simply by incorporating a State-required benefit into its EHB-benchmark plan is not consistent with the statutory design, which treats the defrayal determination as a distinct inquiry from the classification of a benefit as EHB. Second, we do not believe these suggested alternatives are necessary when States can take action before PY 2028 to retain specific benefits as EHB in the State's EHB-benchmark plan consistent with section 1302 of the Affordable Care Act (that is, by repealing the State mandate for the benefit or choosing to defray the cost of additional required benefits). We believe States will have adequate time to make any necessary adjustments consistent with their defrayal policy preferences.
Moreover, in response to the comment suggesting a safe harbor for specific services like fertility treatments, we note that the current EHB-benchmark framework utilizes a State-based approach whereby States determine which benefits should be included as EHB. Providing a Federal safe harbor from the defrayal requirement for any specific subset of benefits that do not meet the typicality standard would be at odds with that framework.
Further, we acknowledge comments regarding compliance with MHPAEA. Plans that are required to provide EHBs must cover mental health and substance use disorder services, including behavioral health treatment, as required categories of EHB and must comply with MHPAEA.
Other commenters noted that States are best positioned to determine appropriate benefits for their populations and expressed concern that changes to the Federal defrayal policy could limit States' ability to reflect State-specific needs. One commenter noted their belief that HHS lacks statutory authority to support the proposed policy because in their view, section 1311 of the Affordable Care Act authorizes defrayal for benefits that are in addition to EHB, but it does not authorize HHS to redefine EHB based on the timing of enactment for State-required benefits. Other commenters noted that Congress delegated to the Secretary of HHS the responsibility to define EHB through a stable, employer-based framework designed to promote uniformity, predictability, and nondiscrimination, while preserving State flexibility through EHB-benchmark plan selection, and that the proposed policy undermines the statutory framework for EHB.
In addition, we do not believe this policy change undermines the statutory framework for EHB. Section 1302(b)(1) of the Affordable Care Act grants the Secretary broad authority to define EHB. Under this authority, we have identified the items and services within the ten EHB categories by relying on State-specific EHB benchmark plans under § 156.111. The defrayal requirement in section 1311(d)(3)(B) of the Affordable Care Act is a distinct statutory provision that operates alongside the Secretary's definition of EHB. The change we are finalizing returns the defrayal framework to its longstanding interpretation prior to the 2025 Payment Notice, under which the scope of EHB in each State continues to be defined by the State's EHB-benchmark plan, while ensuring that the costs of State-required benefits in addition to EHB are defrayed by States. Sections 1302(b)(1) and 1311(d)(3)(B) of the Affordable Care Act are complementary, not competing, statutory directives, and finalizing this policy gives full effect to both.
Several commenters also noted that States act judiciously when adopting benefit mandates, emphasizing that such decisions are infrequent, carefully evaluated, and informed by actuarial and regulatory analysis. Some of these commenters noted that States assess the cost and impact of proposed benefit mandates, often relying on State insurance regulators and Federal statutory requirements, including limits on changes to EHB-benchmark plans (such as actuarial value constraints), to ensure minimal effects on premiums.
Commenters further stated that the proposal would not materially change States' ability to add benefits to EHB-benchmark plans under existing EHB-benchmark requirements and, therefore, would not actually address concerns about premium growth. Some commenters stated that EHB-benchmark plan requirements already limit benefit expansion and associated premium increases, and that State benefit mandates are not a primary driver of rising premiums. Others noted that it is too soon to assess the impact of the policy finalized in the 2025 Payment Notice on premiums or Federal spending.
We do not agree with commenters that stated it is too soon to assess the impact of the policy finalized in the 2025 Payment Notice on premiums or Federal spending. We have observed that a number of States have sought to update their EHB-benchmark plans since finalization of the policy in the 2025 Payment Notice in part to incorporate State-required benefits that would otherwise be subject to defrayal. This pattern of State behavior demonstrates that the 2025 Payment Notice policy did, in fact, influence State decision making regarding EHB-benchmark plan updates and has implications for premium growth. Under the policy finalized in the 2025 Payment Notice, States could incorporate State-required benefits into their EHB-benchmark plans and thereby avoid defrayal obligations entirely, which could effectively shift the cost of those State-required benefits to consumers through higher premiums and to the Federal Government through increased APTC outlays.
We acknowledge commenters' views that affordability is multifaceted and includes factors beyond premiums, such as benefit coverage and cost-sharing. However, premiums remain a primary driver of affordability for many consumers, particularly unsubsidized enrollees, and increases in premiums may also affect Federal spending on APTCs. We also acknowledge commenters' statements that States act judiciously when adopting benefit
One commenter noted that if benefits enacted after December 31, 2011, are reclassified as non-EHB while HHS has paused review of State applications for EHB-benchmark plan updates, some States could temporarily retain EHB-benchmark plans that include benefits no longer treated as EHB for Federal purposes. This commenter stated concern that, in this situation, States could face defrayal obligations for benefits embedded in their EHB-benchmark plans that they are unable to modify during the pause on EHB-benchmark plan updates.
We do not agree that this policy risks reducing the actuarial value of EHB or reducing EHB below required minimum generosity standards. Actuarial value is determined at the plan level under the applicable AV standards, while the scope of EHB is defined by the State's EHB-benchmark plan. To the extent a State repeals a State-mandated benefit but does not modify its EHB-benchmark plan, the benefit remains EHB, and the repeal would not affect a plan's actuarial value.
As discussed above, we are finalizing a delayed effective date for the change to the defrayal policy of PY 2028. We believe this delayed effective date and resulting transition period will provide States with sufficient time to adapt to the revised defrayal policy and sufficient time for us to consider any future updates to the EHB framework that may result from this ongoing review.
One commenter noted that prior HHS guidance distinguished between State-required benefits enacted through separate legislative or regulatory action and those incorporated through the State EHB-benchmark process at § 156.111 and urged HHS to codify this distinction in regulation. This commenter and several other commenters stated that the proposal does not clearly define what constitutes “State action,” making it difficult to determine when updated or expanded benefits would trigger defrayal, particularly given the variety of approaches States have used to update their EHB-benchmark plans. One commenter provided examples from multiple States to illustrate this uncertainty and requested additional clarity to ensure States can continue to update benefits to address local health needs without triggering unintended defrayal obligations.
One commenter requested that HHS collaborate with States to provide clear guidance and technical support on when State benefit mandates require defrayal. Another commenter noted that States vary in their level of engagement with the defrayal process. This commenter noted that some States assess mandate costs or recognize defrayal obligations, but few have a formal defrayal reimbursement process in place. Due to this variation, the commenter noted that HHS should provide a comprehensive document that provides substantive guidance for States in operationalizing their defrayal obligations under the proposed policy.
The EHB-benchmark selection process at § 156.111 is a distinct Federal regulatory framework from the framework governing defrayal under § 155.170. Accordingly, a State's selection or update of an EHB-benchmark plan under § 156.111 does not constitute a “State action” for purposes of defrayal and, by itself, cannot trigger a defrayal obligation. Instead, for purposes of § 155.170, “State action” refers to a State statute, regulation, guidance, or other requirement, separate from the State's selection or update of its EHB-benchmark plan, that requires QHPs to cover a benefit that is in addition to EHB under § 155.170(a)(2).
States with benefit mandates that duplicate benefits included in the State's EHB-benchmark plan and that seek to avoid a defrayal obligation may repeal the applicable State requirement, such that the benefit continues to be covered as EHB under the EHB-benchmark plan or otherwise limit the applicability of the requirement for
Based on our experience working with States, many are actively analyzing their State-mandated benefits for potential defrayal obligations and, where applicable, implementing defrayal. In some cases, States may not have established formal reimbursement processes because they have not identified State-mandated benefits that require defrayal under current standards. The absence of a formal defrayal process is not necessarily indicative of non-compliance or unpreparedness, as it may reflect that no such obligation has yet arisen. Additionally, we have provided technical assistance to several States on how to operationalize defrayal, including approaches to and timing of reimbursement. We intend to continue to engage with States and provide technical assistance as needed to ensure States understand when a State-benefit requirement is in addition to EHB and requires defrayal. We intend for this assistance to provide examples and guidance on applying this policy as finalized and how a State could operationalize the defrayal process pursuant to Federal requirements at § 155.170. However, we note that States remain responsible for establishing and maintaining the internal processes and procedures necessary to ensure that defrayal reimbursements to issuers or enrollees are appropriately administered in accordance with § 155.170.
We note that though the identification and implementation of defrayal obligations is the responsibility of the States, we provide States with robust technical assistance to help with analyzing State mandates and defrayal questions. A State may reach out to and communicate with HHS regarding the final policy, including with questions that relate to identifying which State mandates are in addition to EHB in that State.
Section 1312(e) of the Affordable Care Act directs the Secretary to establish procedures under which a State may permit agents and brokers to enroll individuals and employers in QHPs through an Exchange and to assist individuals in applying for financial assistance for QHPs sold through an
In addition, section 1313(a)(5)(A) of the Affordable Care Act directs the Secretary to provide for the efficient and non-discriminatory administration of Exchange activities and to implement any measure or procedure the Secretary determines is appropriate to reduce fraud and abuse. Section 155.220 specifies procedures to support the State's ability to permit agents, brokers, and web-brokers to assist individuals, employers, or employees with enrollment in QHPs offered through an Exchange, subject to applicable Federal and State requirements. This includes processes under § 155.220(g) and (h) under which HHS may suspend or terminate an agent's, broker's, or web-broker's Exchange agreement(s) in circumstances that involve fraud or abusive conduct or where there are sufficiently severe findings of noncompliance. This also includes the FFE standards of conduct for agents, brokers, and web-brokers who assist consumers in enrolling in coverage through the FFEs that we established under § 155.220(j) to protect consumers and ensure the proper administration of the FFEs. Consistent with § 155.220(l), agents, brokers and web-brokers who assist with or facilitate enrollment in States with SBE-FPs must comply with all applicable FFE standards, including the requirements in § 155.220. Similarly, consistent with § 155.220(n), web-brokers who assist with or facilitate enrollment in States with State Exchanges must comply with all applicable FFE standards, including the requirements in § 155.220(c)(3)(i)(A), (G), (I), and (j)(2)(i).
In the proposed rule, we stated that we have observed numerous abusive, misleading, and coercive practices that harm consumers both financially and medically, necessitating these proposed amendments.
Section 155.220(j)(2) sets forth the standards of conduct for agents, brokers, and web-brokers that assist with or facilitate enrollment of qualified individuals, qualified employers, or qualified employees in coverage in a manner that constitutes enrollment through an FFE or SBE-FP, or that assist individuals in applying for APTC and CSRs for QHPs sold through an FFE or SBE-FP.
Section 155.220(j)(2)(i) requires agents, brokers, and web-brokers to provide consumers with correct information and refrain from marketing or conduct that is misleading. Section 155.220(j)(2)(ii) requires agents, brokers, and web-brokers to document that the consumer (or the consumer's authorized representative) has reviewed and confirmed prior to its submission that his or her eligibility application information is accurate. Under § 155.220(j)(2)(ii), agents, brokers, or web-brokers must also provide the FFEs and SBE-FPs with correct information under section 1411(b) of the Affordable Care Act. Section 155.220(j)(2)(iii) also requires agents, brokers, and web-brokers to document the consumer's consent prior to facilitating enrollments through the FFEs. As explained in the 2017 Payment Notice proposed rule (81 FR 12258 through 12264), these standards are designed to protect against agent, broker, and web-broker conduct that is harmful towards consumers or prevents the efficient operation of the FFEs and SBE-FPs.
In the proposed rule, we stated that we have been conducting documentation reviews to determine compliance with eligibility application review documentation requirements and consent documentation requirements. During these reviews, we have found numerous instances of noncompliance, such as documentation not containing the name of the assisting agent, broker, or web-broker, a missing date, and more. While we have engaged in Technical Assistance (TA) or enforcement, when appropriate, given these findings, we stated in the proposed rule that we have determined that HHS would likely reduce consumer harm by revising the current requirements in § 155.220(j)(2)(ii) and (iii).
We proposed to amend existing regulatory authority under § 155.220(j)(2)(ii)(A) and (j)(2)(iii)(A) to require agents, brokers, and web-brokers to use the HHS-approved and -created consumer consent form to meet the eligibility application review documentation requirements and consent documentation requirements. We stated in the proposed rule that our proposal would eliminate the currently broad allowances on the format for meeting these requirements by mandating that agents, brokers, and web-brokers use only the content in the HHS-approved and -created form. We stated the regulation would also be changed to clarify what types of actions constitute a consumer “taking an action” within the meaning of the regulation.
Currently, agents, brokers, and web-brokers are required to document that a consumer, or the consumer's authorized representative, reviewed and confirmed their eligibility application information prior to the submission of the enrollment information. This language was added to the regulations in the 2024 Payment Notice (87 FR 78206) to help combat fraud and reduce consumer harm caused by application submissions containing inaccurate information. Currently, however, there are no specific requirements regarding the format of this documentation, so long as it meets the minimum regulatory requirements under § 155.220(j)(2)(ii)(A). As a result, we have reviewed documentation submitted in response to enforcement activity in both paper and audio recording formats. During these reviews,
Additionally, paper documentation often contains language and formatting that are generally unique to the specific agent, broker, or web-broker. This language can sometimes be complicated or difficult to follow for consumers, leading to potential consumer harm, as explained below. Based on our experience, we stated in the proposed rule that the documentation submitted by a significant number of agents, brokers, and web-brokers frequently failed to meet the required eligibility application review documentation criteria. These criteria may include but are not limited to: an explanation of attestations; required dates; the name of the agent, broker, or web-broker; an affirmative response from the consumer; a review of all application information; and the name of the consumer or authorized representative. Missing or incorrect information on eligibility application reviews can harm consumers. Inaccurate application information may lead to incorrect eligibility determinations, affect a consumer's tax liability, or result in other negative consequences. For example, if a consumer receives an incorrect APTC determination or is unaware they are enrolled, they may incur an unexpected tax liability or costs associated with obtaining a corrected or voided Form 1095-A. Ensuring that a consumer's income determination has been reviewed and confirmed as accurate can help prevent these issues.
Incorrect consumer information on eligibility application reviews may also affect Exchange operations or HHS' analysis of Exchange trends. For example, a high volume of applications containing erroneous information, such as U.S. citizens attesting to not having an SSN, could hinder the efficient and effective operation of the Exchanges on the Federal platform by requiring HHS to divert time and resources to address these discrepancies. While we have processes in place to investigate and adjudicate complaints, these types of complaints can present challenges when the only available evidence consists of conflicting accounts from the parties involved. We generally do not have access to additional contextual information that could help clarify the circumstances. To help address this, the 2024 Payment Notice (88 FR 25740) revised the standards of conduct at § 155.220(j)(2)(ii) to require agents, brokers, and web-brokers to document prior to the submission of information that the eligibility review information under section 1411(b) of the Affordable Care Act was reviewed and confirmed to be accurate by the consumer or their authorized representative, who has been designated in compliance with § 155.227.
Additionally, under § 155.220(j)(2)(iii), as finalized in the 2024 Payment Notice (88 FR 25740), agents, brokers, and web-brokers are required to document consumer consent on the FFEs and SBE-FPs prior to providing enrollment assistance. This documentation must comply with specific regulatory requirements and show that the consumer took an action that created a record that the agent, broker, or web-broker can maintain and produce to confirm that consent was provided by the consumer or their authorized representative.
Presently, there are no specific format requirements for consumer consent documentation, as long as it meets the minimum regulatory requirements under existing § 155.220(j)(2)(iii)(A), which requires a consumer, or their authorized representative, to “take an action” that produces a record that can be maintained and produced by an agent, broker, or web-broker to confirm that the consumer's consent was documented and confirmed to be accurate. While consent must also be documented, this regulation does not explicitly require an agent, broker, or web-broker to obtain it through the same action. During HHS' investigations, we have found that a substantial amount of the submitted consumer consent documentation either lacked the required information, or presented it unclearly, potentially resulting in consumer harm. HHS has consistently received documentation from agents, broker, and web-brokers that failed to include required information, including, but not limited to: the name of the agent, broker, web-broker, or agency receiving consent; the name of the consumer or their authorized representative; the dates of consent; the scope, duration, and purpose of the consent; and the process through which a consumer or their authorized representative may rescind the consent. There have also been instances where documentation of consumer consent was not provided upon request.
Documentation that omits these regulatory requirements does not adequately demonstrate that the consumer, or their authorized representative, provided consent prior to the agent, broker, or web-broker's facilitation of enrollment or provision of enrollment assistance. Submitting consumers' eligibility application reviews without compliant documented consumer consent is harmful to consumers because the consumers or their representatives may be unaware of their enrollments and the submitted enrollment application may contain incorrect information. This could lead to consumers receiving inaccurate eligibility determinations; not receiving plan correspondence; not being able to access more suitable health coverage for which they may qualify; and unexpected tax liabilities.
Given these findings, we proposed amendments to § 155.220(j) to improve the accuracy of application information and better ensure compliance with consumer consent documentation requirements. First, we proposed amending § 155.220(j)(2)(ii)(A) to further clarify expectations for agent, broker, and web-broker compliance and to make clear that the requirements in this provision are not intended to allow for a broad range of interpretations. Specifically, we proposed to revise § 155.220(j)(2)(ii)(A) to state that documentation by agents, brokers, and web-brokers showing that eligibility application information has been reviewed and confirmed to be accurate by the consumer (or the consumer's authorized representative) must be effectuated by having the consumer or the consumer's authorized representative take an action to execute the HHS-approved and -created consumer consent form.
We also proposed redesignating § 155.220(j)(2)(ii)(A)(2) as § 155.220(j)(2)(ii)(A)(3) and amending newly revised § 155.220(j)(2)(ii)(A)
We proposed revising § 155.220(j)(2)(iii)(A) to require agents, brokers, or web-brokers to demonstrate that the consumer or their authorized representative has obtained and reviewed consent documentation by executing an HHS-approved and -created consumer consent form. We stated that this form would fulfill regulatory documentation requirements related to eligibility application review and consumer consent, ensuring all regulatory requirements are in the documentation provided to and reviewed by the consumer or their authorized representative. We stated that it would also streamline the review of potentially noncompliant agents, brokers, and web-brokers, facilitate the removal of noncompliant agents, brokers, and web-brokers from assisting consumers on the Exchange, and protect consumers from potential harm while safeguarding the integrity of the Exchange. Finally, we stated that it would enable more timely resolution of investigations, benefiting agents, brokers, and web-brokers by generally providing faster final determinations from HHS.
We further proposed redesignating current § 155.220(j)(2)(iii)(C) as § 155.220(j)(2)(iii)(D) and revising § 155.220(j)(2)(iii)(C). We stated that newly proposed § 155.220(j)(2)(iii)(C) would require that the action taken by the consumer or their authorized representative to provide consent demonstrate to HHS that consent was indeed given by the consumer or the consumer's representative. We stated that § 155.220(j)(2)(iii)(C) would provide examples of acceptable actions, which mirror those proposed at § 155.220(j)(2)(ii)(A)(
In summary, we proposed to revise § 155.220(j)(2)(ii)(A) to state that the consumer or their authorized representative must take an action to execute the HHS-approved and -created form, indicating that the eligibility application information has been reviewed and confirmed to be accurate by the consumer (or the consumer's authorized representative). We also proposed redesignating § 155.220(j)(2)(ii)(A)(
We sought comment on these proposals.
After consideration of the comments and for the reasons outlined in the proposed rule and this final rule, including our responses to the comments received, we are finalizing these proposals with modifications to delay the effective date of the proposals such that they will apply for all enrollments for plan years beginning on or after January 1, 2028, including enrollments under § 155.335(j). We are also making modifications to clarify that the proposed acceptable and unacceptable actions in proposed paragraphs §§ 155.220(j)(2)(ii)(A)(
As outlined in the proposed rule (91 FR 6335), we stated that the HHS-approved and -created consumer consent form would eliminate the current broad allowances on the format for meeting the eligibility application review requirements and consent documentation requirements. For the reasons stated earlier in this final rule, we believe the HHS-approved and -created consumer consent form to be used by agents, brokers, and web-brokers will: help reduce errors; provide additional compliance clarity for agents, brokers, and web-brokers; streamline investigations; provide additional consumer protections; and ensure that all consumers are being treated equally, reducing discrepancies in how agents, brokers, and web-brokers document eligibility application review and consumer consent.
The HHS-approved and -created consumer consent form will also meet accessibility needs. We intend to make the HHS-approved and -created consumer consent form Section 508 compliant and we plan to translate the HHS-approved and -created consumer consent form into the languages as shown on
To clarify, requirements already exist outlining the substance of what agents, brokers, and web-brokers must document for: (1) eligibility application review requirements, and (2) consumer consent requirements. The only difference, via this rule, is how agents, brokers, and web-brokers must document eligibility application review requirements and consumer consent requirements using the HHS-approved and -created consumer consent form. As a result, we are not adding additional, substantive elements to the HHS-approved and -created consumer
Further, we considered commenters' suggestion to allow a previously-signed consent form to remain valid for enrollments after the effective date for this policy. We are not adopting that approach because a core purpose of this policy is to ensure that each consumer action resulting in an application update or enrollment reflects an up-to-date and affirmative expression of the consumer's intent using the standardized HHS-approved and -created form. Allowing prior documented consumer consents and prior documentation of eligibility application review to satisfy this policy could weaken our ability to verify that the consumer took the action associated with each specific transaction, which is central to the program-integrity concerns this policy is designed to address. However, once the consumer or the consumer's representative has taken an action to complete the HHS-approved and -created consumer consent form, the consumer's consent will remain in effect unless the consumer or the consumer's authorized representative revokes consent or if the consent expires as expressly stated on the HHS-approved and -created consumer consent form. This means that for PY 2028, agents, brokers, and web-brokers must use the HHS-approved and -created consumer consent form for all enrollments, including enrollments under § 155.335(j), using the HHS-approved and created consent form to document the consumer's or the consumer's representative's (1) eligibility application review and (2) consumer consent. However, the agent, broker, or web-broker will not need the consumer or the consumer's representative to complete a new HHS-approved and -created consumer consent form for every interaction thereafter if the previously obtained consent is valid and has not been revoked by the consumer or the consumer's representative and the agent, broker, or web-broker's action on behalf of the consumer is within the scope of the consumer consent documentation.
Additionally, we note that the HHS-approved and -created consumer consent form will not be contingent on how an agent, broker, or web-broker obtains a client, as the HHS-approved and -created consumer consent form is used with each consumer regardless of whether an agent, broker, or web-broker's relies on mass lead generation or more personal client relationships. Also, the pre-enrollment verification period will be an optimal time to obtain consumer consent documentation and application eligibility review documentation.
We clarify that the language in the HHS-approved and -created consumer consent form cannot vary. For the reasons stated earlier in this section of this final rule, we believe the HHS-approved and -created consumer consent form to be used by agents, brokers, and web-brokers will help: reduce errors; provide additional compliance clarity for agents, brokers, and web-brokers; streamline investigations; provide consumer protection measures; and ensure that all consumers are being treated equally, reducing discrepancies in how agents, brokers, and web-brokers document: (1) eligibility application review requirements, and (2) consumer consent requirements. Allowing variation in the form would undermine the goals behind this policy to reduce investigation lengths, reduce discrepancies, and ensure all consumers are treated equally. Standardizing that agents, brokers, and web-brokers are required use the HHS-approved and -created consumer consent form will help improve consistency in how we compare and assess compliance with the documentation requirements. An increased level of consistency will increase the efficiency of our compliance determinations, thus supporting our efforts to ensure consumer protections. The standardized HHS-approved and -created consumer consent form ensures that every agent, broker, and web-broker is collecting the same categories of information in the same way, making it easier for us to investigate, perform audits, detect fraud or omissions, and enforce regulatory requirements uniformly. If agents, brokers, and web-brokers are using different modes to collect the eligibility application review and consumer consent documentation outside of using the HHS-approved and -created consumer consent form, it becomes increasingly more difficult to efficiently compare submissions, undermining our oversight. Requiring consistent use of a uniform consent and eligibility application information review form reduces the likelihood of consumer manipulation or fraud because each agent, broker, or web-broker must use and collect the same content areas as stated on the HHS-approved and -created form. This also makes it more difficult for agents, brokers, or web-brokers to omit required information and/or alter how questions are framed to steer outcomes.
As mentioned earlier, it is our intent to make the HHS-approved and -created consumer consent form Section 508 compliant as well as translating the HHS-approved and -created consumer consent form into the languages as shown on
Additionally, we clarify in this final rule that recorded telephone calls, in which the agent, broker, or web-broker communicates the entirety of the language in the HHS-approved and -created form to the consumer or the consumers' representative, and the consumer or the consumer's representative provides their verbal consent, is permissible to document: (1) eligibility application review requirements, and (2) consumer consent requirements. Documentation using the whole content of the HHS-approved and -created consumer consent form will be required for all agents, brokers, and web-brokers, for all enrollments for plan years beginning on or after January 1, 2028, including enrollments under § 155.335(j), impacting open enrollment in the fall of 2027. We make similar clarification for documentation of eligibility application review and consent documentation via email: the email chain used to document either eligibility review and the email chain used to document consent, or both if they are one and the same, must contain the entirety of the language in the HHS-approved and -created form. Further, previously obtained consent forms and eligibility application review documentation will no longer satisfy the consumer consent documentation and eligibility application review documentation requirements beginning with enrollments and re-enrollments for PY 2028. Any recordings and documentation must be maintained by agents, brokers, and web-brokers for 10 years, and provided to HHS upon request. See existing § 155.220(j)(2)(iii)(C).
Since we have clarified with further discussion acceptable methods for satisfying eligibility application review and consent documentation requirements, it is no longer necessary to reference “other means” and we are striking the reference from the policy we are finalizing in both revised §§ 155.220(j)(2)(ii)(A)(2) and 155.220(j)(2)(iii)(C).
Additionally, the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. 7001, is the law that gives electronic signatures the same legal effect as paper ones and includes certain consumer-consent and disclosure steps when required information is delivered electronically, see 15 U.S.C. 7001(c)(1)(A) and 15 U.S.C. 7001(c)(1)(B), such as the consumer agreeing to receive the information electronically and being told how to withdraw that consent. E-Sign-compliant methods may be used to sign the HHS-approved and created consumer consent form provided our program integrity requirements are met as set forth above and in this rule.
Previously obtained consumer consent and eligibility application review documentation and other methods used to document consumer consent and eligibility application review prior to PY 2028 will no longer be valid to satisfy consumer consent documentation and eligibility application review documentation requirements beginning with enrollments and re-enrollments for plan years starting January 1, 2028. Agents, brokers, and web-brokers must exclusively use the HHS-approved form for future enrollments (
Any recordings and consent or eligibility documentation must be maintained by agents, brokers, and web-brokers for 10 years and provided to HHS upon request. See § 155.220(j)(2)(iii)(C).
However, we want to emphasize that even if the name of an agency is used on the HHS-approved and -created consent form, it remains the responsibility of the assisting agent, broker, or web-broker to maintain the documentation for 10 years and produce it to HHS, upon request, even when the agency's name or NPN number appears on the HHS-approved and -created consumer consent form. See § 155.220(j)(2)(iii)(C).
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing at revised §§ 155.220(j)(2)(ii)(A)(
In the 2027 Payment Notice proposed rule (91 FR 6337), we proposed to redesignate current § 155.220(j)(3) to § 155.220(j)(4) and add language at § 155.220(j)(3) to create standards of conduct by which agents, brokers, and web-brokers must adhere when engaging in marketing practices related to assisting or facilitating enrollment of qualified individuals, qualified employers, or qualified employees in FFE coverage, or applying for APTC or CSRs for QHPs sold through an FFE or SBE-FP. We clarify in this final rule that these marketing standards apply to agents, brokers, and web-brokers assisting consumers through FFEs and SBE-FPs. State Exchanges may adopt these standards at their discretion, but they are not required to do so. This proposal would establish marketing requirements and provide a non-exhaustive illustrative list of prohibited marketing practices. The marketing practices we identify and prohibit through the final rule are the most common misleading advertisement types we have discovered on social media websites to date. We identified these prohibited practices based on patterns observed through our monitoring of publicly available advertisements and the types of misleading marketing most frequently reported through the Agent Broker Helpdesk.
In the Patient Protection and Affordable Care Act; Program Integrity: Exchange, SHOP, and Eligibility Appeals final rule (78 FR 54076 through 54081), we established a framework for terminating an agent's, broker's, or web-broker's Exchange agreement(s) for cause in situations in which, in HHS' determination, a specific finding of noncompliance or pattern of noncompliance is sufficiently severe.
In the 2017 Payment Notice (81 FR 12204), we added section § 155.220(j)(2) to require agents, brokers, and web-brokers to provide consumers with correct information, without omission of material fact, regarding FFEs, QHPs offered through the FFEs, and insurance affordability programs, as well as refrain from marketing or conduct that is misleading, coercive, or discriminatory.
In the proposed rule, we stated that we have found many instances of advertisements that mislead consumers during our reviews of existing advertisements. We stated that we intend to prioritize taking enforcement actions against agents, brokers, and web-brokers who engage in misleading marketing. Complaints regarding misleading marketing can be sent to the Agent Broker (AB) Helpdesk,
Furthermore, in the proposed rule, we stated that there are instances when it can be difficult or impossible for HHS to determine who is responsible for posting the misleading marketing, hindering HHS' ability to take enforcement actions in those instances. To take an enforcement action, our investigation would need to find information linking the misleading
In the proposed rule, we stated that we have found emerging patterns of misleading marketing and have been engaging in TA and enforcement actions when appropriate. We have found numerous examples of misleading marketing, with common issues ranging from guaranteeing zero-dollar enrollment to misrepresenting enrollment timelines. We stated that we believe these misleading marketing practices warrant additional HHS oversight and believe more robust marketing standards of conduct under § 155.220(j) are needed. Although our current regulations provide ample authority to begin our new TA program as described above and take enforcement action against misleading marketing, we proposed to amend our regulations to add more specific language on certain marketing prohibitions so that agents, brokers, and web-brokers know what is and is not permitted in their marketing.
Therefore, we proposed to amend § 155.220(j)(2) to remove “marketing or” from § 155.220(j)(2)(i); separate conduct related to enrollment from conduct related to marketing in newly redesignated paragraph § 155.220(j)(3); expand marketing requirements for agents, brokers, and web-brokers; and codify a non-exhaustive list of prohibited practices, requirements for responding to HHS requests related to marketing, and responsibilities related to marketing conducted by third parties with whom an agent, broker, or web-broker contracts. We also proposed to remove language from § 155.220(j)(2)(i) that defines the term “sex” to include sex characteristics, including intersex traits; pregnancy or related conditions; sexual orientation; gender identity; and sex stereotypes. We stated that this proposed change would recognize a person's sex as referring to an individual's immutable biological classification as either male or female, consistent with Executive Order 14168 (90 FR 8615) that reflects the current policy of the United States. HHS is of the view that because the sexes are not changeable and one's sex is grounded in fundamental and incontrovertible reality, it is not necessary to address ancillary issues of gender ideology in a regulation governing the activities of State-licensed agents, brokers, and web-brokers. Based on our experience overseeing agents, brokers, and web-brokers as they assist consumers with enrollment through the FFE, we stated that we do not believe this change would result in or facilitate any discrimination against consumers.
At § 155.220(j)(3), we proposed that an individual or entity described in paragraph (j)(1) is required to comply with the standards set forth at § 155.220(j)(3).
We proposed at new paragraph § 155.220(j)(3)(i) to require that all conduct involving marketing must comply with the standards of conduct described within § 155.220(j)(2).
We also proposed, at § 155.220(j)(3)(ii), that all agents, brokers, and web-brokers must provide consumers with correct information about FFEs, QHPs offered through the FFE, and insurance affordability programs that does not omit any material facts. We proposed that agents, brokers, and web-brokers must refrain from marketing that is misleading, materially inaccurate, coercive, or discriminates based on race, color, national origin, disability, age, or sex. For purposes of the proposed rule, and consistent with the proposed revisions to § 155.220(j)(2)(i), we stated that the term “sex” refers to an individual's immutable biological classification as either male or female, consistent with Executive Order 14168 (90 FR 8615). This definition applies to all marketing materials and all consumer-facing communications subject to this section.
At § 155.220(j)(3)(iii), we proposed seven examples of prohibited marketing practices. We proposed at § 155.220(j)(3)(iii)(A) that agents, brokers, and web-brokers may not provide cash, monetary rebates, gift cards, travel vouchers, or cash equivalents to induce consumers to enroll or for any enrollment-related inducement.
At § 155.220(j)(3)(iii)(B), we proposed that agents, brokers, and web-brokers may not offer gifts to consumers unless such gifts are: of nominal value; offered to similarly-situated consumers without regard to whether the consumer enrolls; and are not in the form of cash or cash equivalents.
We proposed at § 155.220(j)(3)(iii)(C) to prohibit agents, brokers, and web-brokers from falsely asserting or suggesting that consumers will always qualify for zero-dollar insurance or zero-dollar premiums. This type of advertisement may confuse or mislead consumers into providing an agent, broker, or web-broker their PII based on a false assumption of what they would qualify for. This PII may then be used by the agent, broker, or web-broker to enroll the consumer in a plan without authorization or for other unauthorized purposes. We stated that this proposed language would therefore aim to prevent consumers from providing their PII to agents, brokers, or web-brokers based on a false assumption.
At § 155.220(j)(3)(iii)(D), we proposed to prohibit agents, brokers, and web-brokers from falsely using identical or facsimiles of government or other official logos and notations. We stated in the proposed rule that this proposal is related to providing consumers with correct information and builds on existing language in § 155.220(j)(2)(i) that prohibits having a “. . . direct enrollment website that HHS determines could mislead a consumer into believing they are visiting
At § 155.220(j)(3)(iii)(E), we proposed to prohibit agents, brokers, and web-brokers from providing inaccurate or misleading information about enrollment timelines and deadlines. In the proposed rule, we stated that this proposal would include actions such as providing false, inaccurate, or misleading information related to SEP deadlines. Inaccurate timelines or misreporting of SEP deadlines may coerce consumers to enroll prematurely, believing they are about to miss an SEP or other enrollment deadline. This may cause consumers to enroll in a plan they may not have chosen otherwise if they realized they had more time to consider their options.
At § 155.220(j)(3)(iii)(F), we proposed to prohibit the misconstruing of legislation, regulations, or Executive Orders, including listing references or citations to fake or incorrect legislation, regulations, or Executive Orders. We stated in the proposed rule that this proposal would encompass advertisements using fictional citations, using misleading characterizations of specific citations, or other deceptive practices related to legislation, regulations, or Executive Orders. We stated that this proposal would help reduce misinformation and disinformation in advertisements, helping to ensure consumers are not misled before providing their PII to an agent, broker, or web-broker.
We also proposed at § 155.220(j)(3)(iii)(G) to prohibit the use of an image, likeness, or quote from a notable figure, such as a celebrity or politician, in an advertisement claiming that the figure has endorsed the agent, broker, web-broker, or their agency when that endorsement is not truthful. We stated in the proposed rule that this would include using artificial intelligence-generated videos, such as, but not limited to, deep fakes, or falsely attributing a quote to the public figure. This behavior may lure consumers into clicking on an advertisement or providing their PII based on a false assumption a public figure has endorsed the product or the person promoting the product. An endorsement would not be truthful if the figure in the advertisement did not actually endorse the product, did not actually speak the words the advertisement says they stated, or other similar behaviors. Furthermore, this behavior may violate State or Federal law on using someone's name, image, or likeness without permission.
The language we would use in proposed § 155.220(j)(3)(ii), and the behaviors we proposed to list in new § 155.220(j)(3)(iii), would better align Exchange requirements with MA requirements and help protect consumers. We stated in the proposed rule that aligning marketing rules for agents, brokers, and web-brokers across the Exchanges would ensure uniformity in enforcement and enhance regulatory compliance, thus creating consistent consumer information. We also stated that we believe these proposals would help ensure advertisements about the Exchanges are accurately providing consumers information about the Exchanges prior to providing their PII and enrolling in a health plan. Accurate advertisements help ensure more consumers enroll on time and provide required supporting documentation in a timely manner, leading to more consumers being enrolled in coverage. We stated that the integrity of the Exchange would be improved by reducing the amount of misleading information being provided to consumers, helping foster an environment where enrollees trust the agents, brokers, and web-brokers providing Exchange enrollment support, as they play an integral role in facilitating enrollments and providing consumers information about the Exchange.
Current §§ 155.220(j)(2)(ii)(A)(2) and 155.220(j)(2)(iii)(C) state HHS or our designee may periodically monitor and audit an agent, broker, or web-broker to assess their compliance with applicable requirements. These requirements allow HHS to request and review eligibility application information and consent documentation to determine compliance with applicable regulations. Therefore, consistent with these other standards of conduct and documentation requirements, we proposed to include the same language in new proposed § 155.220(j)(3)(iv) that agents, brokers, and web-brokers must produce any marketing material upon request in response to monitoring, audit, and enforcement activities conducted consistent with paragraphs (c)(5), (g), (h), and (k) of this section. We stated in the proposed rule that we do not believe a record retention requirement, similar to what is in place in §§ 155.220(j)(2)(ii)(A)(2) and 155.220(j)(2)(iii)(C), is necessary because we would already have access to the marketing materials.
In the proposed rule, we stated that we believe it is the responsibility of all agents, brokers, and web-brokers to ensure advertisements bearing their name or directing consumers to them for Exchange enrollment assistance do not contain misleading information and follow all regulatory requirements. Accordingly, at § 155.220(j)(3)(v), we proposed that an individual or entity described in paragraph (j)(1) of this section would be responsible for ensuring that all marketing-related materials created, written, released, or otherwise produced by the individual or an entity with whom the agent, broker, or web-broker has contracted or engaged to perform marketing on their behalf adhere to the requirements of § 155.220(j)(3)(ii)-(iii) and to make all such marketing-related materials available to HHS upon request in accordance with § 155.220(j)(3)(iv). We stated that an entity working on an agent, broker, or web-broker's behalf under § 155.220(j)(3)(v) could be an agent, broker, or web-broker working for
In summary, we proposed to redesignate § 155.220(j)(3) as § 155.220(j)(4) and at new § 155.220(j)(3), to clarify standards of conduct for marketing. We also proposed at § 155.220(j)(3)(iv) to require that an individual or entity described in § 155.220(j)(1) must produce marketing materials to HHS upon request in response to monitoring, auditing, or enforcement activities. Finally, we proposed at § 155.220(j)(3)(v) to establish that an individual or entity described in paragraph (j)(1) of this section is responsible for ensuring that all marketing-related materials created, written, released, or otherwise produced by the individual or entity or on their behalf adhere to the requirements of § 155.220(j)(3)(ii)-(iii) and, at § 155.220(j)(3)(iv), to produce to the HHS any marketing-related materials upon request in response to monitoring, audit, and enforcement activities.
We sought comment on all aspects of these proposals. Specifically, we sought comment on additional marketing standards of conduct we should consider for agents, brokers, web-brokers, and third-party marketing organizations to address deceptive marketing practices while minimizing administrative burden. We summarize and respond to public comments received on the proposed marketing standards of conduct below.
In addition, the enforcement process under § 155.220(g) provides agents, brokers, and web-brokers an opportunity to respond to our findings and submit information to rebut those findings before any termination of an agent's, broker's, or web-broker's FFE Agreements. This process helps ensure that enforcement actions are directed toward noncompliant conduct.
We did not expand the good faith provision in newly redesignated § 155.220(j)(4) (formerly § 155.220(j)(3)) to include the marketing provisions because marketing activities are fully within the control of the agent, broker, or web-broker. The good faith exception primarily applies to circumstances outside the agent's, broker's, or web-broker's control. For example, agents, brokers, and web-brokers rely on consumers to provide accurate household income information. This situation is not relevant to the marketing regulations because, as indicated earlier, these regulations apply only to activities fully within the agent's, broker's, or web-broker's control.
Our proposal stated that agents, brokers, and web-brokers would be responsible for advertisements created, written, released, or otherwise produced by the individual or an entity acting on their behalf. We believe the “on their behalf” language in our regulations is sufficiently similar to “produced under their direction and control” and, therefore, no change to the language is required. For clarity, we consider an agent, broker, or web-broker responsible for marketing created by a third party only when that third party is contracted, directed, or compensated by the agent, broker, or web-broker. We reiterate that we will not pursue agents, brokers, or web-brokers without sufficient knowledge that they are responsible for their own marketing materials. Additionally, as we do not have oversight authority over TPMO's or lead generators, we could not pursue enforcement against them even if we knew they created an advertisement on an agent's, broker's, or web-broker's behalf. We encourage all agents, brokers, and web-brokers to carefully vet any TPMO, FMO, lead generator, or other third-party entity they collaborate with to ensure they are following all Exchange rules and regulations.
At this time, we do not plan to review advertisements prior to publication. With over 100,000 registered agents, brokers, and web-brokers, preliminary review would be too burdensome and would reduce our ability to engage in enforcement actions against noncompliant agents, brokers, and web-brokers in other areas. We believe reducing our ability to investigate noncompliance would be more harmful to consumers than the benefits that advertisement review prior to publication would provide. We believe our new regulations on prohibited marketing practices will sufficiently inform agents, brokers, and web-brokers on what language and tactics should not be included in advertisements such that preliminary review is unnecessary.
We do not plan on creating and maintaining a repository of approved advertisements for general use. Individual agents, brokers, web-brokers, and agencies are free to create their own advertisements. This allows maximum creativity and flexibility when entities create their own marketing campaigns. We also do not want to create a perception that we are endorsing a particular agent, broker, or web-broker, which may happen if an entity were using CMS-created and approved marketing materials.
Other commenters did not accept HHS' statement in the proposed rule that addressing matters related to gender ideology was not necessary in a regulation focused on agents, brokers, and web-brokers, with commenters citing academic literature and Centers for Disease Control and Prevention findings that transgender populations are particularly vulnerable to discrimination. Other commenters stated concern for consumers who may not receive appropriate, non-discriminatory assistance with enrollment into QHPs by agents and brokers if they are not held to the same standards required by other covered entities.
Other commenters agreed with the proposal to remove the language on the grounds that sex is “an immutable, biological binary.” They further noted that the change would better conform with the text of the Affordable Care Act and would be more consistent with the enforcement of President Trump's Executive Order 14168 (90 FR 8615), “Restoring Biological Truth to the Federal Government.” Another commenter noted that the proposal respects the biological differences of men and women “to ensure clarity in law and protect individual privacy.”
We appreciate the commenter's concerns and the evidence provided regarding vulnerabilities of certain populations to discrimination. However, as we stated in the proposed rule, based on our direct experience in overseeing agents, brokers, and web-brokers and our familiarity with the State licensing and oversight frameworks that govern these entities, they are already subject to an array of professional requirements that provide meaningful accountability and make additional regulatory action unnecessary and could potentially create undue burden and confusion.
We agree with commenters that cited language from Executive Order 14168 (90 FR 8615) as the rationale to remove the parenthetical language would be more consistent with the enforcement of Executive Order 14168 (90 FR 8615). We agree with these commenters that the removal of the language is more consistent with Executive Order 14168 (90 FR 8615).
We are finalizing the removal of nondiscrimination language from § 155.220(j)(2)(i) as proposed. For the reasons we previously stated, we do not believe this change would result in or facilitate any discrimination against consumers. We believe this revision effectively implements Executive Order 14168 (90 FR 8615).
After consideration of comments, we are finalizing the standards of marketing conduct policy as proposed. Specifically, we are finalizing the revision of § 155.220(j)(2) to remove “marketing or” from § 155.220(j)(2)(i); the redesignation of § 155.220(j)(3) to separate standards of conduct related to enrollment from standards of conduct related to marketing; the expanded marketing requirements for agents, brokers, and web-brokers at § 155.220(j)(3)(ii); and the codification of a list of prohibited practices, requirements for responding to HHS requests related to marketing, and responsibilities related to marketing conducted by third parties with whom an agent, broker, or web-broker contracts at § 155.220(j)(3)(iii)(A) through § 155.220(j)(3)(iii)(G). Accordingly, we are also finalizing the redesignation of § 155.220(j)(3) as § 155.220(j)(4). We are also finalizing at
In the 2027 Payment Notice proposed rule (91 FR 6340), we proposed to remove § 155.222, which currently governs the vendor program to provide agent and broker training on an annual basis for a given plan year. Removal of this regulation effectively discontinues the vendor program.
The vendor program was established through § 155.222 to be implemented in PY 2016 and beyond to allow the possibility for certain training and information verification functions to be provided by HHS-approved vendors. In the 2016 Payment Notice (80 FR 10749), we outlined in § 155.222(a) the application and approval process for vendors seeking recognition as HHS-approved vendors for FFE training and information verification for agents and brokers. Section 155.222(b) outlines the standards that an entity must meet to be approved by HHS as a vendor and to maintain their status as an approved vendor, and § 155.222(c) provides that the approved list of vendors will be published on an HHS website. Section 155.222(d) describes how vendors will be monitored for ongoing compliance with the standards outlined in § 155.222(b). Section 155.222(e) describes the appeals process available to vendors whose applications are denied, or whose approvals to offer training and information verification are revoked.
The vendor program has low participation rates and has not seen significant growth. Since the program's inception in PY 2016, only six entities have participated as vendors, with only two or three participating in any given plan year. Additionally, agents and brokers who utilize the program only account for 9.3 percent (9,138) of registered agents and brokers in PY 2025. Moreover, since 2015, training completions by agents and brokers through vendors have never surpassed 10 percent. This data indicates consistently low demand for the program. Importantly, eliminating the vendor program would save the Federal Government approximately $300,000 each plan year.
We stated in the proposed rule that if this proposal to discontinue the vendor agent/broker training program is finalized, it would affect neither the quality of nor access to agent/broker annual training. We stated that agents and brokers would continue to have the ability to access training through CMS' existing Marketplace Learning Management System (MLMS) platform. The proposal to discontinue the vendor agent/broker training program only proposed to remove the option of this alternate training platform, one that, as noted, has been historically underutilized.
In summary, we proposed to terminate the vendor program, which allows approved third-party entities to facilitate the annual agent and broker training and registration process for the Exchange, through removal of § 155.222.
We requested comment on the proposal to remove § 155.222 and eliminate the vendor program.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed removal of the vendor program below.
Section 71301 of the WFTC legislation established new eligibility requirements for the PTC. Specifically, section 71301 of the WFTC legislation amends 26 U.S.C. 36B(e) to provide that a PTC is allowed for the coverage of a lawfully present noncitizen only if he or she is an “eligible alien.” Section 71301 of the WFTC legislation defines “eligible alien” as an individual who is either lawfully admitted for permanent residence (sometimes referred to as a “lawful permanent resident” or “green card holder”); an individual who has been granted the status of Cuban and Haitian entrant as defined in section 501(e) of the Refugee Education Assistance Act of 1980; or an individual who is lawfully residing in the United States in accordance with the Compacts of Free Association (COFA) as defined at 8 U.S.C. 1612(b)(2)(G) (sometimes referred to as a “COFA migrant”). Section 71301 of the WFTC legislation also makes conforming amendments to sections 1411(a)(1), 1411(a)(2), 1411(b)(3), 1411(c)(2)(B)(ii), and 1412(d) of the Affordable Care Act. These amendments require Exchanges to collect attestations regarding “eligible alien” status for applicants applying for APTC, to verify such attestations with the Secretary of the Department of
In the 2027 Payment Notice proposed rule (91 FR 6341), to align Exchange eligibility and verification rules with section 71301 of the WFTC legislation's amendments to sections 1411 and 1412 of the Affordable Care Act, we proposed to add a new definition of “eligible noncitizen” at § 155.20, providing that the term “eligible noncitizen” would have the same meaning as the term “eligible alien,” as defined in 26 U.S.C. 36B(e)(2)(B), which was newly defined in section 71301 of the WFTC legislation.
We further proposed a technical update to § 155.305(f)(1)(ii) to cross-reference 26 CFR 1.36B-1(d). Currently, § 155.305(f)(1)(ii) states that a tax filer may be eligible for APTC if the Exchange determines that one or more applicants for whom the tax filer expects to claim a personal exemption deduction on his or her tax return for the benefit year, including the tax filer and his or her spouse, meets QHP enrollment eligibility requirements and is not eligible for MEC during the coverage month. We proposed to amend this section to state that a tax filer is eligible for APTC if the Exchange determines that one or more applicants who is a member of the tax filer's family, as defined at 26 CFR 1.36B-1(d), meets QHP enrollment eligibility requirements and is not eligible for MEC during the coverage month. In the proposed rule, we stated that this proposed change better aligns with existing Treasury regulations regarding PTC eligibility and provides a clearer description of the individuals on whose behalf a tax filer may be allowed APTC, given that taxpayers can no longer claim personal exemptions on their Federal income tax returns.
Additionally, we proposed to add § 155.305(f)(1)(ii)(C) to provide that an Exchange must grant eligibility for APTC to individuals who are U.S. citizens, U.S. nationals, or eligible noncitizens provided they meet the other APTC eligibility requirements. To align with the new eligibility requirements for APTC for “eligible noncitizens” established by section 71301 of the WFTC legislation, we proposed to add verification regulations at § 155.320(c)(3)(ix). We stated in the proposed rule that this proposal would establish Exchange verification requirements for applicants who attest to having an eligible noncitizen immigration status as defined at § 155.20. Specifically, we stated that it would require Exchanges to attempt to verify eligible noncitizen immigration status using data from the Department of Homeland Security's Systematic Alien Verification for Entitlements (SAVE) program and proceed with the inconsistency process outlined in § 155.315(f)(1) through (4) when the Exchange cannot verify the information using SAVE data.
As part of this regulatory update, we also proposed to remove duplicative language and correct the lack of headings in § 155.320(c)(3) by removing the first occurrence of § 155.320(c)(3)(viii) and adding headings to § 155.320(c)(3)(vii) and (viii). We stated in the proposed rule that we believe the redundancy resulted from an oversight in previous rulemaking, as both provisions were intended to define “family size” to align with definitions in the Code and related Treasury Regulations. The first provision referenced 26 CFR 1.36B-1(d), while the second referenced section 36B(d)(1) of the Code. We stated that we believe that the regulatory definition in 26 CFR 1.36B-1 is more appropriate for use in our regulations.
Additionally, we noted in the proposed rule that section 71301 of the WFTC legislation will impact Federal payments to States that operate BHPs for individuals enrolled in the BHP who are lawfully present noncitizens but who are not “eligible aliens,” as defined in 26 U.S.C. 36B(e)(2)(B). To align BHP program regulations with this statutory change, we proposed to add a definition of “eligible noncitizen” at 42 CFR 600.5, cross-referencing the definition of the same term at 45 CFR 155.20. The underlying statutory provisions at section 71301 of the WFTC legislation apply to plan years beginning on or after January 1, 2027. We stated that our proposed regulatory amendment would be effective beginning with plan years starting on or after January 1, 2027.
Under section 1331(d)(3)(A)(i) of the Affordable Care Act and 42 CFR 600.605(a), Federal BHP payments to States include 95 percent of both the PTC under section 36B of the Code and the CSR that would have been provided for the fiscal year to eligible individuals enrolled in BHP standard health plans in the State if such eligible individuals had been enrolled in QHPs through an Exchange. Currently, Congress does not fund CSR payments. Therefore, CMS assigns a value of zero to the CSR portion of the BHP payment rate calculation and States receive no BHP funding attributable to that portion.
We proposed to update §§ 155.20, 155.305(f)(1), and 155.320(c)(3)(ix) to align Exchange regulations with section 71301 of the WFTC legislation. Section 71301 of the WFTC legislation amended section 36B of the Code to provide that a PTC is allowed for the coverage of a lawfully present noncitizen only if he or she is an “eligible alien” and made conforming amendments to section 1411 of the Affordable Care Act requiring Exchanges to verify applicants' “eligible alien” status. Accordingly, we proposed to add a new definition in § 155.20, update our APTC eligibility regulations at § 155.305(f)(1), and add to our verification regulations in § 155.320(c)(3)(ix) to align Exchange eligibility and verification rules with section 71301 of the WFTC legislation.
In the proposed rule, we also stated that while sections 71301 and 71302 of the WFTC legislation eliminates eligibility for PTC for certain lawfully present noncitizens, such individuals remain eligible for enrollment in the BHP, provided they meet the eligibility requirements of section 1331(e) of the Affordable Care Act and 42 CFR 600.305. Upon further consideration during the comment period, we are continuing to review how the WFTC legislation impacts the BHP.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these policies as proposed. We summarize and respond to public comments received on the proposed changes to the definition of “eligible noncitizen,” PTC eligibility for eligible noncitizens, and corresponding verification requirements below.
Commenters also stated concerns that many of the noncitizens who will lose their APTC eligibility are low income and may be unable to afford full price health insurance, which could lead to an increased rate of uninsurance and reverse previous gains in coverage of individuals including H-2A visa holders, refugees, and asylees. Commenters noted that with more people becoming uninsured, more people would lack access to preventive care, which could increase overall health care costs and further burden emergency rooms and hospital systems that frequently provide care to patients without health insurance. Commenters also noted that this would reduce provider access, and that uncompensated care will increase healthcare costs and limit access to health coverage, with a commenter noting the particular impact on children. Commenters stated that restricting PTC eligibility to only eligible noncitizens undermines the Affordable Care Act's goal of expanding access to affordable health care services. A commenter stated concern that, due to prioritizing restricting eligibility for noncitizens, HHS was not sufficiently focused on making coverage more affordable for eligible enrollees.
This proposal does not expand data transmission requirements nor does it require State Exchanges to establish new connections to SAVE. We currently provide a connection to DHS through the VLP Hub service, which connects to DHS SAVE. For Exchanges that already use the VLP Hub service to verify applicants' lawful presence, Exchanges can meet the requirements in this rule
Section 71302 of the WFTC legislation amended 26 U.S.C. 36B(c)(1) by striking subparagraph (B), which provided that an individual could be considered an applicable taxpayer, and therefore eligible for PTC, if they had household income under 100 percent of the FPL and were a noncitizen lawfully present in the United States who was ineligible for Medicaid due to their immigration status. Because 26 U.S.C. 36B(c)(1)(B) was repealed, such noncitizens are no longer eligible for PTC. Under section 1402(g) of the Affordable Care Act, which provides that an individual is only eligible for CSRs if they are also eligible for PTC for that month, such noncitizens are also no longer eligible for CSRs. This provision is effective for plan years beginning after December 31, 2025.
In the 2027 Payment Notice proposed rule (91 FR 6342), we proposed to remove § 155.305(f)(2) to align regulations with section 71302 of the WFTC legislation. Section 155.305(f)(2) currently requires an Exchange to determine a tax filer eligible for APTC if the Exchange determines that the tax filer is expected to have household income of less than 100 percent of the FPL for the benefit year for which coverage is requested, the tax filer or one or more applicants for whom the tax filer expects to be eligible for a personal exemption is lawfully present and ineligible for Medicaid due to their immigration status, and the tax filer otherwise meets APTC eligibility requirements. Section 71302 of the WFTC legislation amended section 36B of the Code such that PTC is no longer allowed for this population. We stated in the proposed rule that removing
We also proposed conforming amendments to the verification regulations at § 155.320(c)(3)(iii)(A) and to SEP regulations at § 155.420(d)(13), to remove references to § 155.305(f)(2) and to the population described in that provision.
Additionally, we noted in the proposed rule that section 71302 of the WFTC legislation will impact Federal payments to States that operate BHPs for individuals enrolled in the BHP who are ineligible for Medicaid due to their immigration status and with incomes below 100 percent of the FPL. As stated previously, under section 1331(d)(3)(A)(i) of the Affordable Care Act and 42 CFR 600.605(a), Federal BHP payments to States include 95 percent of the PTC under section 36B of the Code. Following the repeal of 26 U.S.C. 36B(c)(1)(B) by section 71302 of the WFTC legislation, noncitizens who are lawfully present, ineligible for Medicaid due to immigration status, and have household income below 100 percent of the FPL are no longer eligible for PTC. Therefore, States will no longer receive Federal BHP payments attributable to members of this population who are BHP enrollees beginning January 1, 2026.
Section 71302 of the WFTC legislation is applicable beginning January 1, 2026. Section 71302 is self-effectuating, and Exchanges are required to operationalize the changes required to implement these new statutory requirements beginning with eligibility determinations for the PY 2026 even though conforming changes to Exchange regulations will not yet have been finalized.
We proposed to remove § 155.305(f)(2) and make conforming updates to §§ 155.320(c)(3)(iii)(A) and 155.420(d)(13) to align Exchange regulations with section 71302 of the WFTC legislation. We stated that removing § 155.305(f)(2) and updating § 155.320(c)(3)(iii)(A) would align Exchange APTC eligibility and verification rules with the statutory changes enacted by section 71302 of the WFTC legislation. We further proposed conforming amendments to § 155.420(d)(13) to remove the SEP triggering event for individuals with household income under 100 percent of the FPL who did not enroll in coverage while waiting for HHS to verify their citizenship or immigration status, as the intent of this SEP was to provide an enrollment opportunity for individuals described at § 155.305(f)(2) who were not able to verify their eligibility for APTC within their original enrollment window.
We sought comment on this proposal.
After consideration of comments, and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. Section 71302 of the WFTC legislation, which no longer allows PTC for lawfully present noncitizens who are ineligible for Medicaid due to their immigration status and have household income under 100 percent of the FPL, was effective January 1, 2026. The provisions in this section of the rule, which align HHS regulations with this new statutory requirement, are effective upon enactment. We summarize and respond to public comments received on the proposed change below.
Commenters stated concern that by disallowing APTC for consumers ineligible for Medicaid because of their immigration status, who have income below 100 percent of the FPL, many immigrants who lose their APTC eligibility are already low income and would be unable to afford full price health insurance, leading to gaps in coverage, an increased rate of uninsurance, and financial strain on immigrant families. Commenters noted that with more people becoming uninsured, more people would lack access to preventive care that could increase overall health care costs and further burden emergency rooms and hospital systems, which frequently serve patients without health insurance. Commenters additionally stated concerns about the increased burden of verification of immigration status, potentially deterring those eligible for coverage due to concerns about how their immigration status data may be used.
In the 2027 Payment Notice proposed rule (91 FR 6342), we proposed to amend paragraph § 155.305(f)(4) so that in PY 2028 and beyond, all Exchanges may not determine a tax filer or their enrollee eligible for APTC if: (1) HHS notifies the Exchange that APTC were paid on behalf of the tax filer, or their spouse if the tax filer is a married couple, for 1 year for which tax data would be utilized for verification of household income and family size, and (2) the tax filer, or the tax filer's spouse if the tax filer files jointly, did not comply with the requirement to file a Federal income tax return and reconcile APTC for that year (referred to as the “1-tax year FTR” process). We also proposed that, at the option of the Exchange, an Exchange may choose to early adopt the 1-tax year FTR policy in PY 2027 if it has the resources and capability to do so, or it can continue to administer a 2-tax year FTR process until PY 2028. We stated that if this proposal is finalized, Exchanges on the Federal platform would adopt the 1-tax year FTR process in PY 2027, as HHS has the resources available to do so.
As background, consumers who receive APTC are required to file an income tax return for the year of coverage pursuant to section 6011(a) of the Code and regulations prescribed by the Secretary of the Treasury. Section 36B(f) of the Code requires taxpayers to reconcile their APTC under section 1412 of the Affordable Care Act with their PTC allowed under section 36B of the Code. FTR regulations, implemented pursuant to the Secretary of HHS' general rulemaking authority under section 1321(a) of the Affordable Care Act, facilitate compliance with those requirements and were implemented as part of the 2012 Exchange Establishment Rule (77 FR 18352 through 18353). Exchange enrollees whose tax filer fails to comply with the requirement to file an income tax return and reconcile APTC as described in § 155.305(f)(4) are referred to as having failed to “file and reconcile.” These individuals are referred to as having an FTR status, and the Exchanges conduct the FTR process to identify such individuals.
In the Exchange Establishment Rule, we finalized the FTR policy in part to prevent a primary tax filer or spouse who has failed to comply with tax filing rules from accumulating additional Federal tax liabilities due to overpayment of APTC. FTR was originally finalized and implemented as a 1-tax year FTR policy and HHS began FTR operations in late 2015. FTR continued as a 1-tax year policy until it was paused in 2021 during the COVID-19 public health emergency (PHE). FTR operations were paused due to concerns that consumers who had filed and reconciled would lose APTC due to IRS processing delays resulting from IRS processing facility closures and a corresponding processing backlog of paper filings.
During the PHE pause, we amended the FTR process such that an Exchange could not determine a tax filer or their enrollee ineligible for APTC until they
When we adopted this 2-tax year FTR process, we acknowledged it could place consumers at risk of increased tax liability. To mitigate this concern, in the 2025 Payment Notice (89 FR 26298 through 26299), we required Exchanges to issue FTR warning notices for enrollees in Exchanges who have not filed and reconciled for 1-tax year. We further mitigated this concern when, in the 2026 Payment Notice (90 FR 4424), we also required Exchanges to issue associated warning notices for enrollees in Exchanges who have been identified as not filing and reconciling for 2 consecutive tax years. When we implemented the 2-tax year FTR policy, we also acknowledged the risk for improper enrollment by consumers who know they can ignore their FTR status for an additional year but concluded these instances would be limited as the majority of enrollees comply with FTR. Despite the potential for large tax liabilities and the risk of improper enrollment, we concluded that this policy would have a positive impact on consumers, while still ensuring program integrity as it would provide better continuity of coverage for consumers who may not be aware of the requirement to file and reconcile. We noted that we would continue to monitor the implementation of this new policy, including whether certain populations continue to experience large tax liabilities, and would consider whether additional guidance, or any additional policy changes in future rulemaking, are necessary.
In the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074), we finalized a return to the 1-tax year FTR process. Specifically, we finalized at § 155.305(f)(4)(iii) that, through the end of PY 2026, Exchanges would be required to find tax filers (or their enrollees) ineligible for APTC if they had a 1-tax year FTR status for PY 2026 only. The finalized regulation provided that Exchanges would revert to the 2-tax year FTR process beginning in PY 2027. We did so for a number of reasons. First, we stated in the 2025 Marketplace Integrity and Affordability final rule that we believe the prior 2-tax year FTR process places a substantially higher number of tax filers at a greater risk of accumulating increased tax liabilities when filing their Federal income taxes. Second, we stated that we believe that the 2-tax year FTR process could incentivize tax filers to not file and reconcile because they would be allowed to keep APTC eligibility for an additional year without filing their Federal income tax return and reconciling APTC. This policy was stayed by the District Court for the District of Maryland in
Under section 36B(b)(1) of the Code, no PTC is allowed for any month that is not a “coverage month.” On July 4, 2025, Congress passed and President Trump signed the WFTC legislation which, under section 71303, amended the definition of “coverage month” under section 36B(c) of the Code for taxable years after December 31, 2027, to provide that a “coverage month” will not include, for any individual enrolled in a QHP through an Exchange, any month for which the Exchange does not meet the requirements of § 155.305(f)(4)(iii), as added by the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074). Section 155.305(f)(4)(iii) reflects the 1-tax year FTR policy proposed in this rule. Thus, under section 71303 of the WFTC legislation, for taxable years beginning after December 31, 2027, no APTC is payable on behalf of any enrollee in an Exchange for any month in which the Exchange has not implemented a 1-tax year FTR policy.
We proposed that for PY 2028 and beyond, an Exchange must determine a tax filer or their enrollee ineligible for APTC, and that, at an Exchange's option, an Exchange may make such a determination for PY 2027 if: (1) HHS notifies the Exchange that APTC was paid on behalf of the tax filer, or their spouse if the tax filer is married, for a year for which tax data would be utilized for verification of household income and family size; and (2) the tax filer, or their spouse if the tax filer is married, did not comply with the requirement to file a Federal income tax return and reconcile APTC payments with PTC the tax filer is allowed to claim on their tax return for that year. If the Exchange does not choose to adopt the 1-tax year FTR policy for PY 2027, they must determine a tax filer or their enrollee ineligible for APTC if: (1) HHS notifies the Exchange that APTC was paid on behalf of the tax filer, or their spouse, if the tax filer is a married couple, for 2 consecutive tax years for which tax data would be utilized for verification of household income and family size; and (2) the tax filer, or their spouse if the tax filer is a married couple, did not comply with the requirement to file a Federal income tax return and reconcile APTC payments with PTC the tax filer is allowed to claim on their tax return for those 2 consecutive years.
We proposed to amend the language at § 155.305(f)(4) to clearly reflect an Exchange's option to implement either the 1-tax year FTR policy or 2-tax year FTR policy for PY 2027 and the 1-tax year FTR policy for PY 2028 and beyond. We proposed to reorganize paragraph (f)(4) to include three sections—Definitions, APTC eligibility, and Notices. We also proposed to revise the language to ensure that notices are sent to consumers that reflect whether the Exchange is implementing the 1-tax year or 2-tax year FTR policies for PY 2027 coverage, and that the Exchange will implement the 1-tax year FTR policy for PY 2028 coverage. In addition, we stated that we are making non-substantive changes to improve the readability and clarity of the regulatory text. We stated that we believe this change is important because it would be imprudent for Exchanges to implement the 2-tax year FTR policy in PY 2028 and thereafter due to the impacts on the definition of coverage month under section 36B(c) of the Code, and allowing Exchanges to voluntarily adopt the 1-tax year policy for PY 2027 gives Exchanges the operational flexibility they need to navigate the vast pre-enrollment verification changes also imposed in section 71303 of the WFTC legislation.
While the revised definition of coverage month that compels Exchanges to implement the 1-tax year FTR policy
The 2025 Marketplace Integrity and Affordability final rule reinstated the 1-tax year FTR policy, but to balance competing concerns, the rule sunset the policy automatically after the end of PY 2026. At the time, we concluded that the 1-tax year FTR policy was needed immediately to reduce the number of improper APTC payments in Exchanges on the Federal platform. However, we also considered that the policy's utility could be less apparent in the context of the expiration of the expanded subsidies and fully-subsidized benchmark plans, which removes much of the incentive for unscrupulous agents, brokers, and web-brokers to fraudulently enroll consumers into Exchange coverage who then may not know they need to file Federal income taxes and reconcile APTC. While we have made progress in reducing improper unauthorized enrollments over the past year, there remains a substantial number of unauthorized enrollments on the Federal platform, and there remains significant risk that persons enrolled without their knowledge will be subjected to surprise tax liability. Finalizing the 1-tax year FTR will mitigate the risk that individuals enrolled in Exchange coverage without their knowledge will amass unintended tax liabilities for 2 years.
When we finalized the sunset of the 1-tax year policy in the finalized 2025 Marketplace Integrity and Affordability final rule, commenters also expressed the following concerns: (1) that the 1-tax year FTR process may result in coverage losses because the tax filing process is complex and consumers are not fully aware of the requirements to file and reconcile, (2) that the 1-tax year FTR process could have a negative impact on the risk pool, and (3) that the 1-tax year process negatively impacts low-income consumers who have a more difficult time predicting and verifying income due to the unpredictable nature of their income. While we acknowledged these concerns in the proposed rule, we stated that we believe that for PY 2027, the overriding policy need for the Federal Exchange is to be able to remove unauthorized enrollments from the Exchange, and the 1-tax year FTR policy enables us to do that better than a 2-tax year FTR policy. As for State Exchanges, which do not all face the same problem for unauthorized enrollments, we stated that we believe that the flexibility to be able to nimbly respond to whatever the Court decides for the final decision in
In the proposed rule, we stated that we also understand that State Exchanges and other interested parties may have planned their FTR operations based on the sunset of the 1-tax year policy as finalized in the 2025 Marketplace Integrity and Affordability final rule. However, due to the stay imposed by the Court, State Exchanges have not implemented the 1-tax year FTR process for 2026. If the stay continues through PY 2026, they would have nothing to sunset in PY 2027 (that is, the 2-tax year FTR policy would continue). Alternatively, if HHS prevails in
A review of plan selections during the 2026 open enrollment period shows 29 percent of people enrolled in fully subsidized plans through the Federal platform.
Though the enforcement of the 1-tax year policy for PY 2026 was stayed after the District Court concluded it would likely be found contrary to law, we stated in the proposed rule that we continue to believe we have a strong statutory basis for applying the 1-tax year policy. In the 2025 Marketplace Integrity and Affordability proposed rule (90 FR 12961), we stated HHS' belief that the Affordable Care Act does not allow HHS to determine someone eligible for APTC if they failed to meet the requirement to file a tax return. Sections 6011 and 6012 of the Code, as implemented under 26 CFR 1.6011-8, require enrollees who receive APTC to file a tax return and reconcile the APTC. Notwithstanding, the District Court reasoned that the policy was likely unlawful because nothing in the statute expressly conditions eligibility on reconciling tax credits. However, our analysis of the statute has focused on the importance of filing a tax return, not reconciling APTC. That's because the tax return is a critical element of the income verification process to qualify for APTC under the statute. As such, filing a tax return is a means of verifying a condition of eligibility and not itself a condition of eligibility. As we explained in the Marketplace Integrity and Affordability proposed rule, the statute requires APTC to be set on the basis of the individual's household income for the most recent taxable year for which information is available. Therefore, the income reported on the tax return for the most recent taxable year establishes the starting point for verifying whether an applicant's income meets the requirements to qualify for APTC. As discussed previously, when the IRS does not have tax return information to verify an applicant's income, section 1412 of the Affordable Care Act requires HHS to establish alternative procedures to determine APTC when there is a change in circumstances or “in cases where the taxpayer was not required to file a return . . .” Because section 1412(b)(2)(B) only references cases where a tax filer was
While we had previously intended to sunset the 1-tax year policy in PY 2026, due to both the inability to implement it in PY 2026 due to a judicial stay in
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed updates to the FTR policy below.
Furthermore, we believe that the impact of the stay is only to invalidate the 2025 Marketplace Integrity and Affordability final rule, thereby reverting Exchanges to the 2-year FTR policy that was previously in effect prior to the stay.
For additional clarification, even if a consumer is determined by HHS to have an FTR status during the FTR process, they or their tax filer can still claim their PTC for the months that they did not receive APTC when they do file their Federal income tax return and reconcile APTC for the applicable tax year. The proposed rule only applies to APTC eligibility, not PTC eligibility.
While we are unable to change the privacy requirements at the IRS related to the ability to disclose FTI to anyone besides the tax filer, we believe that our workarounds provide sufficient notice to the consumer of the requirement to file and reconcile. Furthermore, the notices created by HHS are created with plain language guidelines in mind, while also conveying the implications of not filing and reconciling.
Section 71303(a) and (b) of the WFTC legislation imposes new requirements on Exchanges related to eligibility verification effective with PY 2028.
Section 71303(a) of the WFTC legislation adds a new paragraph (5) to section 36B(c) of the Code, establishing that a month is not a coverage month for an applicant, and therefore no PTC is allowed for the applicant's coverage for that month, if the month begins before the Exchange verifies the applicant's eligibility to enroll in a QHP and for APTC, “using applicable enrollment information that shall be provided or verified by the applicant.” Section 71303(a) of the WFTC legislation also:
• Specifies a minimum set of “applicable enrollment information”;
• Clarifies that a past month may be treated as a coverage month if an Exchange later verifies the applicant's eligibility;
• Specifies that these verification requirements do not impact eligibility to enroll in a QHP;
• Permits the Secretary of the Department of the Treasury to waive these verification requirements when an individual qualifies for an SEP based on a change in family size; and
• States that Exchanges are permitted to use “any data available to the Exchange and any reliable third-party sources in collecting information for verification by the applicant.”
Section 71303(b) of the WFTC legislation amended section 36B(c)(3)(A) of the Code such that any plan enrolled in through an Exchange is not considered a QHP, and therefore no PTC is allowed for enrollment in the plan, unless, no later than August 1 of the year before the plan year, Exchanges provide “a process for pre-enrollment verification” that permits any applicant to verify their household income and eligibility for enrollment in such plan for the upcoming plan year.
In the 2027 Payment Notice proposed rule (91 FR 6345), we stated that we plan to issue regulations, guidance, technical assistance, and educational materials in the future to facilitate implementation of these provisions of section 71303 of the WFTC legislation. In the proposed rule, we sought comment on considerations for future policy development and implementation of these provisions of section 71303 of the WFTC legislation. We sought comment on topics including, but not limited to, operational considerations for State Exchanges, issuers, agents and brokers, navigators and assisters, and consumers; and effective rollout and communications. We sought input from interested parties regarding the required timelines to comply with the law, including the requirement that Exchanges establish a pre-enrollment verification process no later than August 1, 2027. We also sought input on the anticipated complexity, costs, burden, enrollment impacts, and any State-specific considerations. We thank commenters for their feedback and will take comments into consideration in future guidance, technical assistance, educational materials, and rulemaking.
Section 71303 of the WFTC legislation also adds new paragraph (6) to section 36B(c) of the Code, regarding failure to file and reconcile; please see section III.D.10. of this final rule for further discussion regarding failure to file and reconcile.
To support improved payment integrity measures throughout the Exchanges, we finalized a series of income verification provisions in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27121), including revisions to § 155.320(c)(3), to require the submission of documents to verify income when an applicant's attested projected household income is at or above 100 percent of the FPL and trusted data sources indicate the consumer's household income is below 100 percent of the FPL. This policy was a resumption of the requirement to verify income for this subset of consumers that was first finalized in the 2019 Payment Notice (83 FR 16985), a regulation that was later vacated by the U.S. District Court for the District of Maryland in
Since the finalization of the 2025 Marketplace Integrity and Affordability final rule and the issuance of the August 2025 court stay, we have continued to focus on finding and stopping improper enrollments, including those supported by inaccurate income estimations. Without the implementation of the stayed income verification regulation requiring documentation of income when an applicant attests to household income above 100 percent FPL and trusted Federal data sources indicate household income is below 100 percent FPL, the use of inflated incomes could have resulted in consumers being improperly enrolled in Exchange coverage, oftentimes without their knowledge. Since October 2025, the Federal Exchange has continued to detect improper enrollments that included suspect attestations of income. For example, we stated in the proposed rule that the Federal Exchange has received reports that agents, brokers, and web-brokers may be using artificial intelligence to impersonate consumers and falsely attest to household income that could potentially qualify the consumers for APTC and CSR benefits they may not be eligible for, something that we were not aware of when we finalized the 2025 Marketplace Integrity and Affordability final rule. Inaccurate household attestations can lead to consumers experiencing hardship when they go to use health coverage and find out they are enrolled in a plan they were unaware of.
Verifying an applicant's household income could result in HHS detecting improper enrollments before APTC can be paid. We stated in the proposed rule that we continue to uncover improper enrollments through reports from consumers, agents, brokers, and web-brokers, and, in particular, issuers. As mentioned in the fact sheet on CMS actions to strengthen program integrity and protect consumers,
Moreover, submitting documentation to verify income is now even more important to protect applicants from accumulating tax liabilities due to misestimating or misreporting their income. As we explained in relation to the FTR policy in section III.D.10. of this final rule, the WFTC legislation was enacted after the finalization of the 2025 Marketplace Integrity and Affordability final rule removes limitations on repayment of the APTC beginning with PY 2026. Under section 71305 of the WFTC legislation, repayment caps on excess APTC payments discontinued starting in PY 2026. We stated in the proposed rule that under this proposed policy, households would likely receive an income DMI that would require them to submit documents to verify their annual household income and, if they do not verify with documents, would result in the loss of APTC after the 90-day DMI period and protect them from accumulating substantial tax liabilities. The Federal Exchange does have a process that allows consumers to report an unauthorized enrollment, which will allow them to avoid tax liabilities, but this requires the consumers to be aware of the improper enrollment and take actions to correct it. The Federal Exchange also permits issuers to report improper enrollments to HHS, which has the same effect of allowing the consumer to avoid tax liability for an enrollment they were unaware of and did not authorize.
We noted in the proposed rule that Congress did not limit HHS' authority under section 1411 of the Affordable Care Act to verify income under the circumstances targeted by the policy, but granted HHS broad authority and discretion to design verification procedures the HHS Secretary determines appropriate. Section 1411(c) of the Affordable Care Act provides that applicants' previous taxable year household incomes reported on an Exchange application must be submitted to the Secretary of the Treasury for verification. Section 1411(d) of the Affordable Care Act directs HHS or an Exchange to verify the accuracy of information that is not required to be submitted to Treasury, Homeland Security, and Social Security. Income information provided to verify eligibility when there are “changes in circumstances” is not required to be submitted to Treasury. Therefore, under 1411(d), HHS or Exchanges must verify this income information, which includes verifying income through other trusted data sources. If no trusted data source can verify income, section 1411(e)(4) of the Affordable Care Act requires the HHS Secretary to notify the Exchange of the inconsistency and the Exchange to take reasonable steps to resolve the inconsistency, including by contacting the applicant or by taking any additional actions as the HHS Secretary may identify through regulation or other guidance.
If the inconsistency remains unresolved, the Exchange must give the applicant an opportunity to either
With this in mind, section 1412 of the Affordable Care Act describes the process for determining eligibility for APTC using the process described in section 1411 of the Affordable Care Act. Specifically, section 1412(b)(2) of the Affordable Care Act gives the Secretary authority to define additional verification procedures where a consumer's application reflects a change in the consumer's circumstances when compared to data for the most recent taxable year that is available from the Secretary of the Treasury. In cases, as described previously, where an applicant attests to annual household income at or above 100 percent of the FPL but the IRS indicates it is below 100 percent of the FPL, we stated in the proposed rule that the Exchange would use this authority to determine whether they may be eligible for APTC using their attested annual income amount, given the `changes in circumstances' from their tax data. In cases where trusted data sources cannot verify their income under these circumstances, we proposed to specify that Exchanges on the Federal platform would follow the procedures established under 1411(e)(4) and implemented in § 155.315(f)(1) through (4) to create an annual income DMI for these consumers.
Beyond statutory authority, we stated in the proposed rule that there are concerns regarding program integrity that continue to validate enhanced scrutiny for consumers whose annual household income is indicated by tax data as below 100 percent of the FPL. As we noted in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27121), a GAO study on improper payments determined our control activities, such as income verification policies, related to the accuracy of APTC calculations were not properly designed.
A notable driver of these continued payment integrity concerns, as evidenced by the 2025 GAO findings, is agent, broker, and web-broker behavior. In the 2025 Marketplace Integrity and Affordability final rule (90 FR 27121), we provided evidence connecting agent, broker, and web-broker actions to consumers misrepresenting or overestimating their income and the rise in unauthorized enrollments. We observed that some agents, brokers, and web-brokers and applicants are taking advantage of weaknesses in the Exchanges' eligibility framework to enroll consumers in coverage with APTC without their knowledge, even when the consumers are not eligible. We stated in the proposed rule that the persistence of agent, broker, and web-broker actions to undermine payment integrity highlight the need for continued changes to address improper enrollment and improve the accuracy of income attestations. In recently identified internal data, we found that nearly 80 percent of income DMIs were generated for households who worked with an agent, broker, and/or web-broker in PY 2024. Additionally, we found for PY 2025 that enrollees who worked with an agent, broker, and/or web-broker in PY 2025 generated DMIs at a rate three times higher compared to enrollees who did not work with anyone. This could be indicative of continued agent, broker, and web-broker misconduct including broad miscalculations in household income
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed with one minor edit to § 155.320(c)(3)(vi)(C)(2) to cite paragraph (c)(3)(vi) instead of paragraph (c)(3)(iii)(D) for information on the reasonable threshold. Below, we summarize and respond to public comments received on the proposed policy to perform further income verification processes when the IRS returns income that is below 100 percent FPL but an applicant's attested projected annual household income would consider them an applicable taxpayer according to 26 CFR 1.36B-2(b) for the plan year for which coverage is requested, and is more than a reasonable threshold above the annual household income.
For those that experience difficulty identifying documents to submit, we recommend consulting the full list of acceptable documents provided on multiple consumer notices and our website.
While we understand that some consumers may have trouble estimating and proving their income, we emphasize the importance of ensuring that APTC distributed is accurate and fully verified through this additional income verification requirement.
Additionally, we believe that the costs associated with implementing and operating this policy are justified, as this is a critical program integrity measure to ensure consumers who may not be eligible for APTC are not erroneously receiving APTC throughout the entire plan year. Because of that, while we understand State Exchanges are concerned about the implementation and ongoing costs, including any upcoming changes due to the passing of the WFTC legislation, we believe that the program integrity gains outweigh the potential costs to State Exchanges. As illustrated later in the regulatory impact analysis section of this rule, we estimate that APTC savings will be greater than operational costs. This is especially true given that many of these consumers may have annual household income below 100 percent FPL when they file their taxes and therefore may not have to pay back the APTC they received. Absent an income DMI, they would likely receive APTC for the entire plan year whereas, with an income DMI, they would only receive APTC during the inconsistency period if income could not be verified. Finally, we emphasize that while some consumers may end up enrolling in Medicaid after APTC is terminated for failing to verify income, we see this as
When checking data sources, including IRS, to determine whether they can verify income information, we utilize a reasonable threshold to determine whether the income information from a data source sufficiently close to the information on the application. As mentioned in the proposed and final updates to § 155.320(c)(3)(iii)(A), Exchanges must use a reasonable threshold which cannot be less than 10 percent and can include a dollar amount. The Federal Exchange currently employs a threshold of 50 percent or $12,000. Therefore, in cases where data from IRS is slightly different than attested annual household income, but that difference is within a reasonable threshold, we would not generate an income DMI. Additionally, Exchanges can and should continue to use additional data sources subject to timeliness and accuracy standards as approved by HHS to attempt to verify income information in cases where IRS cannot.
Finally, when an income DMI expires, including in this scenario, consumers would have their eligibility for financial assistance decreased based on IRS data which, in this case, would result in them losing financial assistance altogether. While we believe many of these consumers may be eligible for Medicaid rather than Exchange coverage, we recommend Exchanges find ways to help those consumers apply for Medicaid; however, we are not requiring Exchanges to automatically redetermine their eligibility for Medicaid upon income DMI expiration.
In the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074), we removed the requirement for all Exchanges to accept an applicant's annual household income attestation when IRS is successfully contacted but the IRS returns no tax data. We finalized the policy to sunset after PY 2026, requiring Exchanges to resume acceptance of applicant attestations of their household income where the IRS, on behalf of the Treasury Secretary, reports that it has no data in response to a verification request under section 1411(c) of the Affordable Care Act. In the 2027 Payment Notice proposed rule (91 FR 6348), we proposed to permanently rescind the requirement under § 155.320(c)(5) that Exchanges accept attestations under the current rule, in favor of requiring Exchanges, beginning with applications for coverage for PY 2027, to collect documentation from applicants to verify an applicant's household income when the IRS returns no data.
There were many reasons that we opted to temporarily pause the requirement for Exchanges to accept household income attestation when tax data is unavailable. As outlined in the 2025 Marketplace Integrity and Affordability final rule, we believed that this policy may have helped contribute to the weakening of the Exchange eligibility system, which some agents, brokers, and web-brokers took advantage of by enrolling consumers in fully-subsidized plans they may not have been eligible for, oftentimes without those consumers' knowledge. Additionally, after reassessing our reasoning for implementing the original policy, we concluded that we no longer agreed that the original income verification process, including time and effort to submit verifying documents, was punitive. Given this, we concluded in the 2025 Marketplace Integrity and Affordability final rule that the administrative burden of the full income verification process was offset by program integrity benefits that reinstating this policy would have.
We finalized this provision in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074) because we recognized that the imminent program integrity concerns were being driven by the existence of fully-subsidized plans. We noted that the expiration of the enhanced subsidies coupled with the temporary program integrity requirements enacted by the
After further consideration, we proposed in the 2027 Payment Notice proposed rule to remove § 155.320(c)(5), eliminating the requirement to accept an applicant's household income attestation if the IRS does not return any tax data so that for PY 2027 and beyond, Exchanges must generally follow the existing income verification process when the IRS returns no data. We proposed to continue this policy based on our statutory authority and new consideration of impacts from the WFTC legislation.
Section 1411(b)(3)(A) of the Affordable Care Act requires consumers applying for APTC to provide income information described in the Code for the tax year ending the second year preceding the plan year. However, as APTC is determined based on annual household income for the plan year for which they are applying for coverage, when the consumer applies during the open enrollment period, they provide their projected income for the plan year rather than the income from the second year preceding the plan year. Section 1411(c)(3) of the Affordable Care Act requires HHS to submit this income information provided under section 1411(b)(3)(A) of the Affordable Care Act to the IRS for verification without exception. Section 1411(d) of the Affordable Care Act then requires HHS or the Exchanges to verify information submitted on the application that is not required to be submitted to the IRS. This includes income information on “changes in circumstances” under section 1411(b)(3)(B) of the Affordable Care Act as described in section 1412(b)(2) of the Affordable Care Act. Section 1412 of the Affordable Care Act outlines the process for determining APTC. Section 1412(a) directs the Secretary of HHS in consultation with the Secretary of Treasury to establish a program for determining APTC eligibility, and section 1412(b)(2) allows the Secretary of HHS to provide procedures for determining APTC eligibility when a change in circumstance has occurred, which includes substantial changes in income and when the household was not required previously to file a tax return. Finally, section 1412(c)(2)(A) of the Affordable Care Act requires the Secretary of Treasury to provide APTC to issuers on a monthly basis for the plan year.
Historically, given the inconsistency between the statutory requirement for HHS to develop an APTC eligibility process that generally uses income verified by the IRS from the second tax year preceding the plan year, and the fact that HHS must determine eligibility for APTC for the plan year (which occurs significantly after the tax year for which income is used for verification), we have interpreted section 1412(b)(2) of the Affordable Care Act to require households to provide projected annual household income to allow the Secretary of HHS to determine whether a change in circumstance has occurred since the second tax year preceding the plan. In instances where Exchanges receive IRS data as defined in 1411(b)(3)(A) of the Affordable Care Act, the applicant's projected annual household income is compared to that IRS data to determine if it aligns (within certain thresholds) or if there has been a change in circumstance. The Secretary then determines APTC based on projected income per section 1412(b)(2) of the Affordable Care Act if a change in circumstance has occurred and if a change in circumstance has not occurred, meaning the IRS data is aligned with the projected household income, the Exchange is effectively determining APTC based on IRS data for the second tax year preceding the plan year. Furthermore, section 1412(b)(2)(B) allows for instances in which an applicant was not required to file a tax return for the second preceding year to also be considered a change in circumstance, which is one reason why IRS data may not be returned for an applicant. When the IRS cannot verify income and there is a change in circumstance, HHS or the Exchanges then turn to verify income through additional trusted data sources under section 1411(d) of the Affordable Care Act.
In a situation where neither IRS data under section 1411(c)(3) of the Affordable Care Act nor additional trusted data sources under section 1411(d) of the Affordable Care Act can verify income, HHS must then follow the process in 1411(e)(4) of the Affordable Care Act to both require Exchanges to make a reasonable effort to determine the cause of the inconsistency and then allow the applicant the opportunity to correct the inconsistency within a 90-day period. In a situation in which an applicant lacks additional documentation or other supporting evidence of their attested income within the applicable time period, HHS would generally be compelled by statute to deny eligibility for APTC and CSRs based on the inconsistency with IRS data after the 90-day period has ended. In scenarios where IRS does not return income information for a household after the Exchange completes a data request, the statutory framework just outlined establishes additional verifications. When the Exchange's attempt to receive IRS information as stipulated in 1411(b)(3)(A) of the Affordable Care Act is not successful, we stated in the proposed rule that we believe that simply considering that attested annual household income fully verified is insufficient to the authority in section 1411(d) of the Affordable Care Act to verify change in circumstance information stipulated in section 1411(b)(3)(B) of the Affordable Care Act and determine the method of verification, as it does state that the Secretary “shall verify” that information. Absent IRS data, we stated in the proposed rule that we believe that it is necessary to proceed with further verification of this information in order to comply with the requirement in section 1411(d) of the Affordable Care Act to verify it, which would be more than simply accepting attestation.
Therefore, upon further review and consistent with our discussion in the 2025 Marketplace Integrity and Affordability proposed rule (90 FR 12968), we stated in the 2027 Payment proposed rule that we believe the best method of verification to be the current established verification processes for annual income, and that accepting attestation without further verification is not compliant with the requirement to, in some way, verify the information.
Finally, the newly applicable policy from the WFTC legislation provides much stronger motivation to verify consumer income information more stringently than previous practice. Under section 71305 of the WFTC legislation, repayment caps on excess APTC payments will discontinue starting in PY 2026. Absent this proposed policy, we stated in the proposed rule that households for whom IRS returns no data would have their annual household income verified by their attestation of projected household income and, if eligible based on this income, would receive APTC for the duration of the plan year (unless there is a change in eligibility). In contrast, under this proposed policy, we stated that such household incomes
We stated in the proposed rule that this is particularly important for consumers whose income is intentionally or unintentionally misrepresented by agents, brokers, web-brokers, or other intermediaries for enrollment on the Exchange. For example, we stated that many of these agents, brokers, and web-brokers intentionally estimate a household's attested income to receive the maximum amount of APTC possible in order to, even with the expiration of the enhanced subsidies, get consumers into low-cost plans that they may not otherwise be eligible for. While we previously stated in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074) that we believe that unauthorized enrollments will decrease as a result of $0 benchmark plans no longer being available due to the expiration of the enhanced subsidies, we stated in the 2027 Payment Notice proposed rule that the removal of the repayment caps necessitates this policy becoming permanent to protect consumers from significant tax liabilities.
For these reasons, we stated in the 2027 Payment Notice proposed rule that we believe that the justifications for sunsetting this policy in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074) starting in PY 2027 are now outweighed by the loss of the repayment caps. We had previously stated that the removal of the enhanced subsidies, and likely subsequent decrease in unauthorized enrollments, would mean that the corresponding Exchange costs and consumer burden for additional income verification, potential negative risk pool impact, and potential loss of coverage for low-income consumers would be greater than the positive program integrity benefits of making this policy permanent. We are now of the view that the risk of tax liability for these consumers outweigh those concerns, and providing that protection is necessary even with the costs, burdens, and coverage impacts this policy could result in. We reiterated in the proposed rule that applicants whose income is not returned by IRS would benefit from other verification procedures, including the Exchange checking other data sources beyond IRS and having 90 days to submit documentation to verify their attested annual household income.
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. Further, we clarify that § 155.320(c)(5) does not require Exchanges to automatically set an income DMI as soon as IRS returns no data. Likewise, it does not change requirements for the rest of an Exchange's income verification process after the Exchange checks IRS data and IRS returns no data. Rather, this policy simply removes the requirement to accept an applicant's attestation of annual household income when the IRS returns no data. Once the IRS returns no data, Exchanges should continue with the rest of its income verification process under § 155.320(c)(3)(vi). Exchange income verification processes typically include checks of any additional data sources to determine whether the income information on the application can be verified before setting a DMI. Many State Exchanges check available data sources that maintain information specific to the state.
We summarize and respond to public comments received on the proposed policy below.
We appreciate the various comments identifying how this program integrity risk looks different for State Exchanges compared to States on the Federal Exchange. We acknowledge that many State Exchanges have robust income verification processes and can integrate well with additional data sources and their State's Medicaid and CHIP programs, making it more likely that consumers' income will be verified even when tax return data is unavailable. Since the scope of verification data sources State Exchanges have access to when tax return data is unavailable is extensive, this policy should impose limited burden on State Exchanges and their consumers. We believe that the improvements to program integrity and consumer protection outweigh the costs and burden of implementing this policy.
As described earlier in this section, the WFTC legislation eliminates the excess APTC repayment caps that previously limited many consumers' financial liability when their APTC amount exceeded the amount of PTC they were eligible for based on their actual annual income. Without these caps, consumers who receive excess APTC may be required to repay a large amount. This change, which starts with PY 2026, makes accurate income verification critically important for plan years beyond 2025, which is when this
In the 2027 Payment Notice proposed rule (91 FR 6349), we sought comment on whether HHS should permanently discontinue regulatory options allowing QHP issuers to implement a fixed-dollar and gross percentage-based premium payment threshold for PY 2027 and beyond. In the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074), we finalized for PY 2026 that issuers are only able to implement a net percentage-based premium threshold for PY 2026 and, effective January 1, 2027, issuers will be permitted to implement the fixed-dollar threshold and either the net or gross premium percentage-based thresholds.
In the 2017 Payment Notice (81 FR 12271 through 12272), in which HHS established the option for issuers to implement a percentage-based premium payment threshold, we received comment requesting that issuers be allowed to establish a fixed-dollar threshold. At that time, we did not consider implementing a fix-dollar threshold because there can be cases where, due to the payment of APTC on behalf of an enrollee, even a low, flat-dollar amount could represent a large percentage of an enrollee's portion of the premium (81 FR 12272).
In the 2026 Payment Notice (90 FR 4475 through 4478), we implemented an option for issuers to establish a fixed-dollar premium payment threshold policy, under which issuers could consider an enrollee to have paid all amounts due in the following circumstance: the enrollee pays an amount that is less than the total premium owed and the unpaid remainder of which is equal to or less than a fixed-dollar amount of $10 or less, adjusted for inflation, as prescribed by the issuer. In addition, we implemented a gross percentage-based premium payment threshold policy, under which issuers could consider an enrollee to have paid all amounts due when the enrollee pays an amount that is equal to or greater than 98 percent of the gross premium, including payments of APTC, as prescribed by the issuer. If an enrollee satisfies the fixed-dollar or gross percentage-based premium payment threshold policy, the issuer may avoid triggering a grace period for non-payment of premium or avoid terminating the enrollment for non-payment of premium. However, these premium payment thresholds may not be applied to the binder payment.
We stated in the 2025 Marketplace Integrity and Affordability final rule, which was published after the 2026 Payment Notice, that, due to program integrity concerns stemming from the enhanced subsidies, offering these optional threshold flexibilities to issuers could enable a consumer to stay enrolled in a plan they are unaware of after payment of binder. At that time, we finalized modifications to § 155.400(g) that paused through the end of PY 2026 QHP issuers' ability to implement a fixed-dollar or gross percentage-based premium payment threshold. We specified that QHP issuers would regain authority to implement a fixed-dollar or gross-premium threshold after December 31, 2026. We explained that allowing the provision to sunset on December 31, 2026, would address the urgent improper enrollment concerns previously noted without permanently dismantling these premium threshold options.
Overall, HHS observed an increase in the number of unauthorized enrollment (UE) complaints made in 2025 compared to 2024; 229,734 were made in 2024 vs. 341,906 in 2025. However, although HHS continues to see noncompliant behaviors resulting in improper enrollments, we stated in the proposed rule that we believe that program integrity measures implemented over the past year, in addition to the expiration of enhanced APTCs that took effect on January 1 of this year, are likely to lead to a decrease in the number of UE complaints received. Data from the beginning of this year already demonstrate a substantial decrease, with 46,099 UE cases reported in January 2025 compared to 24,053 for January 2026, and this trend is likely to continue.
We have also continued working to implement policies to quickly resolve cases where a consumer may be dually enrolled in Medicaid and a QHP with financial assistance without their consent (referred to as “Medicaid UEs”). We have also implemented multiple data cleanup efforts and have worked with issuers to identify and resolve UEs. We continue to monitor complaints received and UEs resolved to ensure that program integrity concerns continue to decrease.
However, in addition to erroneous and improper enrollment data, we stated in the proposed rule that there is evidence that consumers in many instances are unaware that they remain in coverage. For example, in a recent internal analysis of claims data from 2019 through 2024, we found that among silver plans offered on- and off-Exchange, a significantly higher percentage (34 percent from PY 2023 through PY 2024) of on-Exchange silver enrollments were associated with no claims as compared to off-Exchange silver enrollments (18 to 23 percent from PY 2019 through PY 2024) across all years examined, with the greatest difference occurring in PY 2023 and 2024. This trend was reflected in the percentage of zero claim enrollments in each metal level and was even reflected among enrollees in 94 percent of CSR plans, where out-of-pocket costs are mostly covered by insurers, and where utilization is generally expected to be higher as compared to plans with lower or no cost-sharing assistance available. In addition to this, as we explained in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27140), continued access to zero-dollar bronze plans after the application of APTC increases the risk of fraudulent enrollments and consumers continuing to be enrolled in coverage they do not
The FFE does not collect data from issuers on whether they have implemented a premium payment threshold policy (nor the threshold type), but we have observed that of all auto re-enrolled consumers who had a $0 premium in 2024 but who newly had a non-zero premium in 2025 (1,831,739 consumers), 9.4 percent owed >$0-$5, 9.9 percent owed >$5-$10, while 27.6 percent of consumers owed >$10-$25, and 53.2 percent of consumers owed >$25.
Under the 2025 Marketplace Integrity and Affordability final rule, we finalized that issuers would re-gain the authority to implement fixed-dollar and gross-premium percentage-based thresholds after the end of the 2026 PY. This policy responded to commenter concerns that rescinding QHP-issuer flexibility to implement fixed-dollar and gross-premium percentage thresholds could create barriers to coverage for low-income enrollees who struggle to pay premiums and that consumers with chronic conditions might be able to utilize either the gross-premium percentage-based or fixed-dollar thresholds to avoid coverage gaps. It also acknowledged comments from State Exchanges and State-specific advocacy organizations that limiting this flexibility was unnecessary in States served by State Exchanges that experienced lower rates of improper enrollments.
While we recognized in the proposed rule the additional flexibility these policies might provide to consumers who may struggle in some months to pay their full share of their premium, we stated that we still believe it may be necessary to limit flexibilities to ensure that enrollees do not remain in coverage for extended periods of time without paying at least some of the premium owed. We stated in the 2025 Marketplace Integrity and Affordability final rule that this policy increases the risk that improper enrollments remain undetected, since the enrollee is less likely to receive invoices, and a delinquency or termination notice alerting them to the improper enrollment in the case that the individual or entity submitting the improper enrollment used false contact information. In addition, we stated that an enrollee who stops paying premiums in the belief that this would lead to termination of coverage may instead find that the coverage has continued for several months due to the issuer having implemented a fixed-dollar or gross percentage-based premium threshold, with the additional risk that the enrollee has accumulated a large amount of debt if the issuer has adopted a gross premium percentage-based threshold and the enrollee's gross premium is much higher than the de minimis $10 fixed-dollar threshold. We noted that, in contrast, this is not the case with the long-established net percentage-based threshold, under which enrollees must always pay at least some premium to avoid delinquency or loss of coverage.
As such, in the proposed rule, we stated that we are concerned that allowing the rescission of the fixed-dollar and gross-premium percentage-based threshold flexibilities to sunset for PY 2027 may exacerbate the risks we have outlined. We sought comment from interested parties on whether we should take no regulatory action and allow the policies to sunset at the end of PY 2026, or whether we should amend § 155.400 to rescind these policies for another fixed period of time or permanently in the interest of maintaining program integrity, as the fixed-dollar and gross percentage-based thresholds may hinder efforts at program integrity by allowing consumers to remain enrolled in unwanted coverage after payment of binder. In addition, we sought comment on whether it would be appropriate to grant State Exchanges the flexibility to adopt one or both of these thresholds, even if they remain unavailable for Exchanges on the Federal platform. We also sought comment on any other feedback interested parties may have on other changes HHS can make to the premium payment threshold policy.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing for all Exchanges the removal of the fixed-dollar and gross-premium threshold flexibilities. We summarize public comments received on the comment solicitation below.
We will continue to work with State Exchanges to monitor improper enrollments.
To align Exchange regulations with section 71304 of the WFTC legislation, in the 2027 Payment Notice proposed rule (91 FR 6351), we proposed to remove § 155.420(d)(16) such that all Exchanges will continue to be prohibited from offering the 150 percent FPL SEP after PY 2026. In addition to removing § 155.420(d)(16), we also proposed conforming amendments to remove §§ 155.420(a)(4)(ii)(D) and 155.420(b)(2)(vii), and to revise § 155.420(a)(4)(iii).
The “150 percent FPL SEP” refers to a monthly SEP that was available, at the option of the Exchange, to individuals who were eligible for APTC and who had household income no greater than 150 percent FPL. This SEP enabled qualified individuals to enroll in an Exchange plan at any time and to change their Exchange plan up to once per month. We originally established the 150 percent FPL SEP in regulation, at the option of the Exchange, in part 3 of the 2022 Payment Notice (86 FR 53412). At the time, we stated that the primary objective of the 150 percent FPL SEP was to “make affordable coverage available to more consumers,” by making it easier for individuals to access the enhanced tax credits provided by section 9661 of the ARP (86 FR 53432). As finalized in part 3 of the 2022 Payment Notice, a consumer was required to have an applicable percentage of zero, meaning that they had access to a silver plan with a zero-dollar monthly premium after the application of APTC, to qualify for the SEP. In the 2025 Payment Notice (89 FR 26218), we removed the requirement that an individual have an applicable percentage of zero to qualify for the 150
In the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074), we finalized a policy that prohibited Exchanges from offering the 150 percent FPL SEP, effective from August 25, 2025, until the end of PY 2026, at which time the prohibition would “sunset” and Exchanges could begin offering the 150 percent FPL SEP again. We stated that pausing the availability of the 150 percent FPL SEP was necessary due to a rise in improper enrollments, including misuse of the SEP by agents, brokers, and web-brokers (90 FR 27114). Exchanges would have been permitted to begin offering the 150 percent FPL SEP again in PY 2027, and this pause was finalized in part due to significant concerns raised by commenters regarding the impact of a wholesale repeal of the SEP on low-income Americans who properly use this SEP pathway (90 FR 27114). We reasoned that after the enhanced subsidies expired and individuals were exposed to greater premium costs, the ability of individuals or actors on behalf of individuals to improperly enroll would be diminished, mitigating the risk of allowing Exchanges to offer the 150 percent FPL SEP (90 FR 27114).
The 2025 Marketplace Integrity and Affordability final rule was finalized on June 25, 2025. Shortly thereafter, on July 4, 2025, the WFTC legislation was signed into law. Section 71304 of the WFTC legislation amended section 36B of the Code such that a plan is not considered a QHP, and therefore no PTC is allowed for coverage under the plan, if the plan is enrolled in through an SEP that is based solely on the basis of the relationship of an individual's expected household income to the FPL and not on a change in circumstance (an “income-based SEP”). This provision is effective January 1, 2026.
Section 1411(a)(2)(A) of the Affordable Care Act provides that, for an individual who is claiming APTC or CSRs, the Secretary must determine whether the individual meets the income and coverage requirements of section 36B of the Code and section 1402 of the Affordable Care Act, respectively. HHS has interpreted section 1411(a)(2)(A) of the Affordable Care Act to require an Exchange to align its APTC eligibility rules with the Code's PTC eligibility rules. Therefore, HHS interprets section 71304 of the WFTC legislation to prohibit an Exchange from paying APTC for anyone enrolled in a plan if any individual enrolls in the plan through an income-based SEP, like the 150 percent SEP, that is not in connection with the occurrence of an event or change in circumstances specified by the Secretary.
Under the regulations finalized in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074), Exchanges would have been permitted to resume offering the 150 percent FPL SEP beginning in PY 2027. However, due to requirements established by section 71304 of the WFTC legislation, we stated in the proposed rule that we have determined that permitting Exchanges to offer the 150 percent FPL SEP would provide no additional value and could potentially harm consumers. Throughout prior rulemaking on this topic, we have consistently stated that the primary goal of the 150 percent FPL SEP was to increase consumers' access to affordable coverage (see 86 FR 53432 and 89 FR 26320). We stated in the proposed rule that because consumers who enroll through the 150 percent FPL SEP are no longer allowed APTC for their coverage, permitting Exchanges to offer the 150 percent FPL SEP can no longer achieve this stated objective. Additionally, permitting Exchanges to offer the 150 percent FPL SEP could harm APTC-eligible consumers who enroll through the SEP, as section 71304 of the WFTC legislation prohibits payment of APTC to a plan if any enrollee in that plan enrolled through an income-based SEP.
For the reasons described in this section, we proposed to eliminate the “sunset” of the prohibition on Exchanges offering the 150 percent FPL SEP after PY 2026. To accomplish this, we proposed to remove the paragraph currently at § 155.420(d)(16). We further proposed conforming amendments to remove the paragraphs currently at § 155.420(a)(4)(ii)(D) and § 155.420(b)(2)(vii), which relate to plan category limitations and effective dates for the 150 percent FPL SEP, respectively. Finally, we proposed a conforming amendment to § 155.420(a)(4)(iii), related to plan category limitations, to remove a reference to the 150 percent FPL SEP.
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposal to extend the removal of the 150 percent FPL SEP below.
Given that APTC is no longer permitted for enrollments through the 150 percent FPL SEP, we do not believe that permitting Exchanges to offer the SEP again would be significantly detrimental to program integrity. However, as noted in the preamble of this section, the 150 percent FPL SEP now offers very limited value to consumers, and we are therefore finalizing our proposal to no longer permit Exchanges the SEP.
While we agree with commenters that SEPs other than the 150 percent FPL SEP are sufficient to meet consumers' needs, we also reiterate that we do not believe that permitting Exchanges to offer the 150 percent FPL SEP again would provide a meaningful enrollment opportunity given that APTC is no longer permitted for consumers who enroll through the SEP.
First, as stated throughout prior rulemaking related to the 150 percent FPL SEP (86 FR 53432 and 89 FR 26320), the purpose of this SEP was to make affordable coverage available to more consumers. We do not believe that unsubsidized coverage can meaningfully be considered affordable for low-income consumers and therefore do not believe that the 150 percent FPL can achieve its intended purpose.
Second, HHS has an interest in preventing adverse selection. We believe that allowing Exchanges to offer the 150 percent FPL SEP is likely to contribute to adverse selection, given that the consumers most likely to enroll in unsubsidized coverage despite their low incomes are more likely to have significant medical needs.
Third, HHS has an interest in promoting year-round enrollment. Allowing Exchanges to offer the 150 percent FPL SEP would undermine this interest by allowing a pathway that consumers could use to enroll in or change plans at any time, despite not having experienced a meaningful change in circumstances.
We also acknowledge commenters' concerns about access to coverage for consumers losing Medicaid or CHIP. We clarify that, unlike for most other SEPs, Exchanges have the option to permit consumers losing Medicaid or CHIP coverage 90 days to enroll in a QHP through an Exchange, rather than the typical 60 days, per § 155.420(c)(6). We also clarify that, if an individual does not receive timely notice of their loss of Medicaid or CHIP, then the Exchange must permit the individual to enroll in coverage during the 60 days following the date that the individual knew, or should have known, that their loss of Medicaid or CHIP occurred, per § 155.420(c)(5). We believe that these existing policies provide sufficient enrollment options to consumers transitioning from Medicaid or CHIP to QHP coverage through an Exchange.
We acknowledge commenters' concerns that the removal of the 150 percent FPL SEP, when considered in conjunction with a shorter OEP and increased SEP verification, may make it more difficult for certain consumers to enroll in coverage, potentially leading to longer periods of uninsurance or higher overall rates of uninsurance. However, we believe that both the removal of the 150 percent FPL SEP and the shorter OEP, finalized in the Marketplace Integrity and Affordability final rule (90 FR 27074), have the potential to help promote continuous, year-round enrollment for consumers by ensuring that enrollments that occur during OEP are effective January 1, and that there are clear and limited opportunities available for enrollment outside of OEP. We also reiterate that permitting Exchanges to offer the 150 percent FPL SEP would not meaningfully make it easier for low-income consumers to enroll in coverage, given that they would not be permitted to receive APTC for their coverage.
We do not agree that prohibiting Exchanges from offering the 150 percent FPL SEP could result in enrollees losing access to providers in the middle of treatment. The recission of the 150 percent FPL SEP will not result in individuals who are already enrolled in a QHP through an Exchange losing their coverage. On the contrary, the removal of the 150 percent FPL SEP ensures that individuals do not have the opportunity to change plans mid-year solely on the basis of their income, therefore reducing the risk that consumers may change to a new plan that unexpectedly disrupts their access to existing providers.
We clarify that § 155.410(a)(2) provides that Exchanges may only permit individuals to enroll in or change QHPs during the OEP or during the SEPs enumerated in 45 CFR 155.420. While § 155.420 provides some limited flexibility to Exchanges, such as by allowing Exchanges to decide whether to consider certain triggering events SEP-qualifying, State Exchanges do not have flexibilities with regard to determining SEP policy beyond those specifically described in § 155.420.
We remain committed to addressing fraud, waste, and abuse, including by strengthening oversight of Exchange agents, brokers, and web-brokers. Policies related to strengthening oversight of agents, brokers, and web-brokers are discussed in section III.D.6. of this final rule. We also remain committed to providing consumers with clear and accurate information about the SEPs for which they may be eligible.
We are also committed to providing consumers and all Exchange interested parties with timely and accurate information regarding SEP availability. As part of our implementation of the Marketplace Integrity and Affordability final rule, which prohibited Exchanges from offering the 150 FPL SEP effective August 25, 2025, we updated language on
First, we believe that there is significant likelihood for confusion from both consumers and Exchanges if HHS were to permit an enrollment opportunity that could not be meaningfully used by most enrollees.
Second, while HHS regulations do permit certain limited flexibilities to State Exchanges regarding which SEPs to provide, we also have a compelling interest in promoting clear and uniform SEP policy. Given the high volume of utilization of the 150 percent FPL SEP as compared to other SEPs for which HHS regulations continue to permit limited flexibilities, we believe that permitting Exchanges to offer the 150 percent FPL SEP would damage our ability to promote uniform SEP policy in a way that other existing flexibilities do not. During plan year 2024, approximately 1.9 million consumers enrolled in or changed plans through the 150 percent FPL SEP through the FFE, as compared to fewer than 13,000 consumers who enrolled in or changed plans through the other optional SEPs permitted under §§ 155.420(d)(6)(v) and (d)(13). While we do expect that 150 percent FPL SEP utilization would likely decrease significantly if we were to permit Exchanges to offer the SEP, we still believe that past utilization provides important context about the ways in which allowing the SEP to be offered in States with generous State-funded subsidies could result in differences in SEP policy and functionality that far exceed the differences resulting from other flexibilities permitted under § 155.420.
Finally, we clarify that our interpretation of section 71304 of the WFTC legislation is that Exchanges would be required to prohibit not just APTC, but both APTC and income-based CSRs, for otherwise-eligible individuals who enrolled through the 150 percent FPL SEP. In the preamble in this section, we note that section
Here, we clarify that Exchanges are also prohibited from allowing income-based CSRs for anyone who enrolls in a plan through an income-based SEP. This is because section 1402(g) of the Affordable Care Act provides that CSRs are not permitted for a month unless it is considered a “coverage month” under section 36B of the Code. Under paragraph (c)(2)(A) of section 36B of the Code, a month is generally only considered a coverage month if, as of the first day of the month, the individual is covered by a QHP. Because section 71304 of the WFTC legislation provides that a plan is not a QHP if it is enrolled in through an SEP based solely on income, section 71304 therefore prohibits Exchanges from providing income-based CSRs to individuals who enroll through the 150 percent FPL SEP.
In the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074), we finalized the removal of the restriction for Exchanges on the Federal platform to only conduct Special Enrollment Period Verification (SEPV) for Loss of Minimum Essential Coverage (MEC) cat § 155.420(g). This allowed the Federal Exchange to conduct SEPV for additional SEPs. We also finalized a regulation that required Exchanges on the Federal platform to conduct SEPV for at least 75 percent of new enrollments. The final rule included a provision that both of these provisions were set to sunset on December 31, 2026.
In the 2027 Payment Notice proposed rule (91 FR 6352), we reproposed these provisions as their implementation was stayed by the Court in
We included the sunset provision in the 2025 Marketplace Integrity and Affordability final rule because we recognized that the then-imminent program integrity concerns were being driven by the existence of fully-subsidized plans. We noted that the expiration of the enhanced subsidies coupled with the temporary program integrity requirements enacted by the rule would right-size Exchange enrollment in PY 2026 and would obviate the need for ongoing higher levels of program integrity policies. We stated that as the excess levels of improper enrollments are reduced in PY 2026, we expected the lower subsidy levels to appropriately deter future levels of improper enrollments from ever growing so high again, diminishing the returns of the temporary policies we are enacting in the rule. In other words, the burden of continuing such policies would have reached a point at which they would outweigh any benefits.
In the proposed rule, we stated that we now believe reproposing these policies (without a sunset) is necessary to ensure integrity in the Exchanges and help limit fraudulent enrollments. The proposal to require Exchanges on the Federal platform to conduct SEPV for the loss of MEC SEP is a return to a previous policy that was implemented pursuant to the 2017 Marketplace Stabilization rule. The SEP verification policy in the 2017 rule was driven in part by a 2016 GAO undercover test study of SEPs. The study observed that self-attestation could allow applicants to obtain subsidized coverage they would otherwise not qualify for and then found 9 out of 12 of GAO's fictitious applicants were approved for coverage on the Federal and selected State Exchanges.
Once SEPV was implemented, we studied how the consumer experience was impacted. For PY 2017, a report showed that we averaged a response time of 1-to-3 days to review consumer-submitted documents. In addition, the vast majority (over 90 percent) of SEP applicants who made a plan selection and were required to submit documents to complete enrollment were able to successfully verify their eligibility for the SEP. We conducted additional research for the following plan years through 2021. Based on data from PY 2019, the last year prior to the COVID-19 PHE, which greatly impacted SEPV processing, the majority of consumers (73 percent) were able to submit documents within 14 days of their SEP verification issue (SVI) being generated. Also, we found that the majority of consumers (63 percent) were able to fully resolve their SVI within 14 days of it being generated. That resolution percentage increased to 86 percent by 30 days.
We proposed the 75 percent verification threshold for new SEP enrollments because we believe that most Exchanges would be able to meet it by verifying at least two or three of their largest SEP types based on current SEP volumes. The determination of how many enrollments would constitute 75 percent would be required to be based
We stated in the proposed rule that for SEPs that are being verified, the Exchange would “pend” the consumer's enrollment, meaning that it would not be effectuated until the Exchange verified eligibility for enrollment through the SEP. If the Exchange is unable to verify such eligibility, we stated that the consumer would not be eligible for enrollment through the Exchange under that SEP, and any plan selection under that SEP would be canceled (meaning, terminated before coverage is effectuated) and would not result in enrollment.
Verification for the loss of MEC SEP, which is required under § 155.420(g), was paused through the Covid-19 PHE to ensure consumers could maintain access to continuous coverage. This pause in verification ended on May 16, 2025. After resuming verification for the Loss of MEC SEP on May 16, 2025, we noticed shifts in enrollment trends begin to occur.
We acknowledged in the proposed rule that some shift in SEP volumes was expected due to our best SEP logic, which is a set of hierarchy rules that Exchanges on the Federal platform use to determine what the “best SEP” is for a consumer (generally based on the most advantageous coverage effective date for the qualifying life event experienced by the consumer, verifiable with documents as required), in the event that they attest to multiple SEP qualifying events, such as losing MEC, while also gaining a dependent. Essentially, consumers are often eligible for more than one SEP type and, once verification resumed, another SEP type may become the best SEP for a consumer. However, the substantial shift cannot be explained by that logic alone as these trends do not match any of our historical SEP enrollment data.
When SEPV was first implemented in 2017 and 2018, we noticed shifts in SEP enrollment patterns that resulted in non-verified SEPs making up a larger portion of the total SEP population. For example, the overall portion of consumers granted a non-verified SEP that made them eligible for the Exchange increased from 2.5 percent in 2017 to 10 percent in 2018. During that same period, the Loss of MEC SEP decreased from 60 percent of all SEPs in 2017 to 54 percent in 2018, and the Medicaid/CHIP Denial SEP decreased from 24 percent in 2017 to 19 percent of all SEPs in 2018. From 2019 to 2024, although SEP enrollment volume increased drastically, the proportion of enrollment though each SEP stayed relatively similar. The introduction of the under 150 percent FPL SEP did result in the volume of other non-verified SEPs decreasing. The only notable changes were that the total portion of loss of MEC SEPs increased 5 percent and Medicaid/CHIP denial decreased 6 percent. Given the mass shift away from the loss of MEC SEP throughout 2025 and the significant growth in non-verified SEPs during the same time frame, we stated in the proposed rule that we believe there is a high likelihood action is being taken to intentionally avoid SEP verification. We stated that we believe this trend is being driven primarily by agent and broker activity as 86 percent of SEP enrollments are through agents and brokers.
In addition to trying to mitigate the concern that individuals are attesting to SEPs they are not eligible for in order to avoid verification, we stated in the proposed rule that we believe SEP verification would also help deter bad actors and those who are ineligible to enroll in coverage from gaining access to the Exchanges. We stated that we believe that this would help to reduce rates by preventing individuals who are waiting until they are sick to enroll from utilizing SEPs for which they may be ineligible. As we explained in the 2025 Marketplace Integrity and Affordability rule, we believe that continued access to zero-dollar bronze plans increases the risk of fraudulent enrollments and ineligible individuals gaining access to coverage through SEPs that do not require verification. We believe that increased SEP verification, as we stated in that rule, would reduce the risk of fraud and ineligible enrollments related to zero-dollar bronze plans in the FFE.
For the reasons provided above, we reproposed without a sunset at § 155.420(g), the provision to remove the restriction for Exchanges on the Federal platform to only conduct SEPV for Loss of MEC, and the provision to require Exchanges on the Federal platform to conduct SEPV for at least 75 percent of new enrollments.
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposal to resume Special Enrollment Period Verification.
Agents, brokers, and web-brokers currently have access to training and resources that detail the SEP verification process and the documents required to resolve each SVI, therefore, we do not believe that SEPV will increase time burden on agents and brokers in assisting consumers with submitting documents. Additionally, the documentation required to resolve SVIs does not represent a wholly new type of administrative burden for consumers, as consumers may already encounter documentation submission requirements in connection with other eligibility and verification processes.
For example, under a Loss of MEC SEP, which is one of the most commonly utilized SEPs, consumers who lose employer-sponsored coverage may receive documentation from their employer that they could provide to the Exchange to demonstrate eligibility for the SEP. Accordingly, while we recognize that SEPV may impose administrative burden on agents, brokers, web-brokers, and consumers, we do not believe that such burden is unreasonable in light of the program integrity and consumer protection benefits associated with SEPV.
Regarding the suggestion to accept “reliable” attestation, we note that an Exchange generally cannot assess the reliability of an attestation absent supporting documentation. Additionally, even if an Exchange were to accept attestation that it deems reliable, by failing to confirm eligibility through documentation, it could nonetheless facilitate improper enrollments. Nevertheless, we do intend to allow Exchanges to verify at least 75 percent of SEP enrollments because we believe that most Exchanges are able to meet this verification threshold based on current SEP volumes.
We acknowledge that the SEPV requirement adds a minor administrative burden to the enrollment process; however, we are unable to determine whether this burden contributes to consumers foregoing coverage through the Exchange. Consumers may view a single-button re-enrollment process as a convenient option when engaging with the Exchange, but it may also reduce the likelihood that consumers will carefully review their applications or select the SEP most appropriate for their circumstances. As a result, consumers may experience interruptions in coverage or unexpected medical costs. For example, consumers who do not review their applications may remain enrolled in coverage that no longer meets their medical or financial needs, fail to account for changes in plan benefits or provider networks, or neglect to report updated household or income formation that affects eligibility for APTCs. These circumstances may result in gaps in access to care or the reconciliation of excess APTCs on a subsequent tax return.
Awarding temporary coverage to consumers while their SVI is being processed also has the potential to cause harm to consumers. Although we recognize the importance of access to care, consumers who are granted temporary QHP eligibility, use their coverage, and are ultimately found ineligible for the SEP, could become financially responsible for the cost of care received after the issuer cancels coverage and rescinds payment. The current pended plan selection process is required for Exchanges on the Federal platform (which provides that a consumer's enrollment is not effectuated until the Exchange verifies the SVI) balances the consumer's need for access to care while protecting them from unexpected medical costs.
Additionally, granting consumer's eligibility for the 30 days during which their SVI is being processed, regardless of their ability to provide sufficient documentation, could recreate the conditions that initially led to the establishment of SEPV. Allowing temporary eligibility could allow consumers to use a SEP to enroll in coverage only when they need medical care, and then to let the SVI expire and become uninsured after such medical care is received. This would promote adverse selection and could cause significant instability to risk pools.
In the 2027 Payment Notice proposed rule (91 FR 6353), we proposed to amend § 155.605(d)(1) to codify the expansion of hardship exemption eligibility to individuals who are ineligible for APTC or CSR due to projected household income below 100 percent or above 250 percent of the FPL.
Section 5000A(e)(5) of the Code establishes an exemption from the
State Exchanges may choose to process exemptions, or they may delegate exemption processing to HHS. Most State Exchanges currently delegate hardship exemption processing to HHS.
To avoid confusion for consumers, we stated in the proposed rule that States that currently process exemptions independently may implement the expanded criteria within their existing systems or delegate processing to HHS. We stated that this proposal does not preempt State authority under section 1321 of the Affordable Care Act, which provides States flexibility in the operation and enforcement of Exchanges and related requirements. States retain discretion to determine how to operationalize this policy—either by adopting the expanded criteria or continuing to delegate exemption processing to HHS. We also stated that we would provide technical assistance to support implementation and ensure that States can exercise this flexibility while maintaining consistent consumer protection nationwide.
We sought comment on the proposal to amend § 155.605(d)(1) to codify and expand hardship exemptions for individuals who are ineligible for APTC or CSR due to projected household income. If finalized as proposed, the expanded hardship exemption policy would take effect on the effective date of this final rule.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed expansion of Hardship Exemption eligibility below.
Catastrophic plans are intended as a safety-net against total uninsurance—providing meaningful protection against devastating medical expenses and ensuring access to preventive care for consumers who would otherwise be uninsured. This final rule expands the range of coverage options available to consumers; it does not mandate enrollment in any particular plan type. Consumers may use the plan comparison tools and resources available on
Commenters further noted that Congress constructed a narrow affordability exemption under section 5000A(e)(1) of the Code with specific income-based eligibility criteria and an indexing mechanism under section 5000A(e)(1)(D) that was specifically designed to account for the divergence between premium growth and income growth over time. Commenters stated that the existence of this indexing mechanism reflects a deliberate congressional judgment about how to address premium growth relative to income and that the Secretary cannot use the hardship exemption authority in section 5000A(e)(5) of the Code to create a broader, income-based pathway to catastrophic coverage that replaces or supersedes that statutory standard. In commenters' view, the proposed rule would make catastrophic plans available to approximately 80 percent of adults aged 18-64—including everyone with income below 100 percent of the FPL (approximately $15,650 for a single person) and everyone with income above 250 percent of the FPL (approximately $39,125 for a single person)—a population that commenters noted Congress never intended to have access to catastrophic coverage on a broad, categorical basis.
Commenters also noted that the hardship exemption is limited to individualized, circumstance-specific situations such as an unexpected increase in essential expenses, deprivation of food, shelter, or clothing, or other specific circumstances preventing an individual from obtaining QHP coverage and that the proposed rule adds an income-based exemption without a direct link to the capability to obtain QHP coverage. Some commenters noted that an individual with income above 250 percent of the FPL who could afford a QHP would nonetheless qualify for catastrophic coverage under the proposal, further undermining the connection to hardship. A few commenters requested CMS to withdraw the proposal entirely and to revoke the September 2025 sub-regulatory guidance that initially introduced the expanded eligibility.
Commenters further noted that Congress recently made catastrophic plans eligible to be paired with health savings accounts (HSAs) without amending the statutory eligibility criteria for catastrophic coverage, and that legislation that would have codified and expanded upon CMS' September 2025 guidance, the Health Care Freedom for Patients Act, was considered but not enacted by Congress in December 2025. Commenters stated that these legislative developments reflect a deliberate
Section 1302(e)(2)(B) of the Affordable Care Act establishes two independent, coordinate pathways to catastrophic plan eligibility based on exemption status: eligibility under section 5000A(e)(1) of the Code (relating to individuals for whom coverage is unaffordable) and eligibility under section 5000A(e)(5) of the Code (relating to individuals who have suffered a hardship for the capability to obtain QHP coverage). The statute does not establish a hierarchy between these two pathways, nor does it provide that the hardship pathway is constrained by the criteria Congress established for the separate affordability exemption. This final rule exercises the Secretary's authority under section 5000A(e)(5) of the Code, a distinct statutory provision, and does not modify, replace, or supersede the affordability exemption standard under section 5000A(e)(1) of the Code.
Section 5000A(e)(5) of the Code grants the Secretary of HHS authority to determine whether an individual has “suffered a hardship for the capability to obtain coverage under a qualified health plan.” This provision grants the Secretary discretion to define the circumstances that constitute a qualifying hardship. The statute does not enumerate or limit those circumstances, nor does it require that the hardship exemption be unavailable to individuals who also fail to qualify for the affordability exemption.
We acknowledge that Congress established specific criteria for the affordability exemption under section 5000A(e)(1) of the Code, including an indexing mechanism under section 5000A(e)(1)(D) to account for premium growth relative to income growth. The existence of that indexing mechanism reflects Congress' approach to the affordability exemption; it does not, however, limit the Secretary's separate authority under section 5000A(e)(5) of the Code to recognize that the cumulative divergence between premium growth and income growth—a 219 percent increase in average monthly premiums from 2013 to 2026, including a 26 percent increase in 2026 alone, far outpacing inflation (39 percent) and wage growth (53 percent) over the same period
For individuals with household income above 400 percent of the FPL who are ineligible for APTC, the full unsubsidized premium cost—which has increased 219 percent since 2013—may or may not exceed the affordability exemption threshold depending on their specific income level, but the hardship exemption under section 5000A(e)(5) provides an independent and appropriate pathway to relief for this population through two pathways.
For individuals with projected annual household income between 250 percent and 400 percent of the FPL who are eligible for APTC but ineligible for CSR, the hardship determination rests on a distinct but related basis. While these individuals may reduce their monthly premium through APTC, they remain ineligible for cost-sharing reductions (CSR), which are available only to individuals with household income at or below 250 percent of the FPL enrolled in silver-level plans. CSRs substantially reduce deductibles, copayments, and out-of-pocket maximums—in some cases increasing the effective actuarial value of a silver plan from 70 percent to as high as 94 percent. Without CSRs, individuals in this income range face the full cost-sharing burden of metal-level plans, which may render coverage financially inaccessible as a practical matter even where a premium subsidy is available.
The two exemption pathways address overlapping but distinct circumstances and operate independently of one another. Both pathways respond to the same underlying market condition—sustained, market-wide premium increases that have outpaced inflation and wage growth, creating barriers to obtaining coverage under a QHP. They are distinct, however, in the circumstances each addresses: the affordability exemption under section 5000A(e)(1) of the Code applies a specific, formulaic calculation based on whether the cost of the lowest-cost bronze plan, reduced by any available APTC, exceeds the applicable percentage of household income; the hardship exemption under section 5000A(e)(5) of the Code addresses structural barriers to the capability to obtain coverage that fall outside that formula—including APTC ineligibility due to assumed Medicaid eligibility that does not reflect actual coverage access, the full cost-sharing burden faced by individuals between 250 percent and 400 percent of the FPL who are
For the characterization of the hardship exemption as limited to individualized, event-specific circumstances, we note that the existing regulatory framework does not support that reading. The hardship exemption eligibility standards at § 155.605(d) were originally established in the 2013 final rule.
Moreover, the use of income-based, categorical criteria in the hardship exemption is not a new development. The Medicaid non-expansion exemption at § 155.605(d)(3) provides a particularly instructive precedent. That exemption was established to address the hardship faced by individuals who were ineligible for Medicaid solely because their State chose not to expand Medicaid eligibility under the Affordable Care Act. As we noted in the 2013 final rule, the Secretary determined that it was appropriate for individuals to be eligible for this hardship exemption even if they remained technically eligible for APTC, recognizing that technical eligibility for a subsidy does not, by itself, ensure that coverage is meaningfully accessible or affordable.
We further operationalized the Medicaid non-expansion exemption through sub-regulatory guidance issued on November 21, 2014, which established that an individual residing in a State that did not expand Medicaid coverage with household income below 138 percent of the FPL was eligible to claim a hardship exemption—a categorical, income-based determination made without requiring individualized proof of circumstance-specific hardship.
While regulatory precedent is not itself dispositive of statutory authority, the Medicaid non-expansion exemption is instructive as evidence of the Secretary's longstanding, consistent, and unchallenged exercise of the same authority under section 5000A(e)(5) of the Code in a comparable context. That precedent supports the following features of the current proposal as applied to individuals between 250 percent and 400 percent of the FPL who are eligible for APTC but ineligible for CSR: (1) the use of categorical, income-based criteria to define a qualifying hardship; (2) the availability of a hardship exemption to individuals who retain some technical access to subsidized coverage; and (3) the Secretary's authority to recognize systemic, structural barriers to coverage—not merely individualized, event-specific circumstances—as qualifying hardships under section 5000A(e)(5). The expansion codified in this final rule is consistent with and builds upon that established regulatory history.
For individuals with projected annual household income above 400 percent of the FPL who are ineligible for APTC, the hardship determination rests on independent grounds, as described above: the 400 percent FPL threshold is not a uniform measure of financial capacity—the income available for health insurance premiums and cost sharing is further reduced by other
We note that the hardship exemption expansion does not create a new entitlement or mandate enrollment in catastrophic coverage—it expands the range of options available to consumers who face structural barriers to obtaining coverage under a qualified health plan. The policy's purpose is to ensure that consumers who cannot meaningfully access metal-level coverage have a pathway to some coverage, consistent with the Secretary's authority under section 5000A(e)(5) of the Code.
For individuals between 250 percent and 400 percent of the FPL who remain eligible for APTC, we note that, for individuals who are ineligible for CSR, APTC eligibility alone does not ensure that coverage is meaningfully affordable or adequate. Individuals in this income range are not eligible for CSR, which are available only to individuals with household income at or below 250 percent of the FPL enrolled in silver-level plans. CSRs substantially reduce deductibles, copayments, and out-of-pocket maximums—in some cases increasing the effective actuarial value of a silver plan from 70 percent to as high as 94 percent.
For the request to revoke the September 4, 2025, sub-regulatory guidance, we decline to do so. That guidance was issued under the Secretary's authority under section 5000A(e)(5) and section 1311(d)(4)(H) of the Affordable Care Act,
For the statement that Congress' decision not to enact the Health Care Freedom for Patients Act, or its decision not to amend the statutory eligibility criteria when making catastrophic plans eligible to be paired with HSAs, reflects a congressional judgment against expanding catastrophic plan eligibility, we note that the failure of legislation to pass does not, as a general matter, constitute a prohibition on agency action within existing statutory authority.
Commenters also noted concerns about the interaction between the hardship exemption eligibility expansion and other proposed changes to catastrophic coverage, including the proposed allowance of multi-year catastrophic plan terms at §§ 156.130(c) and 156.155(a)(6) and proposed cost-sharing modifications at § 156.155(a)(3). Commenters stated that the cumulative effect of these changes could accelerate adverse selection dynamics, drawing younger and healthier consumers away from comprehensive metal-level plans and raising premiums for those who remain in those plans. Community health advocates warned of a “dual harm” scenario in which patients enrolled in catastrophic plans delay or avoid needed care due to high-deductible barriers—undermining continuity of care and worsening health outcomes—while community health centers simultaneously experience revenue loss and increased uncompensated care burden. At least one commenter stated that the proposal is counter to sound public policy and should be withdrawn. Commenters also requested that CMS conduct and publish an actuarial analysis quantifying the projected impact on Exchange risk pools, premiums, and Federal subsidy costs before implementation.
For the characterization of this policy as creating a “parallel insurance market” that competes with metal-level Exchange plans, we note that catastrophic plans have always been available through the Exchanges alongside metal-level plans for eligible consumers and all plans—including catastrophic plans—remain subject to the same QHP certification requirements, consumer protection standards, and essential health benefit requirements that apply to all Exchange plans.
We have considered the request to combine risk adjustment transfer calculations for catastrophic and non-catastrophic plans under the State payment transfer formula. We are not combining these calculations in this final rule. As discussed in section III.E.6 of this final rule (§ 156.155(a)(6)), we believe the existing HHS risk adjustment methodology is flexible enough to appropriately accommodate catastrophic plans—including multi-year catastrophic plans—without changes to the HHS risk adjustment models or State payment transfer formula. Risk adjustment transfers for catastrophic plans will continue to be calculated separately from metal-level plans on a plan year basis, consistent with current practice. This applies equally to multi-year catastrophic plans, for which risk adjustment transfers will continue to be calculated on a plan year basis, as described in section III.E.6 of this final rule.
We acknowledge that if catastrophic plan enrollment grows substantially, maintaining separate risk adjustment calculations for catastrophic and non-catastrophic plans could have a more pronounced effect on premiums for metal-level plans. The available enrollment data from the first Open Enrollment Period following the effective date of the September 2025 guidance—during which only 67,489 consumers, or less than 0.3 percent of the 23.1 million total plan selections, selected a catastrophic plan—demonstrates that the actual impact on the metal-level risk pool has been minimal to date. This minimal uptake is consistent with the risk pool assumptions underlying 2027 rate submissions and demonstrates that consumers who can afford and prefer metal-level coverage are, in practice, continuing to choose metal-level plans. We will monitor catastrophic plan enrollment, and risk profile, and will consider whether changes to the HHS risk adjustment methodology—including whether to combine catastrophic and non-catastrophic risk adjustment calculations—are warranted through future notice-and-comment rulemaking.
For the “dual harm” concern raised by community health advocates—that patients enrolled in catastrophic plans may delay or avoid needed care due to high-deductible barriers, while community health centers simultaneously experience revenue loss and increased uncompensated care burden—we note that this concern applies broadly to high-deductible coverage and is not unique to the expanded hardship exemption. Catastrophic plans have always been available to eligible consumers, and the expanded eligibility does not alter the cost-sharing structure of those plans. Moreover, by reducing the number of uninsured, we expect that broadening access to catastrophic coverage will improve revenues and reduce uncompensated care burdens for community health centers. We note that the hardship exemption expansion benefits consumers broadly—it is not targeted at or limited to any particular geographic community or health center service area, and the policy's consumer protection benefits accrue to individuals regardless of where they receive care. As discussed in section III.E.7. of this final rule, to the extent permitted by applicable Federal and State law, issuers of catastrophic plans may offer arrangements designed to reduce the up-front financial barrier associated with high deductibles. Such arrangements could be designed to reduce the up-front financial barrier that can lead to delayed or avoided care.
For the request to withdraw the proposal, we decline to do so for the reasons set forth throughout this final rule.
For the request that CMS conduct and publish an actuarial analysis quantifying the projected impact on Exchange risk pools, premiums, and Federal subsidy costs before implementation of this policy, we note that we will continue to monitor market conditions and enrollment trends and will transparently report on these impacts as data from PY 2026 becomes available.
We note that the hardship exemption guidance underlying this codification was issued on September 4, 2025—sufficiently in advance of PY 2027 rate filing cycle—and that the streamlined online application process launched November 1, 2025, the start of the 2026 Open Enrollment period.
This rule expands the criteria under which individuals may qualify for a hardship exemption under § 155.605(d)(1); it does not alter the rules governing the exemption itself, including the annual nature of exemption eligibility. Concerns about catastrophic plan design—including risk adjustment methodology, multi-year plan terms (including the eligibility carry-through question for individuals who qualify based on a hardship exemption at initial enrollment in a multi-year term), and cost-sharing parameters—are addressed in sections III.E.2 (§ 156.80(d)(2)(ii)), III.E.6. (§ 156.155(a)(6)), and III.E.7. (§ 156.155(a)(3)) of this final rule.
Consumers retain full freedom of choice in the Exchanges. Individuals who qualify for this hardship exemption are not required to enroll in catastrophic coverage—they may continue to shop for and enroll in any available metal-level plan, if eligible. We will continue to monitor market conditions, enrollment trends, and the impact of the expanded eligibility on metal-tier risk pools, premiums, and serious-illness populations, and will transparently report on these impacts as data from PY 2026 becomes available. We are committed to considering corrective regulatory action in future rulemaking if monitoring data reveals material harm to the risk pool or to consumers with serious illness or complex health care needs. Concerns about multi-year catastrophic plan protections—including right to transition to other coverage, such as a metal-level plan, during a special enrollment period triggered by a qualifying life event and pre-enrollment counseling for high-risk applicants—are addressed in section III.E.6. of this final rule.
Commenters also raised concern that consumers eligible for APTC could be targeted by aggressive marketing and induced to enroll in catastrophic coverage based on lower premiums, without fully understanding the coverage limitations. Commenters emphasized that APTC-eligible consumers should not be encouraged to forgo tax credits in favor of catastrophic plans that offer less comprehensive coverage and higher cost-sharing exposure. The underinsurance risk was also highlighted: while catastrophic plans offer protection against major medical events for individuals with low-to-no-health care needs, consumers with routine or ongoing health care needs may face thousands of dollars in out-of-pocket costs before any meaningful coverage applies.
One commenter noted that catastrophic plans generally do not include dental benefits, and that consumers—especially those with limited financial flexibility—may not realize they need to purchase a separate SADP to maintain access to oral health services.
Catastrophic plans cover the same 10 EHBs as other Exchange plans, including preventive services at no cost, and cover at least three primary care visits per year before the deductible is met.
We acknowledge, however, that catastrophic plans have low monthly premiums and very high deductibles, and that they are intended as a safety-net against total uninsurance—not as a preferred coverage option for individuals with serious illness, complex conditions, or ongoing health care needs. Consumers who are concerned about exposure to high deductibles may also wish to explore additional coverage options, such as supplemental insurance products for hospital indemnity, critical illness, or accidents
Consumers will have full visibility into their APTC and CSR eligibility upon completing their Exchange application. The plan shopping experience on
For the dental coverage gap, catastrophic plans do not include dental benefits, and consumers enrolling in catastrophic coverage who wish to maintain access to dental services should consider purchasing a separate SADP. We will ensure that consumer education resources clearly communicate this limitation.
One State Exchange reported that no carriers currently offer catastrophic plans through its platform, representing a complete on-exchange market withdrawal by carriers that had sold these plans in 2025. The Exchange noted that this market exit coincided with the expansion of hardship exemption eligibility guidance released by HHS in September 2025, and that carriers indicated these plans were financially unsustainable under the expanded eligibility framework. The State Exchange stated that it will be able to resume offering catastrophic plans if any carriers choose to do so in the future, and that it and the State insurance regulator intend to proactively seek information from carriers to determine whether future plan designs or revised market conditions may alter their interest in offering catastrophic plans. The State Exchange also noted that the proposed multi-year catastrophic plan structure would present significant implementation and technical challenges.
Other commenters noted concerns about the operational challenges created by the rulemaking timeline relative to State rate filing deadlines. A few commenters requested CMS to delay the implementation date to PY 2028 or later, arguing that by the time the final rule is published, it will be too late for carriers to update rates for PY 2027. Additional commenters noted broader State authority and preemption concerns and noted that the 30-day comment period was insufficient for a proposed rule of this scope and complexity.
For States that enforce their own individual mandates or process their own hardship exemptions, this final rule establishes a Federal floor for hardship exemption eligibility that applies to consumers in all States. States that independently process exemptions may implement the expanded criteria within their existing systems. States that prefer to delegate exemption processing to HHS may do so. We will provide technical assistance to support implementation and ensure that States can exercise this flexibility while maintaining consistent consumer protections nationwide. Unlike regulatory actions that reduce coverage and predictably increase uncompensated care burdens, this rule expands coverage options for individuals who would otherwise be uninsured, reducing—not increasing—the fiscal burden on safety-net providers. Any claim that this rule harms community health centers would require speculation about individual consumer choices that are not traceable to this rulemaking.
For the request that States that enforce their own individual mandates or process their own hardship exemptions retain sole discretion to determine the scope of their hardship exemptions and be exempted from any requirement to broaden hardship exemption eligibility for catastrophic coverage, we decline to adopt this approach. We believe it is an important policy that all consumers—regardless of the State in which they reside—have access to the hardship exemption eligibility criteria established under Federal law, including the expanded criteria codified in this final rule. Consistent with the structure of the Exchange program, this final rule establishes a Federal floor for hardship exemption eligibility. States that independently process exemptions may implement the expanded criteria within their existing systems; States that prefer to delegate exemption processing to HHS may do so. We do not believe it would be appropriate to allow States to
States that have enacted their own individual mandate laws retain sole discretion to determine the scope of hardship exemptions for purposes of their own State mandate penalties—but that discretion is separate from, and does not affect, the hardship exemption criteria under section 5000A(e)(5) of the Code and section 1302(e) of the Affordable Care Act that govern eligibility for catastrophic coverage.
We acknowledge the report that no carriers currently offer catastrophic plans through one State Exchange and that the on-exchange market withdrawal coincided with the September 2025 guidance. Carrier participation decisions are made independently by issuers based on their own actuarial and business assessments, and the availability of catastrophic plans on any given Exchange is subject to issuer participation choices that are outside our direct control. We will monitor carrier participation trends in catastrophic plan markets and will consider whether additional regulatory or sub-regulatory action is warranted to support issuer participation and market stability.
For the implementation timeline and rate filing deadline concerns, we note that the expanded hardship exemption guidance underlying this codification was issued on September 4, 2025—well in advance of the PY 2027 rate filing cycle—and that the streamlined online application process launched November 1, 2025.
We acknowledge that the interaction between this provision and other proposed changes to catastrophic coverage may present additional actuarial complexity for issuers; those interactions are addressed in the relevant sections of this final rule. We will work with States and issuers to facilitate timely and effective implementation and will provide additional operational guidance as needed.
For the comment period length, we note that the proposed rule was published in the
We acknowledge that commenters have raised a policy concern—not a statutory one—about whether we should gather additional enrollment data before codifying and expanding the hardship exemption. We decline to delay finalizing this policy for that purpose for the following reasons. First, the underlying hardship driving this policy is well-documented through existing market data, including the sustained, market-wide premium increases described above, and does not require enrollment data from the expanded eligibility period to establish a sufficient evidentiary basis for action. Second, the September 4, 2025, guidance has been in effect since November 1, 2025, and delaying codification would create regulatory uncertainty for consumers and issuers who have been operating under the expanded eligibility for the duration of the 2026 Open Enrollment Period. Third, the enrollment data that is available—including the 2026 Open Enrollment Period data discussed above—demonstrates that the policy has had minimal market impact, which is consistent with the risk pool assumptions underlying this rule. Finally, we are committed to ongoing monitoring of enrollment trends and market conditions and will consider corrective regulatory action in future rulemaking if monitoring data reveals material harm. This monitoring commitment is the appropriate mechanism for addressing data gaps—not delaying a rule that addresses a present and ongoing hardship.
As previously discussed, the population facing these the income specific circumstances constitute a qualifying hardship with respect to the capability to obtain coverage under section 5000A(e)(5) of the Code and warrant a timely policy response. We will continue to monitor enrollment trends and market conditions as data from PY 2026 becomes available and will transparently report on the impact of the expanded eligibility on risk pools, premiums, and the health care needs of enrollees in catastrophic plans, to the extent such data is available through existing CMS data systems and reporting mechanisms. We are committed to considering corrective regulatory action in future rulemaking if monitoring data reveals material harm. Concerns about actuarial pricing, product design, and the interaction with other catastrophic coverage proposals—including multi-year catastrophic plan terms, cost-sharing modifications, plan-level adjustments, and risk adjustment methodology—are addressed in sections III.E.2. (§ 156.80(d)(2)(ii)), III.E.6 (§ 156.155(a)(6)), and III.E.7. (§ 156.155(a)(3)) of this final rule.
We note, however, that consumers considering this strategy should carefully evaluate whether a catastrophic plan meets their individual health care needs—particularly those with ongoing or complex health care needs who may face significant out-of-pocket spending before the deductible is met.
We conclude that the existing SBC requirements, together with the
• A dedicated Catastrophic Health Plans page that clearly notes who qualifies for catastrophic coverage, and what these plans cover. The page describes the pre-deductible benefits—preventive services at no cost, at least three primary care visits per year before the deductible, and notes that all 10 EHBs are covered but are subject to the plan deductible. The pages also directs consumers who qualify for APTC or CSR to compare bronze and silver plans before selecting a catastrophic plan.
• A Health Plan Categories page that presents a plain-language comparison of bronze, silver, gold, platinum, and catastrophic plan categories, including estimated cost-sharing percentages, deductible levels, and guidance on HSA eligibility for bronze and catastrophic plans.
• A “What Marketplace Health Insurance Plans Cover” page that describes the 10 EHBs required of all Marketplace plans and notes that adult dental and vision coverage are not EHBs—directly addressing the dental coverage gap concern raised by commenters.
• A plan comparison tool that presents consumers with personalized eligibility information, estimated costs after tax credits, and side-by-side plan comparisons.
We recognize that the adequacy of consumer disclosures is particularly important for populations with limited health insurance literacy, reduced access to enrollment assistance, or challenges navigating digital-first enrollment systems. For these consumers, the existing disclosure framework provides meaningful protections. As previously described, issuers are required under § 147.200 to make the SBC available at key points in the enrollment process, including upon application and at renewal, and upon request. The SBC provides standardized, plain language information about the plan's cost-sharing provisions, covered benefits, and coverage examples. Navigators, Certified Application Counselors (CACs), and other assisters also play a critical role in supplementing these disclosures—particularly for consumers who may not fully understand how catastrophic plan deductibles, cost-sharing, and pre-deductible limits operate in practice. As previously discussed, we will ensure that updated assister training materials address the specific needs of these populations, including guidance on how to walk consumers through the SBC, explain the practical implications of catastrophic plan cost-sharing, and help consumers understand when a metal-level plan may better serve their health care needs.
Agent, Broker, Web-Broker, Navigator, and Assister Training: We provide robust and ongoing training, resources, and technical support to agents, brokers, and web-brokers as well as Navigators, CACs, and other assisters throughout the plan year. PY 2026 Marketplace registration and training—available in both English and Spanish—is, at the time of publication of this final rule, live for new and returning agents, brokers, and web-brokers on the MLMS.
We agree that assisters play a critical role in helping consumers—particularly those with chronic health conditions who may have complex health care needs or limited health insurance literacy—make informed enrollment decisions. We will ensure that updated Navigator and open enrollment training curricula reflect the expanded hardship exemption eligibility, the coverage characteristics and cost-sharing obligations of catastrophic plans, the absence of dental benefits in catastrophic plans, and the importance of helping consumers understand how their APTC, PTC, and CSR eligibility interacts with their plan choices.
Given our network adequacy review proposals at §§ 156.230 and 155.1050(d) (which are described in greater detail later and in section III.E.10 of this final rule), in the 2027 Payment Notice proposed rule (91 FR 6354), we proposed, for plan years beginning on or after January 1, 2027, to restore network adequacy authority back to the State Exchanges and SBE-FPs through the removal of requirements at § 155.1050(a)(2)(i) and (ii), which require State Exchanges and SBE-FPs to establish and impose quantitative time and distance network adequacy standards that are at least as stringent as standards for QHPs on the FFEs. We proposed to amend § 155.1050(a)(2) to return to the requirement that State Exchanges and SBE-FPs ensure that each QHP provides sufficient access to providers in a manner that meets applicable standards specified in § 156.230(a)(1)(ii) and (iii) for network plans, or proposed § 156.236(a) for non-network plans, as applicable. These proposals sought to align § 155.1050 with the proposed changes in § 156.230.
In the 2025 Payment Notice (89 FR 26218), we finalized § 155.1050(a)(2)(i)(A) to require that, for plan years beginning on or after 2026, State Exchanges and SBE-FPs establish and impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs under § 156.230. We also finalized § 155.1050(a)(2)(i)(B), which requires that, for plan years beginning on or after January 1, 2026, State Exchanges and SBE-FPs conduct quantitative network adequacy reviews to evaluate a plan's compliance with network adequacy standards under § 156.230(a)(1)(ii), (a)(1)(iii), and (a)(2)(i)(A) prior to certifying any plan as a QHP, while providing a QHP certification applicant the flexibilities described under § 156.230(a)(2)(ii) and (a)(3) and (a)(4).
In the proposed rule (91 FR 6355), we proposed to remove these requirements to align with our proposals to add § 155.1050(d). We also proposed to revise § 156.230 to include language to differentiate areas where requirements are applicable to all QHP issuers that use a provider network, and where requirements are applicable to only QHP issuers that use a provider network in FFE States, including States performing plan management, that do not elect to conduct their own provider access reviews or that HHS has determined have not demonstrated sufficient authority and the technical capacity to conduct network adequacy reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program, as described later in this section and in section III.E.10 of this proposed rule. We also proposed these changes in recognition of the longstanding authority State Exchanges and SBE-FPs previously had to develop and enforce network adequacy standards and, given this past authority and experience, their network adequacy review capabilities and expertise.
The proposal also sought to restore the authority that State Exchanges and SBE-FPs originally had in establishing network adequacy standards for their QHPs and issuers, acknowledging that State Exchanges and SBE-FPs have the experience and expertise to be the best positioned entities to develop network adequacy standards for their distinct consumer markets.
Through our recent assessment of State Exchange and SBE-FP implementation of the network adequacy policy finalized in the 2025 Payment Notice (91 FR 6355), many State Exchanges and SBE-FPs demonstrated they have network adequacy standards and reviews in place that met or exceeded the requirements finalized in the 2025 Payment Notice. We stated in the proposed rule (91 FR 6355) that we are aware that some State Exchanges made updates in the lead up to PY 2026. Throughout 2024, State Exchanges and SBE-FPs provided us with detailed answers to a survey (OMB Control Number: 0938-1341 (CMS-10592)/Expiration date: April 30, 2027) on existing statutory, regulatory, and/or sub-regulatory authorities and policies in place to conduct network adequacy reviews that impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs. We met with each State Exchange and SBE-FP to discuss in detail what they were currently doing to assess network adequacy and any modifications they were working toward prior to PY 2026. State Exchanges and SBE-FPs described a wide variety of approaches, including assessing compliance with time and distance standards, as was required in the 2025 Payment Notice and assessing compliance with time or distance individually due to geographical considerations, appointment wait times, or provider enrollee ratios.
We stated in the proposed rule that the variety amongst the State Exchanges and SBE-FPs regarding how they chose to implement their unique approaches underscored the importance of restoring authority to State Exchanges and SBE-FPs, since these States can better take into consideration the needs of specific enrollee populations stemming from factors such as provider supply shortages and topography. Indeed, while some State Exchanges and SBE-FPs made modifications or updates to their network adequacy policies in the lead-up to implementation, we ultimately determined that most State Exchanges and SBE-FPs were either already aligned with the requirements described at § 155.1050(a)(2)(i), or were granted the exception described under § 155.1050(a)(2)(ii), meaning we determined that the State established and imposed time and distance standards at least as stringent as those for QHPs on the FFEs, or that the State established and enforces alternate quantitative network adequacy standards that are reasonably calculated to ensure a level of access to providers
This proposal also sought to align with proposed § 155.1050(d) and remove an unnecessary layer of Federal regulatory burden on State Exchanges and SBE-FPs while maintaining consumer protections through the existing, robust State-level processes for setting network adequacy requirements for issuers and reviewing QHP network adequacy within their respective State Exchange or SBE-FP that such State Exchanges and SBE-FPs demonstrated to us were already in place prior to PY 2026. Due to the well-established, long-existing approaches that State Exchanges and SBE-FPs demonstrated to us were already in place, we stated in the proposed rule that we have a high level of confidence that restoring § 155.1050(a)(2) to the requirements in place prior to PY 2025 would not result in consumers losing reasonable access to services without unreasonable delay. Generally, most State Exchanges and SBE-FPs have demonstrated through surveys and subsequent conversations that they are conducting network adequacy reviews in compliance with § 155.1050(a)(2)(i) and the remainder of State Exchanges and SBE-FPs were conducting network adequacy reviews that satisfied the criteria for an exception described at § 155.1050(a)(2)(ii).
Separately, concurrent with the proposal to amend § 156.230, to implement changes to reviews of network adequacy for QHP issuers in FFE States that demonstrate sufficient authority and the technical capacity to conduct such reviews and elect to do so, we proposed the addition of § 155.1050(d), which would establish an Effective Provider Access Review Program.
We proposed at § 155.1050(d)(1) that, beginning PY 2027, we would defer provider access reviews of QHP issuers' plans, with or without a provider network, applying for certification to be offered as a QHP through an FFE, to States that elect to conduct such provider access certification reviews, provided the State has demonstrated sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program under proposed § 155.1050(d)(2) through (d)(4). We proposed at § 155.1050(d)(2) to clarify that FFE States considered to have an Effective Provider Access Review Program must ensure that a QHP issuer that uses a network of providers ensures that the in-network providers, as available to all enrollees, include essential community providers (ECPs) in accordance with § 156.235, and maintains a network that is sufficient in number and types of providers, including providers that specialize in mental health and substance use disorder services, to ensure that all services will be accessible without unreasonable delay. The QHP issuer's provider network must also be consistent with the rules for network plans in section 2702(c) of the PHS Act.
At § 155.1050(d)(3), we proposed that FFE States considered to have an Effective Provider Access Review Program must ensure that a QHP issuer that does not use a network of providers (a non-network plan) provides access to a sufficient choice 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.
At § 155.1050(d)(4), we proposed the factors necessary for a State operating on the FFE to be considered to have an Effective Provider Access Review Program. We also proposed to revise § 155.1050(a)(1) to clarify that an FFE State that has elected to conduct provider access reviews and has been determined to have an Effective Provider Access Review Program must ensure that each QHP provides sufficient access to providers in a manner that meets the standards specified in § 156.230(a)(1)(ii) and (a)(1)(iii) for network plans, or proposed § 156.236(a) for non-network plans, as applicable. A detailed discussion of this proposal can be found in section III.E.10 of this final rule. Additionally, we stated in the proposed rule that we would encourage State Exchanges and SBE-FPs to use their network adequacy authority to conduct similar provider access reviews that consider criteria consistent with those outlined at § 155.1050(d)(2) through (d)(4) and described in section III.E.10. of this final rule.
In summary, we proposed to amend § 155.1050(a)(2) to eliminate, for plan years beginning on or after January 1, 2027, the requirements under § 155.1050(a)(2)(i) and (ii) for State Exchanges and SBE-FPs. We proposed to revise § 155.1050(a)(2) to require that State Exchanges and SBE-FPs ensure that each QHP provides sufficient access to providers in a manner that meets applicable standards specified in § 156.230(a)(1)(ii) and (a)(1)(iii) for network plans, or proposed § 156.236(a) for non-network plans, as applicable (91 FR 6354). We also proposed the addition of § 155.1050(d), which is described in greater detail in section III.E.10 of this final rule.
We sought comment on this proposal. We also sought comment on what level of transparency is necessary and appropriate to safeguard public trust in Effective Provider Access Review Programs. While we are not specifically contemplating any particular form of new disclosure in this space at this time, we stated in the proposed rule that we are interested in public feedback on which elements of process and which outputs of Effective Provider Access Review Programs should be subject to public disclosure.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing with modifications the proposed policy to restore network adequacy authority back to the State Exchanges and SBE-FPs through the removal of requirements at § 155.1050(a)(2)(i) and (ii) and amending § 155.1050(a)(2) to return to the requirement that State Exchanges and SBE-FPs ensure that each QHP provides sufficient access to providers in a manner that meets applicable standards specified in § 156.230(a)(1)(ii) and (iii) for network plans, or proposed § 156.236(a) for non-network plans if such plans are allowed to be offered through the Exchange, as applicable. While we finalized in section III.E.12. of this final rule to delay implementation of allowing non-network plans to receive certification to be offered as QHPs through the FFE beginning PY 2028, State Exchanges and SBE-FPs retain full discretion and authority to determine the appropriate implementation timeline for their States if allowing non-network plans to be offered through State Exchanges or SBE-FPs. Accordingly, under § 155.1050(a)(2), State Exchanges and SBE-FPs may allow non-network plans to be offered through the Exchange for plan years beginning on or after January 1, 2027, as applicable. We also finalized a clarification under § 155.1050(a)(2) to suggest these States may allow non-network plans to be offered through the Exchange if such plans are allowed to be offered through the Exchange to preserve the State's authority to determine whether non-network plans are appropriate for their markets. We refer readers to section III.E.12. of this final rule for a more detailed discussion of the rationale to allow State Exchanges and SBE-FPs to offer the non-network plans through their Exchanges
Additionally, we received multiple comments stating support for the restoration of State Exchange and SBE-FP flexibility and authority to develop network adequacy standards unique to their populations. Commenters agreed that States are often better positioned to evaluate network adequacy than Federal regulators, due to their intimate knowledge of local market dynamics and geographic considerations. Several State Departments of Insurance stated their support for a restoration of the approach that emphasizes State oversight and emphasized intent to ensure consumer protections and timely, reasonable access to in-network providers.
For the reasons stated earlier in this section of this final rule, we agree that the criteria for an FFE State to conduct provider access reviews through an Effective Provider Access Review Program are robust and ensure each State can protect consumers while encouraging flexibility and innovation in provider access reviews. Additionally, the continued collection of provider access data (described further in section III.E.10 of this final rule) will provide an extra layer of consumer protection through our visibility and responsiveness at the Federal level. For example, we will be able to analyze the provider data collected during the QHP certification process to assist in addressing any complaints we may receive from external interested parties; appointment wait time (AWT) secret shopper surveys will ensure we maintain a level of awareness around appointment wait times for primary care provider and behavioral health providers; and we can leverage our existing infrastructure of provider data collection to support FFE States as they develop and implement provider access reviews.
In response to the 2025 Payment Notice, State Exchanges and SBE-FPs implemented various unique approaches to conform to the rule's requirements that State Exchanges and SBE-FPs implement network adequacy time and distance standards at least as stringent as standards for QHPs participating on the FFEs, or be granted an exception if the State demonstrates that the Exchange applies and enforces alternate quantitative network adequacy standards that are ensured by Federal network adequacy standards established for QHPs under § 156.230(a)(1)(iii), (a)(2)(i)(A), and (a)(4). Instead of requiring States to react to our policies, we believe that restoring authority to the States will enable them to proactively adapt their Exchange standards to meet their market's needs, as they will be better able to take into consideration the needs of their enrollee population related to factors such as provider supply shortages and topography. We previously determined that generally most State Exchanges and SBE-FPs were already aligned with the requirements now being rescinded at § 155.1050(a)(2)(i), meaning that they had time and/or distance standards we determined to be as-stringent-as our Federal standards, or had implemented alternative network adequacy review activities that allowed them to be granted the exception, and we encourage these States to maintain these standards. The restoration of the previous flexibilities can support State Exchanges and SBE-FPs to conduct their review activities according to their local markets without requiring the State Exchange or SBE-FP to adhere to the one-size-fits-all Federal time and
We are also mindful that the change we are finalizing provides a potential opportunity for State Exchanges and SBE-FPs to invest their resources in the implementation or continuation of network adequacy reviews that may be different than reviewing for time and distance standards (whether prior to QHP certification or after) but more appropriate for the consumers in that State. States Exchanges and SBE-FPs may also find value in adopting a continuous monitoring approach through “spot check” reviews conducted throughout the plan year, offering more flexible and ongoing oversight compared to relying on a single review prior to QHP certification.
Though restoring the flexibilities does technically result in removing the requirement at § 155.1050 for State Exchanges and SBE-FPs to conduct reviews prior to certification, this does not mean that State Exchanges and SBE-FPs will not continue to do so. We are aware of State Exchanges and SBE-FPs that conducted network adequacy reviews prior to QHP certification even before we codified this requirement in PY 2026 and we do not have any indication that States intend to roll back operations that were in place prior to PY 2026. We are aware, based on surveys conducted in PY 2024 that prior to PY 2026, State Exchanges and SBE-FPs largely mirrored HHS' network adequacy reviews prior to QHP certification. As such, this policy change will remove redundant oversight and return authority to the States. Moreover, the increased flexibility will enable States Exchanges and SBE-FPs to conduct network adequacy reviews that fit the needs of their market, and we encourage State Exchanges and SBE-FPs to continue applying measures to assess network adequacy beyond time and distance requirements.
Additionally, we will not require State Exchanges and SBE-FPs to establish public reporting measures for QHP compliance with State network adequacy standards, as our intention is to restore flexibility to the State Exchanges and SBE-FPs and reduce burden. We believe that State Exchange and SBE-FP review of these requirements for QHP certification is sufficient and aligns with the Federal Exchange approach. We also believe that requiring public reporting of issuer network adequacy review results may risk making public proprietary business information. Publishing this information may also lack sufficient context, especially when any noted network deficiencies may be due to geographic limitations or provider availability, or when a deficiency may be in the process of remediation by the issuer.
While there are no current Federal requirements for State Exchanges or SBE-FPs to make public their network adequacy standards, operations, or results, many State Exchanges and SBE-FPs already have public-facing documentation of their network adequacy standards and requirements, though they may or may not make public the results of network adequacy reviews. We would encourage all States to refer to the resources available on the network adequacy page of the QHP certification website,
While we seek to provide flexibility to State Exchanges and SBE-FPs in the determination of how to achieve the aforementioned access requirements, we do not agree that the removal of the requirement to implement time and distance standards as stringent as the Federal standards for QHPs in State Exchanges will directly result in further reductions in access for rural consumers. Reviewing for time and distance standards is only one way to assess a QHP for network adequacy, and removing the requirement to implement our Federal standards allows State Exchanges and SBE-FPs to innovate in their approach, acknowledging the limitation of Federal time and distance standards which may be insurmountable for a QHP to achieve in rural areas due to market factors such as provider shortages. Removing this requirement restores flexibility to the State Exchange and SBE-FP to assess and address rural access issues in ways that may be most appropriate for that particular State, beyond time and distance standards, such as through assessing provider-enrollee ratios, for example, or investing limited resources towards working directly with provider interested parties to increase numbers and types of providers located in rural areas as well as utilizing leverage with QHPs in their States to contract with more available providers in a rural area to ensure as much access as possible for their residents. State Exchanges and SBE-FPs have sufficiently demonstrated their capacity to assess the needs of their consumers across all geographies, and we believe that States are best situated to evaluate the unique network adequacy requirements necessary to ensure proper access to behavioral health and substance use disorder services. Any additional oversight from Federal regulators would be duplicative and risk misunderstanding the needs of each market.
Regarding requests for public-facing documentation of an FFE State's network adequacy standards, we believe that the criteria required under § 155.1050(d)(4) that the State have their provider access standards set forth in statute or regulation, and the FFE State's provider access review process includes reporting systems for provider access metrics and documentation of methodology and the State provides descriptions of all data collection systems, resources, templates, and methodologies used by the State is sufficient for public notice and review because we believe these and the other criteria set a satisfactorily high bar to qualify provider access reviews that should instill consumer confidence in their FFE State's ability to conduct provider access reviews without risking disclosure of issuer's confidential business information, including contracting details and network development strategies, which would be inappropriate. We would refer FFE States with an Effective Provider Access Review Program to our Network Adequacy QHP Certification web page as a model for items to make publicly available regarding provider access reviews. Regarding notifications of and updates on any proposed timelines for an FFE State to demonstrate that it will meet standards to become an Effective Provider Access Review Program, we note that numerous factors may influence a State's timeline that may cause frequent revision, which may ultimately cause more confusion for the public. However, we plan to publicly share a list of States that elect to conduct provider access reviews and have been determined to have an Effective Provider Access Review Program, once that determination has been made. We will continue to evaluate the appropriate scope and format of any necessary public disclosures and highly encourage interested parties to engage with their State regulators to achieve a level of transparency that all parties find satisfactory.
In the 2027 Payment Notice proposed rule (91 FR 6355), beginning PY 2027, we proposed to allow FFE States, including States performing plan management, to elect to conduct their own ECP certification reviews of an issuer's plans with or without a provider network in their State applying for certification as a QHP to be offered through an FFE. We stated that we would allow FFE States to conduct such ECP certification reviews provided the State demonstrates sufficient authority and the technical capacity to conduct these reviews by satisfying the
In the 2027 Payment Notice proposed rule (91 FR 6355), we proposed to amend § 155.1200 to add new paragraph (e) to permit State Exchanges to satisfy certain requirements of the independent external programmatic audit, as outlined in paragraph (d), by completing the proposed State Exchange Improper Payment Measurement (SEIPM) process that would be established at 45 CFR part 155, subpart Q. We also proposed to amend § 155.1200(d) to reduce duplication between the proposed State Exchange SEIPM program described in proposed subpart Q and the annual independent external programmatic audit requirements and standards described at § 155.1200(c) and (d).
The Payment Integrity Information Act of 2019 (PIIA) (Pub. L. 116-117) requires Federal agencies to annually estimate and report on improper payments in the programs they administer that have been determined to be susceptible to significant improper payments. Pursuant to the PIIA, we proposed to establish a SEIPM program, as we have determined that APTC payments administered by State Exchanges are susceptible to significant improper payments and are subject to additional oversight.
We stated in the proposed rule that the proposed SEIPM program would specify a methodology to develop State Exchange improper payment estimates and provide for the accurate calculation, and subsequent reporting, of an improper payment rate in HHS' Agency Financial Report (AFR). To ensure the accurate and consistent calculation of improper payments via the SEIPM program, we proposed to require that State Exchanges provide HHS with access to certain State Exchange data, including eligibility determinations and enrollment information. We further proposed that State Exchanges found to have significant improper payments could, to correct improper payment root causes, be required to develop corrective action plans (CAPs).
Our authority to oversee the State Exchanges arises from the program integrity and oversight requirements they must meet that are specified at section 1313(a) of the Affordable Care Act and at §§ 155.1200 and 155.1210. Key State Exchange reporting requirements at § 155.1200(b) include the annual submission of: (1) a financial statement in accordance with generally accepted accounting principles; (2) a report showing compliance with Exchange requirements; and (3) performance monitoring data.
Pursuant to § 155.1200(c) and (d), each State Exchange is also required to engage or contract with an independent qualified auditing entity that follows generally accepted government auditing standards to perform annual independent external financial and programmatic audits that address compliance with 45 CFR part 155, subparts D and E, or other 45 CFR part 155 requirements as specified by HHS. State Exchanges must provide HHS the audit results, including CAPs to address any audit-identified material weaknesses or significant deficiencies, and we monitor these CAPs until findings are resolved, pursuant to § 155.1200(c)(2). These audits allow us to oversee State Exchange compliance with eligibility and enrollment standards. In sub-regulatory guidance, we specify that the scope of the audits must also include 45 CFR part 155, subparts C and K.
We proposed to amend § 155.1200(d) to reduce duplication between the proposed SEIPM program described in subpart Q and the annual independent external programmatic audit requirements and standards described at § 155.1200(c) and (d). We proposed to add § 155.1200(e) to permit a State Exchange to satisfy certain annual independent external programmatic audit requirements, as described at § 155.1200(d), by completing the proposed required annual SEIPM program process. We stated in the proposed rule that these certain audit requirements would be limited to compliance with 45 CFR part 155, subparts D and E, and would be specified in guidance we would issue. We also proposed to amend § 155.1200(d) to cross-reference proposed § 155.1200(e) to minimize duplication between the annual programmatic audit requirement and proposed SEIPM program. We stated that this would allow us to continue to require an annual independent programmatic audit of other subparts beyond eligibility and enrollment, while reducing duplication for oversight of eligibility and enrollment provisions.
We stated in the proposed rule that we believe this policy would reduce duplicative efforts and burden on State Exchanges that would otherwise be required to fully comply with the programmatic audit requirements and SEIPM, while also maintaining the programmatic audits for requirements not reviewed as part of SEIPM.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received below.
In the 2027 Payment Notice proposed rule (91 FR 6356), we proposed to establish the SEIPM, pursuant to the PIIA,
As a result, we proposed in the 2023 Payment Notice proposed rule (87 FR 584) to establish the SEIPM program, which would have required State Exchanges to submit certain information to HHS so that HHS could report an improper payment estimate of APTC administered by State Exchanges. We proposed that it would begin in calendar year 2024, but a significant volume of public comments stating that State Exchanges would need additional time and guidance to prepare for SEIPM persuaded us not to finalize that proposal. Instead, we proposed in the 2024 Payment Notice (77 FR 78206, 78213) to establish an Improper Payment Pre-Testing and Assessment Program (IPPTA) that would be mandatory for State Exchanges and where they would participate in pre-audit activities to prepare them to comply with audits required under the PIIA. We said that activities under the proposed IPPTA program would (1) prepare State Exchanges for the planned measurement of improper payments, (2) test processes and procedures that support HHS' review of determinations of APTC made by State Exchanges, and (3) provide a mechanism for HHS and State Exchanges to share information that will aid in developing an efficient measurement process. We finalized the IPPTA in the 2024 Payment Notice (88 FR 25740).
In the 2027 Payment Notice proposed rule, we stated that IPPTA was currently underway and the first cohort of eight State Exchanges had completed all of the information submission requirements for ten or more sampled tax households. We had completed the review process for the first cohort of State Exchanges and had communicated to them the findings. As of the time of publication of the 2027 Payment Notice, data collection had been completed for all ten State Exchanges in the second cohort.
The main challenge that HHS and State Exchanges have experienced with IPPTA relates to the quantity of data that the State Exchange must submit in order for HHS to accurately determine whether each payment of APTC was proper or improper. For each tax household, there may be multiple QHP policies, and multiple enrollees who were determined eligible for APTC, all of which invoke specific requirements for determining eligibility. These factors cause considerable volume and complexity in the data that would be required for SEIPM.
Additionally, in the 2027 Payment Notice proposed rule we stated that each State Exchange operates its own platform with a unique data architecture, making it challenging to develop a unified process by which State Exchanges could submit the requisite information. For the purposes of IPPTA, we developed a Data Request Form (DRF) to enable the automated collection of information that proved to be an effective tool for six of the eight State Exchanges in the first cohort. For the other two State Exchanges, however, some of the data had to be collected manually and not through the DRF because those States were unable to successfully submit all of the data required for measurement in the DRF format and structure. As a lesson learned from that data collection process, we proposed to allow a more flexible mechanism for SEIPM data collection.
To mitigate some of the challenges that exist with the data collection, we have automated the data validation process that allows us to assess each submitted DRF and to coordinate with the State Exchanges to correct data when inconsistencies are identified. For SEIPM, in the 2027 Payment Notice proposed rule we stated that we would use the DRF while also allowing flexibility in data submissions for allowing data to be submitted in native formats, which would lessen the burden on State Exchanges.
We proposed to establish a new subpart Q at 45 CFR part 155 (containing §§ 155.1600 through 155.1650) to codify the SEIPM requirements. We proposed to require State Exchanges to annually submit to HHS the information required for HHS to produce an estimate of improper payments in accordance with OMB
In the 2027 Payment Notice proposed rule, we stated that this proposal would address a critical gap in improper payment oversight, as the PIIA requires Federal agencies to estimate and report on improper payments in programs determined to be susceptible to significant improper payments. We noted that, while we have established an improper payment measurement for the FFE, (that is, the Federal Exchange Improper Payment Measure or FEIPM),
We proposed to add a new subpart Q to 45 CFR part 155, which would establish State Exchange responsibilities.
We proposed to add a new § 155.1600 that would convey the purpose and scope of the SEIPM. At § 155.1600(a), we proposed the SEIPM would be an initiative through which HHS measures improper payments of APTC that are administered by State Exchanges, described in more detail in proposed § 155.1610. We proposed to use the results of SEIPM to produce an estimate of improper payments of APTC aggregated across State Exchanges.
At § 155.1600(b), we proposed that unless specified otherwise by HHS, all State Exchanges on an annual basis would be required to submit information that is necessary to support the SEIPM processes. In the proposed rule, we stated that the data and information we would require from State Exchanges would be essential for us to conduct accurate improper payment measurement, as it is not available through any other existing sources or systems. Unlike the FFE where we have direct access to enrollment and payment data, State Exchanges operate independent systems that contain eligibility determinations, enrollment records, and APTC calculation data necessary for HHS to make improper payment assessment under the SEIPM. Without State Exchanges submitting the proposed information, we noted that we would be unable to fulfill our statutory obligations under the PIIA to measure and report improper payments. We stated that the proposed annual submission requirement would ensure that we have access to the most current and complete data necessary to produce statistically valid improper payment estimates and identify areas for program improvement.
At § 155.1600(c), we proposed that HHS would publish in its AFR an estimate of improper payments aggregated across all State Exchanges. Publication in the HHS AFR would ensure that APTC improper payment estimates are subject to the same transparency and accountability standards as other major HHS programs.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed § 155.1600 below.
However, we continue to believe that SEIPM is necessary to address a critical gap in HHS' ability to comply with the PIIA. Under the PIIA, Federal agencies are required to identify programs susceptible to significant improper payments and to produce reliable, statistically valid estimates of improper payments on an annual basis, including reporting through the AFR. While HHS has established such measurement for APTC administered through the Federally-facilitated Exchange, no comparable, systematic measurement currently exists for APTC administered by State Exchanges. Existing audits and reporting mechanisms do not produce the statistically valid improper payment estimates required under the PIIA, nor do they support consistent, nationwide measurement of payment accuracy.
SEIPM is designed to enable HHS to meet these statutory obligations by establishing a uniform framework for collecting the data necessary to calculate improper payment rates and to
Accordingly, while we acknowledge commenters' concerns regarding burden and operational complexity, we are finalizing § 155.1600 as proposed. Many commenters supported the effort to reduce duplication between the proposed SEIPM program and the annual independent external programmatic audit requirements. We will continue to support State Exchanges through sub-regulatory guidance and technical assistance to facilitate implementation in a manner that is as efficient and workable as possible while ensuring compliance with PIIA requirements.
While some Federal improper payment measurement programs operate on multi-year cycles, those approaches reflect program-specific design considerations, including program structure, data availability, and sampling methodologies. In contrast, SEIPM is designed to support ongoing, annual oversight of APTC payments administered by State Exchanges and to align with the existing annual improper payment measurement conducted for the Federally-facilitated Exchange.
Moving to a less frequent cycle could reduce the timeliness of improper payment identification and limit HHS' ability to conduct consistent, ongoing monitoring across all Exchange types. Additionally, annual measurement supports more timely identification of errors and facilitates ongoing program oversight.
While we recognize commenters' concerns regarding operational burden and the time required to implement corrective actions, we believe that these activities can occur on an ongoing basis within an annual measurement framework. Accordingly, we are finalizing § 155.1600 as proposed.
In this section of the 2027 Payment Notice proposed rule, we proposed to add new § 155.1605, which would establish SEIPM's applicability date.
At proposed new § 155.1605(a), we proposed that this subpart would be applicable beginning January 1, 2027, which we believe would provide State Exchanges with sufficient time to begin the SEIPM. In the proposed rule, we noted that for State Exchanges that have participated in IPPTA, the proposed January 1, 2027, applicability date would mean that those State Exchanges would submit the proposed required information and would be subject to improper payment measurement under the SEIPM beginning in 2027 for PY 2026, with the improper payment estimate being reported for the first time in 2028. We stated that this proposed timeline would allow State Exchanges to establish the operational infrastructure and baseline processes to support the SEIPM, such as conducting comprehensive system assessments to identify data collection and reporting capabilities; developing or modifying existing information systems to capture and transmit the required the SEIPM data elements; establishing internal policies and procedures for data validation and quality assurance; training staff on the SEIPM requirements and reporting protocols; and conducting testing and validation of new systems and processes before the effective date. Additionally, we noted that the foundational framework established through IPPTA would have provided State Exchanges with sufficient experience and understanding of their data capabilities and measurement processes to support the transition to SEIPM by January 1, 2027. Any technical adjustments, data collection refinements, or procedural clarifications identified during the IPPTA implementation could be incorporated into the SEIPM through sub-regulatory guidance, allowing for improvements without requiring additional rulemaking or timeline extensions. State Exchanges in the first year of operation would undergo the preparation phase proposed in § 155.1640 and would begin the Measurement Year in 2028 for PY 2027.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed § 155.1605 below.
Some commenters requested phased implementation approaches, including delaying initial reporting or gradually increasing program scope. Commenters further noted that State Exchanges may be undergoing significant system transitions or modernization efforts and may be simultaneously implementing other Federal eligibility and enrollment requirements in 2027 and 2028 such as those required under the Working Families Tax Cut (WFTC) legislation, which may impact Exchange operational readiness. Some commenters also stated concern that SEIPM implementation during 2027 may overwhelm Exchanges' operational readiness due to the system changes required under the WFTC legislation.
Several commenters noted that they had not yet received IPPTA results and therefore could not fully assess the operational impact of SEIPM and urged HHS to delay implementation and allow State Exchanges to provide additional feedback on operational feasibility.
Nevertheless, we continue to believe that the January 1, 2027 applicability date will provide sufficient time for State Exchanges to prepare, particularly in light of experience gained through IPPTA and an approach in SEIPM to allow a flexible form of data submission which will reduce the State burden. While IPPTA will continue through 2026, it has already generated substantial operational insight into data submission, validation, and review processes, which has informed the development of SEIPM. Although IPPTA is ongoing, we believe the insights gained to date provide a sufficient foundation to proceed with implementation, and additional refinements can be incorporated as the program evolves.
The timing for State Exchanges to begin the submission of the universe data that is described in § 155.1615(b)(2) is planned to begin in March 2027. This will be a summary set of information that, while lengthy in volume, would not require intensive query development to produce. The timing for the State Exchanges to begin the submission of the tax household data is planned to begin in April 2027. This will be the detailed set of data specific to the selected sample that we will use to conduct the review. We note this timeline to point out that although formal implementation begins in January 2027, State Exchanges have a buffer of several additional months to prepare for the practical requirements which will not start until March 2027 and would not expand until April 2027.
Importantly, delaying implementation would extend the period during which HHS lacks a comprehensive and statistically valid improper payment measurement for APTC administered by State Exchanges. Under the PIIA, Federal agencies are required not only to identify programs susceptible to significant improper payments, but also to produce and report improper payment estimates on an ongoing, annual basis. At present, HHS fulfills this requirement for APTC administered through the Federally-facilitated Exchange but does not have a corresponding measurement for State Exchanges.
Further delay would therefore postpone HHS' ability to fully meet its statutory obligations to measure and report improper payments across the entirety of the APTC program. We believe it is appropriate to proceed with implementation once sufficient foundational testing has occurred, rather than waiting for all potential refinements to be resolved, particularly where additional operational details can be addressed through sub-regulatory guidance. Accordingly, we are finalizing § 155.1605 as proposed. We will continue to consider interested party feedback and operational experience during implementation and will provide additional guidance and support to State Exchanges, as appropriate, to facilitate readiness.
In the 2027 Payment Notice proposed rule, we proposed to add § 155.1610 to codify the following definitions that would be used in this subpart that are specific to SEIPM and key to understanding its processes and procedures:
•
•
•
•
•
•
•
•
•
•
•
•
•
We sought comment on these proposals.
We did not receive any comments in response to the proposed § 155.1610. For the reasons outlined in the proposed rule, we are finalizing this policy as proposed.
We proposed to add § 155.1615 to specify what information State Exchanges would be required to submit under the SEIPM program. We noted that the collection of such information would be necessary to allow HHS to produce a statistically valid estimate of improper payments of APTC. In the proposed rule, we stated that the general framework of this proposed provision would be that the information submission would consist of three parts: (1) the program documentation that would be used to inform the review criteria; (2) the universe, which would be a summary listing of the tax households that received APTC payments for the respective plan year, from which HHS would select a random sample; (3) tax household data which would be the detailed level of data for each sampled tax household necessary for making a determination as to whether each APTC payment was proper or improper.
At § 155.1615(a), we proposed that HHS would issue an Annual Program Schedule to all State Exchanges no later than January 5th of the Measurement Year. We proposed that the Annual Program Schedule would specify the dates by which all the proposed information required under this section would be due to HHS. This timeline would ensure that State Exchanges receive clear guidance and sufficient advance notice of their submission requirements at the beginning of each Measurement Year, enabling State Exchanges to plan and allocate appropriate resources for compliance with the program's data collection and documentation requirements.
At § 155.1615(b), we proposed that, on an annual basis, each State Exchange would be required to submit or make available to HHS the information specified in paragraphs (b)(1) through (b)(3).
At § 155.1615(b)(1), we proposed that each State Exchange would be required to submit or make available to HHS program documentation that would consist of policy, operational, and technical documentation concerning business rules and APTC calculations that pertain to enrollment and eligibility processes of the State Exchange, as well as information that describes the data system architecture of the State Exchange such as entity relationship diagrams and data dictionaries. We noted that additional parameters for the information described would be communicated in sub-regulatory guidance. We further stated that the program documentation would be essential for establishing the improper payment measurement framework for each State Exchange because it would enable us to assess whether the State Exchange's policies and procedures align with Federal requirements and would be used to develop State-specific review criteria that reflect each State Exchange's unique operational framework.
We proposed at § 155.1615(b)(2) that a State Exchange would be required to submit or make available to HHS the universe of data from which HHS would draw the sample. That universe would, for the plan year being reviewed, consist of a listing of the population of tax households that have associated QHP enrollments and payments of APTC. We proposed that for each tax household within the universe, the State Exchange would be required to submit or make available to HHS the following information: (1) Exchange assigned policy identifier; (2) tax household grouping identifier; (3) SSN inconsistency indicator; (4) citizenship inconsistency indicator; (5) lawful presence inconsistency indicator; (6) annual income inconsistency indicator; (7) non-employer sponsored minimum essential coverage inconsistency indicator; (8) employer sponsored minimum essential coverage inconsistency indicator; (9) incarceration inconsistency indicator; (10) residency inconsistency indicator; (11) number of tax household members; and (12) APTC amount paid over the duration of the plan year. The inconsistency indicators would be a data value for each tax household identifying the presence or number of data match inconsistencies of the specified type. As an example, for the first tax household in the universe, if the data within the State Exchange established that the consumer's attested citizenship status did not match the source of record to which the Exchange is required to verify citizenship status, the citizenship inconsistency indicator would be populated to show that an inconsistency existed for that tax household.
In the 2027 Payment Notice proposed rule, we noted that statistical validity requires that the sample be drawn from a comprehensive and accurately defined population to ensure that the resulting estimates are representative of the entire APTC program within each State Exchange. We stated that this provision would be necessary because without access to the complete universe of tax households having QHP enrollments and APTC payments, we would be unable to establish sampling strata or to calculate the sampling weights that
We stated that the total APTC payment amounts for each tax household in the universe would be necessary to calculate proper monetary weights for the improper payment estimates, ensuring that the financial impact of errors would be accurately reflected in the final statistics. This comprehensive approach would enable HHS to produce improper payment estimates meeting the requirements of PIIA.
At § 155.1615(b)(3), we proposed that a State Exchange would be required to submit or make available to HHS tax household data for each sampled tax household. The tax household data would consist of the comprehensive information that is necessary for HHS to use in conducting the processes described at § 155.1625.
At § 155.1615(b)(3)(i), we proposed that State Exchanges would be required to submit or make available to HHS, for each sampled tax household, information pertaining to the calculation of the APTC benefits paid, including monthly enrollment premium amounts, monthly APTC payment amounts, monthly Second Lowest Cost Silver Plan Premium amounts, and the amount of each monthly premium that is attributable to EHB. We noted that this information would be essential for us to verify the accuracy of APTC calculations and ensure that APTC were computed correctly based on the applicable benchmark plan and EHB requirements. We proposed at § 155.1615(b)(3)(ii) that State Exchanges would be required to submit or make available to HHS enrollment information that would include information relevant to dates and amounts of effectuation payments, premium payment amounts, and policy start and end dates. This enrollment data would enable HHS to confirm that APTC payments were made for valid coverage periods and that the timing and amounts of payments align with policy effectuation and premium payment requirements. We further proposed, at § 155.1615(b)(3)(iii), that State Exchanges would be required to submit or make available to HHS information relevant to the determination of eligibility for an SEP, where applicable, which would include information collected by the State Exchange about consumer attestations and representations regarding SEP eligibility criteria, copies of documentary evidence submitted by applicants, electronic verification information, and timing information. We noted that this SEP-related information would allow HHS to assess whether APTC payments were appropriately authorized during SEPs and whether proper verification procedures were followed to confirm SEP eligibility.
At § 155.1615(b)(3)(iv), we proposed that State Exchanges would be required to submit or make available to HHS information about the timing of QHP certification or approval, the coverage area of the associated QHP, and the timing of any QHP decertification or suppression. In the proposed rule, we stated that this QHP certification information would be necessary to verify that APTC payments were made only for QHPs that were properly certified and available in the consumer's coverage area during the relevant time periods.
At § 155.1615(b)(3)(v), we proposed that, to the extent applicable, for each person who is included in the APTC payment calculation, the State Exchange would submit or make available to HHS: (A) information collected by the State Exchange about consumer attestations regarding QHP and APTC eligibility factors and demographic information relevant to initial QHP enrollment and eligibility; (B) APTC eligibility and payment determinations, including evidence of required data verifications, and which could also include the electronic source consulted, the timing of required verifications, and the results of the verification; (C) information relevant to QHP and APTC manual eligibility verifications and the resolution of electronic verification inconsistencies, which could include copies of documentary evidence submitted by QHP enrollees, the timing of submissions, the timing of adjudication, and information about good faith extensions; and (D) information relevant to QHP and APTC eligibility redeterminations, such as information about automatic annual redeterminations, the timing and results of periodic examinations of data sources, and policy or application changes initiated by the consumer and resultant electronic or manual eligibility verifications. We stated in the proposed rule that this comprehensive individual-level information would enable HHS to reconstruct and validate the complete eligibility determination process for each household member, ensuring that APTC payments were based on accurate demographic information and proper verification procedures, and were made through appropriate eligibility determinations and redeterminations.
In the 2027 Payment Notice proposed rule, we stated that these data elements have been proven effective through their use in the FFE improper payment measurement program, where they have enabled reliable assessment of APTC payment accuracy and identification of root causes of improper payments, and demonstrated they provide the necessary information to conduct comprehensive improper payment reviews. Additionally, through IPPTA, we noted that we have completed the collection of this data for the first cohort of eight State Exchanges for 10 or more sampled tax households. In making the transition from IPPTA to SEIPM, we believe that each State Exchange would be able to use the automation developed during IPPTA to scale the process for submitting data for a larger number of samples. We sought comments on whether there were additional data elements that would be required under this section to support accurate improper payment measurement, or whether any of the proposed data categories would present operational challenges for State Exchanges. We also solicited comments on alternative data submission mechanisms that could streamline the process while maintaining data security and integrity, including comments on the feasibility of automated data transmission methods, preferred file formats, or technical specifications that would facilitate efficient data exchange between State Exchanges and HHS.
At § 155.1615(b)(3)(vi), we proposed that the State Exchange would submit or make available to HHS any consumer submitted documents that were used to establish new or continued eligibility for enrollment in a QHP and APTC.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed § 155.1615 below.
Several commenters further stated concern regarding the scope and granularity of required data elements, including the submission of detailed consumer-level documentation, and noted that these requirements may not be readily automated in SEIPM. Some commenters also requested that SEIPM leverage existing data elements within State Exchange systems, where feasible, to reduce the need for system modifications and manual data transformation and requested additional technical specifications to support implementation planning.
In addition, we acknowledge requests for greater clarity regarding technical specifications, including data definitions, reporting formats, and submission requirements. However, we continue to maintain that the proposed data elements are necessary to support a statistically valid and reliable improper payment estimate, consistent with requirements under the PIIA and OMB Circular No. A-123.
Specifically, the collection of program documentation, a complete universe of tax households receiving APTC, and detailed case-level data for sampled households is essential to support valid sampling, accurate eligibility and payment review, and proper extrapolation of findings to the full population. Without this information, HHS would be unable to construct sampling frames, apply appropriate statistical weighting, or determine whether APTC payments were made in accordance with Federal requirements. As a result, HHS would be unable to produce improper payment estimates that meet Federal standards for accuracy and reliability.
We also note that this framework is consistent with that used in the Federally-facilitated Exchange improper payment measurement program and has been tested through IPPTA, where it has proven effective to support the comprehensive review of eligibility determinations and APTC calculations. While we acknowledge that State Exchanges operate different systems, we believe the proposed framework appropriately reflects the minimum data necessary to conduct improper payment measurement across all Exchange types.
With respect to commenters' concerns regarding operational specificity, we note that the regulation establishes the scope of required information, while detailed technical specifications, submission formats, and operational instructions will be provided through sub-regulatory guidance. This approach allows HHS to adapt technical requirements as needed while maintaining a consistent regulatory framework. Accordingly, we are finalizing § 155.1615 as proposed.
We acknowledge that implementation of SEIPM may require States to allocate resources to support data submission and program participation. However, we continue to believe that these requirements are necessary to support HHS' statutory obligations under PIIA and to ensure accurate measurement of improper payments. The data descriptions specified in § 155.1615 are designed to capture the information required to evaluate eligibility determinations, verify APTC calculations, and assess compliance with Federal requirements. We do not believe that the collection of information needed to support measurement would necessitate system modifications. Accordingly, we are finalizing this provision as proposed.
We proposed to add § 155.1620 to address the sampling procedures. At § 155.1620(a), we proposed that at the beginning of each calendar year, HHS would calculate a sample size in aggregate across all State Exchanges. We stated that the sampling methodology would be designed to achieve two complementary objectives: produce a highly precise aggregate estimate for all State Exchanges and generate individual State Exchange estimates for program management purposes. While some individual State Exchange estimates might have wider confidence intervals than others due to smaller sample sizes, they would meet minimum statistical validity thresholds and provide valuable insights for State-specific program improvements and oversight activities.
We proposed that we would aggregate the estimated dollar amounts of improper payments from each State Exchange to calculate a total estimated amount of improper payments for all participating State Exchanges. We noted that this aggregation process would mathematically combine the individual State Exchange improper payment estimates to produce a comprehensive national estimate. The aggregated estimate would be weighted by State Exchange size, such that a State with $5 billion in APTC would be weighted more heavily in the aggregate State Exchange improper payment rate than a State with $1 billion in APTC. We stated that this weighting approach would ensure that the aggregate State Exchange improper payment rate would accurately reflect the relative financial impact of each State Exchange's improper payment performance on the overall APTC program.
In the proposed rule, we stated that this dual-purpose sampling approach would balance statistical rigor with practical program management needs, ensuring that HHS could meet Federal reporting requirements for precise program level estimates while providing State Exchanges with actionable data for program improvement efforts. The methodology would recognize that perfect precision at the individual State Exchange level would require prohibitively large sample sizes, while the primary statutory requirement is for accurate improper payment measurement and reporting at a program level.
At § 155.1620(a)(1), we proposed that the sample size would be calculated to estimate an improper payment rate. That rate would be estimated across all Exchanges using Generally Accepted Accounting Principles (GAAP).
At § 155.1620(a)(2), we proposed to develop sample sizes specific to each State Exchange, which would take into consideration several factors in determining each State Exchange's sample size for the current SEIPM cycle. We provided that the first factor, at § 155.1620(a)(2)(i), would be overall APTC expenditures associated with the State Exchange; higher APTC expenditures would generally warrant larger sample sizes as they would represent greater financial risk to the Federal Government and have more significant impact on aggregate national improper payment estimates. The relative amount of a State Exchange's APTC payments would amplify the importance of accurate measurement. For example, if a single State Exchange were to account for 20 percent of overall APTC payments made across all State Exchanges, any improper payments within that State would have a proportionally larger impact on the aggregate national improper payment rate. The large share of total APTC payments would necessitate a larger sample size to meet the statistical precision goals and also would not introduce excessive uncertainty into the national aggregate estimate.
At § 155.1620(a)(2)(ii), we proposed to take into consideration a second factor, State-level precision goals for the current SEIPM cycle. We noted that precision goals would establish the acceptable margin of error for improper payment rate estimates at the State level. We proposed that we would set precision targets that balance statistical reliability with operational feasibility, taking into account factors such as State-specific APTC volumes, available resources, and the need for meaningful measurement. We proposed that precision goals could vary by State based on Exchange size, with larger Exchanges held to tighter precision standards due to their greater impact on aggregate national estimates. These precision goals would ensure that State-specific improper payment rates would be statistically meaningful and could support targeted corrective actions while balancing measurement accuracy with resource constraints.
At § 155.1620(a)(2)(iii), we proposed to consider a third factor, the improper payment rate from the State Exchange's previous SEIPM cycle. State Exchanges that are measured as having higher improper payment rates could require larger sample sizes to achieve the same level of statistical precision and confidence as State Exchanges that are measured as having lower improper payment rates. Additionally, we noted that State Exchanges that demonstrate high variability in their previous cycle measurements could need increased sampling to establish more reliable baseline estimates. Conversely, State Exchanges with consistently low and stable improper payment rates could support smaller sample sizes to maintain adequate precision and confidence, which would allow for efficient resource allocation across the SEIPM program.
At § 155.1620(a)(3), we proposed that we would establish minimum and maximum sample sizes to ensure statistical validity while maintaining operational feasibility across State Exchanges of varying sizes. While the sampling methodology design would produce statistically valid improper payment estimates at both the aggregate State Exchange level and individual State Exchange levels, we recognized that the precision of improper payment estimates at the State Exchange level would vary based on State Exchange size and corresponding sample sizes. State Exchanges with smaller APTC populations may have smaller sample sizes resulting in wider confidence intervals and higher margins of error for their individual estimates. Despite these precision limitations, individual State Exchange estimates would meet minimum statistical validity thresholds and would provide meaningful data for program oversight and improvement purposes. We noted that SEIPM's primary focus would remain producing
At § 155.1620(b), we outlined proposed sample selection procedures. We proposed that, on an annual basis, HHS would select random samples of tax households from the data provided by each State Exchange as described in § 155.1615(b)(2). We proposed to use the tax household as the sampling unit because a tax household encompasses all individuals whose income and circumstances are considered together for APTC purposes, which would make it the most appropriate and meaningful unit for measuring payment accuracy.
At § 155.1620(c), we outlined proposed State Exchange coordination and notification procedures that would be necessary to support SEIPM. We proposed at § 155.1620(c)(1) that, following receipt of the universe data from State Exchanges as described in § 155.1615(b)(2), HHS would notify each State Exchange of the specific records selected for review. Such notification would include: (i) the total number of sampled tax households selected for the State Exchange; (ii) a unique identifier for each sampled tax household; and (iii) any specific instructions or requirements needed to facilitate HHS' review of the sampled records. We stated that this information would be intended to give State Exchanges the information necessary to provide the documentation required. This process would help ensure that State Exchanges have clear notification of the specific tax households that have been sampled. This would also help foster efficiencies and accurate submission of the tax household data required under § 155.1615(a)(3).
In the proposed rule, we noted that we would protect all data exchanged during the SEIPM process in accordance with the Federal Information Security Modernization Act of 2014 (FISMA), which mandates comprehensive security controls for Federal information systems, and the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules (45 CFR parts 160 and 164), which require administrative, physical, and technical safeguards to protect the privacy of protected health information and to ensure the confidentiality, integrity, and availability of all electronic protected health information. Additionally, all data transmissions would utilize encryption protocols compliant with National Institute of Standards and Technology (NIST) Special Publication 800-53 security controls and our Acceptable Risk Safeguards (ARS) framework, with access restricted to authorized personnel only through role-based access controls and continuous monitoring as required under the Federal Information Security Management Act.
At § 155.1620(c)(2), we proposed that HHS would provide the sampled records notification described in paragraph (c)(1) of this section no later than 60 calendar days after receipt of the universe data from all State Exchanges. This 60-day timeframe would ensure that HHS would have sufficient time to complete the sampling process across all participating State Exchanges. We stated that the proposed timeline would account for the complexity of coordinating sampling activities across multiple State Exchanges with varying data submission schedules and allow for quality assurance review of the sampling methodology before notification. This approach would balance the need for thorough sampling coordination with the operational requirements for timely completion of improper payment measurement processes.
At § 155.1620(c)(3), we proposed to establish procedures for extending the sampling notification timeline when unforeseen circumstances would warrant additional time for HHS to complete the sampling process. We proposed at § 155.1620(c)(3)(i) that HHS could extend the 60-day timeline specified in paragraph (c)(2) of this section under three specific circumstances: when technical issues would prevent completion of the sampling process within the standard timeframe; when data quality issues would require additional coordination with State Exchanges before sampling can be completed; or when other circumstances beyond HHS' control would necessitate additional time to ensure accurate sampling methodology.
We proposed at § 155.1620(c)(3)(ii) to establish notification and transparency requirements when HHS would determine an extension would be necessary. Under paragraph (c)(3)(ii), HHS would: (A) notify all affected State Exchanges in writing of the extension and the revised notification date; (B) provide the reason for the extension; and (C) confirm the impact, if any, on subsequent SEIPM cycle timelines. In the proposed rule, we stated that this provision would reflect that unforeseen technical or operational challenges potentially could arise when coordinating complex sampling across multiple State Exchanges. Where not properly addressed, such challenges could compromise the sampling methodology accuracy or completeness, so this provision would balance the need for timely program milestone progress with the requirement for statistically sound sampling procedures. By limiting extensions to specific, defined circumstances and requiring transparent communication with State Exchanges, this approach would maintain accountability while providing necessary operational flexibility to ensure the integrity of the SEIPM measurement process.
In the proposed rule, we stated that the notification requirements proposed at § 155.1620(c)(3)(ii)(A) through (C) would also ensure that State Exchanges would remain informed of any timeline adjustments and could plan for the case documentation preparation activities. This transparency would support the collaborative nature of the SEIPM program while maintaining predictable timelines for all participating parties.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed § 155.1620 below.
We also note that one commenter appeared to assume that the SEIPM sampling approach is designed to achieve a specific margin of error at the individual State Exchange level, such as a margin of error of less than 5 percent. This is not the intent of the SEIPM sampling design. As described in § 155.1620(a), the sampling methodology is designed to produce a precise estimate at the aggregate program level across all State Exchanges, consistent with requirements under the Payment Integrity Information Act of 2019 (PIIA).
While State-specific estimates will be produced for program management and oversight purposes, they are not required to meet the same precision thresholds as the aggregate estimate. As a result, individual State Exchange sample sizes may vary and may not be designed to achieve a specific margin of error at the State level. This approach allows us to balance statistical rigor with operational feasibility across State Exchanges of varying sizes.
While we recognize that variability may present operational planning challenges, establishing fixed or highly predictable sample sizes could undermine the reliability of the resulting estimates. We intend to provide additional operational detail, including expectations regarding sampling, through sub-regulatory guidance to support State Exchange planning. Accordingly, we are finalizing § 155.1620 as proposed.
We also acknowledge commenters' concerns regarding the use of APTC expenditures as a factor in determining sample sizes. As described in § 155.1620, APTC payment amounts are used to appropriately weigh the financial impact of improper payments and ensure that estimates accurately reflect the magnitude of Federal expenditures. While alternative approaches, such as using enrollment counts, were suggested, we believe that incorporating APTC payment amounts is necessary to produce statistically valid estimates that reflect the financial risk associated with improper payments across State Exchanges.
We further acknowledge commenters' requests for additional State-level detail in reporting. As described in § 155.1625(c), HHS will provide State Exchanges with State-specific improper payment reports to support program oversight and improvement, while aggregated reporting will be used to meet Federal reporting requirements under PIIA.
The sampling methodology, consistent with the PIIA and OMB Circular No. A-123 guidance, is designed to produce statistically valid estimates representative of the full population at the aggregate program level. Accordingly, we are finalizing § 155.1620 as proposed.
We acknowledge the commenter's interest in alternative statistical approaches; however, the methodology used for the FFE—and proposed for SEIPM—reflects established Federal standards for improper payment estimation and is designed to produce reliable and defensible results at the program level.
Accordingly, we are not adopting an alternative statistical methodology and are finalizing this approach as proposed.
In the proposed rule, § 155.1625 outlined the process by which HHS would determine payment errors. At § 155.1625(a), we proposed procedures for HHS' review of records obtained through SEIPM and identification of payment errors from such records. We proposed at § 155.1625(a)(1) that HHS would, for each sampled record, conduct a comprehensive review using standardized review criteria designed by HHS. This approach would ensure consistency in methodology across all participating State Exchanges while accommodating necessary variations in review procedures where State Exchanges have effectuated State-specific operational approaches. We stated that we would design the criteria to minimize reviewer variability while maintaining the flexibility needed to address State-specific operational differences for which Federal regulations allow. The review criteria would be established using the requirements described in this part in conjunction with the program documentation that would be submitted by each State Exchange. We would make available a general overview of the review methodology on the CMS website.
At § 155.1625(a)(2), we proposed to conduct reviews using the tax household information provided under § 155.1615(b)(3), including any relevant consumer-submitted documents that would be gathered by the State Exchange as part of the enrollment process and provided to HHS. We noted that this approach would ensure that HHS reviews would be based on the same information that was available to State Exchanges at the time of their original APTC-related determinations.
At § 155.1625(a)(3), we proposed that the review would identify whether the State Exchange made any errors related to the following resulting in improper payment of APTC: (i) enrolling or re-enrolling a consumer into a QHP for which APTC was paid; (ii) consumer eligibility for APTC being paid on their behalf; (iii) calculating the APTC amount that was paid on the consumer's behalf; and (iv) taking required actions upon changes to a consumer's application that would affect APTC-related eligibility or payment amount.
At § 155.1625(a)(4), we proposed to apply consistent review standards based on the APTC-related determination requirements established in 45 CFR part 155, subparts D and E, and other applicable provisions of part 155. By anchoring review standards in existing regulations, we would ensure that the State Exchange's performance would be evaluated against the same statutory and regulatory framework that governs their APTC-related determinations. This regulatory framework would ensure that any identified errors would be based on clear violations of established requirements rather than subjective interpretations of the program's goals.
We proposed at § 155.1625(b) how HHS would evaluate each error to determine an improper payment amount. At § 155.1625(b), we proposed that, for each error identified, we would: (1) calculate the correct APTC amount, based on the requirements of section 36B of the Internal Revenue Code and the applicable implementing regulations; (2) determine an improper APTC payment amount, which is the difference between the amount paid and the correct amount; (3) document the error within a Sampled Unit Assessment Package and provide the Sampled Unit Assessment Package to the State Exchange; and (4) extrapolate the identified improper payments from the sample to estimate the total improper payment amount for the State Exchange's entire universe of APTC payments, using statistically valid methodologies that comply with OMB Circular No. A-123 guidance on improper payment estimation.
At § 155.1625(c), we proposed how HHS would report improper payment rates. We proposed at § 155.1625(c) that HHS would make available to the public in the AFR: (1) an aggregate improper payment rate estimated across the FFE and all State Exchanges; and (2) an aggregate improper payment rate estimated across all State Exchanges, pursuant to 31 U.S.C. 3352(c)(1)(B); and also that HHS would provide to each State Exchange a report that would document the State-specific improper payment rate and error analysis. We stated in the proposed rule that this reporting approach would ensure PIIA compliance while providing State Exchanges with actionable data to improve their program operations and reduce future improper payments. The State-specific reports would facilitate corrective action planning, while the aggregate public reporting would support congressional oversight and public accountability for the overall integrity of the APTC program.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed § 155.1625 below.
The SEIPM review process is designed to assess payment accuracy using the same information that was available to the State Exchange at the time of the original eligibility and payment determinations, along with any supporting documentation maintained by the State Exchange. Where sufficient documentation is not available to support that a payment was made in accordance with applicable requirements, the payment may be classified as improper, consistent with Federal improper payment measurement standards. This approach reflects longstanding Federal requirements that determinations be supported by appropriate documentation.
At the same time, we recognize the operational challenges associated with compiling and submitting complex data across diverse State Exchange systems. As discussed in § 155.1615, we are allowing flexibility in data submission approaches, including the ability to submit data in formats that align with State Exchange system architecture where appropriate. We believe this flexibility will help reduce unnecessary burden, improve the accuracy and completeness of submitted data, and support more reliable improper payment determinations.
We also note that the SEIPM process includes opportunities for State Exchanges to provide additional information or clarification through the Difference Resolution and administrative appeal processes prior to finalization of findings. We believe that these processes, including opportunities for clarification and appeal, provide an appropriate balance between ensuring accountability and recognizing operational realities.
We also acknowledge commenters' request for more detailed, non-aggregated reporting of improper payments by State Exchanges. As described in § 155.1625(c), HHS will provide State Exchanges with State-specific improper payment reports to support program oversight and improvement, while aggregated reporting will be used to meet Federal reporting requirements under PIIA. We believe this approach appropriately balances transparency with the need for consistent, program-level reporting. Accordingly, we are finalizing § 155.1625 as proposed.
In new § 155.1630, we proposed procedures for Difference Resolution and administrative appeals of SEIPM findings. This section proposed a process that would allow State Exchanges to challenge HHS determinations regarding error findings and associated determinations of improper payments. This comprehensive dispute resolution framework would ensure that State Exchanges receive fair consideration of their challenges to SEIPM findings while maintaining the integrity and efficiency of the improper payment measurement process. The proposed procedures would provide State Exchanges with meaningful opportunities to present evidence and legal arguments, while also supporting HHS' statutory obligations to produce timely and accurate improper payment estimates under PIIA. Additionally, the structured approach would promote consistency in how disputes would be handled across all State Exchanges, while reducing administrative burden and ensuring that legitimate concerns about error classifications or methodological applications would receive appropriate review and consideration.
At § 155.1630(a), we proposed the Difference Resolution process. We proposed at § 155.1630(a)(1) that the State Exchange could make a written Difference Resolution request to HHS in accordance with proposed § 155.1630(c) to dispute HHS' error and improper payment findings within 30 calendar days after the issuance of a Sampled Unit Assessment Package. The proposed 30-day timeframe for State Exchanges to submit written Difference Resolution requests would balance the need to give State Exchanges sufficient time to review the Sampled Unit Assessment Package with the need for administrative efficiency and timely resolution of the SEIPM process.
At § 155.1630(a)(2), we proposed procedures for HHS' review of Difference Resolution requests. We proposed that upon receipt of a Difference Resolution request, HHS would: (i) engage with the State Exchange in a collaborative process to examine the disputed findings and any additional documentation provided by the State Exchange; (ii) evaluate the disputed findings by applying the same protocol used in the original review while considering whether the State Exchange's position was supported by the existing or newly provided evidence; and (iii) prepare the Difference Resolution Decision. We stated that this collaborative approach would ensure that State Exchanges would have a meaningful opportunity to present their perspective and provide additional context that may not have been available during the initial assessment, while maintaining consistency in evaluation standards. The process would balance the need for thorough consideration of State Exchange concerns with administrative efficiency, promoting fair resolution of disputes while preserving the integrity of the SEIPM measurement methodology.
We proposed at § 155.1630(a)(3) that HHS would communicate the Difference Resolution Decision to a State Exchange within 90 calendar days of receiving the written request for a Difference Resolution. The Difference Resolution Decision would include a summary of the analysis and rationale that informed the decision. This timeline would balance the need for thorough review of a State Exchange's dispute with administrative efficiency requirements, and allow sufficient time for comprehensive analysis while ensuring timely resolution.
Proposed § 155.1630(b) would establish an internal agency administrative appeal process for HHS' Difference Resolution Decision. At § 155.1630(b)(1), we proposed that, for a finding that the State Exchange and HHS could not resolve through Difference Resolution, the State Exchange could make a written request for an administrative appeal to HHS in accordance with proposed § 155.1630(c) within 15 business days after the issuance of the Difference Resolution Decision. We noted that we believe the 15 business day timeline for filing an administrative appeal would strike an appropriate balance between providing State Exchanges adequate time to prepare comprehensive administrative appeals while ensuring prompt resolution of disputes and maintaining administrative efficiency. This shorter appeal period, compared to the initial 30-day timeline to request Difference Resolution, would reflect that the basis of the administrative appeal would have been established and well-described during the Difference Resolution phase, and that the State would not be able to submit new evidence or documentation that had not already been submitted during the Difference Resolution process, although it could provide additional context to clarify evidence that had been submitted. We stated that, as a result, we expect that 15 business days would provide State Exchanges with sufficient opportunity to review the Difference Resolution Decision and prepare a focused administrative appeal that would build upon the previously established record. Furthermore, the administrative appeal timeframe would help ensure that the overall SEIPM cycle would remain on schedule, preventing delays that could affect HHS' ability to meet Federal improper payment reporting deadlines and provide timely program oversight.
At § 155.1630(b)(2), we proposed that upon receipt of an administrative appeal request, HHS would (i) assign the administrative appeal request to one or more qualified reviewers who were not part of the State Exchange team; (ii) conduct a comprehensive review of the disputed findings using the administrative record established during the Difference Resolution process; (iii) evaluate the disputed findings by applying the same protocol used in the original review while considering whether the State Exchange's position is supported by the evidence; and (iv) prepare the administrative appeal decision for the completed review based on a preponderance of the evidence. At § 155.1630(b)(3), we proposed that HHS would issue the administrative appeal decision within 90 calendar days of receipt of the written request for administrative appeal. The administrative appeal decision would include a summary of the analysis and rationale that informed the decision.
In the proposed rule, we stated that HHS would utilize internal staff to conduct administrative appeal adjudications under this provision. The agency would assign qualified internal reviewers who possess appropriate expertise in Federal eligibility and payment requirements and who had not been involved in the original review to ensure objectivity in the administrative appeals process. These reviewers would independently review the appeal, without consultation with the individuals who had executed the dispute resolution. This approach would maintain program consistency while providing State Exchanges with an independent review of disputed findings. The internal agency administrative appeal process described in this section would be an administrative review conducted by agency staff, not a judicial proceeding or formal adjudication requiring an Administrative Law Judge.
We stated that the 90-day timeline would provide sufficient opportunity
We proposed at § 155.1630(c) that all Difference Resolution and appeal requests would be required to contain the following: (1) a clear statement of the specific finding(s) being challenged; (2) all factual and legal bases for filing the request; and (3) evidence directly related to the finding(s), which could include: (i) clarifying information regarding data interpretation; or (ii) legal citations supporting the State Exchange's position. These submission requirements would ensure that HHS would receive sufficient information to conduct meaningful review of disputed findings while enabling State Exchanges to present their strongest arguments and supporting evidence in a structured format that would promote efficient dispute resolution.
We proposed at § 155.1630(d) the treatment of pending Difference Resolution Requests and appeal requests. At § 155.1630(d)(1), for Difference Resolution Requests or administrative appeals resolved in favor of the State Exchange during the current SEIPM cycle, we proposed that: (i) HHS would adjust the affected improper payment rate calculations for the SEIPM cycle; and (ii) updated aggregate rates would be reflected in current cycle reporting. This approach would ensure that corrections identified through the Difference Resolution or appeals process would be incorporated into the current measurement cycle's results, providing the most accurate and complete improper payment estimates for public reporting and program management purposes. We stated that, by adjusting calculations and updating aggregate rates, HHS could maintain the integrity and reliability of SEIPM findings while ensuring that legitimate State Exchange concerns would be reflected in the final reported statistics for the applicable measurement period.
We proposed at § 155.1630(d)(2) provisions for Difference Resolution Requests or administrative appeals resolved in favor of the State Exchange after completion of the SEIPM cycle. At § 155.1630(d)(2), we proposed that, should the decision result in material changes to aggregate rates, HHS would publish amended aggregated improper payment rates in subsequent AFRs or other appropriate public reporting mechanisms as well as notifying affected State Exchanges of any amendments to previously published rates. We noted that, should a decision not result in material changes to aggregate rates, no action would be taken. This framework would ensure that significant corrections identified through post-cycle Difference Resolution Requests or administrative appeals would be incorporated into the public record through amended reporting, maintaining the accuracy and integrity of published improper payment data while avoiding unnecessary administrative burden for minor adjustments that would not materially affect aggregate statistics. The notification requirement for affected State Exchanges would promote transparency and enable States to understand how successful challenges would impact previously published rates, support ongoing program improvement efforts, and maintain the integrity of the SEIPM measurement process.
At § 155.1630(e), we proposed that, for good cause, HHS could extend the timelines for accepting a Difference Resolution request or administrative appeal request or for issuing a Difference Resolution Decision or Administrative Appeal Decision. Good cause would be established for situations including but not limited to: (1) the need for additional technical analysis or consultation with subject matter experts to resolve complex eligibility determination issues; (2) delays in receiving necessary supplemental information or clarification from the State Exchange; (3) the volume or complexity of the dispute requiring additional time to ensure a thorough and accurate decision; or (4) unforeseen circumstances, including system failures, staffing constraints, or other administrative challenges that could materially impact HHS' ability to complete the review. HHS' failure to timely issue a Difference Resolution or Administrative Appeal decision would not indicate an acceptance of the State Exchange's position and would not be a basis to decide in favor of the State Exchange.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed § 155.1630 below.
As described in § 155.1630(e), HHS may extend timelines for Difference Resolution requests or administrative appeals for good cause, including circumstances where additional time is needed to complete technical analysis, obtain supporting documentation, or address complex eligibility determinations. We believe this flexibility appropriately balances the need for thorough review with the need to maintain timely completion of the SEIPM cycle.
We also intend to provide additional guidance, as appropriate, to support State Exchanges in navigating the Difference Resolution and administrative appeal processes. Accordingly, we are finalizing § 155.1630 as proposed.
We proposed to add § 155.1635 to, at our discretion, require a State Exchange to develop and submit a CAP to correct errors identified through the SEIPM process. Our goal would be to establish a set of minimum requirements, using the standards provided at Appendix C to OMB Circular No. A-123, to support State Exchanges in developing, implementing, and monitoring a CAP. We stated in the proposed rule that, should this provision be finalized as proposed, we would issue future sub-regulatory guidance to further detail CAP requirements and processes, and
At § 155.1635(a), we proposed that HHS could, at its discretion, require a State Exchange to develop and submit a CAP to correct errors identified through the SEIPM process. We would not anticipate that SEIPM CAP standards and requirements would markedly differ from the standards employed by other improper payment measurement programs, such as the Medicaid and CHIP Payment Error Rate Measurement program.
At § 155.1635(b), we proposed that a State Exchange's CAP would need to address errors that would be included in the State Exchange improper payment report described in § 155.1625(c)(2). At § 155.1635(b)(1), we proposed that, in developing a CAP, a State Exchange would be required to conduct an error analysis, which could include reviewing causes, characteristics, and frequency of errors that are associated with improper payments. We proposed that a State Exchange would be required to review the findings of the analysis to determine specific programmatic causes to which errors would be attributed, if any, and to identify root improper payment causes. Further, at § 155.1635(b)(2), we proposed that the State Exchange would be required to determine the corrective actions that would be implemented to address improper payment root causes and prevent recurrence. Finally, at § 155.1635(b)(3), we proposed that the CAP would be required to incorporate measurable milestones, accountability mechanisms, regular monitoring and validation of progress, documentation of implemented corrective actions, and regular status updates. We proposed that the CAP would be required to include all of the following items for each identified error: (1) the specific corrective action; (2) status of the corrective action; (3) scheduled or actual implementation date of the corrective action; (4) key personnel that would be responsible for implementing each corrective action; and (5) a plan for monitoring the effectiveness of the corrective action.
At § 155.1635(c), we proposed that a State Exchange would be required to develop a CAP implementation schedule, implement the CAP in accordance with that schedule, and regularly evaluate whether the initiatives were effective at reducing or eliminating error causes. We stated that it would be critical that a State Exchange maintain regular communication with HHS regarding any evaluation findings, particularly to ensure that the State Exchange would determine specific programmatic causes to which errors would be attributed. Therefore, we proposed that a State Exchange would be required to provide updates on CAP implementation progress in a manner and frequency specified by HHS, but at least annually.
At § 155.1635(d), we proposed that if a State Exchange would: (1) fail to submit a CAP when one had been required; (2) submit an incomplete CAP that would fail to address all parts of a CAP as specified at 155.1635(b)(3); (3) fail to implement a CAP; or (4) submit a CAP otherwise found unacceptable by HHS following technical assistance provided by HHS, that HHS could determine that a State Exchange had failed to substantially comply with SEIPM requirements and could take actions outlined in § 155.1650 to ensure program integrity and effectiveness.
We sought comment on these proposals.
After consideration of the comment and for the reasons outlined in the proposed rule and this final rule, including our responses to the comment, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed below.
We proposed new § 155.1640 to create a SEIPM preparation phase. At § 155.1640(a), we proposed that any State Exchange in its first year of operation would be required to participate in a 1-year SEIPM preparation phase prior to participating in SEIPM. We stated in the proposed rule that the proposed preparation phase would be designed to familiarize State Exchanges with the SEIPM processes and requirements. At the beginning of the following year, or, in other words, the second year of operation for the State Exchange, we proposed that the State Exchange would undergo SEIPM to measure improper payments for the preceding plan year, its first year of operation. We noted that this implementation timeline would ensure that newly operating State Exchanges would have the opportunity to participate in the preparation phase before undergoing full SEIPM measurement, thereby preparing the State Exchange for the SEIPM measurement. In essence, HHS would ensure that a State Exchange would test processes and procedures to prepare for SEIPM.
We proposed at § 155.1640(b) that, to satisfy the requirements of the SEIPM preparation phase, a State Exchange would be required to: (1) complete the information submission requirements in § 155.1615(b)(1) and (3) using information from the most current plan year for a sample size not to exceed 10 unique tax households that address scenarios specified by HHS; (2) undergo the review procedures in 155.1625(a) and (b); and (3) participate in HHS' technical assistance activities, which could include: (i) training on SEIPM requirements and procedures, (ii) system readiness assessments, (iii) data quality validation exercises, and (iv) process improvement recommendations. Such a preparation phase approach would promote administrative efficiency by ensuring State Exchanges would have adequate time and resources to develop robust improper payment measurement capabilities before full implementation. Without such a preparation period, State Exchanges could struggle to produce the data that would be necessary for determining accurate measurements.
At § 155.1640(c), we proposed that, at the beginning of each calendar year, HHS would provide any State Exchange that would be subject to this section with a schedule that would span a 12-month period and that would specify when the requirements of this section would have to be completed.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed § 155.1640 below.
We believe that this preparation phase, together with ongoing technical assistance and guidance, will help support operational readiness and facilitate a more effective transition to SEIPM requirements. Accordingly, we are finalizing § 155.1640 as proposed.
We proposed to add new § 155.1645 to permit HHS, to the extent possible, to minimize duplication between the requirements of the SEIPM program described in subpart Q and the annual independent external programmatic audit requirements and standards under § 155.1200(c) and (d). Under § 155.1200(c) and (d), each State Exchange is required to engage or contract with an independent qualified auditing entity to perform an annual independent external programmatic audit to review compliance with 45 CFR part 155 subparts D (eligibility) and E (enrollment), and other requirements under part 155, as specified by HHS, and to provide the audit results to HHS.
In the proposed rule, we stated that, among other things, this external auditing process allows HHS to oversee compliance with eligibility and enrollment standards to ensure that State Exchanges are conducting accurate eligibility determinations and enrollment transactions, including requirements across multiple State Exchange operational areas that exceed the scope of review under the SEIPM program because they do not involve payments of APTC. Section 155.1200(d) further requires that a State Exchange complete an audit to ensure appropriate financial and operational safeguards are in place to avoid making inaccurate eligibility determinations and enrollment transactions, which would include those related to administering APTC and CSRs.
We noted that §§ 155.1200 and 155.1210 were not intended to serve as the type of measurement program contemplated by the PIIA. Program integrity audits completed under § 155.1200(c) and (d), especially as they relate to requirements under subparts D and E, focus on reviewing the processes and procedures that a State Exchange has established to verify that a qualified individual meets eligibility requirements. We stated that these programmatic audits do not review, estimate, or report on the amounts or rates of improper payments resulting from inaccurate eligibility determinations and enrollment transactions. SEIPM would both ensure a review of the accuracy of State Exchange eligibility verification processes and identify improper APTC payments resulting from inaccurate eligibility determinations and enrollment transactions.
To meet the requirements of the PIIA, reduce burden on State Exchanges, and ensure consistency across State Exchanges in terms of our review methodology, we proposed that a State Exchange's participation in SEIPM would satisfy certain duplicative annual independent external programmatic audit requirements, particularly the review of compliance with provisions of subparts D and E that may result in improper payment of APTC. Should this provision be finalized as proposed, we stated in the proposed rule that we would issue sub-regulatory guidance to identify which programmatic audit requirements could be satisfied through completion of SEIPM for a given plan year. We expressed our belief that this policy would reduce duplicative efforts and burden on State Exchanges that would otherwise be required to fully comply with programmatic audit requirements and SEIPM, while also maintaining the programmatic audits for requirements not reviewed as part of SEIPM.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed below.
We proposed to add new § 155.1650 that would address what would happen should a State Exchange fail to comply with the SEIPM requirements. In the proposed rule, we stated that this proposed section would create clear criteria for determining when a State Exchange had failed to substantially comply with SEIPM requirements and would establish appropriate remedial measures to ensure program integrity and effectiveness.
At § 155.1650(a), we proposed to establish a general principle that would govern improper payment classification throughout the SEIPM program. We proposed that HHS would classify APTC payments as improper when a State Exchange failed to provide adequate documentation demonstrating that such payments were made in accordance with applicable Federal requirements. We noted that this principle would align with Federal improper payment measurement standards established under PIIA which require agencies to classify payments as improper when there is insufficient documentation to determine if a payment is proper or improper. The burden of providing adequate supporting documentation would rest with State Exchanges as the entities responsible for making APTC eligibility determinations and payment calculations, ensuring that Federal funds were distributed in accordance with Federal requirements.
We proposed to specify at § 155.1650(b)(1) through (5) when HHS would determine a State Exchange had failed to substantially comply with this subpart by providing specific, measurable criteria addressing the most critical aspects of State Exchange participation in SEIPM, which would consist of the following: (1) failure to submit required data or documentation within the timelines specified in the Annual Program Schedule; (2) submitting data or documentation found to be incomplete, inaccurate, or in a format that would reasonably prevent effective review; (3) failure in the CAP process; or (4) demonstrates a pattern of more than five instances during a SEIPM cycle in which the State Exchange fails to respond within 30 calendar days, or provides a non-responsive answer, to HHS requests for clarification or additional information.
In the proposed rule, we stated that such a proposed compliance framework would balance the need for clear, enforceable standards with recognition that State Exchanges operate complex systems and may encounter operational challenges. We noted that the proposed criteria would focus on substantial compliance failures that would genuinely affect the integrity and effectiveness of the SEIPM program as opposed to minor technical violations that would not materially affect improper payment measurement activities. Such standards would ensure that State Exchanges would provide necessary information within established timeframes to support the overall SEIPM cycle and enable HHS to meet Federal improper payment reporting obligations, while maintaining data quality sufficient to support reliable measurement results. The framework would promote accountability and ensure effective program administration across all participating State Exchanges, while maintaining the collaborative relationship necessary for successful SEIPM implementation. By establishing clear expectations for data submission timeliness, quality standards, corrective action implementation, and ongoing communication, these proposed compliance criteria would support the accuracy of improper payment estimates and the overall integrity of the APTC program oversight process.
At § 155.1650(c), we proposed to establish a process to provide State Exchanges notice and opportunity to address compliance deficiencies before HHS would implement remedial measures. We proposed that before implementing measures under paragraph (d) of this section, HHS would provide written notice to the State Exchange specifying the nature of the noncompliance and the potential consequences, and allow the State Exchange a reasonable opportunity to cure the noncompliance or demonstrate that compliance had been achieved. This notice and cure provision would promote collaborative problem-solving between HHS and State Exchanges. We stated that the written notice requirement would ensure that State Exchanges would have clear understanding of the specific compliance deficiencies and the potential consequences of continued noncompliance, and would enable them to take appropriate corrective action. HHS would set the cure period to be commensurate with the complexity of the compliance issue.
At § 155.1650(d), we proposed to establish a framework of remedial measures that HHS could implement should a State Exchange fail to substantially comply with SEIPM requirements and such failures undermine or prohibit HHS' efficient administration of Exchange improper payment measurement activities. We stated that this provision would provide HHS with appropriate enforcement tools to secure State Exchange compliance while maintaining program integrity and ensuring effective oversight of APTC administration. We proposed that HHS could implement measures or procedures to secure the State Exchange's compliance with the requirements of this subpart which are proposed to include: (1) enhanced monitoring and reporting; (2) mandatory implementation of specific operational procedures or controls; and (3) on-site visits to State Exchange facilities to assess operational procedures, data systems, and compliance with program requirements.
In the proposed rule, we stated that this graduated enforcement approach would recognize that different compliance failures may require different remedial responses, allowing HHS to tailor interventions to the specific nature and severity of the noncompliance. Enhanced monitoring and reporting requirements would provide ongoing oversight for State Exchanges experiencing compliance difficulties, while mandatory operational procedures or controls would address systemic deficiencies that could be contributing to improper payment risks. On-site visits would enable HHS to conduct comprehensive assessments of State Exchange operations, identify root causes of compliance failures, and provide targeted technical assistance to support improvement efforts.
At § 155.1650(e), we proposed that HHS could initiate proceedings to revoke a State Exchange's authority to operate if a State Exchange continued to fail to comply after implementation of initial remedial measures under paragraph (d) of this section. Revoking a State Exchange's authority to operate would represent the most serious enforcement action available and would be reserved for cases where other remedial measures had failed to secure the State Exchange's compliance, and the State Exchange's continued operation would pose unacceptable risks to program integrity and enrollee protection.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed § 155.1650 below.
The available actions are intended to ensure that HHS can effectively administer improper payment measurement activities and maintain program integrity, while allowing for appropriate consideration of the nature and severity of noncompliance. More significant actions, such as revocation of a State Exchange's authority to operate, would be reserved for circumstances in which a State Exchange persistently fails to comply, after consideration of any mitigating circumstances at the Federal and State level, and where other remedial measures have not been effective.
We recognize that during implementation, State Exchanges will experience challenges and difficulties while working in good faith to comply with the provisions of this subpart. We will be seeking a collaborative partnership with the State Exchanges to mitigate or relieve any such difficulties without resorting to the enforcement actions described in this provision.
In the 2027 Payment Notice proposed rule (91 FR 6366), for the 2027 benefit year, we proposed an FFE user fee rate of 2.5 percent of total monthly premiums and an SBE-FP user fee rate of 2.0 percent of total monthly premiums.
Section 1311(d)(5)(A) of the Affordable Care Act permits an Exchange to charge assessments or user fees on participating health insurance issuers as a means of generating funding to support its operations. If a State does not elect to operate an Exchange or does not have an approved Exchange, section 1321(c)(1) of the Affordable Care Act directs HHS to operate an Exchange within the State. Accordingly, in § 156.50(c), we state that a participating issuer offering a plan through an FFE or SBE-FP must remit a user fee to HHS each month that is equal to the product of the annual user fee rate specified in the annual HHS notice of benefit and payment parameters for FFEs and SBE-FPs for the applicable benefit year and the monthly premium charged by the issuer for each policy where enrollment is through an FFE or SBE-FP. OMB Circular No. A-25 established Federal policy regarding user fees and what the fees can be used for.
Based on estimated costs, enrollment in the FFEs (including anticipated enrollment loss due to certain States transitioning from the FFE to SBE-FPs or from SBE-FPs to State Exchanges), and premiums for the 2027 benefit year, we proposed a 2027 user fee rate for all participating FFE issuers of 2.5 percent of total monthly premiums.
Section 156.50(c)(1) provides that, to support the functions of FFEs, an issuer offering a plan through an FFE must remit a user fee to HHS, in the timeframe and manner established by HHS, equal to the product of the monthly user fee rate specified in the annual HHS notice of benefit and payment parameters for the applicable benefit year and the monthly premium charged by the issuer for each policy where enrollment is through an FFE. As in benefit years 2014 through 2026, issuers seeking to participate in an FFE in the 2027 benefit year will receive two special benefits not available to issuers offering plans in State Exchanges: (1) the certification of their plans as QHPs; and (2) the ability to sell health insurance coverage through an FFE to individuals determined eligible for enrollment in a QHP. For the 2027 benefit year, issuers participating in an FFE will receive special benefits from the following Federal activities:
• Provision of consumer assistance tools;
• Consumer outreach and education;
• Management of a Navigator program;
• Regulation of agents and brokers;
• Eligibility determinations;
• Enrollment processes; and
• Certification processes for QHPs (including ongoing compliance verification, recertification, and decertification). Activities performed by the Federal Government that do not provide issuers participating in an FFE with a special benefit are not covered by the FFE user fee.
The proposed user fee rate reflected our estimates for the 2027 benefit year of costs for operating the FFEs, premiums, enrollment, and transitions in Exchange models from the FFE and SBE-FP models to either the SBE-FP or State Exchange models. The total enrollment in Exchanges in States anticipated to transition from operating an SBE-FP to a State Exchange model represents premiums for which we will no longer collect user fees, and the total enrollment in Exchanges in States anticipated to transition from an FFE to an SBE-FP model represents premiums for which we will assess user fees at the lower SBE-FP rate. Thus, these anticipated transitions impact our total projected collections, may affect the FFE and SBE-FP user fee rates, and were considered as part of our calculation of our proposed user fee rates.
As stated in the proposed rule, to develop the proposed 2027 benefit year FFE user fee rate, we considered a range of costs, premiums, and enrollment projections. For the 2027 benefit year FFE user fee rate, we estimated that budget costs would be lower in 2027 than the budget costs that we used to
We took several factors into consideration in choosing which premium and enrollment projections will inform the proposed 2027 FFE user fee rate. First, for our estimated premium trend rate projections, we expected premiums will increase in 2026. We also expected that while the rate of premium increase will be smaller in benefit year 2027 increases in premiums will persist.
For the 2021 through 2025 benefit years, the individual non-catastrophic market risk pool in all States generally experienced increased enrollment. Our 2026 estimates accounted for projected decreased 2026 benefit year Exchange enrollment in the individual market due to the impact of the expiration of the enhanced PTC subsidies. For the 2027 benefit year, we estimated a further decrease in Exchange enrollment in the individual market due to the expiration of subsidies at the end of the 2025 benefit year as well as the effects of the WFTC legislation and the Marketplace Integrity and Affordability final rule (90 FR 27074).
After taking into consideration a projected reduced budget, enrollment decreases, and a higher premium trend rate, we proposed a 2027 benefit year FFE user fee rate of 2.5 percent of total monthly premiums, which is the same as the 2026 benefit year FFE user fee rate. We stated in the proposed rule that based on our estimates, the proposed FFE user fee rate will allow us to have sufficient funding available to fully fund user fee-eligible FFE activities. We noted that if any events occurring between the proposed rule and the final rule significantly changed our estimated FFE operational costs, or if our enrollment or premium projections changed (especially based on the availability of more recent data), we may finalize an FFE user fee rate that differs from the proposed rate to reflect those changes. We acknowledged that the 2026 open enrollment period closed prior to release of the proposed rule, but we stated that we did not consider that data in developing the proposed user fee rates because the data available at the time was too premature to use for our proposed rule estimates. As discussed in the proposed rule, our intention was to reconsider the enrollment estimates for the final rule. We stated that if the actual 2026 enrollment numbers are lower than the projected enrollment numbers we used to set the proposed user fee rate, the final 2027 user fee rate may be higher. We also stated that if the actual 2026 enrollment numbers are higher than our projected enrollment numbers, the 2027 user fee rate may be lower.
In the 2027 Payment Notice proposed rule (91 FR 6367), we proposed to charge issuers offering QHPs through an SBE-FP a user fee rate of 2.0 percent of the monthly premium charged by the issuer for each policy under plans offered through an SBE-FP for the 2027 benefit year.
In § 156.50(c)(2), we specify that an issuer offering a plan through an SBE-FP must remit a user fee to HHS, in the timeframe and manner established by HHS, equal to the product of the monthly user fee rate specified in the annual HHS notice of benefit and payment parameters for the applicable benefit year and the monthly premium charged by the issuer for each policy where enrollment is through an SBE-FP. SBE-FPs enter into a Federal platform agreement with HHS to leverage the systems established for the FFEs to perform certain Exchange functions and enhance efficiency and coordination between State and Federal programs. The benefits provided to issuers in SBE-FPs by the Federal Government include use of the FFE information technology and call center infrastructure used in connection with eligibility determinations for enrollment in QHPs and other applicable State health subsidy programs, as defined at section 1413(e) of the Affordable Care Act, and QHP enrollment functions under 45 CFR part 155, subpart E. The user fee rate for SBE-FPs is calculated based on the proportion of total FFE costs associated with Federal activities that provide SBE-FP issuers with special benefits, including costs that are associated with the FFE information technology infrastructure, the consumer call center infrastructure, and eligibility and enrollment services.
To calculate the proposed SBE-FP user fee rate for the 2027 benefit year, we used the same assumptions related to budget, enrollment, and premiums as we used for the proposed FFE user fee rate. As we stated in the proposed rule, the user fee rate for SBE-FPs is calculated based on the proportion of the total FFE costs associated with Federal activities that provide SBE-FP issuers with special benefits, which we stated we continue to estimate to be approximately 80 percent of total FFE costs. These FFE costs associated with Federal activities that provide SBE-FP issuers with special benefits include the costs associated with the FFE information technology infrastructure, the consumer call center infrastructure, and eligibility and enrollment services. Additionally, we stated that the proposed user fee rate for SBE-FP issuers for the 2027 benefit year includes assumptions about States transitioning from either the FFE model to an SBE-FP, or from an SBE-FP to a State Exchange for the 2027 benefit year, which impacts the SBE-FP enrollment projections.
Based on this methodology and our projected reduced budget, enrollment decreases, and a higher premium trend rate that were described in section III.E.1.a. of the proposed rule, we proposed a 2027 benefit year SBE-FP user fee rate of 2.0 percent of total monthly premiums, which is the same as the SBE-FP user fee rate we established for the 2026 benefit year. Specifically, we noted in the proposed rule that changes in budget, enrollment, and premium trends have the same impact for the SBE-FPs as the FFE. We further noted that if any events occurring between the proposed rule and the final rule significantly change our estimated Federal platform operational costs, or if our enrollment or premiums projections change (especially based on the availability of more recent data), we may finalize an SBE-FP user fee rate that differs from the proposed rate to reflect those changes.
We sought comment on the proposed 2027 benefit year FFE and SBE-FP user fee rates.
After the proposed rule was published, we revised our premium projections because of newly available data analysis based on the 2026 open enrollment period that occurred between November 2025 and January 2026. This data analysis found that 2026 premiums increased from what we previously estimated and used for the proposed 2027 user fee rates. After consideration of comments, the reasons outlined in the proposed rule and this
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these 2027 user fee rates as described in the above paragraph. We summarize and respond to public comments received on the proposed FFE and SBE-FP user fee rates for the 2027 benefit year below.
As discussed in section III.E.6. of the 2027 Payment Notice proposed rule (91 FR 6370), we proposed to modify the requirements for catastrophic plans at § 156.155(a)(6) to specify that a catastrophic plan may have a plan term of either 1 year, or of multiple consecutive years not to exceed 10 years, and sought comment on whether to also specify such standards for individual market metal level plans. To align with that proposal and comment solicitation, and under our authority to implement the single risk pool requirements in section 1312(c)(1) and (2) of the Affordable Care Act, in the 2027 Payment Notice proposed rule (91 FR 6368), we proposed to amend § 156.80(d)(2)(ii) to permit issuers of multi-year catastrophic plans to make plan-level adjustments to the index rate that reflect the length of the entire term. We stated in the proposed rule that such plan-level adjustments would account for the benefit design characteristics of such plans, such as their deductible and maximum out-of-pocket cost structure. We further stated that the proposal to codify standards for catastrophic plans to have multi-year terms of up to 10 consecutive years would clarify certain aspects of the structure of multi-year plans, such as permitting such plans to cover certain additional preventive service benefits before an enrollee satisfies their deductible and annual limitation on cost sharing. We stated that allowing issuers of multi-year catastrophic plans to make plan-level adjustments to the index rate would permit these issuers to take such plan design features into account when developing premiums for such plans. We further stated that, given that these plan design features, which are discussed in section III.E.6 of this final rule, will be unique to multi-year catastrophic plans, it would be appropriate for issuers to take them into account when setting premiums for such plans. We stated that an issuer's calculation of the magnitude of this plan-level adjustment must be accurate, and therefore, must be actuarially justified.
We sought comment on all aspects of the proposal, including whether a separate plan-level adjustment based on term length should be permitted for multi-year catastrophic plans, and whether and the degree to which the risk profile of multi-year catastrophic plans that are otherwise identical to single year catastrophic plans would justify plan-level adjustments over and above those that would be made to account for the different features of such plans.
After consideration of comments, we are not finalizing this proposal because, as discussed below, current regulations already allow issuers to make plan-level adjustments to account for the benefit design characteristics of multi-year catastrophic plans. We summarize and respond to public comments received on the proposal.
We note that in making plan-level adjustments for multi-year catastrophic plans, such plans can have different rates from each other only if they are different plans, as that term is defined in § 144.103.
Section 1302 of the Affordable Care Act provides for the establishment of an EHB package that includes coverage of EHBs (as defined by the Secretary), cost-sharing limits, and AV requirements. Among other requirements, the law directs that the EHBs be equal in scope to the benefits provided under a typical employer plan, and that they include at least the following 10 general categories and the items and services covered within the categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
We established requirements relating to the coverage of EHBs in the EHB Rule (78 FR 12834). In the 2019 Payment Notice (83 FR 17009), we added § 156.111 to provide States with additional options from which to select an EHB-benchmark plan for plan years beginning on or after January 1, 2020. We revised the EHB-benchmark plan selection process in the 2023 Payment Notice (87 FR 27290) and the 2025 Payment Notice (89 FR 26218).
As we stated in the 2027 Payment Notice proposed rule (91 FR 6368), we have paused review of State applications to select EHB-benchmark plans in accordance with § 156.111. We are actively conducting a comprehensive review of section 1302 of the Affordable Care Act, as we are considering future rulemaking to revise § 156.111 and other regulations relating to the EHBs.
We received several comments regarding this pause. We summarize and respond to public comments received below.
In the 2027 Payment Notice proposed rule (91 FR 6368), we proposed to revise § 156.115(d) to prohibit issuers from including routine non-pediatric dental services as an EHB.
In the EHB Rule (78 FR 12834), we finalized at § 156.115(d) that issuers of a plan offering EHBs may not include, among other services and benefits, routine non-pediatric dental services as an EHB, even if the State's current EHB-benchmark plan includes such services as covered benefits. Section 1302(b)(2) of the Affordable Care Act directs the Secretary, in defining the EHBs, to ensure that they are equal in scope to the benefits provided under a typical employer plan. In the proposed EHB Rule (77 FR 70644), in support of the proposed prohibition at § 156.115(d), we noted that routine non-pediatric dental services are not typically included in the medical plans offered by employers and are often provided as excepted benefits
In the 2025 Payment Notice, we finalized removal of this prohibition at § 156.115(d) for plan years beginning on or after January 1, 2027. In support of this policy, we noted, as we did in the 2025 Payment Notice proposed rule (88 FR 82597), that a more natural reading of section 1302(b)(2) of the Affordable Care Act is one that considers all the benefits typically covered by employers, regardless of whether such benefits are historically considered a “health benefit” or whether such benefits are “typically covered” by an employer's major medical plan. We also stated that based on recent data, it appeared that routine non-pediatric dental services were commonly covered as an employer-sponsored or other job-based benefit to a degree that warranted removing the prohibition on coverage of these services as an EHB. We further stated that oral health has a significant impact on overall health and quality of life,
However, to better align our regulation at § 156.115(d) with section 1302(b)(2)(A) of the Affordable Care Act, which directs that the scope of EHBs be equal to the scope of benefits provided under a typical employer plan, in the 2027 Payment Notice proposed rule we proposed to reinstate the regulatory prohibition on issuers from including routine non-pediatric dental services as an EHB. In the proposed rule, we acknowledged that in the 2025 Payment Notice proposed rule (89 FR 26342), we previously interpreted section 1302(b)(2)(A) of the Affordable Care Act as supporting a more natural reading that considers all the benefits typically covered by employers, regardless of whether such benefits are historically considered a “health benefit” or whether such benefits are “typically covered” by an employer's major medical plan. Upon further consideration of the statutory framework, we stated in the proposed rule that we now believe a more precise interpretation of section 1302(b)(2)(A) of the Affordable Care Act should apply.
Specifically, we stated that we believe the language of section 1302(b)(1) of the Affordable Care Act, which outlines the 10 EHB categories and specifically includes, “Pediatric services, including oral and vision care,” suggests that Congress did not view routine non-pediatric oral and vision care as an EHB at the time the Affordable Care Act passed. We further stated that this language indicates Congress' intention to differentiate pediatric from non-pediatric dental services and explicitly limit EHB coverage to pediatric oral care. We stated that if Congress had intended for non-pediatric dental services to be included in the list of the 10 EHB categories it would have explicitly included these services, as it explicitly included pediatric oral care. Thus, we stated that the best reading of the statute, which only mentions pediatric oral care, indicates non-pediatric oral care was not meant to be included as an EHB.
In the proposed rule, we acknowledged that the 10 EHB categories set the floor for what constitutes EHB and that routine non-pediatric dental services could theoretically be added on top of this minimum set of EHBs. However, we noted that the EHB typicality standard at section 1302(b)(2)(A) of the Affordable Care Act requires the scope of EHB to be equal to the scope of benefits provided under a typical employer plan, as determined by the Secretary. As we stated in the 2025 Payment Notice (89 FR 26345), the statutory term “a typical employer plan” is ambiguous as to whether it references a single major medical plan, or the entire suite of benefits provided by the employer. We stated that given Congress' intent reflected in section 1302(b)(1) of the Affordable Care Act to specifically include pediatric oral care and not non-pediatric oral care as an EHB category, and the fact that standalone non-pediatric dental plans are excepted benefits, we now interpret “a typical employer plan” under section 1302(b)(2)(A) to refer to an employer's major medical plan rather than the entire suite of benefits typically covered
Additionally, we noted that KFF Employer Health Benefits surveys in recent years show most employers do not include dental benefits as part of their traditional medical plan. In KFF's 2019 survey, 59 percent of small firms (3-199 workers) and 92 percent of large firms (200 or more workers) offered separate dental benefits.
Further, in the proposed rule we acknowledged that oral health can have a significant impact on overall health and quality of life. We clarified that the proposed prohibition on including routine non-pediatric dental services as an EHB would not prevent States from addressing non-pediatric oral health and overall health outcomes through alternative policy mechanisms. We noted, for example, that States could mandate coverage of routine non-pediatric dental services as a non-EHB and defray the cost associated with that benefit. We stated that we believe achieving better alignment of the regulatory requirements at § 156.115(d) with section 1302(b)(2)(A) of the Affordable Care Act regarding the EHB typicality standard outweighs these other policy considerations.
We stated in the proposed rule that if the proposal to prohibit issuers from including routine non-pediatric dental services as an EHB were finalized, there would be fewer operational concerns for issuers associated with States adding routine non-pediatric dental services as an EHB. As we acknowledged in the 2025 Payment Notice (89 FR 26347), if States added routine non-pediatric dental services as an EHB, States would need to consider that some medical plans may not currently have infrastructure or experience working with Current Dental Terminology (CDT) codes that report dental procedures to dental payers. More specifically, for plans that do not directly reimburse using dental codes, the transition to new coding will require investments in technology, staff, and internal expertise. As we further stated in the 2025 Payment Notice (89 FR 26347), these investments may have led to additional premiums and an overall increase in health care spending. Under the proposal, we stated that issuers would not have to consider operational and cost concerns related to developing infrastructure around CDT codes. Additionally, we noted that, as we stated in the 2025 Payment Notice (89 FR 26347), if States added routine non-pediatric dental services as an EHB, this may have required plans to establish new networks of dental providers if plans did not already have such networks available.
Furthermore, we stated in the proposed rule that if this proposal were finalized, we believe there would be fewer impacts on cost-sharing and stand-alone dental plans (SADPs). As we stated in the 2025 Payment Notice (89 FR 26343), while section 1302(b)(4)(F) of the Affordable Care Act permits a medical QHP sold on the Exchange to omit coverage of pediatric dental EHB services if an SADP is offered through an Exchange,
In addition, we noted in the proposed rule that the proposal to prohibit routine non-pediatric dental services from being covered as an EHB would not impact
We acknowledged in the proposed rule that under the current policy, States could have submitted applications to HHS to add routine non-pediatric dental services as an EHB by the May 7, 2025 deadline for effectiveness in PY 2027 via the EHB-benchmark update application process under § 156.111. We further acknowledged that although no States submitted applications to make this change by the May 7, 2025 deadline, other States may have already begun work towards their applications to update their EHB-benchmark plan to add routine non-pediatric dental services as an EHB for a future plan year. We noted that the proposal, if finalized, would therefore frustrate these States' efforts.
We sought comment on the proposal to revise § 156.115(d) to prohibit issuers from including routine non-pediatric dental services as an EHB, including the impact the proposal, if finalized, would have on health insurance coverage in the individual, small group, and large group markets, as well as on self-insured plans. We stated that if finalized as proposed, the proposed policy to prohibit coverage of routine non-pediatric dental services as an EHB would be effective upon the effective date of the final rule.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing, as proposed, our proposal to revise § 156.115(d) to prohibit issuers from including routine non-pediatric dental services as an EHB. We summarize and respond to public comments received on the proposed policy below.
We also do not agree that this policy overrides State-level policy judgments without justification. Given that the Affordable Care Act expressly identifies pediatric oral health services, and not routine non-pediatric dental services, as an EHB category, the EHB framework is not the appropriate vehicle for expanding routine non-pediatric dental coverage, and reinstating the prohibition at § 156.115(d) reflects a considered determination to restore alignment with the statutory structure.
Regarding the commenter who argued that the Affordable Care Act's EHB framework was deliberately designed to allow States to define benchmark plans reflecting their specific health care priorities, disease burden, and population health needs, we agree that the EHB framework at § 156.111 grants States flexibility in designing their EHB-benchmark plans. However, that flexibility outlined in regulation operates within the statutory framework established by the Affordable Care Act, including the typicality standard at section 1302(b)(2)(A) and the EHB categories at section 1302(b)(1), which do not require, and in our view do not permit, the inclusion of routine non-pediatric dental services as an EHB. The EHB framework at § 156.111, which allows for State flexibility, does not override the statutory boundaries within which that flexibility must be exercised.
Regarding commenters' concerns that this policy would worsen health outcomes, increase emergency department utilization, and increase long-term health care expenditures, we acknowledge, consistent with our position in the 2025 Payment Notice, that oral health and overall health are inextricably linked. We further acknowledge that lack of access to routine non-pediatric dental services may contribute to an increase in emergency department visits and downstream health care expenditures. We note that employers must also balance these potential downstream health care expenditures with the added costs of routine non-pediatric dental services and as discussed further below, the typical employer continues to offer dental coverage as a separate plan from their major medical plan. By design, the statutory framework for establishing EHBs aims to align with the cost-benefit analysis made by the typical employer. We also recognize commenters' concerns regarding access to oral health care in rural and medically underserved communities, although we do not agree that this policy will widen existing gaps in access to care. States retain meaningful tools to address routine non-pediatric oral health needs outside of the EHB framework; for example, by mandating coverage of routine non-pediatric dental services as a non-EHB benefit and, where applicable, defraying the associated costs. To the extent that States exercise these options, they can help mitigate the risk of worsening health outcomes, increased emergency department utilization, and downstream costs associated with unmet dental care needs. States are well-positioned to tailor such mandates to the specific oral health needs and access challenges present in their populations, including those in rural and medically underserved areas. We therefore do not agree that this policy unduly restricts State action to address the oral health needs of their populations; rather, it ensures that the EHB framework remains consistent with the Affordable Care Act's statutory structure while preserving State flexibility through other available mechanisms.
In response to the commenter who noted that classifying the oral cavity as separate from the rest of the human body is medically incorrect, we agree; as we mentioned in the 2025 Payment Notice, we agree that oral health and overall health are inextricably linked. However, the distinction drawn here is not a medical one, but a statutory and market-based one: routine non-pediatric dental benefits have historically been administered, priced, and delivered separately from major medical coverage, and reinstating the prohibition at § 156.115(d) is consistent with this established structure and with the typicality standard under § 156.111(b)(2)(i) and section 1302(b)(2)(A) of the Affordable Care Act.
As we stated in the proposed rule, the prohibition on issuers from including routine non-pediatric dental services as an EHB would not prevent States from addressing these concerns through alternative policy mechanisms. States may, for example, mandate coverage of routine non-pediatric dental services as a non-EHB and defray the associated costs. Additionally, routine non-pediatric dental coverage remains broadly available to consumers, including through SADPs offered on the Exchange, which are specifically designed to administer dental benefits. We continue to believe that achieving better alignment with the typicality standard at section 1302(b)(2)(A) of the Affordable Care Act outweighs these other policy considerations.
We also do not agree with commenters who stated that reinstating the prohibition at § 156.115(d) undermines the goals of fostering competition and lowering overall health care costs. States retain the ability to mandate routine non-pediatric dental coverage as a non-EHB benefit, and SADPs will remain available on the Exchange, which supports robust competition among dental issuers and preserves consumer choice. In response to commenters who noted that the prior decision to allow issuers to include routine non-pediatric dental as an EHB was based on extensive interested party input, we acknowledge that the 2025 Payment Notice was informed by that feedback. However, upon further evaluation of relevant regulatory and policy considerations, we have determined that reinstating the prohibition better aligns with the statutory structure of the Affordable Care Act and the typicality standard at section 1302(b)(2)(A) of the Affordable Care Act.
Further, we acknowledge commenters' concerns regarding coverage continuity for individuals transitioning from Medicaid to the Exchange. We recognize that such transitions can create gaps in access to dental care, particularly for low- and middle-income individuals. However, as we have previously mentioned, States retain the ability to address routine non-pediatric dental coverage through alternative mechanisms outside of the EHB framework, including by mandating such coverage as a non-EHB benefit and defraying the associated costs, which could help support more consistent access to dental care for individuals navigating coverage transitions.
On the other hand, many commenters who opposed the proposal disagreed with the legal argument that Congress intended only for pediatric dental services to be an EHB. Many of these commenters noted their belief that Congress' decision not to include routine non-pediatric adult dental services as an EHB was not a permanent exclusion, but reflected market considerations at the time of the Affordable Care Act's enactment. These commenters also noted that Congress granted HHS authority under sections 1302(b)(4)(G) and (H) of the Affordable Care Act to periodically review and update EHB to reflect evolving evidence, market practices, and consumer needs, indicating that EHB standards are intended to be dynamic. One commenter stated that the ten categories of EHBs are only a minimum and HHS can include other benefits as EHBs. This commenter also noted that the Affordable Care Act does not link EHB coverage to excepted benefits and stated that HHS offers “wildly differing and at-times erroneous interpretations” of the “typical employer plan” provision. Some commenters opposing this proposal also stated that routine non-pediatric dental services are commonly covered in employer-sponsored plans, suggesting that this exclusion may not be warranted under the typical employer plan standard. At least one of these commenters explained that according to Delta Dental, approximately 90 percent of employers with 500 or more employees offer dental benefits.
Additionally, one commenter stated that the proposed prohibition on issuers including routine non-pediatric dental services as an EHB is procedurally invalid and inadequately justified. This commenter contended that the Department failed to abide by the procedural requirements in section 1302 of the Affordable Care Act, which include a requirement for the Secretary of Labor to conduct a survey of employer-sponsored coverage and for the Secretary of HHS to submit a report to Congress, and that this failure deprived States and commenters of the
A few commenters also warned that a final rule reinstating this prohibition could be vulnerable to challenge under the APA's arbitrary and capricious standard if CMS fails to meaningfully engage with the substantial body of peer-reviewed evidence on oral-systemic health linkages, the cost savings of preventive dental care, and the consequences of dental coverage gaps on emergency department utilization and population health. One commenter expressed their belief that the proposal is arbitrary and capricious because it does not reasonably explain departing from the view cited in the 2025 Payment Notice that routine non-pediatric dental services can reflect a typical employer plan and promote health equity.
In response to commenters who stated that routine non-pediatric dental services are commonly covered in employer-sponsored plans and therefore meet the typical employer plan standard, we acknowledge that many employers offer dental benefits. However, as discussed further below, the relevant inquiry under the typicality standard is whether routine non-pediatric dental services are typically included in employer-sponsored major medical plans, not whether employers offer dental benefits through any vehicle, including SADPs or limited-scope excepted benefit dental plans. The data cited by commenters reflects employer dental benefit offerings broadly and does not establish that routine non-pediatric dental services are typically included within major medical coverage. We also disagree with the characterization that HHS has offered erroneous interpretations of the “typical employer plan” provision; as explained in the proposed rule and in this final rule, our current interpretation reflects a reasoned and well-supported reading of the statutory framework consistent with the regulatory history at § 156.115(d).
In response to commenters who stated that the Congress' decision not to include non-pediatric dental services as an EHB was not a permanent exclusion and that HHS has authority to update EHB standards under section 1302(b)(4)(G) and (H) of the Affordable Care Act, we agree that the statute requires periodic review of EHB. We also acknowledge that the ten EHB categories established in section 1302(b)(1) of the Affordable Care Act represent a minimum floor, and that HHS retains discretion to include additional benefits as EHBs. However, the exercise of that authority and discretion must remain consistent with the typicality standard at section 1302(b)(2)(A) of the Affordable Care Act. We have evaluated the relevant evidence and policy considerations and have determined that reinstating the prohibition better aligns with the statutory structure and the typicality standard, as routine non-pediatric dental services are not typically included in employer-sponsored major medical plans.
Further, we do not agree with the commenter who stated that this proposal is procedurally defective because the Secretary of Labor failed to conduct a survey of employer-sponsored coverage and the Secretary of HHS failed to submit a report to the Congress before proposing to revise EHB. Reinstating the prohibition at § 156.115(d) restores the longstanding regulatory baseline that existed prior to the 2025 Payment Notice and was developed after considering the Secretary of Labor's survey of employer-sponsored coverage,
In response to commenters who raised APA concerns, we have considered the evidence on oral-systemic health linkages, the cost-effectiveness of preventive dental care, and the ability of States to address dental coverage gaps through alternative mechanisms outside of the EHB framework, as reflected throughout this preamble. We have determined that, notwithstanding these important public health considerations, reinstating this prohibition better aligns with the statutory structure of the Affordable Care Act and the typicality standard, and that States retain meaningful tools to address adult oral health needs outside of the EHB framework.
We also do not agree with the commenter who stated that Exchange enrollees would be disadvantaged compared to individuals with private coverage. First, we note that EHB applies to all non-grandfathered individual and small group market plans, which is inclusive of some private coverage. Second, we are required by statute to ensure that EHB is equal in scope to a typical employer plan. A policy goal such as equalizing coverage generosity across markets does not negate that statutory requirement. We also believe that routine non-pediatric dental coverage remains available to many Exchange enrollees
Lastly, in response to the commenter who stated that classifying routine non-pediatric dental as an EHB under the Ambulatory Patient Services category is inconsistent with how that category is commonly understood, we appreciate this concern and understand why the inclusion of dental services under a category typically associated with outpatient medical care, such as office visits and urgent care, may seem incongruous. However, we note that categorization of EHBs in a State's EHB-benchmark plan is not Federally defined or required. Any State categorization of a benefit within a particular EHB category does not independently determine whether a benefit may be included as an EHB, and we do not believe the categorization question has bearing on the EHB-benchmark application or approval process.
A few commenters also noted that annual benefit maximums would not apply to adult dental EHB services if embedded into QHPs, which would raise the costs of PPO dental plans and drive issuers toward offering narrower-network Dental Health Maintenance Organizations (DHMOs) to control expenses. These commenters noted that these DHMO networks would lack the capacity to absorb large numbers of new enrollees, resulting in care disruptions, reduced access to the broader PPO options consumers prefer, and a potential decline in quality of care. These commenters also warned that this shift toward DHMO networks would create substantial financial barriers for consumers and risk eroding the competitive SADP market that currently helps keep dental coverage affordable. One commenter additionally noted that embedding adult dental benefits into QHPs would limit consumer choice and reduce access to affordable coverage.
Some commenters also stated that reinstating the prohibition would correct what they characterized as administrative overreach and preserve a stable dental insurance market currently serving millions of enrollees, and noted that embedding these benefits into QHPs could reduce consumer choice, increase costs, subject services to higher cost-sharing, and disrupt existing dental provider networks.
However, some commenters who opposed this proposal stated that QHPs already possess the necessary infrastructure to offer adult dental benefits, as evidenced by the 36 States where QHPs already embed such benefits.
While we do not necessarily agree with commenters' concerns that the current policy limits consumer choice, we do believe that prohibiting routine non-pediatric dental services from being covered as an EHB is a better approach for market stability. Including routine non-pediatric dental services as an EHB could have disrupted the existing SADP market by reducing enrollee demand for separate dental plans. Additionally, SADPs are the primary avenue through which enrollees access non-pediatric dental benefits in the existing market, and reinstating the prohibition better aligns the Exchange market with that established market structure. We also acknowledge commenters' concerns that, because annual benefit maximums would not apply to non-pediatric dental services embedded as an EHB in a QHP, this could have raised the costs of PPO dental plans and may have created incentives for issuers to offer narrower-network dental HMOs to control expenses—networks that may have faced challenges absorbing large numbers of new enrollees, which could have potentially resulted in care disruptions and reduced access to the broader PPO options consumers prefer. Embedding adult dental services as an EHB in QHPs could have undermined the SADP market by reducing enrollee demand for SADPs, given that dental coverage would already be incorporated into their QHP. We agree with commenters who noted that reinstating the prohibition preserves the stable dental insurance market structure that currently serves millions of enrollees. Additionally, States and issuers may have faced various operational challenges, including the need to establish new dental provider networks, develop infrastructure for processing CDT codes, and ensure seamless enrollment and cost-sharing arrangements, which are burdens that could have further destabilized the existing SADP market structure. We acknowledge that some commenters stated that these operational concerns are overstated, pointing to the 36 States where QHPs already embed non-pediatric dental benefits as evidence that the necessary infrastructure exists, and asserting that CDT coding is a long-standing administrative standard that does not present a meaningful barrier. Although CDT coding is an established standard, there is operational complexity that arises from integrating two distinct types of codes with claims processing practices. We also acknowledge the argument that dental provider network concerns are manageable given the widespread establishment of dental networks and existing coordination between QHP issuers and SADPs. While we recognize that some issuers have developed capacity to embed dental benefits, we do not believe that the existence of such capacity in certain markets is sufficient to conclude that the operational and market disruption concerns raised by the majority of commenters are without merit. Moreover, the fact that some QHPs currently embed adult dental benefits does not mean that such embedding is consistent with how dental benefits are typically structured or accessed, nor does it resolve the structural concern that embedding dental coverage within a combined medical deductible framework creates an illusory benefit for enrollees. We further note that the existence of coordination between QHP issuers and SADPs does not mean all QHP issuers already have the dental network infrastructure necessary to administer embedded dental benefits as an EHB at scale. We also acknowledge the comment that SADPs have low annual maximums that may limit access to comprehensive care; however, SADP benefit limits reflect how those products are designed and priced in the market and are not a consequence of this prohibition. States retain the ability to address benefit adequacy through other mechanisms, including State insurance mandates.
However, we note that these potential effects on SADPs would have depended on the State-specific decisions regarding EHB-benchmark plans and would not have necessarily occurred uniformly across all States. Specifically, under the current policy finalized in the 2025 Payment Notice, it would have been up to each State to determine whether to add routine non-pediatric dental services as an EHB and, if so, to define the scope of those benefits, within the confines of the typicality standard under § 156.111(b)(2)(i). Because States likely would have taken varied approaches to adopting routine non-pediatric dental services as an EHB, any resulting impact on SADPs would not have been uniform or guaranteed across all States.
In response to the commenter who suggested that States could have required separate dental and medical deductibles as an alternative to pre-deductible coverage under the current policy, we acknowledge this as a potential State-level option; however, we note that this does not resolve the broader concern that embedded dental coverage is inconsistent with how dental benefits are typically delivered and accessed.
Some commenters who opposed this proposal stated that reinstating the prohibition on issuers including routine non-pediatric dental services as EHB would deny consumers Federal premium tax credits and cost-sharing reductions for the dental portion of their coverage, strip EHB protections—including prohibitions on annual and lifetime limits and cost-sharing caps—and require States to defray the costs associated with routine non-pediatric dental benefits from their own budgets. Many commenters also stated that this proposal would increase downstream costs, and that it is significantly less costly to provide preventive dental services upfront than to pay for avoidable emergency room visits for dental emergencies. Some commenters cited relevant data, including one commenter who explained that according to the American Dental Association, a dental Emergency Department (ED) visit costs approximately three times more than an office visit ($749 vs. $90-$200), with national ED dental costs totaling approximately $1.6 billion annually (one-third of which is paid by
Some commenters had recommendations for CMS if the proposal to reinstate the prohibition on inclusion of routine non-pediatric dental services as an EHB were finalized. One commenter recommended that if the proposal is finalized, CMS clearly articulate the viable pathways through which States and issuers may continue to support routine non-pediatric dental access outside the EHB framework without creating coverage fragmentation or administrative complexity that deters enrollment. In addition, this commenter also encouraged CMS to evaluate and describe the likely consumer impacts of the policy, including whether it increases the likelihood that consumers forgo dental coverage entirely and whether coverage separations create barriers for patients who require coordinated medical and dental care.
Regarding commenters' concerns that the current policy would lead to increased plan costs, premiums, and Federal outlays, we acknowledge that plan costs, premiums, and Federal outlays would have likely increased under the current policy in States that adopted routine non-pediatric dental services as an EHB. However, as we noted in the 2025 Payment Notice (89 FR 26348), despite the prohibition on annual and lifetime dollar limits for EHB and States' ability to choose how comprehensive a routine non-pediatric dental EHB would be, there would have been a limit on the extent to which premiums and Federal outlay could increase because States' ability to increase benefit generosity is constrained by the typicality standard at § 156.111(b)(2)(i), which requires that the scope of benefits of a State's EHB-benchmark plan fall within the range defined by the State's least and most generous typical employer plans.
In response to the commenter who stated that the current policy, which allows for the designation of routine non-pediatric dental services as an EHB, would increase adverse selection risk, we note that, as stated in the 2025 Payment Notice, adverse selection has not been a significant concern in prior EHB-benchmark plan applications, and the Affordable Care Act has established mechanisms—including the risk adjustment program, premium subsidies, and limited enrollment windows—to help prevent unchecked adverse selection.
We also acknowledge the commenter who stated that an improperly structured routine non-pediatric dental services EHB could create consumer confusion, increase cost sharing, and lead to coverage loss. Embedding routine non-pediatric dental services as an EHB within a QHP would have subjected those services to the QHP's combined medical and dental deductible—a structure inconsistent with how a majority of consumers access dental benefits—which could have rendered the benefit difficult to use in practice, increased effective cost sharing relative to standalone dental products, and potentially discouraged enrollment. Reinstating the prohibition avoids these outcomes by preserving the SADP market structure through which consumers are accustomed to accessing dental benefits.
We acknowledge commenters' concern that reinstating the prohibition would deny consumers Federal premium tax credits and cost-sharing reductions for the dental portion of their coverage. However, because no State added routine non-pediatric dental services as an EHB under the current policy, no enrollees are currently receiving APTC or CSRs for such coverage. Accordingly, reinstating the prohibition does not result in a loss of existing enrollee subsidies. In response to commenters' concerns regarding the loss of EHB consumer protections, including the prohibition on annual and lifetime limits and cost-sharing caps, we refer readers to our discussion regarding those concerns earlier in this preamble to § 156.115(d). We also acknowledge that reinstating the prohibition would generally require States to defray the costs of routine non-pediatric dental benefits if they choose to mandate such coverage. States retain the flexibility to determine whether to mandate such coverage and take on the associated defrayal costs.
For commenters' concerns related to downstream costs and the cost-effectiveness of preventive dental care, we acknowledge, as we noted in the proposed rule and the 2025 Payment Notice, that oral health and overall health are inextricably linked, and that improving access to routine dental services can yield downstream savings in overall health care expenditures and reduce costly emergency room visits for dental care. A discussion of the downstream cost data cited by commenters, including emergency department utilization costs and the cost-effectiveness of preventive dental care, is included in the Regulatory Impact Analysis section of this final rule. However, we note that this prohibition does not prevent States from addressing non-pediatric oral health outcomes through alternative policy mechanisms. For example, States could mandate coverage of routine non-pediatric dental services as a non-EHB benefit and defray the associated costs. We emphasize that States retain meaningful tools to address oral health needs outside of the EHB framework, which States can use to improve access to dental health services and reduce costly emergency room visits for dental care.
We also acknowledge the recommendation that CMS articulate viable pathways for States and issuers to support access to non-pediatric dental services outside the EHB framework and evaluate likely consumer impacts. As noted throughout this section, States may mandate non-EHB routine non-pediatric dental coverage and defray associated costs, and SADPs remain
On the other hand, one commenter who opposed this proposal noted that dental exams are a required component of care before cancer patients begin certain treatments (such as chemotherapy, radiation, and stem cell transplants) because untreated oral infections can cause serious, irreversible complications, including osteonecrosis of the jaw. This commenter stated that prohibiting issuers from including routine non-pediatric dental services as an EHB would put access to these necessary preventive services at risk.
In response to the commenter who raised concerns about cancer patients' access to pre-treatment dental care, we acknowledge that dental clearance is an important component of care for patients undergoing certain cancer treatments, and that untreated oral infections can cause serious complications. However, the prohibition on including routine non-pediatric dental services as an EHB does not eliminate access to dental care for these patients. Routine non-pediatric dental coverage remains available through SADPs offered on the Exchange, and States retain the ability to mandate such coverage as a non-EHB benefit and defray the associated costs. We therefore do not believe this prohibition forecloses access to the preventive dental services that cancer patients require prior to treatment.
As established in part 2 of the 2022 Payment Notice (86 FR 24238), starting with the 2023 benefit year, for benefit years in which we are not making changes to the methodology to calculate the premium adjustment percentage index (PAPI), the required contribution percentage, and the maximum annual limitation on cost sharing and reduced maximum annual limitation on cost sharing, we publish these parameters in guidance annually by January of the year preceding the applicable benefit year. In the 2025 Marketplace Integrity and Affordability final rule (90 FR 27166 through 27168), we finalized a change to the methodology for calculating these parameters starting with the 2026 benefit year such that we will use private health coverage premiums (excluding Medigap and the medical portion of accident insurance [“property and casualty” insurance]) as the definition of premiums for calculating the premium adjustment percentage and related parameters. In the 2027 Payment Notice proposed rule (91 FR 6370), we did not propose to change the methodology for calculating these parameters for the 2027 benefit year. As such, these parameters are not included in this rulemaking. Instead, we published the 2027 benefit year parameters in guidance,
We summarize and respond below to public comments received regarding the publication of the 2027 PAPI, the maximum annual limitation on cost sharing, the reduced maximum annual limitation on cost sharing, and the required contribution percentage in guidance.
In the 2027 Payment Notice proposed rule (91 FR 6370), we proposed to codify requirements under which issuers of catastrophic coverage may enroll individuals for multiple plan or policy year terms with periods of up to 10 years. We proposed modifying the requirements for catastrophic plans in § 156.155 to specify that a catastrophic plan has a plan term of either 1 plan or policy year, or of multiple consecutive plan or policy years not to exceed 10 years.
We proposed that catastrophic plans with terms of at least 2 plan or policy years may utilize value-based insurance designs (VBID) to offer benefits for preventive services under section 2713(c) of the PHS Act, in addition to those specified in section 2713(a) of the PHS Act, without the enrollee having to first satisfy their deductible or annual cost-sharing limitation. We requested comment on the proposal at § 156.130, that issuers of multi-year catastrophic plans have the option to apply the annual limitation on cost sharing for each plan year of the contract on an annual basis, or, on average, over the life of the contract. We stated, for example, that as an alternative to applying the annual limitation on cost sharing on an annual basis, an issuer could opt to offer a 5 year catastrophic plan that would apply the annual limitation as follows: the average over 5 years of the annual limitation on cost sharing in the plan equals the average over 5 years of the annual limitation on cost sharing as required by statute. Alternatively, we stated that the issuer could opt to vary the annual limitation on cost sharing in the plan by disease, for example, cancer, if that disease requires treatment that spans multiple years, so long as the average over all plan participants and over years of the annual limitation on cost sharing equals the average over 5 years of the annual limitation on cost sharing as required by statute. We stated that the value of
Finally, as more fully discussed in section III.E.2. of this final rule, we proposed to amend § 156.80(d)(2)(ii) to allow issuers of multi-year catastrophic plans to make a plan-level adjustment to the index rate. We stated that this proposal was intended to promote innovation in health coverage plan design that could exert downward pressure on premiums and costs, while increasing access to coverage and care and improving health outcomes.
We proposed that an individual who satisfies the requirements for a catastrophic plan at the time of enrollment in the plan under section 1302(e)(2) of the Affordable Care Act would remain eligible for the duration of its multi-year term.
We stated in the proposed rule that given the large increases in premiums for health coverage in recent years, we are interested in offering additional alternatives for individuals to enroll in less expensive options. We stated that we believe that Congress' recent decision to designate all catastrophic and bronze plans as high-deductible health plans, as well as our recent broadening of the hardship exemption for individuals to qualify for catastrophic health plans,
We stated in the proposed rule that, in addition to incentivizing investments in health promoting activities, health insurance contract terms that exceed a year may decrease the administrative costs associated with marketing and enrollment and encourage alternative pricing structures where administrative efficiencies are reflected in lower premiums and enrollees in plans with multi-year terms are insulated from short-term premium spikes. We stated that, from the perspective of the individual, remaining enrolled with the same plan or issuer for a longer period of time might also promote adherence to disease management programs, and thus promote better overall long-term health. Because of the potential positive impacts on enrollee health and plan affordability, we proposed modifying the requirements for catastrophic plans in § 156.155(a)(6) to specify that a catastrophic plan has a term of either 1 plan or policy year, or of multiple consecutive plan or policy years not to exceed 10 years. We stated in the proposed rule that if we should finalize the proposal to codify requirements for multi-year catastrophic plans, we would consider expanding these or other similar requirements to multi-year plans of one or several metal levels.
We noted that section 1302(e)(1)(B) of the Affordable Care Act specifies benefits that catastrophic health plans are required to provide pre-deductible, including three primary care visits per year and preventive services specified in section 2713 of the PHS Act. Section 2713(a) of the PHS Act requires applicable health plans to cover: (1) evidence-based items or services that have in effect a rating of “A” or “B” in the current recommendations of the United States Preventive Services Task Force (USPSTF); (2) immunizations that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention for the individual involved; (3) for infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA); and (4) for women, such additional preventive care and screenings not described in paragraph (1) as provided for in comprehensive guidelines supported by HRSA.
Section 2713(c) of the PHS Act authorizes the Secretary to develop guidelines to permit health plans to utilize VBID. As described above, we stated in the proposed rule that we believe broadening plan terms beyond a single plan or policy year for catastrophic plans would increase the value provided to consumers in the form of better incentives for the issuer to invest in the long-term health of its enrollees. As such, we proposed under our authority at section 2713(c) of the PHS Act that catastrophic plans with a term of at least 2 plan or policy years may utilize a VBID in the context of designing health coverage for preventive services such that benefits related to said design may be offered prior to satisfaction of the plan's deductible and prior to satisfying the plan's cost-sharing limitation, in addition to those benefits that can be offered prior to satisfaction of the plan's deductible and cost-sharing limitation enumerated in section 1302(e)(1) of the Affordable Care
We proposed at § 156.130 that issuers of multi-year catastrophic plans have the option to apply the annual limitation on cost sharing for each plan year of the contract on an annual basis, or, on average, the life of the contract. We stated, for example, that the limitation applicable to a specific year under each plan year of the coverage could be divided by 12 to determine the monthly limit on cost sharing under the plan.
We noted in the proposed rule that, currently, enrollees can experience dramatic coverage changes when insurance contracts reset or change from one year to the next as deductibles and out-of-pocket limits reset. We further noted that this can lead to significant shifts in cost sharing from month to month for the same services. We stated that given that multi-year plans would not be subject to renewal at year's end (other than after the final year of the multi-year term), we believe it is appropriate to allow for a benefit structure that does not reset every 12 months. We stated that we believe that providing a consistent, predictable monthly out-of-pocket limit would reduce consumer confusion, improve financial planning, and bolster adherence to treatment plans.
We stated in the proposed rule that under the example above under which an issuer chooses to divide by 12 to determine the monthly limit on cost sharing, the monthly limitation on cost sharing during any plan or policy year contained in the multi-year plan would reflect one-twelfth of the annual limitation for the plan or policy year for which the Federal annual limitation has been calculated. We stated that it is our view that this approach is consistent with how the annual limitation on cost sharing must be calculated by plans. We further stated that under the proposal to set requirements for catastrophic plans with multi-year terms, issuers would be able to choose the length of the multi-year term up to a maximum of 10 years, and could offer as many or as few such plans as desired, with different maximum terms. We also stated that issuers would not be required to offer a 1-year plan that is otherwise identical to each multi-year plan. We noted that catastrophic plans with multi-year terms would continue to be subject to the Affordable Care Act guaranteed availability and guaranteed renewability requirements for individuals who are eligible for catastrophic plans under Federal law (as is the case for catastrophic plans with terms of 1 year). We further noted that individuals dropping coverage under a multi-year catastrophic plan, either at the end of the term or mid-term, would be treated the same as individuals dropping coverage under a 1-year policy either at the end of the year or mid-year, respectively, for open enrollment and special enrollment periods. Additionally, we noted that other Federal requirements, including, but not limited to, the Mental Health Parity and Addiction Equity Act, the Women's Health and Cancer Rights Act, the Newborns' and Mothers' Health Protection Act, Michelle's Law, and the No Surprises Act, would continue to apply to such coverage.
We stated in the proposed rule that under current policy, an enrollee could terminate their enrollment in a multi-year catastrophic plan at any time and for any reason, without a penalty or being liable for the premium for the remainder of the multi-year term. An issuer could discontinue the product or exit the market under the same guaranteed renewability exceptions that apply generally under section 2703 of the PHS Act. That said, we stated that we understand the importance of certainty for issuers and enrollees in unlocking the aforementioned benefits of multi-year plans and the improvements in incentives they create. We sought comment on how Federal policies could promote continuous coverage in multi-year plans and defray the risk of termination by either the enrollee or issuer, including by promoting continuous coverage for individuals who churn in and out of the individual market through the use of individual coverage health reimbursement arrangements.
We stated in the proposed rule that all multi-year catastrophic plans would be expected to disclose that the plan has a multi-year term, and the length of that term. We further stated that, to the extent multi-year catastrophic plans utilize the monthly method of applying the annual limitation on cost sharing discussed earlier in this preamble, plans would be expected to include that information in marketing and enrollment materials.
We also stated that under the proposal, issuers could apply the deductible that applies in the first year of coverage on an annual basis for each year within the coverage, or divide the annual deductible by 12, and apply it equally to each month of the policy throughout the entire term of coverage, similar to how a multi-year plan could choose to apply the annual limitation on cost sharing, as discussed in this section of the rule. We stated, for example, that if the plan had an annual deductible of $6,000, it could apply
We acknowledged that multi-year plans in individual health insurance markets represent a novel idea that could necessitate changes to other programs and processes that affect individual and group market plans. We stated, for example, that we would need to consider how to treat multi-year catastrophic plans for purposes of the HHS-operated risk adjustment program, but to do that we would want to consider what the benefits and drawbacks are to each option.
Therefore, we sought comments on all aspects of the proposal, including whether there are any specific plan duration terms that would incentivize enrollees to adopt longer term, health-promoting habits. We also requested comment on ways that plans with multi-year terms could be a more affordable option for consumers over single-year terms, including how premiums and rating practices for these plans might differ from other catastrophic plans that have a standard 1-year term; and whether plan terms of more than 10 years would better facilitate rating and promote lower premium products. We also sought comment on if and how any terms of coverage should be permitted to change over the course of the multi-year term, such as reduced deductibles or other cost-sharing, or reduced maximum cost-sharing requirements, and in what intervals such changes could be permitted.
We also requested comment on whether any further modifications to HHS risk adjustment regulations under 45 CFR part 153 may be needed to align with any expected differences in rating practices and any resulting risk selection; whether we should use the same catastrophic HHS risk adjustment models regardless of whether the catastrophic plan is offered for a standard plan year or on a multi-year basis or whether we should have separate models or factors for these catastrophic plans (or enrollees in catastrophic plans) offered on a multi-year basis and, if so, what data, trending
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy, applicable for plan years beginning in 2027, with the following modifications. We are finalizing § 156.155(a)(6) with minor revisions to refer to “plan years” instead of “years” for greater clarity and precision. We are also finalizing modifications stating that multi-year catastrophic plans may utilize VBID to provide benefits before reaching the deductible, pursuant to guidelines issued by the Secretaries of HHS, Labor, and the Treasury under section 2713(c) of the PHS Act. We are not finalizing the proposed conforming amendments to § 156.155(a)(1), as multi-year catastrophic plans, like other catastrophic plans, must meet all applicable requirements for health insurance coverage in the individual market. We also are not finalizing the proposed addition of § 156.130(c), which provided that in the case of a catastrophic plan with a multi-year term, the annual limitation on cost sharing for the initial plan year of the contract may apply on an annual basis, or on average over the life of the contract. Therefore, as finalized, a multi-year catastrophic plan could have a term of up to 10 consecutive plan years, individuals eligible for catastrophic coverage at the time of enrollment would remain eligible for the duration of the multi-year term, and coverage could be provided before the deductible is met for certain VBID benefits to be specified in future guidance. Otherwise, there would be no material differences between the regulatory requirements for such plans and 1-year catastrophic plans, although as described in the preamble of the proposed rule and in the response to the public comments, the longer coverage terms of such plans could result in valuable advantages to both issuers of such plans and their enrollees.
We summarize and respond to public comments received on the proposal below.
Furthermore, we believe that the HHS risk adjustment methodology is flexible enough to appropriately accommodate multi-year catastrophic plans without making changes to the HHS risk adjustment models or State payment transfer formula. First, as described elsewhere in this preamble, multi-year catastrophic plans would be required to update their out-of-pocket maximums annually, to account for the updated maximum annual limitation on cost sharing that would apply for each plan year included in the catastrophic plans' contract term. As such, the plan liability assumptions that underlie the HHS risk adjustment models for a given plan year would be largely consistent between multi-year and single-year catastrophic plans, resulting in HHS risk adjustment models for catastrophic plans that are applicable regardless of the contract term of the plan. Furthermore, risk scores calculated from the HHS risk adjustment models would continue to be calculated on a plan year basis. For example, an enrollee who remained enrolled for the entirety of the first plan year of a multi-year catastrophic plan's contract term but ended their enrollment in the second plan year of the contract term would receive no HCC-contingent enrollment duration factor in their risk score for the first plan year because HCC-contingent enrollment duration factors only apply to adult enrollees with 6 or fewer months of enrollment. This enrollee could receive an HCC-contingent enrollment duration factor in their risk score for the second plan year to the extent that they also have an HCC recorded in their enrollee-level EDGE data for that plan year. The enrollee's HCCs, RXCs, and demographic factors would similarly be determined on a plan year basis using their age, diagnoses, and prescription drugs from the claims and demographic data in the plan's enrollee-level EDGE data for the applicable plan year. Similarly, we will be able to continue to conduct HHS-RADV activities with reference to the HCCs, RXCs, and demographic factors that appear in a multi-year plan's enrollee-level EDGE data for an applicable plan year.
For the State payment transfer formula, the Statewide average premium used for catastrophic plan risk adjustment transfers is an enrollment-weighted average premium for all catastrophic plans in the State. Likewise, all plan-level variables in the State payment transfer formula are enrollment-weighted variables. As such, these variables can all be updated for an applicable plan year using the data of the enrollees who remain enrolled in the plan for that plan year. We will continue to calculate HHS risk adjustment transfers (and HHS-RADV adjustments to HHS risk adjustment transfers) on a plan year basis across all catastrophic plans with active enrollment in that plan year by using the enrollee-level EDGE data for the applicable plan year and the applicable plan years' HHS risk adjustment models for catastrophic plans.
Other questions raised by commenters, which they stated were not sufficiently addressed, include: Would enrollees progress through the age curve each year? Would the issuer have to keep any dependents on the contract until the full term expired? Would covered benefits be fixed? What valuation assumptions would be fixed? Would issuers be able/required to adjust rates annually as part of the annual single risk pool premium filing? How would coverage apply for newly added dependents during the plan's term? How would premiums be handled for consumers who move between rating areas? Would the plan-level adjustment for multi-year catastrophic plans have a trend component, like the quarterly trend adjustment in the small group market? If the adjustment functions like a quarterly trend, when would premium refilings be permitted? If premium refilings are permitted, would refilings affect the rates of currently issued products? How would multi-year plans be treated under State 1332 waiver programs? What kinds of novel financial reporting issues would multi-year plans raise under GAAP and statutory accounting? What discount rates would be appropriate for any longer-term valuation of benefits? Would any cash value accumulate if there is a disconnect between premiums collected and benefits received over the contract term? What modifications to regulatory capital requirements would be warranted for multi-year plans to reflect the increased risk they pose to issuers? What additional rate review requirements would be required for multi-year catastrophic plans, particularly if contract terms are largely fixed at pricing.
In response to the comments that stated that any mid-term changes in premiums, benefits, and networks would constitute issuer gaming that denies consumers their chosen coverage, we note that we expect benefits and networks to generally remain stable for the length of the term, and such coverage would continue to be subject to applicable Federal and State laws, and premiums will vary annually as issuers of multi-year plans comply with the single risk pool, risk adjustment, and other requirements that impact rating.
For rate setting, rate calculations for multi-year plans, including plan-level adjustments, would be determined each year, as they are for a 1-year plan that renews each year. Thus, rate increases for the whole term would not be set at the initial filing; premiums for the entire term and rating area factors would not be fixed at effectuation, but would be set annually; and enrollees would not progress through the age curve each year. Rather, as with 1-year plans, the enrollee's age as of the date of policy issuance or renewal must be used, under § 147.102(a)(1)(iii). With respect to multi-year catastrophic plans, the date of renewal is the first day the coverage is renewed after the multi-year term has expired. For example, if an individual enrolls in a catastrophic plan with a term of 5 consecutive plan years, the date of renewal would be the first day following the expiration of the 5 plan-year term. With respect to the comments regarding valuation assumptions and discount rates, we note that rates for a multi-year catastrophic plan would be set annually under the single risk pool requirements in § 156.80. We defer to the appropriate governing boards for any novel financial reporting issues that multi-year plans might raise under GAAP and statutory accounting standards. For any modifications to regulatory capital requirements for multi-year plans, issuers would be subject to the capital requirements set by State regulators. For the question about what additional rate review requirements would be required for multi-year catastrophic plans if contract terms are largely fixed at initial pricing, we again note that rates would not be set in advance for the entire term of the policy, but would be set annually, under the single risk pool requirements set forth at § 156.80. Therefore, no additional rate review requirements would be required or necessary. The issuer would keep any dependents on the contract until the full term expired, unless the enrollee voluntarily dropped the dependent from coverage or the dependent ceases to satisfy the plan's terms of eligibility for dependent coverage, consistent with 45 CFR 147.120. Coverage would apply for newly added dependents during the plan's term, and premiums for consumers who move between rating areas would be handled no differently than in 1-year plans. State law would determine whether a multi-year catastrophic plan may have a cash value that the policyholder may borrow against, or for which the plan could be sold.
For section 1332 waivers, the Departments of HHS and the Treasury recognize that multi-year plan designs may raise unique considerations over the waiver period. To the extent a waiver application, waiver amendment, or other proposed change presents such considerations, the Departments of HHS and the Treasury will address them through the appropriate section 1332 waiver processes. Specifically, the Departments of HHS and the Treasury will continue to seek public comments on each waiver application or proposed waiver amendment and consider those comments in assessing whether the waiver application or proposed waiver amendment, satisfies the statutory guardrails set forth in section 1332(b)(1)(A) through (D) of the Affordable Care Act.
We also proposed that, to the extent multi-year catastrophic plans utilize the proposed monthly method of applying the annual limitation on cost sharing discussed earlier in this preamble, plans would be expected to include that information in marketing and enrollment materials. Given that we are not finalizing that method of applying the annual limitation on cost sharing, issuers of multi-year catastrophic plans would not be expected to make such disclosure in marketing and enrollment materials.
Another commenter stated that multi-year plans should allow deductible carryover or premium stability features—for example, if an enrollee does not meet the deductible in year one, the issuer could offer premium stability or enhanced benefits in subsequent years. This commenter also stated multi-year plans should be permitted to incorporate higher out-of-pocket cost exposure in early years paired with reduced exposure, enhanced benefits, or premium stability in subsequent years for continuously enrolled individuals, while another commenter stated that multi-year plans should be permitted to provide upfront pledges of rebates to premiums for those who remained enrolled.
Another commenter stated that people often cannot predict when they will experience a health condition. This commenter and other commenters stated that front-loading cost sharing early in a multi-year term will lead people to forego needed care early, leading to high costs and suffering. Several commenters stated it is unreasonable for enrollees to be expected to pay higher cost sharing in the early years of a term, as they might not be able to afford to. Other commenters stated that multi-year designs can create consumer expectations that value will accrue over time (for example, if cost sharing is structured to be less burdensome later in the term), but if a product is discontinued mid-term, or if CMS were to later prohibit this practice, enrollees may not be able to realize the benefit trajectory that was offered at enrollment. According to one commenter, this risk is structural and is not fully addressed through general disclosures.
However, varying cost sharing by plan year in a manner that deviates each year's cost sharing from its statutory limitation on cost sharing would not be statutorily prohibited for other metal-level plans and might be a very appealing feature to some enrollees. Unlike catastrophic plans, which are prohibited from setting their annual limitation on cost sharing for a plan year above or below the applicable limit for that plan year, metal-level plans may set their annual limitation on cost sharing for a plan year below the statutory limitation for that plan year, provided the plan satisfies the appropriate actuarial value standards for its metal tier.
Insurance with vanishing or reduced deductibles over the life of the insurance contract has become more common in certain insurance markets such as automobile insurance. We believe such a feature has the potential to be of great value to both issuers and enrollees in the health insurance context. To the extent the promise of more generous coverage as a plan term progresses would cause an enrollee to remain in the plan, this would help further ensure that an issuer's focus on offering preventive and wellness benefits in the earlier years of the term might pay off in the form of a healthier enrollment base, which could encourage issuers to focus on offering and promoting such benefits. Also, the promise of more generous benefits in later years of the term might incentivize enrollees to remain in their plan, even after carefully considering other options, as the increased benefits might be superior to those other options. Depending on issuers' and enrollees' experience with multi-year catastrophic plans, we might consider through rulemaking extending multi-year standards to metal level plans, including applying the declining cost sharing concept to such plans.
We note that multi-year and 1-year catastrophic plans may be able to offer relief from the high deductible and maximum annual limitation on cost sharing through other mechanisms. For example, issuers of catastrophic plans could consider financing the deductible by providing enrollees a loan. To the extent permitted by applicable Federal and State law, this could be especially helpful for enrollees who, before reaching their deductible, incur a large amount of medical costs within a short period of time. Under this approach, as long as the loan terms require repayment, the plan would not be considered to be covering those services prior to satisfaction of the deductible for purposes of section 1302(e)(1)(B)(i) of the Affordable Care Act. To the extent permitted by applicable Federal and State law, issuers of multi-year catastrophic plans could offer repayment flexibility as defined in the loan contract with the enrollee.
For the comment suggesting an adjustment to an individual's premium from one year within a multi-year catastrophic plan to the next, based on whether or not the individual had satisfied their deductible, we note that such an adjustment, or any other based on a factor other than those permitted in § 147.102(a), is prohibited.
A few commenters stated that allowing the annual limitation on cost sharing to be prorated on a monthly basis would help to alleviate up-front “shock” of high out-of-pocket costs. Another commenter stated that allowing deductibles or limitations on cost-sharing thresholds to reset on a monthly or similarly frequent basis would undermine the core purpose of catastrophic coverage by repeatedly restarting a consumer's financial exposure during ongoing treatment. One commenter stated that an annual limitation on cost sharing that is prorated monthly could be significantly favorable to consumers in lowering limitations on cost sharing for specific services within a month. However, this commenter pointed out that a range of challenges exist, including that claims can take 6 months or more to be paid. This commenter stated that, at most, that means the payment can occur in the next plan year, but potentially 6 or more monthly limitation on cost sharing cycles, which could lead to consumer confusion and additional administrative complexity. This commenter also stated that new consumer utilization patterns such as stacking services within a month to take advantage of the lower limitations on cost sharing could arise, particularly if multiple, higher cost elective services are in play. The commenter stated that this could lead to material increases in actuarial value which, if unpriced for, could create significant solvency challenges. This commenter also stated that current actuarial continuance does not take into account how consumer behavior might change under a monthly benefit.
Another commenter stated that smaller monthly limits would help both acute and chronic patients by limiting the one-time cost burden for the former and spreading known, recurring costs over the year for the latter. This commenter stated that limiting monthly cost sharing to one twelfth of the annual limit will likely benefit individuals with single acute medical events, while being harmful to either healthy individuals who face higher premiums if actuarial value increases or to individuals with chronic medical costs if actuarial value is held constant but monthly limits increase.
Prior sub-regulatory guidance issued by the Departments has generally described VBID as health plan designs that provide incentives for enrollees to utilize higher-value and/or higher-
The Departments believe that incentivizing high-value care, including utilization of services related to wellness and prevention, has the potential to improve health outcomes and therefore reduce utilization and plan expenditures over time, in a number of ways. Issuers of multi-year plans would be uniquely suited to reap the benefits of a healthier population that remains in the plan over several years. One way of achieving this is through an adjustment to the out-of-pocket cost of services if furnished by certain providers, to encourage enrollees to seek services from lower-cost providers. For example, the preventive service regulations at 26 CFR 54.9815-2713(a)(3), 29 CFR 1590.715-2713(a)(3), and 45 CFR 147.130(a)(3) generally permit group health plans and group and individual health insurance coverage that have a network of providers to impose cost-sharing requirements on recommended preventive services delivered by an out-of-network provider. Another such potential way is by promoting, via cost saving incentives, services linked to emerging technologies, or services that have been identified as reducing morbidity or severity of illness, including services for which new evidence demonstrates that the health benefits outweigh their cost. We believe that for all these reasons, VBID might have positive, valuable implications for issuers of multi-year plans, and for their enrollees.
For these reasons, consistent with the delegation of authority in section 2713(c) of the PHS Act, we are finalizing the proposed provision at § 156.155(a)(6) with modifications to state that multi-year catastrophic plans may utilize VBID to provide benefits before reaching the deductible, pursuant to guidelines issued by the Departments under section 2713(c) of the PHS Act. Accordingly, the Departments intend to issue guidelines on how plans and issuers may implement VBIDs, including the scope of services that may be offered with reduced or no cost sharing in a manner designed to promote high-value care. The Departments intend to issue these guidelines in the near future. Until the guidelines are issued and applicable, multi-year catastrophic plans may provide pre-deductible coverage only for preventive services described in section 2713(a) of the PHS Act and benefits for at least three primary care visits per year.
To address an issue that has arisen in the implementation of section 1302(c) through (e) of the Affordable Care Act, in the 2027 Payment Notice proposed rule (91 FR 6373), we proposed changes to the permissible cost-sharing parameters for individual market bronze plans through new proposed § 156.136 and to the required cost-sharing parameters for catastrophic plans through revisions to § 156.155(a)(3).
Section 1301(a)(1)(B) of the Affordable Care Act directs all issuers of QHPs to cover the EHB package described in section 1302(a) of the Affordable Care Act, which includes coverage of the benefits described in section 1302(b) of the Affordable Care Act, adherence to the cost-sharing limits described in section 1302(c) of the Affordable Care Act, and meeting the AV levels established in section 1302(d) of the Affordable Care Act.
Section 2707(a) of the PHS Act, which is effective for plan or policy years beginning on or after January 1, 2014, extends the requirement to cover the EHB package to non-grandfathered individual and small group health coverage, irrespective of whether such coverage is offered through an Exchange. In addition, section 2707(b) of the PHS Act directs non-grandfathered group health plans to ensure that cost sharing under the plan does not exceed the limitations described in section 1302(c)(1) of the Affordable Care Act.
Section 2707(a) of the PHS Act and section 1302 of the Affordable Care Act direct issuers of non-grandfathered individual and small group health insurance plans (including QHPs) to ensure that these plans adhere to the levels of coverage specified in section 1302(d)(1) of the Affordable Care Act (except for catastrophic plans described in section 1302(e) of the Affordable Care Act). Section 1302(c) of the Affordable Care Act limits the annual cost sharing incurred under a health plan to the maximum annual limitation on cost sharing. Section 1302(d)(2) of the Affordable Care Act provides that a level of coverage of a plan, or its AV, is determined based on its coverage of the EHB for a standard population. Section 1302(d)(1)(A) through (D) of the Affordable Care Act requires a bronze plan to have an AV of 60 percent, a silver plan to have an AV of 70 percent, a gold plan to have an AV of 80 percent, and a platinum plan to have an AV of 90 percent. Section 1302(d)(2) of the Affordable Care Act directs the Secretary to issue regulations on the calculation of AV and its application to the levels of coverage. Section 1302(d)(3) of the Affordable Care Act requires the Secretary to develop
Section 1302(e) of the Affordable Care Act permits an individual market health plan not providing a bronze, silver, gold, or platinum level of coverage to be a catastrophic health plan that is treated as meeting the levels of coverage specified in section 1302(d)(1) of the Affordable Care Act for a plan year. A catastrophic plan may be offered only in the individual market and only to qualified individuals who have not attained age 30 before the beginning of the plan year, or to qualified individuals who are exempt from the requirement to
In the proposed rule, we provided an overview of how HHS has implemented the AV requirements of the Affordable Care Act, including a discussion of the major components of AV calculation. We reiterate this overview in the sections that follow. In the proposed rule, we went on to explain that we have discovered an inherent and unavoidable issue for implementation of the cost-sharing provisions of the EHB package in section 1302(c) through (e) of the Affordable Care Act that will eventually make issuer compliance with all these provisions mathematically impossible. We noted that this issue has first become evident for bronze and catastrophic plans, though without further changes, it will eventually impact silver plans and plans at higher metal tiers. To mitigate the worsening issue, in the proposed rule, we proposed to create new optional cost-sharing parameters for bronze plans and to revise the cost-sharing requirements for catastrophic plans in the individual market only.
AV is the anticipated covered medical spending for coverage of EHB
The maximum annual limitation on cost sharing impacts AV calculation since it changes the maximum amount that an enrollee may have to pay out-of-pocket each year. When the maximum annual limitation on cost sharing increases from year-to-year (which it typically does), it has the effect of decreasing year-over-year AVs. This is because plans can increase their MOOPs with a higher maximum annual limitation on cost sharing, which means enrollees typically need to pay more out-of-pocket for the EHB than they did in previous years, which would lower AV.
We review a variety of data sources on medical services and prescription drug claims costs, including rate data from the Unified Rate Review Templates (URRTs) and National Health Expenditure data from the HHS Office of the Actuary, to develop and select the proposed adjustment to health care costs. This health care cost update also impacts AV calculation; as health care becomes more expensive, the generosity of a plan's AV increases as an enrollee needs to receive less medical care than in previous years to reach the maximum annual limitation on cost-sharing. If we did not apply this trend factor, the AV Calculator would not account for changes in the cost of health care and would be less and less accurate each year, inconsistent with section 1302(d)(1)(A)'s instruction to calculate AV based on the “actuarial value of the benefits provided under the plan.”
As we stated in the proposed rule, together, these three major components of AV calculation affect AV differently each year, depending on how the health of the standard population, the maximum annual limitation on cost sharing, and EHB costs all change, and at different rates. We noted that, ideally, the effect of a higher statutory maximum annual limitation on cost sharing each year would allow plans to exactly offset the year-over-year increase on AV created by the more expensive standard population and increased EHB costs required by the statute. We stated that would mean that the net impact of the three major factors on AV would be zero each year, and in turn any particular plan with the same cost-sharing structure would have the same AV year-over-year. We further stated that we believe this is the actuarially preferred approach, because it would allow for relatively consistent cost sharing and benefits design year-over-year, which promotes consumer understanding. We noted, however, plans do not have the same AVs each year because the three factors change at different rates.
We stated in the proposed rule that for nearly every year since 2014, the effect of updating the AV Calculator with the most recent data on the standard population and health care costs has led to a faster rise in AV with the same cost sharing structure than can be mitigated by the effect that a higher maximum annual limitation on cost sharing has on decreasing AV.
We noted in the proposed rule that this shift often forces issuers to change other parts of a plan's cost-sharing structure (to make the plan less generous) to conform to the relevant
We stated in the proposed rule that the discrepancy in the rates of change of the three components have a magnified effect on the ability of issuers to design plans that conform to the
We also stated that since we expanded the bronze
We further
However, we noted that the maximum annual limitation on cost sharing limits issuers' options in bronze plan design. We stated that we believe issuers may have designed competitive plans that would be attractive for bronze plan consumers but that are ineligible for sale because they need to have a higher MOOP than is permissible under the maximum annual limitation on cost sharing. Specifically, we stated that the existing permissible MOOP leads to issuers offering higher deductible bronze plans over time because costs have risen faster than the permissible MOOP, requiring plans to raise cost-sharing below the permissible MOOP to meet the AV range for bronze plans. We noted that by 2024, the average deductible for bronze plans exceeded $7,000. We further noted that with a $9,450 maximum annual limitation on cost sharing that year, these plans look increasingly like catastrophic plans with a deductible that is almost set to the maximum annual limitation on cost sharing, and this includes expanded bronze plans that have an AV of up to 65 percent. We stated that the convergence of non-expanded bronze plans with catastrophic plan design is even more stark when viewing the median (or midpoint) of the deductibles and MOOPs of all the bronze plans offered on the FFEs alongside the maximum annual limitation on cost sharing over the last few years (Table 12).
We noted in the proposed rule that this convergence in the deductible and MOOP in these plan designs with the maximum annual limitation on cost sharing occurred at the same time the AV of bronze plans increased (Table 11). We stated that if issuers lowered deductibles in existing bronze plans but held their MOOP and average copayment rate between the deductible and MOOP constant, those plans would have higher AVs and risk appearing more like silver plans than bronze plans, or having to meet the requirements described at § 156.140(c) to be an expanded bronze plan. We further noted that issuers could feasibly lower the AV of their bronze plans by raising the deductible in those plans, but few offer such plans (Table 11).
We also stated in the proposed rule that plans could increase their MOOP to offer plans with lower deductibles and copayment rates. We noted that variation in MOOPs and deductibles across bronze plans in 2024 reveals that, for the median bronze plan a $1 higher MOOP is associated with a 58 cent lower deductible. We also noted that there is less response to the MOOP in higher metal tiers, consistent with the idea that the MOOP affects deductibles more at lower AV levels. We stated, however, as claims continue to rise at a rate greater than the growth in the statutory maximum annual limitation on cost sharing (due to rising faster than the index calculated based on how much premiums have increased), a higher MOOP may eventually be warranted to tamp down deductibles for plans seeking to maintain their AV compliance with higher metal tiers than bronze, as well. We noted, however, the deductible and MOOP of most plan designs at the other metal tiers have not converged with the maximum annual limitation on cost sharing; in other words, silver plans and higher metal tier plans appear to still have appropriate flexibility in their cost sharing design, as observed by their wider ranges of deductibles, pre-deductible coverage, and MOOPs compared to non-expanded bronze plans (see Table 12).
We stated that, of the metal plans, bronze plans are most susceptible to increases in AV because they have the lowest AV (60 percent), and the highest allowable maximum annual limitation on cost sharing typically requires issuers to cover more than 60 percent of allowed claims. We further noted that issuers have fewer options to adjust the cost sharing for bronze plans compared to other metal level plans and, as noted previously, are increasingly designing them to have a deductible near or equal to the maximum annual limitation on cost sharing. To address this increase in AV for bronze plans in the short-term, we stated that we have already utilized the authority at section 1302(d)(3) of the Affordable Care Act to revise § 156.140(c) to expand the allowable de minimis range for bronze plans to a maximum of 65 percent AV, and refer to these plans as “expanded bronze” plans.
As we stated in the proposed rule, we began to reduce the distortion created by outliers with very high spending in the AV Calculator's standard population beginning in 2021 by implementing a cap on enrollee spending at $1,000,000. In later years, we capped enrollee spending at the 99.50th percentile of annual allowed amounts for all enrollees in the claims data. We noted in the proposed rule that without this cap, many, if not all, bronze plan designs would already be non-viable. We stated, for example, that utilizing the 2027 version of the AV Calculator without the enrollment cap, we estimate that all bronze plan AVs would be 5 to 6 percentage points higher than with it. We also stated that based on internal analysis, all existing non-expanded bronze plans offered in the FFEs in PY 2026 would have an average AV of 65.1 percent if calculated using an AV
We stated in the proposed rule that as AVs increase year-over-year, absent some other administrable regulatory solution, we may need to consider continuously expanding the cap on enrollee spending beyond the 99.50th percentile to preserve plan design viability, particularly for bronze plans. We stated that we know expanding this cap is not a permanent solution. We noted that the AV Calculator becomes less accurate, and less representative of the standard population as more and more enrollees are excluded from it. Moreover, we noted that the continued cap expansion does not align with the statutory requirements for determining the AV. We stated that while the initial cap may have reasonably been set from the Secretary's discretion to define a standard population, the continued expansion of the cap clearly serves a separate purpose. We stated, however, without it, bronze plans will eventually become entirely non-viable, which is not a result that Congress could have intended. Thus, we stated that an issue exists in the implementation of sections 1302(c) through (e) of the Affordable Care Act and, to date, we have chosen to address it by applying flexibility in the determination of the AV. However, we stated that if current trends persist (and we have no reason to believe they will not), eventually the maximum annual limitation on cost sharing will be too low to allow for an AV calculation for a bronze plan design with a deductible set to the maximum annual limitation on cost sharing that is within widened
We stated in the proposed rule that we are not aware of any administrable, actuarially sound regulatory alternatives that we might propose that could address these issues to preserve the integrity of AV calculations and the comparability between the levels of coverage. As discussed above, we stated in the proposed rule that we can continue to expand the cap on enrollee spending beyond the 99.50th percentile as a temporary solution, but we hesitate to do so to preserve the integrity of AV calculations, as section 1302(d)(1)(A) of the Affordable Care Act directs the calculation of AV based on the “actuarial value of the benefits provided under the plan.” We noted in the proposed rule that we have also considered not trending the AV Calculator to account for changes in the standard population or for changes in EHB costs. We noted that this would make AV rise less quickly year-over-year. However, we stated that we believe doing so would render the AV Calculator wholly inaccurate actuarially. We also stated in the proposed rule that we have also considered proposing changes to EHB policy to reduce the scope of benefits that are covered as EHB to address this issue, but the calculation of AV does not so readily factor in the scope of covered benefits under the plan. We stated that we believe changing the current EHB benchmark framework and potentially making significant changes to covered benefits is an extreme approach that would yield minor benefits, if any because AV is a measurement of the cost sharing imposed by an issuer on whatever benefits the plan covers as EHB, and not a measurement of the EHB themselves. Additionally, as we noted in the proposed rule, section 1302(b)(2)(A) of the Affordable Care Act requires HHS to define the EHB to cover items and services covered within 10 specific categories of benefits such that their scope is equal to the scope of benefits provided under a typical employer plan; the statute does not create ability to define the EHB to accommodate AV calculations. In addition, we stated that we believe there are no changes to the PAPI methodology that would raise the annual limitation on cost sharing enough to preserve the viability of AV calculations, even in the short-term, though we solicited comment on whether there are any regulatory changes we might make to the PAPI that would address this AV issue.
We sought comment on other administrable regulatory alternatives that we might consider that could address these issues to preserve the integrity of AV calculations and the comparability between the levels of coverage long-term. However, we stated at the time of the proposed rule that we believed no administrable alternatives exist because the issue is one of innate mathematical incongruence, not methodological decisions. In the end, we stated that we believe the differing rates of changes between the three major factors of AV calculation pose an insurmountable regulatory problem created by the cost-sharing provisions of section 1302 of the Affordable Care Act.
As discussed in the proposed rule (91 FR 6379), we proposed to revise the cost-sharing parameters for bronze plans and to revise the cost-sharing requirements for catastrophic plans, respectively, to adhere to the cost-sharing provisions of section 1302 of the Affordable Care Act, given this regulatory issue.
Consistent with longstanding principles of statutory interpretation, we sought to give effect to all provisions of the Affordable Care Act so that they operate together in a coherent structure.
We stated in the proposed rule that we believe that maintaining the AV requirement for metal-level plans is the more specific and operational statutory instruction, and adherence to it best serves Congress' intent. We stated that the AV requirement applies only to a defined subset of plans offered in the individual and small group markets, and establishes precise quantitative benchmarks that define the statutory coverage tiers themselves. We further stated that, by contrast, the maximum annual limitation on cost sharing applies broadly across all plan types and markets and functions as a general consumer protection ceiling rather than a plan-defining metric. In addition, we noted that compliance with the AV requirements necessitates detailed, plan-level calibration of cost-sharing parameters and is central to preserving Congress' deliberate creation of distinct
We stated in the proposed rule that interpreting the AV requirement as the more specific statutory directive is consistent with how the Affordable Care Act, as originally passed, treated another conflict between cost-sharing limits and AV calculations. As originally passed, the Affordable Care Act included an annual limitation on deductibles for employer-sponsored plans under section 1302(c)(2) of the Affordable Care Act.
For these reasons, we concluded in the proposed rule that the proposals that followed represented a reasonable and legally permissible approach to implementing section 1302 of the Affordable Care Act that gives effect to Congress' core design of distinct coverage tiers while preserving the overall operability of the statutory framework. Accordingly, we stated that the proposals reflect our obligation to implement section 1302's interrelated provisions in a manner that is understandable and workable.
In the proposed rule, we noted that any regulatory framework that permits plans to exceed the maximum annual limitation on cost sharing should be as limited as possible to still implement section 1302(c) through (e) of the Affordable Care Act so that these paragraphs operate together in as coherent a structure as Congress could have intended. We stated that since the issue becomes more pronounced each year due to the growing disparity in the rates of change among the three major components of AV calculation, absent a statutory change, we believe we should implement regulatory solutions in a gradual, proportional manner.
To that end, we stated that we view the set of proposals that followed as only the beginning of necessary regulatory changes to the cost-sharing parameters for metal-tier and catastrophic plans. Catastrophic and bronze plans are the two plans most demonstrably and presently affected by this issue, and so we proposed changes to the cost-sharing parameters for these plans first in the hopes of giving enrollees more PY 2027 options at lower premiums and with more attractive plan designs. Because we seek to minimize the extent that these plans may exceed the maximum annual limitation on cost sharing, we stated in the proposed rule that we anticipate proposing future amendments to the applicable regulations through notice and comment rulemaking to address other metal tiers—at the point that the growing disparity in the rates of change among the three major components of AV begins to affect these higher tiers, and after sufficient research into how to prevent unintended effects on the calculation of premium tax credits.
We stated in the proposed rule that, as demonstrated above, standard silver plans would already be non-viable if we had not already adjusted the standard population by capping enrollee spending at the 99.50th percentile of annual allowed amounts for all enrollees in the claims data. We stated that we considered proposing changes to the permissible cost-sharing parameters for silver plans in the proposed rule but chose not to at that time. Rather, we stated that our intent in the future would be to propose changes to the cost-sharing parameters for silver plans, when necessary, through future notice and comment rulemaking. Second-lowest cost silver plans are used as the benchmark to determine premium tax credit amounts. We stated that seeking changes to the permissible cost-sharing parameters for silver plans could have an outsized impact on the overall affordability of plans for subsidized enrollees, and we stated that we sought to minimize any destabilizing effects of the proposed policy by assuming such an incremental regulatory approach. We stated that for now, we would monitor and consider future incremental action we may take to change the cost-sharing parameters for the other metal tiers, and we invited comments about how we might calculate an appropriate threshold for flagging that the cost sharing incongruence is severely limiting silver plan design. We also sought comment on other implications that may exist for silver plans that do not exist for bronze and catastrophic plans.
To ensure that plans designated at the bronze metal level can continue to exist in the future and to also preserve a meaningful difference between the AVs of bronze and silver plans, which we believe was part of the congressional intent of having metal tiers, in the 2027 Payment Notice proposed rule (91 FR 6380), we proposed to add new § 156.136 that states, for plan years beginning on or after January 1, 2027, if an issuer offers a bronze plan (as defined at § 156.140(b)(1)) in the individual market that complies with the cost-sharing requirements at § 156.130 and the levels of coverage requirements at § 156.140, it may also offer, within the same service area, bronze plans that utilize a cost-sharing design that exceeds the maximum annual limitation on cost sharing at § 156.130 by amounts in increments of 50 dollars to achieve an AV within the standard bronze
We further proposed, that, in order for an issuer to avail itself of the ability to offer individual market bronze plans that utilize a cost-sharing design that exceeds the maximum annual limitation on cost sharing, the issuer must also offer at least one individual market bronze plan in the same service area that utilizes a cost-sharing design that does not exceed the maximum annual limitation on cost sharing at § 156.130 and complies with the levels of coverage requirements at § 156.140. We stated that this proposed flexibility is necessary to support the design and offering of bronze plans with AVs closer to the 60 percent intended by the Affordable Care Act. We stated that the MOOP for such individual market bronze plans must be in increments of 50 dollars. Under the proposal, we stated that we would not specify a strict dollar amount as the upper bound by which issuers could exceed the maximum annual limitation on cost sharing; rather, issuers would calculate this amount so that it fits within the narrower bronze
In addition, we noted in the proposed rule that limiting this additional flexibility for bronze plans to issuers that also offer a bronze plan that complies with the existing cost-sharing requirements in the same service area ensures that, to the extent a bronze plan is available, there would be at least one in the service area that meets the maximum annual limitation on cost sharing. We stated that by allowing a wider range of possible cost-sharing designs at the bronze metal tier in the individual market, we would create opportunities for issuers to offer plans that are appealing to more consumers with lower premiums and more pre-deductible coverage than would have been possible without this proposal.
In the proposed rule, we considered imposing no precondition that issuers offer a bronze plan within the same service area that utilizes a cost-sharing design that does not exceed the maximum annual limitation on cost sharing at § 156.130 to offer bronze plans that utilize a cost-sharing design that exceeds the statutory maximum annual limitation on cost sharing. However, we stated that we believe the precondition is necessary at this time because bronze plans are barely still viable in 2027 without the 99.50th percentile cap (a bronze plan with a deductible equal to maximum annual limitation on cost sharing has an AV of 63.91 percent in 2027) and we believe consumers must retain access to bronze plans that do not exceed the maximum annual limitation on cost sharing so that we can best signal our good faith efforts to adhere to the statute.
We stated in the proposed rule that if it is no longer possible to design a bronze plan with a MOOP set at or below the maximum annual limitation on cost sharing and a permissible bronze AV, then it would also no longer be possible to take advantage of the new proposed flexibility in bronze plans' allowed MOOP limit: as in, it would no longer be possible to additionally offer a non-expanded (standard) bronze plan with a higher MOOP limit. We stated that the proposed flexibility relies on the issuer already offering a bronze plan in the same service area which has a permissible bronze AV and complies with that plan year's maximum annual limitation on cost sharing as a prerequisite to setting a higher MOOP for additional bronze plans. If the market reaches this point, as we warned in the proposed rule—that a bronze plan with a MOOP set at the maximum annual limitation on cost sharing will be unable to fit within the bronze AV
Thus, we stated in the proposed rule that we intend to require such plans for as long as these bronze plans remain actuarially viable; however, under the overall incremental approach described earlier, we stated that we may revisit this precondition in future rulemaking as AVs continue to rise. Given these circumstances, we considered and requested comment on whether we should allow an adjustment to the result of the AV Calculator (which uses the 99.50th percentile cap) that approximates an AV calculation based on a standard population which includes those highest-cost enrollees (that is, approximates what the AV output would be from an AV Calculator which includes claims from the 0.50th highest percentile). We sought comment on how to better align with standard actuarial practice in our interpretation of the AV Calculator's outputs in light of the statutory incongruence described in this section, and how future AV Calculators might appropriately include more of these high-cost enrollees in its standard population without causing unnecessary disruption to existing plans that seek to remain in the same metal tier in the following plan year. Alternatively, we sought comment on whether an issuer should be permitted to offer bronze plans which exceed the maximum annual limitation on cost sharing to achieve an AV between 58 and 62 percent only after a default adjustment to the 2027 AV Calculator's output for that plan design which approximates what the plan's AV would be if measured by an AV Calculator without a spending cap, and on whether a future release of the AV Calculator, such as the PY 2028 AV Calculator, could reduce or remove the spending cap.
We further proposed that this flexibility would apply only in the individual market, and rounded down to the next lowest multiple of 50 dollars. Specifically, we stated that we believe individual market consumers in particular would be interested in more plan choices offering lower deductibles and lower premiums. We further stated that we believe prospective consumers who do not qualify for APTCs may be deterred from enrolling in individual market plans due to the benefit design of current bronze plans. We stated that providing additional plan design flexibility may encourage individual market enrollment and in turn promote a healthier risk pool by capturing currently uninsured people.
We stated that, as already is the case, States that are the primary enforcers of AV standards would be responsible for ensuring that issuers that design bronze plans that exceed the maximum annual limitation on cost sharing do so to achieve an AV within the standard (non-expanded) bronze
We sought comment on the proposal. Specifically, we sought comment on what, if any, additional requirements we should consider in order for issuers to avail themselves of the flexibility to exceed the maximum annual limitation on cost sharing. For example, we also considered whether to propose allowing bronze plans to exceed the maximum annual limitation on cost sharing only when bronze plans would otherwise be non-viable (that is, impossible to design). In addition, we noted that we were interested in comments discussing
In the proposed rule, we noted that as we contemplate how this policy could apply to plans at higher metal levels, we were seeking comment on what special considerations may exist for those plans, and particularly for silver plans in determining the second lowest cost silver plan. We also sought comment on whether this flexibility should also apply to cost-sharing variants. Finally, we sought comment on whether we should propose changes to the bronze de minimis range and expanded bronze policy at § 156.140(c)(1).
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing the addition of § 156.136 with the following modification: we are narrowing the flexibility proposed for individual market bronze plans such that these bronze plans are permitted to exceed the standard annual limitation on cost sharing by up to 130 percent of the standard annual limitation on cost sharing, rounded down to the nearest $50 increment. For PY 2027, that is $15,600 for self-only coverage and $31,200 for other than self-only coverage, based on multiplying the market-wide individual annual limitation on cost sharing by 1.3, that is, $12,000 × 1.3 = $15,600. We reiterate that the policy being finalized applies to individual market bronze plans only. We summarize and respond to public comments received on the proposal below.
We believe that this policy has several potential benefits. A higher annual limitation on cost sharing will provide issuers with greater benefit design flexibility in their QHP offerings. This in turn could encourage currently unsubsidized, uninsured consumers to enroll. These consumers who have forgone coverage due to cost are often healthier, and the addition of individual market bronze plans using this flexibility will improve the overall risk pool, which can bring down premiums for all enrolled in these plans. We believe that these potential benefits outweigh the potential risks related to affordability, particularly when the potential risks that commenters raised (such as increases to uncompensated care and delayed care) can be mitigated by a consumer selecting a bronze plan with a standard annual limitation on cost sharing or a plan offered at a different metal level, in which they would receive more covered care.
In response to comments requesting that we set a specific ceiling on the MOOP limit for individual market bronze plans, we are finalizing our proposed addition of § 156.136 with a modification to add a ceiling on an individual market bronze plan's highest permissible MOOP limit. We believe setting this upper limit appropriately constrains the flexibility provided to issuers while preserving the policy's purpose of ensuring the continued availability of individual market bronze plans with plan designs that are attractive to consumers. We specifically selected the upper bound of 130 percent of the annual limitation on cost sharing for several reasons. First, this percentage is consistent with the multiplication factor we are finalizing for the catastrophic plan annual limitation on cost sharing starting with PY 2028, which provides a consistent framework. Second, a 130 percent ceiling preserves the core consumer protection function of the annual limitation on cost sharing, ensuring no bronze plan enrollees are subject to out-of-pocket costs that are disproportionate to the plan's bronze-tier design. At the same time, it provides issuers with sufficient flexibility to offer these additional bronze plan designs that are meaningfully distinct from standard bronze plans and catastrophic plans. Third, we considered whether a lower multiplier (such as 110 or 120 percent) would be sufficient to address the plan design viability problem identified in the proposed rule and concluded that a lower ceiling would not provide issuers with adequate flexibility to design bronze plans with meaningfully lower deductibles and more pre-deductible coverage. A 130 percent ceiling allows issuers to shift cost-sharing structure in a way that is actuarially meaningful, to enable lower deductibles offset by a higher MOOP among other plan designs, without exposing consumers to unlimited or unconstrained out-of-pocket liability. The 130 percent ceiling therefore functions as a consumer protection constraint on the outer boundary of issuer flexibility, not as an incentive to maximize cost sharing (that is, we do not expect every additional bronze plan to set the highest MOOP limit possible). For PY 2027, the 130 percent ceiling corresponds to $15,600 for self-only coverage and $31,200 for other than self-only coverage.
We are finalizing a ceiling of 130 percent of the annual limitation on cost sharing in this final rule for these reasons and in response to comments, as we agree that issuers would be more likely to offer such plans in the future if we provided greater clarity on the upper bound of what would be permissible for these additional bronze plans. We also agree that having a nationally established upper limit is an important consumer protection. We are considering whether to propose in future rulemaking a methodology by which we could annually establish a percentage, or another factor by which this upper bound is calculated from the annual limitation on cost sharing, in the annual guidance in which CMS releases the premium adjustment percentage, maximum annual limitation on cost sharing, reduced maximum annual limitation on cost sharing, and required contribution percentage for a given benefit year.
We further note that the flexibility in setting a MOOP limit no higher than 130 percent of the standard annual limitation on cost sharing for some bronze plans is designed to expand, not contract, the range of bronze plan designs available to consumers. We agree that encouraging more offerings of lower costing bronze plans—such as less generous bronze plans within the non-expanded AV
We do not expect a significant APTC spending impact from this flexibility afforded to additional bronze plans, as we are not extending the flexibility to silver plans, nor do we expect such significant offerings of and enrollment into these bronze plans with higher MOOP limits such that it would skew the market's risk. We will monitor the impact of this policy on enrollment, risk pool composition, and premiums and will consider whether additional action is warranted in future rulemaking. We do not expect any unique compounding effects in PY 2028 and future plan years when catastrophic plans are newly required to adhere to a higher annual limitation on cost sharing, including in plan years when some of those catastrophic plans utilize the flexibilities afforded to multi-year plans discussed in section III.E.6. of this final rule. We disagree with commenters who viewed the combined effect of these two proposed policies as requiring a unified impact analysis prior to finalization. We have analyzed enrollment and premium effects of current plan policy decisions on bronze plans and catastrophic plans, as described in the preceding sections. We are not convinced that attempting to project the combined enrollment effects of these two policies would yield instructive results given the range of issuer design choices, State market conditions, and consumer behavior variables that will determine actual uptake. We have relied on available data—including enrollment trends in catastrophic and bronze plan tiers, AV modeling, and the risk adjustment framework applicable to catastrophic plans—to inform our assessment of likely market effects. We believe they represent a reasonable basis for the policy as finalized. Our view is that this policy will attract currently uninsured, price-sensitive consumers without materially disrupting the risk pool for subsidized metal tier enrollees, which is supported by available enrollment data, actuarial modeling, and the optional, issuer-discretionary nature of the policy.
Some commenters stated that the proffered justification for the policy—the impossibility of creating a bronze plan within the current
Some commenters stated that because CMS has modified the AV Calculator in the past to ensure that issuers can continue to create bronze plans, CMS could continue to use this approach, and the statutory impossibility noted in the proposed rule does not actually exist. Those commenters stated that CMS has an obligation to first consider less harmful alternatives and that to do otherwise would be arbitrary and capricious.
While we believe that there are policy benefits to allowing issuers greater flexibility in plan design, which should in turn give consumers additional choice, the ultimate purpose of this policy is to ameliorate a statutorily created problem. Section 1302 of the Affordable Care Act establishes parameters for the AV and annual limitation on cost sharing policies. We have modified these policies over the years, within the confines of section 1302 of the Affordable Care Act. Some policies have changed how the annual limitation on cost sharing is calculated, which has resulted in an increased annual limitation on cost sharing (90 FR 27166 through 27168). Other policies, such as changing the standard population, have modified how AV is calculated, which has generally resulted in issuers being able to continue to design bronze plans. However, we believe that we have exhausted reasonable methodological changes to calculation of AV and the annual limitation on cost sharing. Although we could attempt to finalize additional changes to the AV Calculator methodology or underlying data sources to preserve bronze plans, we are not convinced that such changes would comply with section 1302(d) of the Affordable Care Act and risks rendering the AV Calculator meaningless. Specifically, as we stated earlier in this rule and in the proposed rule, we are not aware of any administrable, actuarially sound regulatory alternatives that could mitigate this problem. We provided examples of alternatives that we considered but did not implement,
We do not agree with commenters that this approach deviates from congressional intent. The Congress included requirements for AV and the annual limitation on cost sharing as consumer protections that must by their nature function together. Specifically, the annual limitation on cost sharing is an important input when calculating AV. We believe that allowing issuers to optionally offer plans with a non-standard annual limitation on cost sharing if they also offer at least one plan with the standard annual limitation on cost sharing is the most reasonable option, given that it preserves what commenters believe to be congressional intent regarding AV (that is, issuers can create bronze plans within the bronze
We disagree with commenters that our reliance on
We disagree with comments that this policy should be more fully researched prior to finalization. We conducted robust research and analyses prior to proposing this policy. In fact, prior to proposing this policy, we spoke with States about the difficulty in creating bronze plans and have also made changes to the AV Calculator to ameliorate this difficulty, as stated in the AV Calculator methodology documents that we issue annually.
Given that issuers, Exchanges, and the SBC currently provide information about the annual limitation on cost sharing and plans' MOOP limits, we do not believe that the SBC requires an amendment to specifically note when a given plan's MOOP limit exceeds the standard annual limitation on cost sharing set by § 156.130. As such, because we are not proposing any
Several commenters opposed the extension of the flexibility to silver plans, and specifically warned about the mixed impact of the proposed requirements on catastrophic plans alone as shifting overall risk and premium shifts for the wider QHP and insured market (see the next subsection for in-depth discussion). One commenter stated concern about the possibility of market disruption and subsequent negative impact to American Indian and Alaska Native (AI/AN) plan variations.
Given that we did not receive comments that supported extending the flexibility in the annual limitation on cost sharing to the small group market, higher metal tiers including silver plans, or plan variants, we are finalizing this policy as applicable to the individual market only and are not extending this flexibility to the small group market at this time. We appreciate the concerns raised about potential effects for those enrolled in AI/AN plan variations and other metal tiers, and are also finalizing this policy without applying it to the on-Exchange cost sharing plan variations (including plan variations only available to AI/AN enrollees) or any other metal tiers (that is, to the silver, gold, and platinum plans). As stated in the proposed rule, we intend to continue researching what might be an appropriate threshold for determining that a silver plan (or higher metal tier plan) has become too difficult or impossible to create, and any potential unanticipated or negative effects related to AI/AN plan variations. We will continue to monitor whether similar challenges arise in the small group market or in the cost-sharing plan variations, as well as operational implications of the combined plan policy changes, and we will consider whether further action through future rulemaking is warranted.
To best preserve a meaningful difference between the AVs of bronze and catastrophic plans, in the 2027 Payment Notice proposed rule (91 FR 6382), we proposed to amend § 156.155(a)(3) to require catastrophic plans to provide no benefits for any plan year (except as provided in § 156.155(a)(4), (b), and (c)) until an amount equal to 130 percent of the maximum annual limitation on cost sharing, rounded down to the next lowest multiple of 50 dollars, is reached.
We stated in the proposed rule that the issue regarding the implementation of the maximum annual limitation on cost sharing and AV also impacts catastrophic plans. We noted that issuers do not have flexibility in varying the cost sharing for catastrophic plans; the Affordable Care Act requires catastrophic plans to have a deductible and MOOP set to the maximum annual limitation on cost sharing and provide few specific benefits pre-deductible at section 1302(e)(1)(B). We stated that because of this rigidity, catastrophic plans do not have prescribed AV requirements. Nevertheless, we stated that the perceived value of catastrophic plans is still affected by the conflict. We estimated that the year-over-year AVs for catastrophic plans are gradually rising, just like metal-tier plans. However, we noted that they are rising at an even faster rate than bronze plans.
We noted that an eligible consumer might prefer to select a bronze plan over a catastrophic plan if the catastrophic plan has a similar premium to the bronze plan and has a comparable AV to a bronze plan, but the bronze plan is able to provide more pre-deductible benefits and lower deductibles and MOOPs. We stated that this obvious choice is evident in enrollment data; enrollment in catastrophic plans on the FFEs has decreased every year since 2016 while bronze plan enrollment has increased. In 2016, nearly 100,000 people enrolled in catastrophic plans, but only about 20,000 people enrolled in catastrophic plans in 2025. Since we expanded the bronze de minimis ranges in 2018, enrollment in bronze plans has more than doubled from about 2.5 million to about 5.4 million in 2025. We stated that we believe the continuous rise in AVs for bronze plans and the decrease in enrollment for catastrophic plans may be causally connected, though we sought comment on other potential reasons to explain this phenomenon.
We stated in the proposed rule that we believe that catastrophic plans only appeal to consumers when there is a clear difference in the perceived value between catastrophic and bronze plans. We stated that when there is such a clear difference, the healthier consumers that are generally eligible and best suited to enroll in catastrophic plans are more motivated to select a catastrophic plan in lieu of a bronze plan. We stated that this is plainly what Congress intended.
Accordingly, we proposed a revision to § 156.155 that would more clearly distinguish catastrophic plans from bronze plans. We proposed to require catastrophic plans to provide no benefits for any plan year (except as provided in § 156.155(a)(4), (b), and (c)) until an amount equal to 130 percent of the standard annual limitation on cost sharing, rounded down to the next lowest multiple of 50 dollars, is reached, beginning in 2027. We stated that for PY 2027, this amount would be $15,400. We stated that we chose to propose multiplying the standard annual limitation on cost sharing by a factor of 130 percent because we estimated this would lower the estimated AV for these catastrophic plans to 55 percent; we stated that by definition, increasing the cost sharing
We stated that this higher cost-sharing limit for catastrophic plans would allow for a more meaningful difference between the cost sharing typically expected for catastrophic and bronze plans and would allow issuers to more aggressively price catastrophic rates lower so that cheaper catastrophic plans would appeal to the kinds of consumers that we believe should tend to be enrolled in catastrophic plans especially the healthy, non-subsidized enrollees who may be disincentivized from enrolling in a QHP due to the rise in costs. However, we sought comment on whether we should strive for a theoretical AV for catastrophic plans that is higher or lower than 55 percent, including whether we should phase in this multiplication factor over a number of plan years to ease the impact on catastrophic plan cost sharing, and how the availability of catastrophic plans at 130 percent of the maximum annual limitation on cost sharing would affect the landscape of plans available to consumers. We reserved the ability to finalize a different factor than 130 percent in the final rule after reviewing public comments. In addition, we solicited comments that address whether, in potentially finalizing this proposal, we should not require catastrophic plans to provide no benefits for any plan year (except as provided in § 156.155(a)(4), (b), and (c)) until an amount equal to 130 percent of the maximum annual limitation on cost sharing. Alternatively, we solicited comments that address whether we should, in potentially finalizing this proposal, require issuers to offer, in the same service area, at least one catastrophic plan that provides no benefits for any plan year (except as provided in § 156.155(a)(4), (b), and (c)) until an amount equal to 100 percent of the maximum annual limitation on cost sharing, as a precondition to being able to offer catastrophic plans that provide no benefits for any plan year (except as provided in § 156.155(a)(4), (b), and (c)) until an amount equal to 130 percent of the maximum annual limitation on cost sharing. We also solicited comment on whether we should, in potentially finalizing this proposal, alternatively allow catastrophic plans to provide no benefits for any plan year (except as provided in § 156.155(a)(4), (b), and (c)) until an amount that could be less than 130 percent of the maximum annual limitation on cost sharing (but not less than 100 percent). We stated in the proposed rule that this proposed approach for catastrophic plans harmonizes plan and market outcomes with section 1302(c) through (e) of the Affordable Care Act to the greatest extent possible to preserve meaningful catastrophic plan availability without jeopardizing the integrity of the metal-tier framework that Congress envisioned. And, we stated that while raising the maximum annual limitation for catastrophic plans beyond what Congress specified is not an action we take lightly, we believe that, due to the mathematical irreconcilability created by current section 1302(c) through (e) of the Affordable Care Act, this proposal is necessary and most narrowly-tailored to ensure the coherent implementation of the Affordable Care Act's overall statutory scheme with as minimal disruption to consumers as possible. Per the previous section, we also proposed to allow issuers to offer catastrophic plans with a multi-year term: all catastrophic plans that an issuer wishes to offer for PY 2027 would be required to use the higher annual limitation on cost sharing.
We also sought comment on whether there would be impacts to HHS risk adjustment as a result of requiring catastrophic plans to provide no benefits for any plan year (except as provided in § 156.155(a)(4), (b), and (c)) until an amount equal to 130 percent of the standard annual limitation on cost sharing, rounded down to the next lowest multiple of 50 dollars, is reached—or as we are referring to it in this final rule, the catastrophic plan annual limitation on cost sharing. Finally, we considered whether the guidance document on the “Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage,” or another regulatory vehicle, might be more appropriate for annually releasing this additional flexibility for defining plans' annual limitation on cost sharing, and invited comment on where to release and seek comment on the updated annual limitations on cost sharing ahead of each plan year.
We sought comment on all aspects of this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing the amendment to § 156.155(a)(3) as proposed, with the following modifications: we are delaying implementation of the policy until PY 2028 and modifying the dollar amount calculation provided in the proposed rule to correct an inadvertent mathematical computation error in the proposed rule's calculation of 130 percent of the maximum annual limitation on cost sharing. We summarize and respond to public comments received on the proposal below.
However, we note that the purpose of this policy is to restore a meaningful distinction between catastrophic plans and bronze plans—a distinction that Congress plainly intended and that has been eroded by the gradual rise in the AV of catastrophic plans. As enrollment data demonstrates, catastrophic plan enrollment on the FFEs has decreased every year since 2016, from nearly 100,000 enrollees in 2016 to approximately 20,000 enrollees in 2025. We believe this decline is attributable in part to the convergence of catastrophic and bronze plan AVs, which has made catastrophic plans less attractive to the healthy, non-subsidized enrollees for whom they were designed. Commenters recognized current catastrophic plan premiums are too high to drive enrollment growth, a fact that supports the policy's rationale: the current convergence of catastrophic and bronze plan AVs has eliminated the premium differential that makes catastrophic plans attractive. By restoring a meaningful AV distinction, we believe this policy will make catastrophic plans more attractive to these consumers, potentially lowering catastrophic plan premiums and improving the overall risk pool for catastrophic plans, and increasing catastrophic plan growth.
We do not refute the studies cited by commenters about the impact of the financial burden of high cost-sharing on chronically ill and low-income individuals. Consumers who are aware of their chronic illness and use health insurance coverage to manage it would not be likely to select catastrophic coverage, even when they qualify for it. The net impact we anticipate on low-income consumers who are eligible for catastrophic plans will hopefully attract the enrollment of price-sensitive consumers, ideally capturing younger, healthy individuals who would otherwise go uninsured. An uninsured individual has no bankruptcy protection against health costs, let alone a required limitation on any of their out-of-pocket health spending. A catastrophic plan enrollee with a 130 percent MOOP has a defined, capped out-of-pocket maximum. The policy therefore improves financial protection relative to the alternative of no coverage, even if it does not provide the same protection as a metal tier plan.
After consideration of comments, we are finalizing a multiplication factor of 130 percent of the maximum annual limitation on cost sharing for catastrophic plans, as proposed. We believe this factor appropriately balances the need to restore a meaningful AV distinction between catastrophic and bronze plans with the need to minimize disruption to catastrophic plan enrollees. We estimate that this factor will generally result in an AV of approximately 55 percent for catastrophic plans, which we believe is a reasonable estimate that strikes a balance between comprehensiveness of coverage and premium affordability for healthier enrollees.
We acknowledge that catastrophic plans are not subject to the AV requirements established in section 1302(d) of the Affordable Care Act. However, we believe that using an estimated AV as a reference point for calibrating the catastrophic plan annual limitation on cost sharing is a reasonable and transparent approach to achieving the policy's goal: restoring a meaningful distinction between catastrophic plans and bronze plans. The 55 percent estimated AV is not a binding requirement imposed on catastrophic plans; rather, it is an analytical tool that allows us to estimate the relative value of catastrophic plan coverage and to set the 130 percent multiplication factor in a principled, quantifiable manner.
We appreciate the comment about a sliding scale annual limitation on cost sharing. Currently, people in cost sharing variant plans at the silver metal tier have reduced cost sharing and a corresponding reduced annual limitation on cost sharing. A phase-in across plan years would defer the correction while the underlying problem continues to compound; a linear percentage-based calculation limiting cost sharing proportionally to the generosity of the metal tier or reduced cost-sharing plans goes beyond the scope of what we considered for finalization: there is no evidence of negative plan outcomes from incongruent policies at the higher metal tiers, and we are not finalizing any cost sharing changes to silver, gold, or platinum tiers, or cost sharing reduction variations. As previously stated, we anticipate that plans with a higher annual limitation on cost sharing will have lower premiums.
We agree that protection against bankruptcy was a key reason the Affordable Care Act was enacted in law, and we discuss congressional intent further in the next response to comments. These final rules provide greater flexibility for States and plans to determine what QHPs are best tailored to their markets; it does not prohibit future enrollees from selecting a metal-tier plan with a MOOP limit set at or below the standard annual limitation on cost sharing as an option for protecting themselves from higher out-of-pocket medical costs. This policy will give enrollees access to more affordable (and quantifiably more) QHP choices.
Although we believe that the actuarial problem driving this proposal—the gradual convergence of catastrophic and bronze plan AVs—warrants immediate action, we are delaying the implementation (but not approach) of the multiplication factor for calculating the catastrophic plan annual limitation on cost sharing to PY 2028. A phased approach delays the restoration of a meaningful distinction between the two plan types but minimizes the impact on Exchanges, plans, and enrollees for PY 2027, giving Exchanges and plans time
Section 1302(c)(1) of the Affordable Care Act establishes the annual limitation on cost sharing and directs the Secretary to update this limit annually. Critically, the statute does not expressly prohibit the Secretary from establishing a differentiated cost-sharing limit for catastrophic plans, nor does it mandate that the same numerical limit apply uniformly across all plan types. As noted previously, our intent is for different statutory sections to operate together coherently and harmoniously. We also understand our charge to apply the best reading of the statute, under the principles of statutory construction affirmed in
In response to the commenters that stated that the statute does not
By setting the annual limitation on cost sharing for catastrophic plans at 130 percent of the standard limit, we are exercising our regulatory authority to ensure that the catastrophic plan category remains a viable and distinct option in the market—one that reflects the higher cost-sharing structure Congress contemplated when it created this separate coverage tier. This approach is a reasonable and permissible exercise of the Secretary's authority under section 1302 of the Affordable Care Act and is consistent with the overall structure of the Affordable Care Act.
In response to comments requesting delayed implementation, we are finalizing this requirement with an effective date starting in PY 2028 to allow issuers, States, and Exchanges additional time to prepare. We believe this approach appropriately balances the need to address the underlying actuarial challenge with the operational concerns raised by commenters, particularly since PY 2027 QHP certification has already commenced, and rate and form filings have largely been submitted.
We note, however, that the underlying actuarial problem driving this proposal—as in, the gradual convergence of catastrophic and bronze plan AVs—has been developing for several years, and that we have been monitoring and discussing this issue since at least the 2017 Market Stabilization Rule. We do not believe that further delay would meaningfully change the actuarial trajectory or the need for regulatory action, but have chosen to delay implementation by 1 year to ease the impact on issuers, States, and Exchanges.
States do not have the authority to set separate, unique annual limitations for catastrophic plans offered in their markets, and if offered in their Exchange, these plans must meet the Federal requirements. States that wish to limit the impact of this policy on their markets may exercise their Exchange authority under § 155.1000(e) to decline to certify any catastrophic plans from being offered in PY 2028 and future years.
As addressed in the in the preceding section, we believe we have conducted sufficient forecasting before finalizing this policy. We acknowledge that projections of enrollment response to plan design changes involve inherent uncertainty. We believe that the policy we are finalizing in this rule represents the best possible outcome since it ensures that meaningful difference be restored between catastrophic plans and bronze plans. We believe this policy would attract currently uninsured individuals who are not eligible for subsidies but deterred by the high premiums of metal tier plans, which could improve the overall risk pool. We note that offering catastrophic plans is optional for issuers. Nothing prevents issuers from conducting a risk assessment when deciding whether to offer these plans for PY 2028 and future plan years that are subject to the cost-sharing changes. We will continue to monitor the impact of this policy on catastrophic plan availability, enrollment, premiums, and risk pool composition, and will consider whether additional action is warranted in future rulemaking.
Further, we do not expect any unique compounding effects in PY 2028 and future plan years when catastrophic plans are newly required to adhere to a higher annual limitation on cost sharing, including in plan years when some of those catastrophic plans utilize the flexibilities afforded to multi-year plans discussed in section III.E.6. of this final rule. We do not agree with commenters who viewed the combined effect of these two policies as requiring a unified impact analysis prior to finalization. We have analyzed enrollment and premium effects of current plan policy decisions on bronze plans and catastrophic plans, as described in the preceding sections. We are not convinced that attempting to project the combined enrollment effects of these two policies would yield instructive results, given the range of issuer design choices, State market conditions, and consumer behavior variables that will determine actual uptake. We have relied on available data—including enrollment trends in catastrophic and bronze plan tiers, AV modeling, and the risk adjustment framework applicable to catastrophic plans—to inform our assessment of likely market effects. We believe they represent a reasonable basis for the policy as finalized. Our view is that this policy will attract currently uninsured, price-sensitive consumers without materially disrupting the risk pool for subsidized metal tier enrollees, which is supported by available enrollment data, actuarial modeling, and the optional, issuer-discretionary nature of the policy.
In the 2027 Payment Notice proposed rule (91 FR 6383), we proposed to exercise our authority under sections 1311(c)(1) and 1321(a)(1)(B) of the Affordable Care Act to discontinue the full suite of standardized plan option policies effective beginning in PY 2027. Specifically, we proposed to remove the following from our regulations: the definition of “standardized option” at § 155.20; all requirements pertaining to standardized plan options at § 156.201 (the requirements for FFE and SBE-FP QHP issuers in the individual market to offer these plans at paragraphs (a) and (b), as well as the requirement for these plans to meaningfully differ from one another at paragraph (c)); the differential display of standardized plan options on
Standardized options were first introduced in the 2017 Payment Notice and codified at § 155.20 (81 FR 12289 through 12293). These standardized option plan designs were subsequently updated in the 2018 Payment Notice (81 FR 94107 through 94112). The 2018 Payment Notice (81 FR 94118) also introduced the authority for HHS to differentially display standardized options on
Standardized options were then discontinued in the 2019 Payment Notice (83 FR 16974 through 16975). However, the discontinuance was challenged in the United States District Court for the District of Maryland. On March 4, 2021, the court decided
As a result, in part 2 of the 2022 Payment Notice (86 FR 24264 through 24265), we announced our intent to engage in rulemaking under which we would propose to resume designation of standardized options and propose specific designs in more detail in PY 2023. Thus, in the 2023 Payment Notice (87 FR 27310 through 27322), we reintroduced standardized plan options to enhance the consumer experience, increase consumer understanding, simplify the plan selection process, and combat discriminatory benefit designs.
In the 2023 Payment Notice (87 FR 27312), we finalized standardized plan options at the following metal levels: one bronze plan, one bronze plan that meets the requirement to have an AV up to 5 points above the 60 percent standard, as specified in § 156.140(c) (known as an expanded bronze plan), one standard silver plan, one version of each of the three income-based silver CSR plan variations, one gold plan, and one platinum plan. We did not finalize standardized plan options for the AI/AN CSR plan variations as provided for at § 156.420(b) given that the cost sharing parameters for these plan variations are already largely specified.
In the 2023 Payment Notice (87 FR 27312), we finalized two sets of standardized plan options to accommodate different States' cost sharing laws. Specifically, the first set of standardized plan options applied to all FFE and SBE-FP issuers, except issuers in Delaware, Louisiana, and Oregon. The second set of standardized plan options applied only to issuers in Delaware and Louisiana to accommodate these two States' specialty prescription drug cost sharing laws.
We designed these standardized plan options to resemble the most popular QHP offerings that millions of consumers were already enrolled in by taking the following steps: selecting the most popular cost sharing type for each benefit category; selecting enrollee-weighted median cost sharing values for each of these benefit categories based on PY 2022 cost sharing and enrollment data; modifying these plans to ensure they were able to comply with applicable State cost sharing laws; and decreasing the AVs for these plan designs to be at the floor of each AV
In the 2023 Payment Notice (87 FR 27313), we also resumed the differential display of standardized plan options on
As such, web brokers and QHP issuers were once more required to differentially display standardized plan options in accordance with § 155.205(b)(1) in a manner consistent with how standardized plan options are displayed on
In the 2024 Payment Notice (88 FR 25847 through 25855), we maintained a high degree of continuity with our approach to standardized plan options finalized in the 2023 Payment Notice. However, in contrast to the policy finalized in the 2023 Payment Notice, at § 156.201(b), we finalized for PY 2024 and subsequent plan years to no longer include a standardized plan option for the non-expanded bronze metal level—primarily due to AV constraints and the infeasibility of designing such a plan.
In the 2025 Payment Notice (89 FR 26357 through 26362) and in the 2026 Payment Notice (90 FR 4493 through 4500), we continued to maintain a high degree of continuity with the approach to standardized plan options finalized in the immediately preceding Payment Notices (that is, the 2024 and 2025 Payment Notices). In each rulemaking, we made only minor modifications to the plan designs to ensure they continued to have AVs within the permissible
We explained that this requirement was based in part on our experience with the meaningful difference standard, which was previously codified at § 156.298. The meaningful difference standard was introduced in the 2015 Payment Notice (79 FR 13813 through 13814), revised in the 2017 Payment Notice (81 FR 12312 and 12331), and subsequently discontinued and removed from our regulations in the 2019 Payment Notice (83 FR 17027). The meaningful difference standard was originally intended to enhance the consumer experience on
We refer readers to the preambles to the 2023, 2024, 2025, and 2026 Payment Notices discussing § 156.201 (87 FR 27310 through 27322, 88 FR 25847
In the 2027 Payment Notice proposed rule (91 FR 6384), we proposed, effective beginning in PY 2027, that FFE and SBE-FP QHP issuers in the individual market would no longer be required to offer standardized plan options. Further, we stated in the proposed rule that we would remove the following from our regulations: the definition of “standardized options” at § 155.20; all requirements pertaining to standardized plan options at § 156.201 (the requirements for FFE and SBE-FP QHP issuers in the individual market to offer these plans at paragraphs (a) and (b), as well as the requirement for these plans to meaningfully differ from one another at paragraph (c)); the authority to differentially display standardized plan options on
In the proposed rule (91 FR 6384), we stated that nothing under the proposal would impact or preclude State-enacted standardized plan option requirements, including the requirement for issuers in the State of Oregon to offer such plans.
We also clarified (91 FR 6385) that while we proposed to discontinue the requirement for issuers to offer standardized plan options, the annual design and publication of these plans in the applicable Payment Notice each plan year, and the differential display of these plans on
We further stated (91 FR 6385) that under the proposed approach, if issuers wished to discontinue their existing standardized plan option offerings altogether, they would be permitted to do so, and enrollees in these plans would be crosswalked to a different plan in accordance with the crosswalk hierarchy at § 155.335(j). Additionally, we stated that if issuers wished to continue offering these existing standardized plan options with the same cost sharing, they would also be permitted to do so, and enrollees in these plans would continue to be auto-reenrolled in these plans from one plan year to the next, absent selecting a different plan or discontinuing coverage. However, we stated that these plans would no longer be visually distinguished as standardized plan options on
We proposed this approach for several reasons. To begin, when we reintroduced standardized plan options in the 2023 Payment Notice (87 FR 27316 through 27317), we noted that
In response to these comments, in the 2023 Payment Notice (87 FR 27316 through 27317), we acknowledged and agreed that
In the 2023 Payment Notice (87 FR 27316 through 27317), we further stated that the stabilization of the individual market was demonstrated by the proliferation of plan offerings, increased issuer participation in the Exchanges, and record enrollment. We thus stated that resuming standardized plan options at that time could play a constructive role in enhancing the consumer experience, increasing consumer understanding, and simplifying the decision-making process for consumers on the Exchanges, despite the fact that
In the 2023 Payment Notice (87 FR 27316), we further stated that we believed standardized plan options could play an important role in that simplification by allowing consumers to compare offerings based on other meaningful features outside of cost sharing structures, such as premiums, networks, formularies, and quality ratings. We then stated that employing standardized plan option requirements at that time would allow consumers to
Thus, issuers that offer QHPs through the FFEs and SBE-FPs have been required to offer standardized plan options at every product network type, at every metal level (with the exception of the non-expanded bronze metal level since PY 2024), and throughout every service area they offer non-standardized plan options since PY 2023. As such, we stated in the proposed rule (91 FR 6385) that we have accumulated 4 plan years of experience (PY 2023 through PY 2026) administering these standardized plan option policies. We stated that this cumulative experience provides us with a comprehensive and nuanced perspective regarding weighing both the advantages and disadvantages of requiring FFE and SBE-FP QHP issuers to offer standardized plan options, whether this strategy aligns with our originally articulated objectives with standardized plan option policies, and whether this strategy has yielded the intended results.
We stated (91 FR 6385) that based on this experience, we concluded that requiring FFE and SBE-FP QHP issuers to offer standardized plan options is an ineffective strategy in enhancing the consumer experience, increasing consumer understanding, and simplifying the plan selection process—the originally articulated objectives of employing our standardized plan option policies. We stated that this is primarily because requiring issuers to offer standardized plan options at every product network type, at every metal level, and throughout every service area that they offer non-standardized plan options led to an increase in the total number of QHPs that issuers offer through the FFEs and SBE-FPs in PY 2023 (the first year in which the requirement to offer these plans was introduced), which exacerbated plan proliferation—directly counteracting our originally articulated objectives.
In fact, we stated (91 FR 6385) that the resumption of standardized plan options and the introduction of the requirement for FFE and SBE-FP QHP issuers to offer standardized plan options coincided with an increase in the weighted average number of total plans available per enrollee from 108 in PY 2022, the year before the introduction of the requirement to offer standardized plan options, to 114 in PY 2023, the year in which this requirement was introduced, with most of this increase in plan offerings being comprised of standardized plan options. Furthermore, we noted that plan proliferation as measured by the weighted average number of total plans offered per issuer (which is derived by dividing the weighted average number of total plans available per enrollee by the weighted average number of total issuers per enrollee) increased from 16.9 in PY 2022 to 17.3 in PY 2023—meaning each issuer on average tended to offer a higher number of plans after the imposition of the requirement to offer standardized plan options than the year before this requirement was made effective.
Furthermore, we noted (91 FR 6386) that even with the introduction of the non-standardized plan option limit of four in PY 2024 and its reduction to two as well as the introduction of the exceptions process in PY 2025, the net impact of both the requirement to offer standardized plan options as well as the subsequent imposition of non-standardized plan option limits and exceptions on the weighted average number of total plans available per enrollee and the weighted average number of total plans offered per issuer (including both standardized and non-standardized plan options) was marginal—despite the substantially increased regulatory complexity and the associated burden of creating and submitting certification applications for new plans (standardized plan options) and correspondingly adjusting existing portfolios of plan offerings (non-standardized plan options).
Specifically, we noted that the weighted average number of total plans available per enrollee decreased from 114 in PY 2023 to 100 in PY 2024 and remained consistent at 100 in PY 2025. We further noted that the weighted average number of total plans offered per issuer decreased from 17.3 in PY 2023 to 14.7 in PY 2024 and 13.7 in PY 2025. Thus, we noted that from PY 2022, before this suite of standardized plan option policies was introduced, there was a weighted average number of 108 total plans available per enrollee and a weighted average number of 16.9 total plans offered per issuer, whereas in PY 2025 (after several consecutive years imposing novel layers of requirements), these same measures were 100 and 13.7, respectively.
We stated (91 FR 6386) that we do not believe the marginal net reductions in the weighted average number of total plans available per enrollee and the weighted average number of total plans offered per issuer achieved by introducing this suite of standardized plan option and non-standardized plan option limit requirements warrant imposing additional burden on issuers or impeding issuer innovation in plan design choice. We stated that this is especially true given that these metrics continue to remain significantly elevated compared to only several plan years ago. We noted, for example, that in PY 2020, the weighted average number of total plans available per enrollee was 39, and the weighted average number of total plans offered per issuer was 11.1. We noted that the impact of our non-standardized plan option limits and exceptions process policies on these metrics and plan proliferation were discussed in greater detail in section III.E.9. of the proposed rule.
We stated (91 FR 6386) that the increase in the weighted average number of total plans available per enrollee from PY 2022 to PY 2023 (which arose primarily from the introduction of the requirement for issuers to offer standardized plan options), even taken altogether with the subsequent marginal net reductions in PY 2024 and PY 2025 (which arose primarily from the introduction of the non-standardized plan option limit of four in PY 2024 and the reduction of this limit to two as well as the introduction of the exceptions process in PY 2025), is particularly important.
We noted (91 FR 6386) that we have utilized this metric, the weighted average number of total plans per enrollee, as opposed to the unweighted average number of total plans per enrollee, as the primary metric by which to evaluate plan choice overload because utilizing weighted averages takes into consideration the number of enrollees in a particular service area when calculating the average number of plans available to enrollees. We stated that as a result of weighting averages by enrollment, service areas with a higher number of enrollees have a greater impact on the overall average than service areas with a lower number of enrollees. Thus, we stated that weighting averages by enrollment allows a more representative metric to be calculated that more closely resembles the actual experience of enrollees.
Therefore, we stated (91 FR 6386) that, as measured by this metric, the weighted average number of total plans per enrollee, the plan proliferation that occurred subsequent to the introduction of the requirement for FFE and SBE-FP QHP issuers to offer standardized plan options in PY 2023 is inconsistent with our originally articulated objectives of
We stated (91 FR 6386) that based on our 4 plan years of experience (PY 2023 through PY 2026) administering this suite of standardized plan option and non-standardized plan option limits and exceptions policies, we have concluded that a marginal net reduction in the number of plan choices in the FFEs and SBE-FPs created by the approach of imposing requirements to offer standardized plan option and imposing non-standardized plan option limits and exceptions has significant disadvantages—namely, imposing additional burden and constraining issuer innovation and consumer choice.
We further noted (91 FR 6386) that the FFEs operate under constraints that differ substantially from other contexts in which standardized plan options have been implemented, such as in States with a State Exchange model type. In particular, we stated that there is a significant degree of heterogeneity on the FFEs (for example, in terms of consumer demographics, health care needs, and preferences) given that there are currently 28 States with an FFE model type, and it is impractical to design a standardized plan option offering that issuers must conform to regardless of the market dynamics in a given location. We further stated that we do not believe that it is feasible for HHS to more precisely tailor specific plan designs and requirements to the unique circumstances and market conditions in each State and update these plan designs on an annual basis. Finally, we stated that we do not believe that such an approach would be warranted in the first place given the limited efficacy that these policies have demonstrated in the last several years.
Relatedly, we stated (91 FR 6386) that the strategy of requiring issuers to offer standardized plan options as well as differentially displaying these plans on
However, we stated (91 FR 6387) that based on our 4 plan years of experience (PY 2023 through PY 2026) administering these standardized and non-standardized plan option policies, we have found that in practice, given that standardized plan options continue to be offered alongside non-standardized plan options, whether a particular plan offering was a standardized or non-standardized plan option served as yet another variable that consumers must consider during the plan selection process, adding an additional layer of complication. Furthermore, we noted that in our experience, we have found when consumers are faced with a large number of heterogeneous plan options, they continue to rely primarily on premiums, networks, and issuer brand—meaning that standardizing cost sharing parameters by itself (especially when doing so only for a subset of all available plan options) fails to meaningfully reduce decision complexity for consumers.
In the proposed rule (91 FR 6387), we also considered more recent literature examining the effects of offering standardized plan options alongside non-standardized plan options. We highlighted a 2024 study demonstrating that the introduction of “Simple Choice” plans in PY 2017 and PY 2018 was associated with a reduction in gross premiums.
We also noted (91 FR 6387) that the study further documented that premium impacts dissipated following the discontinuation of the policy after PY 2018, with no evidence of persistent effects in subsequent years—suggesting that plan standardization, absent continued market disruption or policy-induced uncertainty, did not result in durable structural changes to issuer pricing behavior. We considered this lack of persistence particularly relevant when evaluating the continued necessity of standardized plan option requirements and associated non-standardized plan option limits within the current market context—especially with the increased burden, inhibition of issuer innovation, and constrained consumer choice associated with these policies.
Beyond this more recent literature, we noted (91 FR 6387) that for each plan year since these requirements were introduced in PY 2023, there has consistently been a comparatively low uptake of standardized plan options relative to corresponding non-standardized plan options. In fact, we noted that only 20 percent of total enrollment in the FFEs and SBE-FPs was in standardized plan options in PY 2023, 33 percent in PY 2024, and 33 percent in PY 2025, even with the reduction in non-standardized plan option offerings due to the introduction of the non-standardized plan option limit of four in PY 2024 and its reduction to two in PY 2025.
Relatedly, we noted (91 FR 6387) that 25 percent of total plan offerings were standardized plan options in PY 2023, 28 percent in PY 2024, and 31 percent in PY 2025.
Moreover, we noted (91 FR 6387) that even among active plan selections (which includes both consumers currently enrolled in a QHP that are making a new plan selection as well as consumers who are enrolling in any QHP offered through an FFE or SBE-FP for the first time, but excludes consumers who are auto-reenrolled in their current QHP from one year to the next), only 18 percent of consumers in the FFEs and SBE-FPs actively selected standardized plan options in PY 2023, 26 percent in PY 2024, and 18 percent in PY 2025.
We noted (91 FR 6387) that this consistently low uptake of standardized plan options by FFE and SBE-FP consumers for the last several plan years, as measured by both the proportion of total enrollment in as well as active selections of these plans, has occurred despite the fact that a full suite of differential display features visually distinguishes these plans from corresponding non-standardized plan options on both
We stated (91 FR 6387) that under the present form of differential display on
We stated (91 FR 6388) that even with this full suite of differential display features that visually distinguishes standardized plan options from non-standardized plan options on
Furthermore, we stated (91 FR 6388) that total enrollment in and active selections of standardized plan options would be conceivably lower without the progressively more stringent non-standardized plan option limits (since there would have been a greater number of non-standardized plan options for consumers to select from). We stated that given the consistently low proportion of total enrollment in and active selections of standardized plan options each plan year since these requirements were introduced in PY 2023, we no longer believe that the benefits of requiring issuers to offer these plans outweighs the burden of requiring them doing so—especially since employing this strategy has failed to achieve our originally articulated objectives.
Specifically, we stated (91 FR 6388) that the burden of requiring issuers to offer these plans includes creating new plans that have cost sharing parameters that conform with the designs specified by HHS in annual rulemaking, the burden for both issuers and HHS in certifying a greater number of plans during QHP certification each year (standardized plan options as well as non-standardized plan option limit exceptions process plans), and the burden on issuers correspondingly adjusting portfolios of plan offerings (non-standardized plan options).
We noted (91 FR 6388) that in addition to enhancing the consumer experience, increasing consumer understanding, and simplifying the decision-making process for consumers purchasing coverage through the Exchanges, as we stated in the 2023 Payment Notice (87 FR 27311), another original objective of requiring FFE and SBE-FP QHP issuers to offer these standardized plan options was combatting discriminatory benefit designs. We stated that we attempted to achieve this objective in our approach to the design of these plans.
In particular, we noted (91 FR 6388) that each plan year since we introduced standardized plan options in PY 2023, in our design of these plans, we exempted the following frequently utilized benefit categories from the deductible at every metal level: primary care visits, specialist visits, mental health and substance use outpatient office visits, speech therapy, physical and occupational therapy, and generic drugs—with an increasing number of benefit categories being exempted from the deductible at higher metal levels. We stated that we adopted this approach since exempting benefits from the deductible reduces barriers to access for these services and makes it easier (that is, less expensive) for consumers to obtain these health care services. We noted that we also attempted to combat discriminatory designs by requiring flat copayments as the form of cost sharing instead of coinsurance rates for a greater number of benefit categories. We stated that we incorporated this plan design feature to enhance consumer certainty and reduce the risk of unexpected financial costs when obtaining health care.
We stated (91 FR 6388) that we continue to recognize that subjecting additional benefit categories to the deductible and including coinsurance rates as the form of cost sharing instead of flat copayments may make it more difficult for consumers to obtain the
More specifically, regarding the methodology we employ to design these plans, we noted (91 FR 6388) that in the 2024 Payment Notice (88 FR 25848), we stated that we design these standardized plan options by selecting the most popular cost sharing type for each benefit category (which is a copayment or coinsurance rate that is either subject to or exempt from the deductible); selecting enrollee-weighted median cost sharing values for each of these benefit categories (as well as for the annual limitation on cost sharing and deductible values) based on refreshed cost sharing and enrollment data; modifying these plans to be able to accommodate State cost sharing laws; and decreasing the AVs for these plan designs to be at the floor of each AV
We stated (91 FR 6388) that employing this methodology in the annual design of these standardized plan options has resulted in these plans being comparable in many respects to corresponding non-standardized plan options that millions of consumers are already enrolled in. We noted that this further means that pre-deductible benefit coverage and flat copayments as the form of cost sharing instead of coinsurance rates are design features that are not exclusive to standardized plan options. We stated that, instead, these plan design features largely reflect market consensus and do not substantially deviate from this consensus. We also stated that the fact that these plan design features are already routinely included in many non-standardized plan options means that we could combat discriminatory plan designs (another originally articulated objective for reintroducing the requirement for issuers to offer standardized plan options) without subjecting both issuers and HHS to the increased burden of requiring issuers to offer and submit certification applications for these plans that largely reflect market consensus and existing offerings.
Furthermore, we stated (91 FR 6388) that we believe incorporating coinsurance rates as the form of cost sharing for particular benefits instead of flat copayments can serve an important role in plan design—by promoting greater engagement on behalf of consumers in evaluating health care options and by providing issuers additional levers to control costs, thereby helping to manage rising premiums. We further stated that we believe incorporating coinsurance rates as the form of cost sharing promotes greater engagement on behalf of consumers by encouraging consumers to more comprehensively research the full costs for particular services from different providers. We thus stated that we believe employing coinsurance rates instead of flat copayments as the form of cost sharing for particular benefits is not in itself necessarily discriminatory in nature and is an important factor in controlling costs and by extension counteracting increasing premiums.
Additionally, we stated (91 FR 6388) that the combination of standardized plan option requirements as well as non-standardized plan option limits has increasingly constrained issuers' ability to offer a sufficiently broad range of plans for several plan years. We stated that this includes plans with tiered provider networks, plans with separate medical and drug deductibles (as opposed to integrated medical and drug deductibles), plans with separate medical and drug MOOPs (as opposed to integrated medical and drug MOOPs), HSA-eligible high-deductible health plans (HDHPs), and plans with more than four tiers of prescription drug coverage. We noted that issuers have not been able to offer plans with these design features as standardized plan options since doing so would deviate from the required cost sharing parameters specified by HHS in rulemaking. Thus, we stated that removing this suite of requirements would grant issuers additional flexibility to once more vary plans along these parameters, which would enhance issuer innovation in plan design and consumer choice.
However, we stated in the proposed rule (91 FR 6389) that we recognize that some issuers and consumers may still find certain features of these plan designs valuable. We stated that this is why we were not proposing to require issuers to discontinue their standardized plan option offerings altogether. Instead, we stated that under the proposed approach, FFE and SBE-FP QHP issuers would be permitted to choose whether to discontinue these offerings altogether or to continue offering them with either the same or modified cost sharing, while we simultaneously discontinue the differential display of these plans on
We stated (91 FR 6389) that under our proposed approach, if issuers wished to discontinue their standardized plan option offerings altogether, they would be permitted to do so, and enrollees in these plans would be crosswalked to a different plan in accordance with the crosswalk hierarchy at § 155.335(j). Additionally, we stated that if issuers wished to continue offering these standardized plan options with the same cost sharing, they would also be permitted to do so, and enrollees in these plans would continue to be auto-reenrolled in these plans from one plan year to the next. However, we noted that these plans would no longer be visually distinguished as standardized plan options on
We noted (91 FR 6389) that in most scenarios where an issuer modifies the cost sharing structure of one of its standardized plan option offerings, the newly modified plan that was formerly the standardized plan option would be considered a new plan and would therefore require a new plan ID. We stated that in this scenario, enrollees would be crosswalked from the discontinued plan to another plan in accordance with the crosswalk hierarchy at § 155.335(j). We stated that these enrollees could be crosswalked into the newly modified plan that was formerly the standardized plan option, or an entirely different plan altogether, depending on the unique circumstances in each county.
However, we stated (91 FR 6389) that under the definition of “plan” at § 144.103, a State may permit issuers to make greater changes to a plan's cost sharing while still permitting that plan to be considered the same plan—thus maintaining the same plan ID. Furthermore, we stated that under § 147.106(e)(3)(iv), as long as the variation in cost sharing is solely related to changes in cost and utilization of medical care, or to maintain the same
We stated (91 FR 6389) that in the scenario where an issuer modifies what was formerly a standardized plan option's cost sharing structure while maintaining the same plan ID, enrollees in the plan would be auto-reenrolled from one plan year to the next. We stated that in either case, whether the modification of a former standardized plan option's cost sharing results in that plan being considered the same or a different plan, enrollees would be crosswalked in accordance with the crosswalk hierarchy at § 155.335(j), and that plan would no longer be differentially displayed as a standardized plan option on
We stated (91 FR 6389) that, altogether, we believe that employing this suite of policies for the last several plan years has failed to achieve the originally articulated objectives of enhancing the consumer experience, increasing consumer understanding, and combatting discriminatory benefit designs. We stated that this failure is demonstrated by exacerbated plan proliferation in PY 2023 and the comparatively low uptake of these standardized plan options despite the full suite of differential display features that visually distinguishes these plans from corresponding non-standardized plan options. Finally, we noted that these standardized plan options reflect market consensus and incorporate the most popular plan design features of many existing non-standardized plan option offerings, meaning these plan design features are not exclusive to standardized plan options.
We stated (91 FR 6389) that given that imposing these requirements has increased burden for both issuers and HHS (for example, by requiring issuers to create and submit certification applications for additional plans) and unnecessarily constrained issuers in plan design while failing to achieve our originally articulated objectives, we no longer believe that the advantages of employing this strategy outweigh the disadvantages of doing so. We stated that we therefore believe that discontinuing the full suite of standardized plan options policies (in conjunction with discontinuing non-standardized plan option limits and exceptions, discussed in section III.E.9. of the proposed rule) would reduce issuer and HHS burden and provide more flexibility for issuers to innovate in plan design.
Accordingly, we stated (91 FR 6389) that the proposal would remove the following from our regulations effective beginning PY 2027: the definition of “standardized option” at § 155.20; all requirements pertaining to standardized plan options at § 156.201 (the requirements for FFE and SBE-FP QHP issuers in the individual market to offer these plans at paragraphs (a) and (b), as well as the requirement for these plans to meaningfully differ from one another at paragraph (c)); the differential display of standardized plan options on
We sought comment (91 FR 6389) on this proposal. We also sought comment on potential regulatory alternatives that would allow us to achieve the same goals of simplifying the plan selection process and reducing burden without discontinuing this suite of policies in its entirety. In particular, we sought comment on continuing to require issuers to offer standardized plan options only at particular metal levels, such as the bronze and silver metal levels (instead of at every metal level at which they offer non-standardized plan options). We also sought comment on requiring issuers to offer standardized plan options only in certain service areas in which they offer a certain number of non-standardized plan options. We also sought comment on transitioning from requiring issuers to offer these standardized plan options to once more allowing issuers to voluntarily offer them—as was the approach with the previous iteration of the policy—while we continue to maintain the differential display of these plans on
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposal to discontinue the full suite of standardized plan option policies below.
Commenters who supported discontinuing the requirement to offer standardized plan options also emphasized that plans with standardized cost sharing can still differ significantly in other important dimensions, such as in terms of benefit coverage, cost sharing for benefit categories outside those specified by HHS in annual rulemaking, provider networks, formularies, and utilization management practices. These commenters subsequently stated that formally designating plans that conform with the required cost sharing parameters specified by HHS in rulemaking as standardized plan options (along with differentially displaying these plans on
Commenters who supported discontinuing the requirement for issuers to offer standardized plan options further agreed that standardized plan options have failed to meaningfully simplify consumer choice as was originally intended—especially since standardized plan options continue to exist alongside non-standardized plan options. These commenters stated that contrary to the original intention of employing these standardized plan option policies—simplifying the plan
Commenters further stated that the failure of these standardized plan option policies to meaningfully simplify the plan selection process is evinced by the fact that the total number of plan offerings remains similar to the total number of plan offerings before the imposition of these requirements. Specifically, these commenters highlighted that the weighted average total number of plans available per enrollee was only reduced from 108 in PY 2022 to 100 in PY 2025—despite imposing multiple layers of novel requirements for several consecutive years, which substantially increased issuer burden and caused considerable market disruption in the form of plan discontinuations.
In contrast, several commenters opposed the proposal to discontinue the requirement to offer standardized plan options. These commenters stated that standardized plan options improve consumers' ability to make informed plan selections by facilitating more meaningful comparisons across plans. These commenters stated that standardizing cost sharing enhances transparency and allows consumers to more meaningfully evaluate other important plan attributes, such as provider networks, formularies, and quality ratings rather than relying on premium differences alone. Several commenters thus stated concern that removing standardized plan options would increase complexity for consumers and make plan selection more difficult, particularly for individuals with limited health insurance literacy.
Commenters further stated that standardized plan options promote more predictable and consumer-friendly cost sharing, including the use of copayments in place of coinsurance rates and the coverage of certain services before the deductible. Relatedly, several commenters emphasized that standardized plan options help mitigate the risk of potentially discriminatory benefit designs by reducing issuers' ability to structure benefits or formularies in ways that discourage enrollment by individuals with chronic and high-cost conditions. Several commenters stated concern that eliminating standardized plan options could increase opportunities for risk segmentation (for example, by allowing issuers greater leeway in designing plans in such a manner to encourage the enrollment of healthier and lower risk consumers while simultaneously discouraging the enrollment of less healthy and higher risk consumers), potentially leading to less stable risk pools and greater premium volatility.
Commenters who supported continuing requiring issuers to offer standardized plan options also highlighted that enrollment in and active selection of standardized plan options has increased in recent years and now represents a substantial share of total enrollment in the FFEs and SBE-FPs. Some commenters further pointed to the experience of State Exchanges that have adopted standardized plan option requirements, stating that these approaches have improved affordability, access, and consumer understanding. Finally, several commenters raised concerns about potential disruption to current enrollees, stating that discontinuing standardized plan options could force consumers to transition to new plans that may not meet their existing health care needs, potentially resulting in changes to provider networks, covered benefits, or prescription drug coverage.
We also agree with commenters that standardized plan options may still differ across other important dimensions, such as in terms of benefit coverage, cost sharing for benefit categories not specified by HHS in rulemaking, provider networks, formularies, and utilization management practices. We therefore agree that designating these plans as standardized plan options despite these significant differences can be potentially misleading and confusing for consumers.
We also agree that contrary to the original intention of our standardized plan option policies—simplifying the plan selection process—whether a particular plan offering is a standardized or non-standardized plan option in practice serves as yet another variable that consumers must consider during the plan selection process, introducing an additional layer of complexity. This additional variable that consumers must consider in turn complicates the plan selection process and subsequently increases the risk of suboptimal plan selection.
We also agree that the total number of plan offerings remaining similar to the total number of plan offerings before the imposition of these requirements demonstrates that these standardized plan options failed to achieve our intended result. Specifically, we note that that the weighted average total number of plans available per enrollee was only reduced from 108 in PY 2022 to 100 in PY 2025. This is despite imposing multiple layers of novel requirements for several consecutive years, which substantially increased issuer burden and caused considerable market disruption in the form of plan discontinuations. The market disruption and plan discontinuations that occurred subsequent to the imposition of these requirements is discussed in greater detail in section III.E.9. of this final rule.
We acknowledge that standardized cost sharing may facilitate more direct comparisons between some subset of all available plan offerings, especially when supplemented with the differential display features for these plans on
Furthermore, we believe that there are more effective and less burdensome alternatives for simplifying the plan selection process than continuing to require issuers to offer standardized plan options. In particular, we believe that making enhancements to plan display, choice architecture, decision-support tools, and other forms of consumer assistance on
We further considered comments stating that standardized plan options promote more predictable cost sharing, including the use of copayments and pre-deductible coverage. We do not believe it is necessary to require issuers to offer standardized plan options to achieve these outcomes. This is because issuers continue to retain the flexibility to incorporate these features into plan designs absent standardization requirements and frequently do so. As we stated in the proposed rule, we designed these plans to incorporate the most popular plan design features of many existing non-standardized plan option offerings—meaning many of these plan design features largely reflect market consensus, are not exclusive to standardized plan options, and are already frequently included in many standardized plan options currently offered through the FFEs and SBE-FPs.
For example, since the reintroduction of these standardized plan option policies in PY 2023, we finalized every annual iteration of plan designs with pre-deductible copayments as the form of cost sharing for the primary care visit benefit category at every metal level. When we initially created the plan designs for PY 2023, we based these plan designs on FFE and SBE-FP cost-sharing and enrollment data from PY 2021, which was the most recent available data at that time. In PY 2021, 91 percent of FFE and SBE-FP consumers were enrolled in plan offerings with pre-deductible copayments as the form of cost sharing for the primary care visit benefit category at the standard silver metal level. Furthermore, in the FFEs and SBE-FPs in PY 2021, the weighted average pre-deductible copayment amount for the primary care visit benefit category at the standard silver metal level was $37, while the copayment amount for this benefit category in our plan design at the standard silver metal level for PY 2023 was $40—a difference of only $3. Taken altogether, this means that this plan design feature was not exclusive to standardized plan options and was already incorporated into the vast majority of non-standardized plan option offerings—as is true for many other plan design features.
We also considered comments stating that standardized plan options help mitigate discriminatory benefit designs and reduce opportunities for risk segmentation. We note that existing nondiscrimination requirements, including those at §§ 156.125 and 156.200(e), as well as other FFE and SBE-FP QHP issuer monitoring and compliance mechanisms, continue to apply and prohibit discriminatory benefit designs. These requirements and mechanisms include, as part of Exchange QHP certification reviews, reviews for discriminatory language (which prohibit issuer marketing materials and benefit descriptions from containing language or content that discriminates against or discourages enrollment by individuals based on protected characteristics); cost-sharing outliers (which identify plans with unusually high or potentially discriminatory cost sharing relative to other plans to prevent the inclusion of plan attributes that could discourage enrollment by individuals with significant health needs); and various treatments under the treatment protocol calculator (which evaluate whether issuer utilization management policies (such as prior authorization and step therapy) are applied in a clinically appropriate and non-discriminatory manner to prevent practices that could inappropriately restrict access to medically necessary care or discourage enrollment by individuals with significant health needs). Due to their comprehensive scopes and well-established review processes, we believe that these existing protections are sufficient to address these concerns without requiring issuers to offer standardized plan options.
We further considered comments expressing concern that eliminating standardized plan options could negatively affect risk pool stability and increase premium volatility. We do not believe that continuing to require issuers to offer standardized plan options is necessary to maintain stable risk pools—especially since risk pools were relatively stable prior to the introduction of the requirement to offer these plans beginning in PY 2023. Additionally, since we designed standardized plan options to reflect and incorporate the most popular plan design features of QHPs offered in the FFEs and SBE-FPs, many non-standardized plan options that continued to be offered have these same plan design features. Thus, the discontinuation of the requirement for issuers to offer these plans would largely reflect a return to the status quo from several years ago with respect to risk pool stability and premium volatility.
Furthermore, other program features, including risk adjustment requirements (such as those under part 153) and rating rules (such as those at § 147.102) will help ensure that this discontinuation does not destabilize risk pools and does not encourage adverse selection (namely, issuers designing plans in such a manner to encourage the enrollment of healthier and lower risk consumers and discourage the enrollment of less healthy and higher risk individuals).
We also considered comments citing increasing enrollment in standardized plan options and the experience of State Exchanges that have adopted standardized plan requirements. While we acknowledge that a significant number of consumers have actively selected and enrolled in standardized plan options, we do not believe that this fact alone justifies maintaining these requirements—especially since these standardized plan options reflect the most popular plan design attributes of existing offerings and are thus largely duplicative of non-standardized plan options.
We further note that active selection of and enrollment in standardized plan options would be substantially lower without differential displaying these plans on
We also note that State Exchanges continue to retain the flexibility to adopt and implement State standardized plan option requirements, and this policy does not constrain their ability to do so. We further note that while requiring issuers to offer standardized plan options may be appropriate in those particular States, the nature of the markets in the FFEs and SBE-FPs differs substantially from the nature of the markets in those States (such as the markets in Connecticut, Massachusetts, and Vermont). Namely, the consumer populations (and by extension the unique health care needs) within the FFEs and SBE-FPs are significantly more heterogeneous in nature, and it is therefore difficult to impose an effective, uniform approach to plan design across all these States.
Finally, we acknowledge commenters' concerns regarding potential disruption to current enrollees, and we acknowledge that some enrollees may be required to transition to different plan offerings if issuers discontinue their existing standardized plan options. That said, as previously stated, standardized plan options were designed to largely reflect industry consensus on numerous fronts, and therefore we do not expect the discontinuation of standardized plan options to cause systematic disruption. Further, we expect that issuers will continue to offer a range of plans that meet consumer needs—including with plan design features previously incorporated into standardized plan options, since standardized plan options were designed to reflect the most popular plan design features in the FFEs and SBE-FPs.
In addition, as explained earlier in this section of this final rule, existing enrollment and crosswalk processes, such as those at § 155.335(j), are designed to support consumers during transitions and minimize disruption. We further reiterate that we are not requiring issuers to discontinue their standardized plan options. Instead, we are simply discontinuing the requirement for issuers to offer these plans as well as the differential display of these plans on
These commenters stated that HHS failed to adequately justify its departure from longstanding findings in the 2017, 2018, and 2023 through 2025 Payment Notices, in which HHS concluded that standardized plan options enhance consumer understanding and simplify plan comparisons by reducing variation in cost sharing. These commenters further stated that HHS did not sufficiently explain why these previously identified benefits are now afforded less weight. These commenters stated that reliance on findings of only “marginal” reductions in plan counts is insufficient, particularly given evidence that even modest improvements in plan comparability can improve consumer outcomes.
Commenters also cited research indicating that excessive plan choice can lead to consumer confusion and suboptimal plan selection due to difficulty processing complex health insurance information and fatigue—which may lead to unnecessary spending and unexpected financial harm for consumers.
For example, as we explained in the proposed rule (91 FR 6385 through 6389), the requirement to offer standardized plan options increased both the weighted average number of total plans available per enrollee and the weighted average number of total plans offered per issuer in PY 2023; introduced another variable that consumers must consider during the plan selection process; yielded comparatively low enrollment in and active selection of standardized plan options despite the differential display of these plans as well as concurrent limits on the number of non-standardized plan options; and duplicated the most popular plan design features of plans offered through the FFEs and SBE-FPs—while simultaneously inhibiting issuer innovation in plan design, constraining the degree of consumer choice, imposing substantial burden, and causing significant market disruption.
We also do not agree that the proposal failed to address prior findings regarding the potential benefits of standardized plan options. While prior rulemaking identified potential benefits related to consumer understanding and plan comparison, we stated in the proposed rule (91 FR 6385 through 6389) that these benefits have not materialized to a sufficient degree in practice to justify continuing to require issuers to offer standardized plan options and limiting the number of non-standardized plan options.
Specifically, we found that the marginal net reductions in the weighted average number of total plans available per enrollee and per issuer associated with these standardized plan option and non-standardized plan option limits and exceptions policies were modest and likely indiscernible to consumers during the plan selection process. In particular, in PY 2022, the year before introduction of the standardized plan option policies, there was a weighted average number of 108 total plans available per enrollee and a weighted average number of 16.9 total plans offered per issuer. Whereas in PY 2025 (after several consecutive years imposing novel layers of requirements), these same measures were 100 and 13.7, respectively. For the reasons stated in the proposed rule and earlier in this section of this final rule, we concluded that these marginal net reductions do not warrant the ongoing regulatory complexity, increased issuer burden, limitations on issuer flexibility
We further do not agree that the proposal fails to explain why prior findings are now afforded less weight, and we do not agree that prior findings are indeed “afforded less weight.” The proposed rule explains (91 FR 6387) that standardized plan options have operated alongside non-standardized plan options and, even when combined with limits on non-standardized plan options, have not meaningfully reduced overall plan complexity. Based on this experience, we concluded that standardized plan options are not an effective mechanism for achieving the intended goals of improving consumer experience and simplifying plan selection.
We acknowledge commenters' references to research on consumer decision-making and choice overload. However, we do not believe maintaining standardized plan option requirements is the most effective means of addressing concerns about improving consumer experience. We believe the standardized plan option policies inhibited issuer innovation in plan design, constrained the degree of consumer choice, and imposed substantial burden. As discussed earlier in this section, we believe that making improvements to choice architecture, transparency, and consumer decision-support tools are better suited to supporting informed plan selection without imposing prescriptive plan design constraints. We reiterate that we intend to continue researching such enhancements and that we encourage issuers and other DE partners to do the same.
Further, we do not agree that there is an internal inconsistency in discontinuing both standardized plan options and non-standardized plan option limits and exceptions. We determined that both the requirement to offer standardized plan options as well as imposing restrictive non-standardized plan option limits were ineffective tools for achieving their distinct intended objectives and simultaneously imposed unnecessary burden and constraints. Given that standardized plan options are offered alongside non-standardized plan options, whether a particular plan offering is a standardized or non-standardized plan option serves as yet another variable that consumers must consider during the plan selection process. This is contrary to the original intent of simplifying the plan selection process and introduces an additional layer of complexity.
Finally, the fact that eliminating these policies may result in marginal changes to the total number of available plan offerings per consumer and issuer does not render the policy arbitrary where, as here, HHS has reasonably stated its rationale for moving away from this regulatory approach and proposed, with evidence, a more effective approach for enhancing the consumer experience, increasing consumer understanding, and simplifying the decision-making process for consumers on the Exchanges.
These commenters stated that this could in turn increase plan proliferation and make it more challenging for consumers to identify coverage that best meets their unique health care and financial needs. These commenters thus suggested that differences in key plan design features, such as MOOPs, deductibles, benefit coverage, provider networks, or formularies should be required for plans to be considered meaningfully different from one another (and thus be permitted to be offered through the FFEs and SBE-FPs). In addition, these commenters recommended continuing monitoring plan offerings to ensure that any meaningful difference standard effectively prevents excessive plan proliferation and reduces consumer confusion.
Further, we do not believe that maintaining or expanding a meaningful difference standard to apply to non-standardized plan option offerings (which we also did not propose to do) is the most appropriate or effective mechanism to address these concerns at this time. We believe that such requirements would impose additional operational burdens on issuers (such as by being forced to modify a plan's benefit coverage, cost sharing, MOOP, deductible, provider network, or formulary solely to conform to such a standard—which could also cause disruption to consumers enrolled in those plans).
We also believe that such requirements would fail to consistently yield differences that are meaningful or relevant from a consumer perspective—especially based on our experience administering the meaningful difference standard that was previously codified at § 156.298 from PY 2015 through PY 2018. In fact, when we discontinued the previous version of the meaningful difference standard, we stated (83 FR 17027) that removing the meaningful difference standard would not substantially increase the number of materially similar plans from the same issuer. This is because with the standard—similar to our experience with the standard at § 156.201(c)—there were only a handful of instances of such duplicate plans out of hundreds of total plan offerings in the FFEs and SBE-FPs that had to be modified to conform with the standard at § 156.298.
We are further concerned that such imposing requirements could further constrain issuers' flexibility to design plan offerings that respond to local market conditions and consumer preferences, similar to our concern about the impact of non-standardized plan option limits, discussed in section III.E.9. of this final rule, which is contrary to our current approach. We further acknowledge commenters' recommendations that HHS continue monitoring plan offerings to prevent excessive plan proliferation and consumer confusion. We intend to continue to monitor plan offerings and consumer experience. We further note that improvements to plan display, consumer decision-support tools, and transparency on
These commenters suggested improvements such as more robust filtering capabilities, side-by-side plan comparisons, utilization-based recommendations, and targeted educational prompts to help consumers differentiate among plan options. Some commenters also recommended enabling consumers to more easily identify and filter plans based on specific characteristics, such as disease-specific offerings. Several commenters noted that emerging technologies, including tools that allow consumers to describe their health care needs in natural language and receive personalized cost projections, may facilitate the plan selection process more meaningfully than the suite of standardized plan option policies—and without the disadvantages of this approach.
In addition, several commenters emphasized the importance of clear and accessible plan information, including transparent presentation of provider network participation and cost-sharing obligations for key services such as hospital care. Commenters stated that improving the clarity and usability of plan information would better enable consumers to make informed decisions.
We also appreciate commenters' specific recommendations to enhance consumer decision-support tools on
We also agree that such tools have the potential to more meaningfully facilitate the plan selection process than employing these standardized plan option policies—and without the disadvantages of this approach. This is because consumers would have an enhanced degree of choice in terms of diverse plan offerings (with issuers no longer being constrained by these standardized plan option policies), and the search results of all available plan offerings on
We further agree with commenters on the importance of clear, accurate, and accessible plan information, including transparent presentation of provider network participation and cost-sharing obligations for key services. This information is included on
In the 2027 Payment Notice proposed rule (91 FR 6390), we proposed to exercise our authority under sections 1311(c)(1) and 1321(a)(1)(B) of the Affordable Care Act to discontinue non-standardized plan option limits and exceptions at § 156.202 effective beginning in PY 2027. Section 1311(c)(1) of the Affordable Care Act directs the Secretary to establish criteria for the certification of health plans as QHPs. Section 1321(a)(1)(B) of the Affordable Care Act directs the Secretary to issue regulations that set standards for meeting the requirements of title I of the Affordable Care Act, which includes section 1311, for, among other matters, the offering of QHPs through such Exchanges.
In the 2023 Payment Notice proposed rule (87 FR 27345 through 27347), we solicited comment on choice architecture and preventing plan choice overload. In this comment solicitation, we noted that although we continued to prioritize competition and choice on the FFEs and SBE-FPs, we were concerned about plan choice overload, which can result when consumers have too many choices in plan options. We referred to a 2016 report by the RAND Corporation reviewing over 100 studies which concluded that having too many health plan choices can lead to poor enrollment decisions due to the difficulty consumers face in processing complex health insurance coverage
With this concern in mind, in the 2023 Payment Notice proposed rule (87 FR 27345 through 27347), we stated that we were interested in exploring possible methods of improving choice architecture and preventing plan choice overload. We stated interest in exploring the feasibility and utility of limiting the number of non-standardized plan options that QHP issuers could offer through the FFEs and SBE-FPs as one option to reduce the risk of plan choice overload and to further streamline and optimize the plan selection process for consumers on the FFEs and SBE-FPs.
Accordingly, we sought comment on the impact of limiting the number of non-standardized plan options that issuers can offer through the FFEs and SBE-FPs, on effective methods to achieve the goal of reducing the risk of plan choice overload and to further streamline and optimize the plan selection process for consumers on the FFEs and SBE-FPs, the advantages and disadvantages of these methods, and if there were alternative methods not considered. We also sought comment on evidence-based approaches to enhancing choice architecture within the FFEs and SBE-FPs.
In response to this comment solicitation, in the 2023 Payment Notice (87 FR 27345 through 27347), we highlighted many commenters' specific recommendations regarding modifying choice architecture to enhance the consumer shopping experience. We also noted that several commenters supported limiting the number of QHPs that could be offered through the FFEs and SBE-FPs, explaining that adopting such an approach could lower costs for consumers, set standards for plan quality, and foster robust competition among issuers seeking entry into the FFEs and SBE-FPs. Conversely, we noted that several commenters opposed limiting the number of QHPs that could be offered through the FFEs and SBE-FPs, explaining that doing so would limit issuer flexibility to design plans based on consumer preferences and needs. We also noted that several commenters supported resuming an updated version of the meaningful difference standard, which was previously codified at § 156.298.
In the 2024 Payment Notice (88 FR 25855 through 25865), at § 156.202, we introduced limits on the number of non-standardized plan options that issuers of QHPs can offer through FFEs and SBE-FPs to four non-standardized plan options per product network type (as described in the definition of “product” at § 144.103), metal level (excluding catastrophic plans), and inclusion of dental and/or vision benefit coverage, in any service area for PY 2024, and two for PY 2025 and subsequent plan years.
In the 2024 Payment Notice (88 FR 25856 through 25857), we stated that we introduced non-standardized plan option limits for several reasons. We stated that there had been a sizeable increase in the weighted average number of total QHPs on the FFEs and SBE-FPs available per enrollee and plans offered per issuer in recent years. We stated that with this continued plan proliferation, we believed that limiting the number of non-standardized plan options that FFE and SBE-FP issuers of QHPs could offer through the FFEs and SBE-FPs would greatly enhance the consumer experience on
We stated that we believed that adopting both of these measures (in conjunction with requiring issuers to offer standardized plan options) would be the most effective method to streamline the plan selection process and to reduce the risk of plan choice overload for consumers on
In the 2025 Payment Notice (89 FR 26362 through 26375), we introduced an exceptions process allowing issuers to offer additional non-standardized plan options exceeding the limit of two per product network type, metal level, inclusion of adult dental benefit coverage, pediatric dental benefit coverage, and adult vision benefit coverage, and service area for PY 2025 and subsequent plan years, if issuers demonstrate that these additional non-standardized plans have specific design features that would substantially benefit consumers with chronic and high-cost conditions. As part of this exceptions process, each issuer must demonstrate how cost sharing pertaining to the treatment of the chronic and high-cost condition would be reduced by 25 percent or more relative to that issuer's other non-standardized plan option offerings in the same product network type, metal level, inclusion of adult dental benefit coverage, pediatric dental benefit coverage, and adult vision benefit coverage, and service area.
In the 2025 Payment Notice (89 FR 26366), we stated that we introduced this exceptions process for several reasons. Specifically, we noted that several commenters stated that reducing the non-standardized plan option limit from four in PY 2024 to two in PY 2025 would cause FFE and SBE-FP issuers to discontinue non-standardized plans with lower enrollment, which would likely be plans with designs that are attractive to a smaller number of enrollees who have relatively less common and high-cost health care needs. Commenters further stated that many of the plans that would likely be discontinued would be those that benefit consumers with chronic and high-cost conditions. Commenters stated that permitting issuers to offer additional non-standardized plan options that would provide targeted coverage specifically for medically complex populations with chronic and high-cost conditions would allow for more targeted innovation by issuers while still achieving the reduction in plan proliferation HHS has sought.
In the proposed rule, we stated (91 FR 6391) that under our proposed approach, issuers would no longer be subject to the non-standardized plan option limit of two per product network type, metal level, inclusion of adult dental benefit coverage, pediatric dental benefit coverage, and adult vision benefit coverage, in any service area at § 156.202(a) through (c), for PY 2027 and subsequent years. We also stated that issuers would similarly no longer be required to utilize the non-standardized plan option limit exceptions process at § 156.202(d) through (e) to offer additional non-standardized plan options given that they would no longer be limited in the number of non-standardized plan options they may offer. We stated that we would correspondingly remove § 156.202 from our regulations.
Similar to our proposal to discontinue the requirement for issuers to offer standardized plan options (as well as the differential display of these plans) but not to require issuers to discontinue these existing offerings altogether, in the proposed rule, we proposed to discontinue the non-standardized plan option limits and exceptions process but not require issuers to discontinue these existing offerings altogether (91 FR 6391). We stated that, instead, under the proposal, issuers would be permitted to choose whether to discontinue the chronic and high-cost condition plans originally offered through the non-standardized plan option limit exceptions process altogether or continue offering them with either the same or modified cost sharing.
We stated (91 FR 6391) that under this proposed approach, if issuers wished to discontinue the chronic and high-cost condition plans originally offered through the non-standardized plan option limit exceptions process altogether, they would be permitted to do so, and enrollees in these plans would be crosswalked to a different plan in accordance with the crosswalk hierarchy at § 155.335(j). Additionally, we stated (91 FR 6391) that if issuers wished to continue offering the chronic and high-cost condition plans originally offered through the exceptions process with the same cost sharing structures, they would also be permitted to do so, and enrollees in these plans would continue to be auto-reenrolled in these plans from one plan year to the next. Finally, we stated that if issuers wished to continue offering the chronic and high-cost condition plans originally offered through the exceptions process but also wished to modify these plans' cost sharing structures, they would be permitted to do so, but these issuers would continue to be subject to the requirements under the definition of “plan” at § 144.103 and to the uniform modification requirements at § 147.106.
We also stated (91 FR 6391) that in most scenarios where an issuer modifies the cost sharing structure of one of its chronic and high-cost condition plans originally offered through the exceptions process, the newly modified plan that was formerly the exceptions process plan would be considered a new plan and would therefore require a new plan ID. In this scenario, enrollees would be crosswalked from the discontinued plan to another plan in accordance with the crosswalk hierarchy at § 155.335(j). We stated that these enrollees could be crosswalked into the newly modified plan that was formerly the exceptions process plan, or an entirely different plan altogether, depending on the unique circumstances in each county.
However, we noted (91 FR 6391) that under the definition of “plan” at § 144.103, a State may permit issuers to make greater changes to a plan's cost sharing while still permitting that plan to be considered the same plan—thus maintaining the same plan ID. Furthermore, we noted that under § 147.106(e)(3)(iv), as long as the variation in cost sharing is solely related to changes in cost and utilization of medical care, or to maintain the same metal tier level (and other applicable requirements under § 147.106(e) are met), the modifications could be considered uniform (thus, a viable exception to guaranteed renewability).
We stated (91 FR 6391) that in the scenario where an issuer modifies what was formerly an exceptions process plan's cost sharing structure while maintaining the same plan ID, enrollees in the plan would be auto-reenrolled from one plan year to the next. We stated that in either case, whether the modification of a former exceptions process plan's cost sharing results in that plan being considered the same or a different plan, enrollees would be crosswalked in accordance with the crosswalk hierarchy at § 155.335(j), including reenrollment, if applicable.
In the proposed rule, we proposed this approach for several reasons. As discussed earlier in this section and in the section of the proposed rule addressing proposed updates to § 156.201 (91 FR 6391), for the last several plan years, we have employed a multi-faceted strategy in an attempt to streamline the consumer experience. This strategy entailed requiring issuers to offer standardized plan options, requiring these plans to meaningfully differ from one another, differentially displaying these plans, making additional enhancements to choice architecture on
As we noted (91 FR 6391) in the preamble section of the proposed rule addressing the proposed removal of § 156.201, we have accumulated 4 plan years of experience (PY 2023 through PY 2026) administering this strategy (91 FR 6385). We stated that this cumulative experience provides us with a comprehensive and nuanced perspective regarding weighing both the advantages and disadvantages of employing this strategy, whether this strategy has aligned with our originally articulated objectives, and whether this strategy has yielded the intended results.
Similar to our view on the ineffectiveness of employing standardized plan option requirements, we stated in the proposed rule (91 FR 6391) that based on this experience, we have concluded that imposing non-standardized plan option limits and permitting exceptions to this limit for chronic and high-cost condition plans is an ineffective strategy in counteracting plan proliferation and enhancing the consumer experience on
We stated (91 FR 6392) that this is because requiring issuers to offer additional plans in the form of standardized plan options increased the weighted average number of total plans available per enrollee from 108 in PY 2022, the year before the introduction of the requirement to offer standardized plan options, to 114 in PY 2023, the year in which this requirement was introduced, with most of this increase in plans being comprised of standardized plan options. Furthermore, we noted that plan proliferation as measured by the weighted average number of total plans offered per issuer (which is derived by dividing the weighted average number of total plans available per enrollee by the weighted average number of total issuers per enrollee) increased from 16.9 in PY 2022 to 17.3 in PY 2023—meaning each issuer on average tended to offer a higher number of plans after the imposition of the requirement to offer standardized plan options than the year before this requirement was made effective.
Furthermore, we stated (91 FR 6392) that even with the introduction of the non-standardized plan option limit of four in PY 2024 and its reduction to two as well as the introduction of the exceptions process in PY 2025, the net impact of both the requirement to offer standardized plan options as well as the subsequent imposition of non-standardized plan option limits and exceptions on the weighted average number of total plans available per enrollee and the weighted average number of total plans offered per issuer (including both standardized and non-
Specifically, we noted (91 FR 6392) that the weighted average number of total plans available per enrollee was reduced from 114 in PY 2023 to 100 in PY 2024 (when the non-standardized plan option limit of four was introduced) and remained constant at 100 in PY 2025 (when the limit was reduced to two and the non-standardized plan option limit exceptions process was introduced). Relatedly, we noted that the weighted average number of total plans offered per issuer decreased from 17.3 in PY 2023 to 14.7 in PY 2024 and 13.7 in PY 2025. Thus, we noted that in PY 2022, the year before this suite of policies was introduced, there was a weighted average number of 108 total plans available per enrollee and a weighted average number of 16.9 total plans offered per issuer, whereas in PY 2025 (after several consecutive years of imposing new layers of requirement), these same measures were 100 and 13.7, respectively.
We stated (91 FR 6392) that we do not believe that the marginal net reductions in the weighted average number of total plans available per enrollee and the weighted average number of total plans offered per issuer achieved by introducing this suite of standardized plan option and non-standardized plan option limit and exceptions requirements warrant imposing additional burden, impeding issuer innovation in plan design, and constraining consumer choice—especially given that these reductions are largely indiscernible to consumers during the plan selection process. We stated that this is especially true given that these metrics continue to remain significantly elevated compared to only several plan years ago. Specifically, we noted that in PY 2020, the weighted average number of total plans available per enrollee was 39, and the weighted average number of total plans offered per issuer was 11.1.
Thus, we stated (91 FR 6392) that the primary metric by which we have evaluated plan proliferation (the weighted average number of total QHPs available per enrollee in the FFEs and SBE-FPs) has remained relatively constant despite the imposition of multiple layers of requirements from PY 2023 to PY 2025 (specifically, the requirement to offer standardized plan options in PY 2023, non-standardized plan option limits in PY 2024, and the reduction of this limit and the introduction of the exceptions process in PY 2025). Further, we stated that the imposition of these requirements substantially increased burden for both issuers and HHS (that is, the burden associated with issuers creating and submitting certification applications for additional plans that would otherwise not be created and offered, and HHS reviewing and certifying these additional plans). We stated that this suite of policies creates additional fixed costs for issuers, introducing market inefficiencies. Finally, we stated that the imposition of these requirements caused a significant degree of market disruption—as reflected by the substantial number of plan discontinuations and the high number of enrollees impacted by these discontinuations, as is discussed in greater detail later in this section.
We referred readers (91 FR 6392) to the section III.E.8. of the proposed rule addressing the proposal to discontinue standardized plan options (§§ 155.20, 155.205(b)(1), 155.220(c)(3)(i)(H), 156.201, and 156.265(b)(3)(iv)) for a detailed discussion of relevant literature we also considered in our approach to the proposal to discontinue non-standardized plan option limits and exceptions.
Relatedly, we stated (91 FR 6392) that the strategy of requiring issuers to offer standardized plan options, differentially displaying these plans on
However, we stated (91 FR 6392) that in practice, given that standardized plan options continue to be offered alongside non-standardized plan options, whether a particular plan option was a standardized or non-standardized plan option served as yet another variable that consumers must consider during the plan selection process. Furthermore, we stated that in our experience, we have found when consumers are faced with a large number of heterogeneous plan options, they continue to rely primarily on premiums, networks, and issuer brand—meaning that standardizing cost sharing parameters alone (especially when doing so only for a subset of all available plan options) fails to meaningfully reduce decision complexity for consumers.
In addition, we stated (91 FR 6392) that we believe the fact that the consistently high proportion of total FFE and SBE-FP enrollment in as well as active selections (which includes both consumers currently enrolled in a QHP who are making a new plan selection as well as consumers who are enrolling in any QHP offered through the FFEs and SBE-FPs for the first time, but excludes consumers who are auto-reenrolled in their current QHP from one year to the next) of non-standardized plan options reflects the fact that consumers value the full range of choice within these plan offerings.
Specifically, we noted (91 FR 6393) that 80 percent of all consumers in the FFEs and SBE-FPs were enrolled in non-standardized plan options in PY 2023, 67 percent in PY 2024, and 67 percent in PY 2025. Furthermore, we noted that non-standardized plan options constituted 82 percent of FFE and SBE-FP active selections in PY 2023, 74 percent in PY 2024, and 82 percent in PY 2025.
Thus, we stated (91 FR 6393) that total enrollment in non-standardized plan options was higher compared to what would be expected based on the total proportion of plans that were non-standardized plan options in PY 2023 and within the expected range of deviation for PY 2024 and PY 2025. Furthermore, we stated that active plan selections for non-standardized plan options were higher compared to what would be expected based on the total proportion of plans that were non-standardized plan options in PY 2023, PY 2024, and PY 2025.
We stated (91 FR 6393) that the consistently low proportion of consumers enrolled in standardized plan options over the years suggests that these plans fail to appeal to consumers compared to corresponding non-standardized plan options—or at the very least that consumers are unable to perceive a significant difference between standardized and non-standardized plan options. We further stated that this is despite the full suite of differential display features for standardized plan options on
We stated (91 FR 6393) that without this full suite of differential display features that visually distinguishes standardized plan options from non-standardized plan options, the proportion of FFE and SBE-FP total enrollment in and active selections of non-standardized plan options would likely be considerably higher. This is because those visual markers have the effect of steering consumers to standardized plan options. We stated that we believe consumers' demonstrated preference for non-standardized plan options (as measured by both total enrollment and active plan selections) is in large part due to the fact that there is a greater degree of choice and variety in these plan offerings compared to standardized plan options.
Indeed, as we noted in the proposed rule (91 FR 6393), in the 2024 Payment Notice (88 FR 25860), many commenters who opposed imposing non-standardized plan option limits emphasized the importance of permitting issuers to maintain a diverse range of plan offerings as a mechanism to maximize the degree of consumer choice. These commenters specifically stated that imposing non-standardized plan option limits would force issuers to drastically reduce the unique plan designs they have thoughtfully developed to best serve their members' health care needs, which would in turn force consumers into a “one-size fits all” benefit offering.
Relatedly, we stated (91 FR 6393) that the combination of standardized plan option requirements as well as non-standardized plan option limits has increasingly constrained issuers' ability to offer a sufficiently broad range of plans for several plan years. We stated that this includes plans with tiered provider networks, plans with separate medical and drug deductibles (as opposed to integrated medical and drug deductibles), plans with separate medical and drug MOOPs (as opposed to integrated medical and drug MOOPs), HSA-eligible high-deductible health plans (HDHPs), and plans with more than four tiers of prescription drug coverage.
We stated (91 FR 6393) that issuers have been constrained by these requirements since they have been forced to discontinue offerings to comply with the non-standardized plan option limit. We noted that the plans that issuers have discontinued have generally been those with lower enrollment—which has often been plans with the aforementioned design features. Thus, we stated that removing this suite of requirements would grant issuers additional flexibility to once more vary plans along these parameters, which would enhance consumer choice. We further stated that removing this suite of requirements would also simultaneously reduce the issuer burden associated with creating and submitting additional QHP certification applications as well as HHS burden in reviewing and approving these applications.
Regarding market disruption that arose from issuers discontinuing plans to conform to the non-standardized plan option limit, we acknowledged (91 FR 6393) that there is a baseline rate of routine plan discontinuations on the FFEs and SBE-FPs that occur for a range of reasons unrelated to the imposition of new requirements. We noted, for example, that in the FFEs and SBE-FPs from PY 2020 to PY 2021, 17 percent of plan-county combinations were discontinued, affecting 10 percent of enrollees.
However, we noted (91 FR 6393) that from PY 2022 to PY 2023, when the requirement for FFE and SBE-FP QHP issuers to offer standardized plan options was introduced, 35 percent of plan-county combinations in the FFEs and SBE-FPs were discontinued, affecting 19 percent of enrollees. In addition, we noted that from PY 2023 to PY 2024, when the non-standardized plan option limit of four was introduced, 24 percent of plan-county combinations in the FFEs and SBE-FPs were discontinued, affecting 17 percent of enrollees. Finally, we noted from PY 2024 to PY 2025, when the non-standardized plan option limit was reduced from four to two, 24 percent of plan-county combinations in the FFEs and SBE-FPs were discontinued, affecting 15 percent of enrollees on the FFEs and SBE-FPs.
Thus, we stated (91 FR 6393) that employing these standardized plan option, non-standardized plan option limit, and non-standardized plan option limit exceptions process policies coincided with an increase in plan-county discontinuations of 18 percent and an increase in enrollees affected by these discontinuations of 9 percent compared to the years immediately preceding the introduction of these requirements (specifically between PY 2020 and 2021 and when the requirement to offer standardized plan options was introduced from PY 2022 to PY 2023). We stated that, ultimately, requiring issuers to discontinue other existing plans (to comply with the new non-standardized plan option limits) increased plan-county discontinuations and the number of enrollees affected by these discontinuations.
We acknowledged (91 FR 6394) that some portion of these plan discontinuations and the subsequent number of enrollees affected by these discontinuations is attributable to the narrowing of the AV
We stated (91 FR 6394) that, given this accumulation of data, we no longer believe that the advantages of imposing non-standardized plan option limits and exceptions (namely, a marginal net reduction in plan proliferation) outweigh the disadvantages of imposing these requirements (namely, increased burden, increased regulatory complexity, market disruption, inhibition of issuer innovation in plan design, and constrained consumer choice).
Altogether, we proposed (91 FR 6394) to discontinue non-standardized plan option limits under § 156.202(a) through (c) and the corresponding exceptions process under § 156.202(d) through (e), since we have concluded that adopting these measures (in conjunction with requiring issuers to offer standardized plan options) is an ineffective method of achieving our originally articulated objectives of employing this suite of policies to streamline the plan selection process, counteract plan proliferation, and reduce the risk of plan choice overload for consumers on
We sought comment (91 FR 6394) on this proposal. After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposal to discontinue non-standardized plan option limits and exceptions below.
Commenters that supported discontinuing non-standardized plan option limits also stated that this policy failed to effectively achieve its intended goals—streamlining the plan selection process, counteracting plan proliferation, and reducing the risk of plan choice overload for consumers—while simultaneously increasing regulatory complexity, issuer burden, and market disruption. These commenters pointed to the marginal net reductions in the weighted average total number of plans available per enrollee and issuer from PY 2022 to PY 2025 as well as the substantially increased number of plan discontinuations that coincided with the introduction of the non-standardized plan option limit of four in PY 2024 and the reduction of this limit to two in PY 2025.
We also agree with commenters that stated that this policy failed to effectively achieve its intended goals—streamlining the plan selection process, counteracting plan proliferation, and reducing the risk of plan choice overload for consumers—while simultaneously increasing regulatory complexity, issuer burden, and market disruption. We further agree with these commenters that this failure is evinced by the marginal net reductions in the weighted average total number of plans available per enrollee and issuer from PY 2022 to PY 2025 as well as the substantially increased number of plan discontinuations that coincided with the introduction of the non-standardized plan option limit of four in PY 2024 and the reduction of this limit to two in PY 2025.
Commenters also cited research demonstrating that FFE and SBE-FP enrollees experience difficulty comparing plans, including challenges understanding differences in provider networks, benefit coverage, cost sharing, and premiums.
Other commenters warned that discontinuing these limits would enable issuers to offer duplicative plans to increase visibility in FFE and SBE-FP displays and dominate search results—a noncompetitive strategy which could distort plan selection dynamics and lead to fluctuations in market share. In addition, several commenters noted that non-standardized plan option limits and exceptions have only recently been implemented and that HHS has had insufficient time to fully evaluate their effects. These commenters urged continued monitoring before making significant policy changes.
In particular, instead of streamlining the plan selection process, counteracting plan proliferation, and reducing the risk of plan choice overload for consumers (as was originally intended), we received feedback, and observed, that these non-standardized plan option limits increased regulatory complexity, issuer burden, and market disruption; inhibited issuer innovation in plan design; constrained the degree of consumer choice; only had a marginal net impact on plan proliferation; and in conjunction with the standardized plan option policies, complicated the plan selection process by introducing another variable that consumers must consider in the plan selection process.
For the reasons explained in the proposed rule (91 FR 6391 through 6394) and stated earlier in this final rule, while we acknowledge these concerns, we believe that consumers benefit from having access to a wider range of plan designs that better reflect diverse needs and preferences, that any theoretical advantages of employing these non-standardized plan options limits are outweighed by the significant disadvantages (such as inhibited issuer innovation in plan design and constrained consumer choice), and that these concerns would be best addressed by discontinuing non-standardized plan option limits.
We further do not believe that non-standardized plan option limits are the sole nor the most effective, least burdensome, or least disruptive mechanism to address these concerns. Instead, as was discussed in greater detail in section III.E.8. of this final rule, we believe that making enhancements to choice architecture, plan display, and consumer decision-support tools on
We also disagree with commenters who stated that discontinuing non-standardized plan option limits could increase the risk of adverse selection and contribute to premium volatility. We note that the non-standardized plan option limit of four was introduced in PY 2024 (with the limit being reduced to two the following year in PY 2025). Given that no such limits were in place prior to PY 2024 (and during that time, there was no evidence to suggest increased risks of adverse selection or premium volatility even when there were no limits in place), discontinuing these limits in PY 2027 would represent a return to the status quo in PY 2023 in terms of risk pool stability and premium volatility. We further note that other program features, including risk adjustment requirements (such as those under 45 CFR part 153) and rating rules (such as those at 45 CFR 147.102), are designed to mitigate adverse selection and promote market stability. Thus, we do not believe that maintaining these limits is necessary or even conducive to achieve these objectives.
We acknowledge commenters' concerns that discontinuing these limits could potentially enable issuers to offer duplicative plans to increase visibility in FFE and SBE-FP displays and dominate search results. However, we note that we do not anticipate such an occurrence at a sufficient scale to warrant the continuation of this policy. In large part, this is because there were only a handful of instances of such duplicate plans out of hundreds of total plan offerings in the FFEs and SBE-FPs in PY 2026 that issuers needed to modify to conform with the meaningful difference standard for standardized plan options at § 156.201(c).
Instead, we anticipate a return to the weighted average total number of plans available per enrollee and issuer to approximate what these metrics were before these limits were introduced in PY 2024 (since these limits only yielded marginal reductions in the first place). We also note that we will continue to monitor FFE and SBE-FP plan offerings and display practices during the annual QHP certification process and through other existing avenues through which consumers regularly submit complaints (such as the Health Insurance Casework System).
We further note that making additional enhancements to plan display and sorting methodologies on
We also considered comments stating that non-standardized plan option limits have only recently been implemented and that additional time may be needed to more comprehensively evaluate their effects. While we acknowledge that these policies were introduced several years ago, we believe that the considerations discussed above support discontinuing these limits at this time to reduce regulatory burden and increase flexibility. Our four years of cumulative experience administering these standardized plan option and non-standardized plan option limit and exception policies has provided us with a comprehensive and nuanced perspective regarding weighing both the advantages and disadvantages employing this strategy. After careful consideration, we have concluded that this strategy had failed to yield the originally intended results, as discussed throughout this section. We further believe that these concerns are better
Under our approach, issuers will have increased flexibility to design and offer a broader and more diverse array of plan options, including those with targeted benefit structures for individuals with chronic and high-cost conditions, without the need to obtain formal approval through the currently required exceptions process. We thus believe that discontinuing the exceptions process removes administrative barriers and will allow issuers to continue offering such plan designs with decreased burden. Further, nothing in this approach requires issuers to discontinue plans that are currently offered through the non-standardized plan option limit exceptions process.
In the 2027 Payment Notice proposed rule (91 FR 6394), we proposed to exercise our authority under sections 1311(c)(1)(B) and 1321(a)(1)(B) of the Affordable Care Act to defer reviews of network adequacy to FFE States, including States performing plan management, provided the State elects to conduct such reviews, and demonstrates sufficient authority and the technical capacity to conduct network adequacy reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program under proposed § 155.1050(d)(2) through (d)(4). We proposed to revise § 156.230 to clarify that HHS would continue to conduct network adequacy reviews using standards described at § 156.230(a)(2) through (a)(4) for QHP issuers that use a provider network in FFE States that do not elect to conduct their own provider access reviews, or that HHS has determined do not satisfy applicable criteria to be considered to have an Effective Provider Access Review Program, as described at proposed § 155.1050(d).
Section 1311(c)(1)(B) of the Affordable Care Act requires the Secretary to establish minimum criteria for provider network adequacy that a health plan must meet to be certified as a QHP. Section 1321(a)(1)(B) of the Affordable Care Act directs the Secretary to issue regulations that set standards for meeting the requirements of title I of the Affordable Care Act, which includes section 1311, for, among other matters, the offering of QHPs through such Exchanges.
In the Exchange Establishment Rule (77 FR 18418), we set forth minimum network adequacy standards that plans must satisfy to be certified as QHPs at § 156.230. The Exchange Establishment Rule (77 FR 18409 through 18420) provided that an issuer of a QHP that uses a provider network must maintain a network that is sufficient in number and types of providers, including providers that specialize in mental health and substance use disorder services, to ensure that all services will be accessible to enrollees without unreasonable delay. In the 2016 Payment Notice (80 FR 10830 through 10833), we revised § 156.230(a) to clarify that network adequacy requirements only apply to QHPs that use a provider network, defining such networks as networks comprised only of providers that are contracted as in-network. For PYs 2015 through 2017, the FFEs conducted network adequacy reviews of proposed QHPs for compliance with network adequacy time and distance standards.
The 2017 Market Stabilization final rule (82 FR 18346) initially deferred reviews of network adequacy for QHPs to States that HHS determined to have a sufficient network adequacy review process, an approach that was reiterated in the 2019 Payment Notice (83 FR 16930). Specifically, we deferred these reviews to States that possessed sufficient authority to enforce network adequacy standards that were at least equal to the reasonable access standard defined in § 156.230 and that had the means to assess the adequacy of plans' provider networks. In States without the authority or means to conduct network adequacy reviews, we relied on an issuer's accreditation (commercial, Medicaid, or Exchange) from an HHS-recognized accrediting entity—specifically, either The National Committee for Quality Assurance (NCQA), URAC, or Accreditation Association for Ambulatory Health Care (AAAHC). Any unaccredited issuers were required to submit an access plan to demonstrate that the proposed QHP's provider network met the requirement in § 156.230(a)(2) to demonstrate that an issuer had standards and procedures in place to maintain an adequate provider network consistent with the National Association of Insurance Commissioners' (NAIC's) Health Benefit Plan Network Access and Adequacy Model Act. To provide additional support to States, we further coordinated with States to monitor network adequacy through consumer complaint tracking and resolution.
On March 4, 2021, the United States District Court for the District of Maryland issued its decision in City of Columbus v. Cochran, which addressed a challenge to the policy of outsourcing network adequacy reviews.
Comments and evidence in question centered around assessment of States' ability to meaningfully conduct network adequacy reviews, and the use of accreditation as a basis for determining QHP issuers' satisfaction of provider network adequacy standards. Commenters stated that States' and accrediting entities' review processes do not do enough to ensure enrollees have adequate access to necessary care. In particular, the decision raised concerns about HHS' position that States' network adequacy review procedures are adequate simply because States have State-specific regulations without explaining what these entail or why they are comparable to review under Federal standards. The court also raised concerns about comments stating that State review procedures are often not adequate, have no quantitative standards for network adequacy in place, and, in many States, are complaint driven rather than preemptive, as well as comments that in some States, requirements only apply to certain types of plan designs. Comments expressing concern about relying on accreditation as a determination of network adequacy standard satisfaction stated that accreditation standards are not public, accreditors do not have regulatory authority over plans, and accreditors are not in a position to monitor network adequacy via consumer complaints or other means.
In the 2023 Payment Notice (87 FR 27322), we finalized that we would evaluate the adequacy of QHP provider networks offered through the FFEs, or of plans seeking certification as FFE QHPs, except for FFEs in States performing plan management that elect to conduct network adequacy reviews, so long as the State applies and enforces quantitative network adequacy standards that are at least as stringent as the Federal network adequacy standards established for QHPs under § 156.230 (that is, Michigan, New Hampshire, South Dakota, and West Virginia) beginning with the 2023 QHP certification cycle. Additionally, in the 2023 Payment Notice (87 FR 27322), we adopted time and distance standards at § 156.230(a)(2) to assess whether plans seeking to be certified as QHPs in all FFE States meet network adequacy time and distance requirements.
In the 2024 Payment Notice (88 FR 25740), we revised network adequacy standards at § 156.230(a)(2) to establish appointment wait time standards starting in PY 2025. We also required all individual market QHPs, including individual market SADPs, and all SHOP QHPs, including SHOP SADPs, across all Exchanges to use a network of providers that complies with the network adequacy standards, and removed the exception that these requirements do not apply to plans that do not use a provider network. A limited exception was finalized at § 156.230(a)(4) for certain SADP issuers that sell plans in areas where it is prohibitively difficult for the issuer to establish a network of dental providers.
In the 2025 Payment Notice (89 FR 26218), we finalized § 155.1050(a)(2)(i)(A) to require that State Exchanges and SBE-FPs establish and impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs under § 156.230. We also finalized § 155.1050(a)(2)(i)(B) which required that, for plan years beginning on or after January 1, 2026, State Exchanges and SBE-FPs conduct quantitative network adequacy reviews to evaluate a plan's compliance with network adequacy standards under § 156.230(a)(1)(ii), (a)(1)(iii), and (a)(2)(i)(A) prior to certifying any plan as a QHP, while providing QHP certification applicants the flexibilities described under § 156.230(a)(2)(ii) and (a)(3) and (4).
To implement the requirements for FFEs that were in place from PY 2023 and subsequent years outlined above, we published in the 2023 Final Letter to Issuers in the Federally-facilitated Exchanges
Additionally, beginning January 1, 2025, QHP issuers in the FFEs were required to meet appointment wait time standards established in the 2023 Letter to Issuers.
In the proposed rule, we stated that the preceding years of conducting reviews of QHP issuer provider network adequacy, including analyzing issuer submitted data and through discussions with States, issuers, and other various interested parties around diverse market conditions, have demonstrated that a one-size-fits all approach to provider network adequacy review is not satisfactory. We noted, for example, that issuers have highlighted to us persistent challenges in locating and contracting with enough providers of various specialties (for example, allergy and immunology, behavioral health, gastroenterology) in remote or difficult
In addition, we stated that partnerships with States performing plan management, who have elected to conduct their own network adequacy reviews, have also highlighted for us how States may innovate in their approach to conducting network adequacy reviews that are sensitive to conditions and capacity in the State. For example, we stated that we are aware of States performing plan management that assess network adequacy based on access to services rather than provider types. We stated that deferring network adequacy reviews to FFE States that demonstrate sufficient authority and the technical capacity by satisfying the criteria to demonstrate they have an Effective Provider Access Review Program would empower these States to similarly innovate and mold their network adequacy standards to the needs of consumers in their individual States. We noted, for example, that a State may find it is in the interest of their consumers to assess network adequacy using a time or a distance standard individually rather than assessing whether a QHP issuer meets a time and distance standard, make adjustments to time and distance standards that account for more remote areas or more urban areas, assess network adequacy in different ways such as through provider-enrollee ratios, expand or change the provider types they assess, and implement other innovative, State-specific approaches to identify and address the systemic issues that result in many issuers being unable to meet the network adequacy standards described at § 156.230(a)(2). We stated that a State, with its more intimate knowledge of its own demographics, topography, quantity, and density of providers, is often best positioned to evaluate local provider networks and market conditions and tailor network adequacy standards in a more nuanced way than Federal requirements.
Thus, in recognition of the crucial role States have in developing and enforcing network adequacy standards and because we believe that States are often best positioned to evaluate local provider networks and market conditions, we proposed at § 155.1050(d), for PY 2027 and subsequent years, to allow FFE States, including States that perform plan management, to conduct reviews for provider access for issuers' plans that use and do not use a provider network, provided that we determine the State has sufficient authority and the technical capacity to conduct the reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program as described at proposed § 155.1050(d)(2) through (d)(4) and the State elects to conduct these reviews. Concurrently, we proposed, for plan years beginning on or after January 1, 2027, to amend § 156.230, including by (1) revising the section heading to state, “Provider access standards for network plans”; (2) revising § 156.230(a)(1) to remove the requirement that a QHP must use a provider network and clarify that the standards described in § 156.230(a)(1)(i), (ii), and (iii) apply to a QHP that uses a network of providers; (3) revising § 156.230(a)(2)(i) and (ii) to clarify that requirements for issuers of QHPs to meet time and distance standards and appointment wait time standards at § 156.230(a)(2) only apply in States that do not elect to conduct their own provider access reviews or States that we have determined do not do not satisfy the criteria to be considered to have an Effective Provider Access Review Program as described at proposed § 155.1050(d); (4) revising the exception at § 156.230(a)(3) to clarify that it applies only when HHS is conducting network adequacy reviews; and (5) revising § 156.230(a)(4) to conform with proposed revisions to § 156.230(a)(1).
Additionally, in recognition of the traditional role that all State Exchanges and SBE-FPs have in developing and enforcing network adequacy standards and to align with proposed changes for FFE States detailed in section III.D.18 of the proposed rule, we proposed to remove the requirements under § 155.1050(a)(2)(i) and (ii) for State Exchanges and SBE-FPs to establish and impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs under § 156.230 and to no longer require State Exchanges and SBE-FPs to conduct quantitative network adequacy reviews to evaluate a plan's compliance with network adequacy standards under § 156.230(a)(1)(ii), (a)(1)(iii), and (a)(2)(i)(A) prior to certifying any plan as a QHP. Instead, we proposed to restore § 155.1050(a)(2) to a pre-PY 2025 policy and require that State Exchanges and SBE-FPs ensure that each QHP provides sufficient access to providers in a manner that meets standards specified in § 156.230(a)(1)(ii) and (iii) for network plans, or proposed § 156.236(a) for non-network plans, as applicable. This proposal is discussed in more detail in section III.D.18 of the proposed rule and this final rule.
In addition, as we stated in section III.E.12. of the proposed rule, we also now believe that there are alternative administrable regulatory standards that can ensure satisfaction of provider sufficiency requirements by QHPs that do not use traditional contracted networks of providers and that, especially in light of efforts to improve health care price transparency, an expanded definition of how to achieve sufficient access to providers would allow for innovations in plan design. Our proposal to allow for QHP certification of plans without a provider network is described in detail in section III.E.12. of the proposed rule.
Our proposed revisions to §§ 156.230(a)(2)(i) and (ii) and (a)(3) reflect our proposed change in policy at § 155.1050(d) to defer network adequacy reviews to FFE States that elect to perform such reviews, and that demonstrate they have sufficient authority and the technical capacity to conduct these reviews by satisfying the criteria to be considered to have an Effective Provider Access Review Program as described at § 155.1050(d)(2) through (d)(4), while also retaining Federal standards for HHS to utilize in conducting network adequacy reviews, including time and distance and appointment wait time standards, in States that do not elect to conduct such reviews or do not demonstrate they have sufficient authority and the technical capacity to conduct these reviews.
As we stated in the proposed rule, network adequacy analyses are often highly data-intensive. We stated that because the FFE has economies of scale
We stated that we would consider a State to have sufficient authority and the technical capacity to conduct network adequacy reviews if the State meets criteria set forth at proposed § 155.1050(d)(2) through (4) (discussed at section III.D.18. of the proposed rule). The proposal also clarified that if States are not determined to have an Effective Provider Access Review Program, then HHS would continue to perform provider access certification reviews consistent with § 156.230(a)(1) through (a)(4) for network plans and proposed § 156.236 for non-network plans.
We stated that, as proposed at § 155.1050(d)(2), an FFE State with an Effective Provider Access Review Program would be required to ensure that a QHP issuer that uses a network of providers ensures that its network of providers, as available to all enrollees, includes ECPs in accordance with § 156.235, and maintains a network that is sufficient in number and types of providers, including providers that specialize in mental health and substance use disorder services, to ensure that all services will be accessible without unreasonable delay, and is consistent with the rules for network plans of section 2702(c) of the PHS Act. We proposed at § 155.1050(d)(3) that an FFE State with an Effective Provider Access Review Program must ensure that a QHP issuer that does not use a network of providers (a non-network plan) provides access to a sufficient choice 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 all services will be accessible without unreasonable delay.
We further stated (91 FR 6397) that under our proposal at § 155.1050(d)(4), a State operating an FFE that elects to conduct its own provider access reviews would be considered to have an Effective Provider Access Review Program by satisfying the following requirements:
(1) The FFE State has established provider access standards that are set forth in State statute or regulation which are consistent with provider access standards as set forth in § 156.230(a)(1)(ii) and (iii), and reports to HHS whether the State has delegated authority to some entity other than the State Department of Insurance to perform any or all provider access review activities;
(2) The FFE State's provider access review process includes reporting systems for State-required provider access metrics and documentation of methodology and the State provides descriptions of all data collection systems, resources, templates, and methodologies used by the State or the State's delegated entity to collect and review provider access data; and the State receives from issuers data and documentation in connection with provider access standards that are sufficient to conduct the examination;
(3) The FFE State's provider access review process includes procedures to ensure full and ongoing compliance with State provider access standards and enforcement frameworks applicable to issuers that fail to meet provider access standards so that those issuers come into compliance with State provider access standards, including standardized processes to assess efforts the issuer is pursuing to come into compliance with State provider access standards, and implementing any justification and exception processes for issuers that have not yet or cannot meet provider access requirements;
(4) The FFE State establishes and maintains clear procedures and timeline requirements for regular provider access reviews, including processes that ensure reviews occur prior to each plan year's QHP certification cycle;
(5) The FFE State has a process for monitoring and addressing consumer-related provider access complaints to ensure sufficient access to providers consistent with section 1311(c)(1)(B) of the Affordable Care Act and as set forth in State statute; and
(6) The FFE State has a process to collect and review information sufficient to show that non-network plans provide access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full.
We proposed at § 155.1050(d)(5) that we would determine whether a State has an Effective Provider Access Review Program based on information available to us that demonstrates whether the program meets the criteria described at proposed § 155.1050(d)(4). We proposed at § 155.1050(d)(6) that we may also grant an exception to these criteria if we determined that making such an exception is in the interests of qualified individuals in the State or States in which such Exchange operates. We also proposed at § 155.1050(d)(7) that we would notify the FFE State electing to conduct provider access certification reviews of our decision in writing regarding whether the State is determined to have an Effective Provider Access Review Program and can therefore conduct its own provider access certification reviews. We proposed that we would also reserve the right at any time to evaluate whether, and to what extent, a State's circumstances have changed such that it has established, or no longer has, an Effective Provider Access Review Program under § 155.1050(d). We proposed that these evaluations may result in HHS assuming provider access review responsibilities or transitioning such responsibilities back to the State.
We also proposed that a State would need to demonstrate that it meets applicable criteria for both network plans and non-network plans under § 155.1050(d), if it decides to certify such plans, to receive the designation to have an Effective Provider Access Review Program. We stated that this would mean that a State would not be permitted to elect to conduct provider access certification reviews for only network plans and not non-network plans, if it certifies such plans, or vice versa. We stated that we believe this is important, as some QHP issuers may choose to offer both network and non-network plans, and centralizing reviews to a single entity, whether the FFE State or HHS, for the same issuer would reduce administrative inefficiencies that may result if the FFE State and HHS have to coordinate provider access certification review results across a range of network and non-network plans. We stated that we also believe that review authority being limited to a single entity, either the FFE State or HHS, would allow both network and non-network plans to undergo consistent, standardized reviews conducted by the same reviewing entity. We further stated that we believe this would ensure similar requirements and methodologies would be applied fairly across network and non-network plans and reduce potential differences in provider access review results. We stated that, overall, just as with network plans, non-network plans would be required to ensure sufficient access to a range of providers in a manner consistent with section 1311(c)(1)(B) of the Affordable Care Act.
We stated in the proposed rule that rather than specifying the detailed methodology and standards States would be expected to use to determine sufficient access to providers, the proposed factors focus on processes to ensure a State has sufficient authority and the technical capacity to conduct network adequacy reviews. We further stated that the approach, as set forth at proposed § 155.1050(d), would provide for more than a perfunctory review of authority, but rather would thoroughly investigate States' ability to ensure provider access sufficiency in line with § 156.230(a)(1)(ii) and (iii). We stated that this proposed approach would allow States more flexibility in defining network adequacy standards that reflect their local markets, provider availability, geographic considerations, and demographics. We further stated that we would evaluate if the network adequacy review program in the State has established network adequacy standards that are set forth in State statute and regulation that are consistent with those set forth in § 156.230(a)(1)(ii) and (iii).
The first proposed criterion for evaluation requires that the State has established provider access standards that are set forth in State statute or regulation, which are consistent with provider access standards as set forth in § 156.230(a)(1)(ii) and (iii), and reports to HHS whether the State has delegated authority to some entity other than the State Department of Insurance to perform any or all provider access review activities. We stated that this criterion would be crucial as it addresses whether or not the State has sufficient authority to conduct provider access reviews. We noted that it would also be important for a State to report to us whether the State has delegated authority to some other entity to perform provider access review activities so we understand how the State is handling provider access review data and to whom it entrusts such data.
The second proposed criterion states that the State's provider access review process includes reporting systems for State required provider access metrics and documentation of methodology and the State provides descriptions of all data collection systems, resources, templates, and methodologies used by the State, or the State's delegated entity, to collect and review provider access data; and the State receives from issuers data and documentation in connection with provider access standards that are sufficient to conduct the examination. We stated that this information would be important for us to understand processes a State has in place to appropriately assess provider access. We stated that under our proposal, we would evaluate whether the State's provider access data, documentation, and analysis practices are sufficient to ensure it can conduct provider access reviews.
The third proposed criterion provides that the State's provider access review process includes procedures to ensure full and ongoing compliance with State provider access standards and enforcement frameworks applicable to issuers that fail to meet provider access standards so that those issuers come into compliance with State provider access standards, including standardized processes to assess efforts the issuer is pursuing to come into compliance with State provider access standards, and implementing any justification and exception processes for issuers that have not yet or cannot meet provider access requirements. We stated that this information would be important for reasons similar to the previously discussed proposed factor. We also noted that ensuring that adequate compliance processes exist would bolster the robustness of any network adequacy review to ensure sufficient provider access.
The fourth proposed criterion requires that the State establish and maintain clear procedures and timeline requirements for regular provider access reviews, including processes that ensure reviews occur prior to each plan year's QHP certification cycle. We stated that we believe that it would be important for States to have clearly established procedures for network adequacy review that are not reactive but are preemptive to ensure that plans being offered on an Exchange provide sufficient access to providers and so that consumers shopping for a plan have that guarantee.
The fifth proposed criterion requires the State to have a process for monitoring and addressing consumer-related provider access complaints to ensure sufficient access to providers consistent with section 1311(c)(1)(B) of the Affordable Care Act and as set forth in State statute. We stated that this criterion would be important because provider access can change often during the year. We stated that for plans using a provider network, contracts may be executed or terminated throughout a plan year for various reasons. We stated that any inaccuracies or out-of-date information contained in provider directories can create confusion or be misleading to consumers. Additionally, we noted that consumers may have trouble actually making appointments with network providers due to lack of availability of appointments. We further stated that for plans without a provider network, we anticipate that providers that accept a benefit amount as payment in full may also change frequently depending on market conditions, negotiations, and competition.
The sixth proposed criterion requires the State to have a process to collect and review information capable of demonstrating whether non-network plans provide access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full. We stated that this criterion would be important to ensure that, should a State offer non-network plans, these plans also ensure sufficient access to providers.
We stated that while these proposed criteria for assessing whether a State has an Effective Provider Access Review Program are comprehensive, we believe this approach would provide ample flexibility to States to determine the best
We stated that under our proposed approach, we would seek to work in partnership with States and would provide numerous resources to States to utilize as they see fit to further develop and enhance their network adequacy review capabilities. We stated that, for example, we would offer extensive resources originally developed for Federal network adequacy review during the annual QHP certification cycle as States may work to further develop network adequacy standards and review methods that best suit the conditions of their distinct consumer populations and needs. We stated that these tools, including a network adequacy template, other supporting document templates, manual data validation resources, and FAQs, could provide support to interested States as States continue to develop and implement processes to standardize any issuer-submitted data during their reviews, leveraging HHS' extensive experience in identifying efficient data formats and validation processes. We noted that this comprehensive support system would be available to States as States continue to develop and implement individualized network adequacy standards and review processes that are most appropriate and protective for their own consumers.
In summary, we proposed, for plan years beginning on or after January 1, 2027, to amend § 156.230, including (1) revising the section heading to state, “Provider access standards for network plans”; (2) revising § 156.230(a)(1) to remove the requirement that a QHP must use a provider network and clarify that the standards described in § 156.230(a)(1)(i), (ii), and (iii) apply to a QHP that uses a network of providers; (3) revising § 156.230(a)(2)(i) and (ii) to clarify that requirements to meet time and distance standards and appointment wait time standards at § 156.230(a)(2) only apply to States that we have determined do not satisfy the criteria to be considered to have an Effective Provider Access Review Program or that do not elect to conduct their own provider access reviews of issuers as described at proposed new § 155.1050(d); (4) revising exceptions to the aforementioned requirements at § 156.230(a)(3) to apply only when HHS is conducting network adequacy reviews; and (5) revising § 156.230(a)(4) to conform to revisions to § 156.230(a)(1). We stated that through these proposed changes, we would defer provider access reviews, for network and non-network plans, to FFE States, including States performing plan management, provided the State elects to conduct such reviews, and demonstrates it has sufficient authority and the technical capacity to conduct network adequacy reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program, as detailed at proposed § 155.1050(d)(2) through (4).
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy with minor modifications. We are modifying § 155.1050(a)(1) to differentiate between FFE States with an Effective Provider Access Review program and FFE States without an Effective Provider Access Review Program. We are revising § 155.1050(d)(1) to add a phrase clarifying that if States do not elect to conduct provider access reviews, CMS will continue to conduct reviews of QHP issuer provider access consistent with requirements under § 156.230 for network plans and, for plan years beginning on or after January 1, 2028, under § 156.236 for non-network plans and to acknowledge the delay in implementation of the policy, as finalized in this rule, allowing certification of non-network plans as QHPs beginning on or after January 1, 2028. Additionally, we are modifying § 155.1050(d)(4)(iv) to clarify that, to have an Effective Provider Access Review Program, the FFE State must establish and maintain clear procedures and timeline requirements for regular provider access reviews, including processes that ensure reviews occur prior to “completion of” each plan year's QHP certification cycle. We are also modifying § 155.1050(d)(4)(vi) to require that the State have a process to collect and review information described under § 156.236(b)(4) through (b)(9) from non-network plans. We are modifying § 155.1050(d)(5) to clarify that CMS will determine whether a State has an Effective Provider Access Review Program based on information that demonstrates whether the program meets criteria described under § 155.1050 (d)(2) through (d)(4).
We summarize and respond below to public comments received on this proposal.
We recognize that duplicative Federal and State review processes can create administrative burden for issuers without commensurate benefit to consumers. By allowing States that meet clearly defined criteria to conduct network adequacy reviews, we aim to reduce this duplication while preserving consumer protections. We believe this approach appropriately balances the goals of State flexibility and Federal oversight.
We also affirm our commitment to maintaining Federal network adequacy reviews as the default and to continued provider data collection, including collection of time and distance and appointment wait time (AWT) data for all FFE States, including States that elect to conduct provider access reviews and are determined to have an Effective Provider Access Review Program. This provider data will be available to States determined to have an Effective Provider Access Review Program, in a standardized format, to assist them in their network adequacy analysis. States that do not meet criteria described at § 155.1050(d)(2) through (d)(4), or that choose not to conduct their own reviews, will continue to be subject to Federal oversight. This ensures that consumers in all States benefit from a baseline level of protection, regardless of the State's capacity, authority, or approach to network adequacy oversight.
With regard to the request to delay implementation due to operational concerns, while we acknowledge the risk that some issuers operating in multiple FFE States may experience an increased administrative burden and are mindful of the potential operational implications for them, we will not be delaying implementation of this proposal. We reiterate that that the default status will be for the continuation of Federal network adequacy reviews and we anticipate most issuers will not experience much change operationally as it relates to network adequacy reviews in PY 2027 compared to PY 2026. In the event an FFE State elects to conduct provider access certification reviews and subsequently meets the criteria to be considered to have an Effective Provider Access Review Program for PY 2027, we will promptly communicate with issuers in that FFE State to inform them that the State is determined to have an Effective Provider Access Review Program for PY 2027. We also encourage issuers to communicate concerns with any States in which they operate and request guidance regarding expectations should the State elect to conduct provider access reviews for PY 2027.
We recognize that these concerns, including concerns regarding a lack of baseline quantitative standards and concerns that proposed changes would reverse trends in the reduction of network adequacy-related lawsuits and consumer complaints, reflect a broad apprehension about the absence of baseline quantitative requirements, including time and distance standards, that would apply uniformly to FFE States electing to conduct their own reviews. We acknowledge that quantitative standards can serve an important function in supporting
We are also committed to working in partnership with FFE States that elect to conduct provider access reviews and are determined to have an Effective Provider Access Review Program by providing technical assistance and support, including through continued network adequacy data collection and through maintaining the requirement that all QHP issuers in all FFE States conduct AWT Secret Shopper Surveys. This empowers us to provide additional resources to FFE States as well as to retain the ability to continue to compare and monitor QHP issuer performance.
Additionally, there is also nothing barring FFE States from adopting Federal time and distance and appointment wait time standards, in whole or part, if the State determines this is in the best interest of consumers in their State. We have seen this approach in practice as some States that have transitioned from FFEs to State Exchanges have outright adopted or mirrored our current quantitative time and distance standards. For example, as of PY2027 Georgia continues to implement the network adequacy standards, including time and distance standards and appointment wait time standards, established by CMS.
One commenter specifically noted that requiring uniform standards would better support consumers in understanding their plans and assessing whether those plans are in compliance with network adequacy requirements, particularly for appointment wait times.
In this context, many commenters, including those that acknowledged support for State flexibility, called on CMS to maintain clear baseline Federal standards to address common challenges across jurisdictions, and to preserve confidence in the QHP certification process.
However, uniform policy requiring identical time and distance standards across all FFEs that elect to conduct provider access reviews and are determined to have an Effective Provider Access Review Program would not appropriately capture the realities of local provider availability, provider willingness to contract with issuers, and various geography. The needs of consumers in Alaska, for example, are fundamentally different from those of consumers in Florida, due to differences in geography, population size and distribution, and age of the States' populations.
We reiterate that we do not believe a one-size-fits all approach is satisfactory, as evidenced through our experience in conducting network adequacy reviews, and through discussions with States, issuers, and other various interested parties around diverse market conditions. As we noted in the proposed rule (91 FR 6458), for example, issuers have highlighted to us persistent challenges in locating and contracting with enough providers of various specialties (for example, allergy and immunology, behavioral health, gastroenterology) in remote or difficult to access areas of a State. We further noted that States have brought to our attention various geographic constraints that impact QHP issuers' ability to satisfy time and distance requirements and have made suggestions to assess a QHP issuer's ability to meet a time or a distance standard individually, rather than requiring it to meet a standard that assesses time and distance together, which may be insurmountable due to a topographical constraint such as a body of water or navigating roads in mountainous terrain. In these instances, variability in reviews has the potential to work to the benefit of the consumers, and the closer proximity of State regulators will work to support robust reviews in their own States as State regulators have intimate knowledge of
We reiterate that we believe the criteria established under § 155.1050(d)(2) through (d)(4) for an FFE State to demonstrate it has an Effective Provider Access Review Program serves as robust means to ensure States have sufficient authority and the technical capacity to conduct provider access reviews. We discuss the importance of these criteria earlier in this final rule in detail. Additionally, our continued network adequacy data collection from issuers in these States will allow us to continue to monitor QHP issuer performance and provide support to States. The State could then use this network adequacy data to supplement their reviews, according to needs of their State's consumers. There is also nothing barring FFE States from adopting Federal time and distance and appointment wait time standards under § 156.230, in whole or part, if the State determines this is in the best interest of their consumers.
One commenter further stated that monitoring network adequacy is part of the Secretary's statutory duty and that Congress had an explicit intent to require uniform standards applicable to all Exchanges throughout the country.
The policy we are finalizing in this rule is very different than the previous policy which deferred network adequacy reviews to FFE States. It establishes a structured, criteria-based pathway through which FFE States may elect to conduct provider access reviews while retaining CMS as the default review entity. and this policy also preserves meaningful Federal oversight, as we will continue to require QHP issuers in all FFE States to continue to submit network adequacy data prior to QHP certification and to conduct AWT Secret Shopper Surveys, regardless of whether we or the FFE State is conducting provider access reviews. This policy recognizes the unique capability of States to address the specific needs of their own consumers in a way that can be much more nimble, targeted, and flexible than is possible at a Federal level. We reiterate that a State, with its more intimate knowledge of its own demographics, topography, quantity, and density of providers, is often best positioned to evaluate local provider networks and market conditions and tailor network adequacy standards in a more nuanced way than Federal requirements. We discuss this in greater detail earlier in this final rule.
The network adequacy policy vacated in the
Additionally, we are confident, for the reasons stated earlier in this final rule, that the criteria the FFE State must meet to be determined to have sufficient authority and the technical capacity to conduct provider access reviews, as described at § 155.1050(d)(4), will ensure a high bar to conduct provider access reviews and a baseline level of consistency across FFE States. In particular, under § 155.1050(d)(4)(i), the FFE State must establish provider access standards that are set forth in State statute or regulation, meaning they are publicly available, and are consistent with the Federal provider access standards described at § 156.230(a)(1)(ii) and (iii). Additional, non-exhaustive examples of criteria that will ensure a level of consistency and consumer confidence in QHP certification across FFE States, that were not present in the previously vacated policy, include requirements that the FFE State share its provider access review process with us, including reporting systems, access metrics, and methodology; that the review processes include procedures around ongoing compliance and enforcement of provider access standards; that clear review timelines be established with reviews completed prior to QHP certification; and that processes be in place for monitoring and addressing consumer complaints.
This policy seeks to empower FFE States that elect to conduct these reviews and are able to demonstrate sufficient authority and the technical capacity to do so with a level of flexibility intended to allow them to implement review programs that best fit their consumer needs, market conditions, and resource availability. This may include implementing reviews that are different from our quantitative time and distance review and reviews that are potentially more qualitative in nature, however, for the reasons stated earlier in this final rule, we believe we have developed a robust, comprehensive set of criteria that must be met and thus are confident FFE States that elect and that are determined to have Effective Provider Access Review Programs will conduct provider access reviews that are of a high quality and protect consumers.
Additionally, another difference in this policy is that we will continue to collect provider data from all QHP issuers in all FFE States, regardless of who is conducting the review, to maintain a level of awareness of QHP issuer provider networks and an ability to be responsive to consumer and interested parties complaints. All QHP issuers in all FFE States will also continue to conduct Appointment Wait Time Secret Shopper Surveys during the plan year using the provider data submitted to us during QHP certification. For the reasons stated earlier in this section of this final rule, we are confident that this policy will ensure a baseline level of consumer protection and access to care while empowering FFE States to innovate and invest in improving access for consumers through addressing concerns more locally and through the ability to make adjustments in standards and compliance requirements in a nimbler and more informed way than we are able.
We acknowledge the commenter concerns regarding the wide variation in network review practices across States, the assertion that States rarely take
Regarding a call to delay implementation of this policy, we will be finalizing the policy as proposed for PY 2027. We acknowledge the operational concerns issuers may have in the event an FFE State they operate in elects to and is determined to meet the criteria to have an Effective Provider Access Review Program, but we believe that some FFE States may already be prepared to conduct these reviews. For example, some FFE States performing plan management have already elected to conduct network adequacy reviews in prior plan years. These States have already demonstrated sufficient authority and technical capacity in prior plan years to conduct provider access reviews, and may therefore already be positioned to meet the criteria to have an Effective Provider Access Review Program in PY 2027 and subsequent years. In our partnerships with these States, they have also highlighted how States may innovate in their approach to conducting network adequacy reviews that are sensitive to conditions and capacity in the State. We also want to reiterate that there is no requirement for FFE States to take on provider access reviews for PY 2027. If FFE States wish to elect to conduct provider access reviews, we encourage—and would require—them to take the time necessary to ensure they have established an Effective Provider Access Review Program that meets HHS standards. We will also notify issuers in FFE States if their State elects to conduct provider access reviews and is determined to have an Effective Provider Access Review Program. We encourage issuers and other interested parties to communicate and work directly with their State, if they have concerns surrounding when an FFE State may elect to conduct provider access reviews and any processes and expectations surrounding the way FFE States will conduct these reviews. We are also committed to providing necessary guidance and technical assistance to support States and issuers as they navigate this process. We will continue collecting network adequacy data, including time and distance and appointment wait time data from all FFE issuers, including FFE States determined to have an Effective Provider Access Review Program, with a view to make it available in a standardized format to assist them in their network adequacy analysis. We also offer extensive resources originally developed for Federal network adequacy review during the annual QHP certification cycle as States may work to further develop network adequacy standards and review methods that best suit the conditions of their distinct consumer populations and needs. These tools, including a network adequacy template, other supporting document templates, manual data validation resources, and FAQs, provide support to interested States as States continue to develop and implement processes to standardize any issuer-submitted data during their reviews, leveraging our extensive experience in identifying efficient data formats and validation processes.
We have made clear in this proposal, that should the four FFE states performing plan management functions that currently conduct their own network adequacy reviews also elect to conduct provider access reviews and be determined to have an Effective Provider Access Review Programs, they can tailor network adequacy standards to reflect State-specific needs, just as any other FFE State with an Effective Provider Access Review will be able to. This will allow this group of FFE States the flexibility, to tailor network adequacy standards to best reflect the needs of their State. We also clarify that we will work closely with FFE States that conduct plan management functions that have been previously approved to conduct their own network adequacy reviews in previous plan years to assist in a smooth transition to determine if they have Effective Provider Access Review Program in place if they elect to continue to conduct provider access reviews.
We will retain the exceptions process as it provides flexibility to accommodate FFE States who may be developing innovative methods to assess for provider access but may be, for example, temporarily not clearly meeting a criterion to be determined to have sufficient authority and the technical capacity to conduct provider access reviews and retains room for potential methods and scenarios beyond what we have explicitly described in § 155.1050(d)(2) through (4), which may ultimately benefit consumers in those States. Additionally, while we may consider an appeals process in future rule making, we are not developing an appeals process at this time, but do view the exceptions process as a route that provides comparable flexibility to an appeals process in that if an FFE State is electing to conduct provider access reviews but is aware of criteria they may or will not meet, the exceptions process retains flexibility and offers an open line of communication between the FFE State and HHS to determine if an exception is appropriate and the FFE State can otherwise be determined to have sufficient authority and the technical capacity to conduct provider access reviews.
We are choosing to retain provider data collection requirements for all QHP issuers in all FFE States as we believe this allows us to remain responsive to consumer and other interested parties complaints while providing additional support to FFE States with an Effective Provider Access Review Program. We want to reiterate that QHP issuers in FFE States with an Effective Provider Access Review Program will not be reviewed by us for compliance with our network adequacy standards.
As to the request to develop standard definitions to describe provider specialties and county designations, we believe that these are not necessary as there is already a level of standardization around provider specialty definitions and county type designations. We will not be requiring a common methodology to measure access or requirements for FFE States to conduct oversight of provider availability throughout the plan year as we believe this runs counter to the goals of this policy to allow FFE States flexibility in developing methodologies that are most responsive to specific needs of the State. However, we do want to highlight that to be determined to have sufficient authority and the technical capacity to have an Effective Provider Access Review Program, an FFE State must meet the requirements listed at § 155.1050(d)(4)(ii) which includes a requirement to submit a description of its methodology to us, and these FFE States must also comply with the requirement at § 155.1050(d)(4)(iv) which requires that FFE States conduct reviews prior to the completion of QHP certification. The latter requirement does not prevent the FFE State from additionally conducting mid-year reviews.
As it relates to the request that we publicly disclose all information submitted to us by the State, including our written determinations and decisions to re-evaluate States, and require States to submit an annual report on their network adequacy review activities and standardized network adequacy metrics, we will not be including these as requirements as it may risk disclosing QHP issuer confidential business information,
As it relates to the comment requesting that we audit FFE States with Effective Provider Access Review Programs, at this time we will not include any additional requirements or develop timelines or processes for proactive audits, but we will consider it for future plan year rulemaking. Due to the nascent state of the policy and the expectation that it may take a few plan years before we see many FFE States electing to conduct and satisfy the criteria to have Effective Provider Access Review Programs, we believe that, currently, the addition of a proactive audit would be an unneeded additional burden on States that are or will be the process of initial qualification. Though, we will consider this for future rule-making we feel we first must gain a clear understanding of the number of FFE States who elect to conduct provider access reviews, receive their initial submission of the contents of their Effective Provider Access Review Programs, and understand how they intend to conduct these reviews before we can begin to develop an auditing process. In the meantime, we also view the continued collection of provider data from all QHP issuers, including those in FFE States determined to have an Effective Provider Access Review Program, as a means of maintaining awareness of provider access relative to our Federal time and distance standards, should complaints arise from interested parties.
Regarding requests for public facing documentation of an FFE State's network adequacy standards, we believe that the criteria described under § 155.1050(d)(4) that an FFE State must meet to be determined to have an Effective Provider Access Review Program, specifically the requirement that the State have its provider access standards set forth in statute or regulation, satisfies this request. We would refer FFE States with an Effective Provider Access Review Program to our Network Adequacy QHP Certification web page as a model for items to make publicly available regarding provider access reviews. Regarding notifications of and updates on any proposed timelines for an FFE State to demonstrate that it will meet standards to become an Effective Provider Access Review Program, we note that numerous factors may influence a State's timeline that may cause frequent revision, which may ultimately cause more confusion for the public. However, we plan to publicly share a list of States that have been determined to have an Effective Provider Access Review Program once that determination has been made. We will continue to evaluate the appropriate scope and format of any necessary public disclosures and highly encourage interested parties to engage with their State regulators to achieve a level of transparency that all parties find satisfactory.
In the 2027 Payment Notice proposed rule (91 FR 6399), for PY 2027 and subsequent plan years, we proposed changes to QHP certification requirements for essential community providers (ECPs) included within a network plan issuer's provider network. First, we proposed to reduce the minimum percentage requirement (also referred to as the “ECP thresholds” or “ECP threshold requirements”) from 35 to 20 percent. (The minimum percentage requirement specifies a minimum percentage of participating ECPs that must be included within a network plan issuer's provider network based on the total available ECPs within the issuer's service area). Second, we proposed to change the narrative justification regulation text at § 156.235(a)(3) and (b)(3) to be consistent with systems changes and existing issuer ECP data submission requirements as part of ECP certification reviews. Third, as further discussed in this section, we proposed at new § 155.1051 to allow FFE States, including States performing plan management, to elect to conduct their own ECP certification reviews of QHP issuers' plans provided that the State has sufficient authority and the technical capacity to conduct these reviews, demonstrated by satisfying applicable criteria established by HHS to be considered an Effective Essential Community Provider (ECP) Review Program.
Section 1311(c)(1)(C) of the Affordable Care Act directs the Secretary to establish by regulation certification criteria for QHPs, including criteria that require QHP issuers to include ECPs within health insurance plan networks. ECPs include providers that serve predominantly low-income and medically underserved individuals, such as health care providers described in section 340B(a)(4) of the PHS Act and section 1927(c)(1)(D)(i)(IV) of the Act. We first implemented the above statutory provisions of the Affordable Care Act and codified ECP standards at § 156.235 in the Exchange Establishment Rule (77 FR 18310).
Sections 156.235(a)(2)(i) and (b)(2)(i) stipulate that a plan applying for QHP certification to be offered through an FFE has a sufficient number and geographic distribution of ECPs if it demonstrates, among other criteria, that its provider network includes as participating providers at least a minimum percentage, as specified by HHS, of available ECPs in each plan's service area collectively across all ECP categories defined under § 156.235(a)(2)(ii)(B). As stated in § 156.235(a)(2)(i) and (b)(2)(i), for purposes of satisfying this minimum percentage requirement, also known as the ECP threshold requirement, multiple providers at a single location count as a single ECP toward both the available ECPs in the plan's service area and the contracted ECPs included in the issuer's network for calculating the threshold.
The minimum percentage requirements have been modified over the years (for example, 20 percent, 30 percent, 35 percent) to accomplish different policy and operational priorities, such as to reduce regulatory burden (82 FR 18373, 83 FR 17025), to align with market conditions (82 FR 18373, 83 FR 17025), to expand access to care for consumers (87 FR 27336, 88 FR 25882), and to promote broader networks (87 FR 27336, 88 FR 25882). For example, for QHP certification for PY 2018, we reduced the minimum percentage requirement from 30 to 20 percent to substantially reduce the regulatory burden on issuers (due to issuers needing to submit less data on provider contracts with ECPs to demonstrate satisfaction of the ECP standard under § 156.235), while still requiring issuers to include a sufficient number and geographic distribution of ECPs in their networks (82 FR 18373). These minimum percentage requirements have been set at 35 percent since PY 2023 (87 FR 27336). In the 2024 Payment Notice (88 FR 25882), we also began to apply these minimum percentage requirements separately to two existing types of ECP categories that comprise more than 60 percent of all facilities on the HHS ECP List: FQHCs and family planning providers, in accordance with revisions to § 156.235(a)(2)(i) and (b)(2)(i).
At a high level, to meet the ECP threshold requirements under § 156.235, issuers have been required to contract with at least 35 percent of available ECPs in each plan's service area to participate in the plan's network (that is, the overall ECP threshold requirement), at least 35 percent of available FQHCs that qualify as ECPs in the plan's service area (that is, the FQHC threshold requirement), and at least 35 percent of available family planning providers that qualify as ECPs in the service area (that is, the family planning provider threshold requirement).
To reduce administrative burden for QHP issuers, we proposed (91 FR 6399) to reduce the overall threshold, FQHC threshold, and family planning provider threshold requirements from 35 to 20 percent for both medical QHP and SADP issuers in FFE States, including States performing plan management, for PY 2027 and thereafter. We stated that we would consider medical QHP and SADP issuers to have satisfied the overall threshold requirement if these issuers contract with at least 20 percent of available ECPs in each plan's service area collectively across all ECP categories defined under § 156.235(a)(2)(ii)(B) to participate in the plan's provider network. Additionally, we stated that medical QHP issuers would be considered to have satisfied the separate FQHC and family planning provider threshold requirements by contracting with at least 20 percent of available FQHCs that qualify as ECPs in the plan's service area and at least 20 percent of available family planning providers that qualify as ECPs in the plan's service area, respectively. We also stated that SADP issuers would be considered to have satisfied the separate FQHC threshold requirement by contracting with at least 20 percent of FQHCs offering dental services in the plan's service area. We stated that the calculation methodology for determining if an issuer meets the threshold requirements would be consistent with previous years.
In the proposed rule (91 FR 6400), we stated that we believe reducing the overall threshold, FQHC threshold, and family planning provider threshold requirements from 35 to 20 percent would provide additional flexibility for QHP issuers to build provider networks that comply with the ECP Standard under § 156.235. We further stated that we believe reverting to the previous 20 percent minimum percentage that issuers were accustomed to at the establishment of the FFE in PY 2014 and during PYs 2018 through 2022 would minimize disruptions for issuers in adjusting to meet the threshold requirements. We stated that in the past, several commenters on the Market Stabilization final rule (82 FR 18373) supported our proposals to decrease ECP threshold requirements, commenting that the lower threshold requirement would reduce the administrative burden on issuers, especially for those issuers in rural areas or States with few ECPs. We welcomed comments on if the proposed threshold percentage would still enable enrollees to access ECPs in rural areas and would not impose barriers to entry for issuers in rural areas by discouraging issuers from expanding into such areas (91 FR
Lastly, we stated that we continue to recognize concerns shared previously by commenters related to potential access to care barriers when reducing ECP threshold requirements in the past (82 FR 18373). We noted that when ECP threshold requirements were set at or reduced to 20 percent in previous years (PY 2014, PYs 2018 through 2022), we expanded efforts to ensure continued access to care to ECPs within an issuer's provider network. We continuously monitored potential issues raised by consumers and escalated any ECP access concerns identified through monitoring efforts by performing direct outreach to QHP issuers, as appropriate, including as part of post-certification monitoring and compliance efforts. Similarly, we stated that we would continue to monitor potential issues and undertake efforts to ensure consumers maintain adequate access to ECPs, and we would address any concerns through future guidance and/or possible rulemaking, as appropriate.
We sought comment on this proposal to reduce the overall threshold, FQHC threshold, and family planning provider threshold requirements from 35 to 20 percent. We received many comments from a variety of commenters that represent issuers, provider-based advocacy organizations, ECPs, and consumers.
After considering these comments and for the reasons outlined in the proposed rule and this final rule, we are not finalizing this proposal. Accordingly, HHS will retain the existing threshold requirements at 35 percent. We summarize and respond to public comments received on this proposal below.
Commenters raised an array of concerns regarding access to care and other downstream impacts to safety-net providers that such a reduction in threshold requirements may perpetuate, especially for low-income and medically underserved individuals that rely on ECPs. Commenters believed this would weaken one of the few statutory safeguards within the Affordable Care Act that is intended to protect access to safety-net providers. Commenters stated that lowering threshold requirements would narrow and destabilize provider networks, affecting a consumer's reliable access to ECPs as participating providers in their issuer's provider network. Some commenters noted that this may widen existing gaps in provider networks between “theoretical network coverage” and “practical access,” which are influenced by providers no longer accepting new patients or an issuer's plan, or even “ghost networks”
Commenters further stated that if issuers include fewer ECPs within their provider networks as in-network providers due to this proposal, then consumers may experience disruptions in established relationships with existing ECPs, which may push some consumers to change providers. Other commenters noted that reducing the number of in-network providers may further limit enrollee choice, increase waiting times, cause families to travel farther for care, make consumers forgo needed services, or necessitate that consumers switch plans to stay with their provider of choice.
In contrast, some commenters, including issuers, supported the proposal to reduce the threshold requirement from 35 to 20 percent. These commenters reasoned that this would reduce contracting burden while still maintaining meaningful inclusion of ECPs within an issuer's network. One commenter stated that a minimum percentage of 35 percent may force plans to include any willing ECP regardless of their quality or cost-efficiency to meet regulatory requirements, and reducing the minimum percentage may allow plans to focus on curating a network of higher-quality ECPs. Lastly, one commenter stated that they would support a proposed reduction in the threshold requirement, provided issuers continue to ensure at least one ECP category per county in the issuer's service area is included in their networks.
In particular, we recognize the valid points that consumers raised regarding the existence of ghost networks or “theoretical networks” and the ECP threshold reduction potentially widening gaps in access already impacted by ghost networks, leading to no guarantee that all ECPs that an issuer contracts with are truly available and even more so if less ECPs are in-network with the issuer. We agree with commenters that these are important issues that need to be addressed, and that maintaining the existing threshold requirement could mitigate some of these effects while we conduct further analysis. While additional policy solutions would likely be required to address the specific issue of ghost or theoretical networks, which are beyond both the scope and purpose of this proposal, we appreciate the commenters' attention and feedback.
We also recognize concerns raised by commenters that reducing the number of in-network ECP facilities may further limit enrollee choice, and increase wait times, cost, and consumer burden due to the need to travel farther for care, potentially leading to consumers forgoing needed medically necessary services, including specialty care. We believe that retaining the existing minimum threshold would help stabilize the number of ECPs within current issuer networks at the current level, which would assist in addressing commenters' concerns that the threshold reduction would compromise enrollee choice and increase wait times and cost due travel time for specialized care.
Furthermore, we understand that some commenters believe that a specific minimum percentage may incentivize some issuers to contract with additional providers or facilities to meet requirements regardless of quality and that a lower minimum percentage may allow issuers to focus more resources on curating a network of higher quality ECPs. While it is possible that the specific minimum percentage could produce tradeoffs in the extent to which issuers consider the quality versus quantity of providers and facilities in their network, we believe that assuring consumers have more choice in the ECPs available within issuer's network and service area and adequate access should be prioritized. HHS can help facilitate this by setting a specific minimum percentage to ensure consumers have access to ECPs, but we do not currently set parameters on quality and cost-efficiencies for ECPs nor how issuers choose which qualified ECPs to include in their networks, as issuers are best equipped to consider these factors when deciding which providers are in their networks. Issuers retain the discretion to select among HHS-approved, qualified ECPs when curating their networks. The pool of eligible ECPs already reflects a baseline standard of eligibility and qualifications, as ECPs are reviewed and approved by HHS and other Federal partners
Lastly, regarding the commenter who supported a threshold reduction if the category per county requirement was retained, we confirm that issuers must continue to offer a contract to at least one ECP category per county in the issuer's service area and networks, as we did not propose to remove this requirement.
However, commenters in support of the proposal stated that a reduction in threshold requirements may help lower costs for consumers with savings from a decrease in administrative costs, if issuers have more flexibility to evade contracts with higher-cost providers that increase premiums. These commenters also reasoned that lower threshold requirements would allow issuers more resources to account for other variables in their network designs, such as workforce shortages and improving care coordination, while still ensuring consumers have access to ECPs. One commenter believed there was little evidence to prove that the previous 20 percent threshold harmed access to care when in effect; though, many commenters opposing this proposal stated that reducing administrative burden is an insufficient reason to reduce threshold requirements, which increase the risk of impacting patient care.
Additionally, we believe commenters raised important concerns regarding the financial stability of ECPs, including the financial strain of declining margins, disproportionate shares of uncompensated care, and low reimbursement rates. These cost-related concerns and risks to the financial stability of ECPs warrant additional consideration and analysis before finalizing any reduction in the threshold requirement. We remain open to understanding more directly from ECPs how specific minimum percentages influence an ECPs' ability to successfully negotiate contracts with QHP issuers.
Furthermore, in response to comments that supported reducing threshold requirements due to lower administrative costs for issuers and greater flexibility in network design, we understand that a reduced threshold requirement may reap these benefits, but we remain more concerned about the impact of this policy on ECP financial stability and consumer out-of-pocket costs. While one commenter stated that there is no substantive evidence that the previous 20 percent threshold negatively impacted access to care, we believe the potential for harm to vulnerable populations warrants a particularly cautious approach. Lastly, we hope that recent HHS initiatives to reduce issuer administrative burden and costs during QHP certification will further mitigate these concerns; for example, MPMS enhancements to allow issuers to import ECP data from their previous year's QHP application, filter options to only display applicable ECPs meeting specific ECP requirements, and a new ECP calculation workspace that provides direct feedback to issuers on performance and how to close gaps.
We will continue to monitor ECP inclusion trends and may revisit the threshold requirements in future rulemaking if evidence supports a revision. In the meantime, we reiterate that as crucial safety-net providers, ECPs must continue to treat patients on a sliding fee schedule and regardless of ability to pay; thus, regardless of the specific minimum percentage, ECPs should continue to serve low-income, medically underserved individuals regardless of insurance status and not subject individuals to excessive out-of-pocket costs far beyond their ability to pay. Thus, in this way, we agree with commenters that it is important to ensure low-income, medically underserved individuals receiving care at ECPs are not exposed to significant out-of-pocket costs.
Commenters also responded to HHS' comment solicitation on whether there is an alternative threshold percentage that is more effective and appropriate, including threshold percentages that may be targeted to specific geographic areas where issuers may require additional flexibilities to meet threshold requirements, and a percentage that strikes the appropriate balance between issuer flexibility and enrollee access. Specifically, some commenters recommended maintaining the threshold requirement at 35 percent or an alternative threshold between 20 and 35 percent until CMS can publish additional data to evaluate enrollee access to ECPs and impact on premiums. One commenter believed the existing 35-percent threshold is too low and should be increased. A few commenters suggested that CMS at least maintain the FQHC threshold requirement at 35 percent, create a new threshold requirement for ECPs that treat serious illnesses (for example, Cancer Hospitals, Ryan White Providers, Community Mental Health Centers, etc.), or require issuers that seek to include in their network around 20 percent of available ECPs in the issuer's service area to demonstrate that ECP access for underserved populations will be maintained.
We thank commenters who highlighted our progress in expanding protections for populations served by ECPs, as evidenced by higher rates of issuer compliance due to most issuers
Commenters further shared additional implications that a reduction in the FQHC threshold may have on dental services. Multiple commenters that represent dental health centers shared that FQHCs serve as crucial dental safety-net providers that provide dental care and treat severe dental infections for enrollees who often face financial, geographic, and insurance-related barriers to accessing routine dental care. These commenters were concerned that the reduction of the FQHC threshold may have a compounding disadvantage for safety-net dental providers alongside broader proposals to reinstate the prohibition on coverage of routine non-pediatric dental services as an essential health benefit.
Furthermore, some commenters were similarly concerned over the proposed reduction in the family planning provider threshold. Commenters reasoned that family planning providers serve as the safety-net for sexual and reproductive health care, women preventive care and screening, and counseling, and that these providers have relied on the family planning provider thresholds as points of leverage during contract negotiations with Exchange insurers. Commenters added that family planning providers have experienced significant, increasing financial pressure and operational strains in recent years to serve patients due to funding disruptions, thus losing additional revenue from contracts with insurers may further disrupt timely access to care and worsen maternal health outcomes.
In addition, we take note of the concerns raised by commenters that family planning providers have experienced significant financial pressures and operational strains in recent years due to funding disruptions, and the concern that a reduction in the threshold requirement would potentially correspond to the loss of revenue from insurer contracts if issuers do not renew contracts with ECPs due to lower threshold requirements. Not finalizing this proposal would allow us to further examine these concerns in more depth. Additionally, we will continue monitoring consumer access to FQHC and family planning provider, and consider potential future revisions to these threshold requirements as needed.
Additionally, we proposed to change the narrative justification regulation text at § 156.235(a)(3) and (b)(3) to be consistent with system changes, current HHS operational processes, and existing issuer ECP data submission requirements as part of ECP certification reviews.
However, as we stated in the proposed rule, since beginning to collect this narrative justification information in PY 2014, we have instituted multiple refinements and modernizations to this process in recent years, including through innovations and standardizations to ECP data collection by implementing the ECP User Interface (UI)
In the proposed rule, we stated that due to these technical enhancements, along with other process efficiencies and resources provided to issuers (for example, Final Plan Year ECP Lists, outreach activities, and change reports), we have been able to efficiently obtain relevant quality data to adequately perform ECP certification reviews while reducing the time and resources required by issuers to submit supporting information, including the narrative justifications required by § 156.235(a)(3) and (b)(3). The ECP data obtained by issuers during the QHP certification process details which qualified ECPs have contracts executed with the issuer within each of the issuer's provider networks and service areas, which allows us to calculate an issuer's satisfaction of the ECP standard. This ECP data also identifies opportunities to alleviate gaps in an issuer's network and service area to ensure reasonable and timely access to ECPs by identifying additional ECPs an issuer may contract with to meet the ECP standard, while also highlighting different contract negotiation statuses that may explain why an issuer has not yet executed a contract with a specific provider.
Therefore, we proposed to modify and simplify this regulatory language at § 156.235(a)(3) and (b)(3) to remove the narrative justification and description requirement so that the regulatory language simply requires that an issuer include as part of its QHP application the status of contract offers to qualified ECPs available in the network plan's service area. As stated above, we believe that continuing to collect contract negotiation status data from issuers is essential for performing ECP certification reviews. We stated that not only does this data allow us to monitor an issuer's progress toward contracting with a specific ECP and learn the rationale for why an issuer has yet to offer a contract with a specific ECP, the type of contract negotiation status an issuer selects for an ECP also determines whether the issuer will receive credit for that ECP toward satisfaction of the threshold, category per county, and Indian health care requirements under the ECP Standard. For example, if an issuer designates that an ECP rejected their contract offer in MPMS as part of their QHP application, the issuer will receive credit towards their efforts to offer a contract despite it being rejected as part of the calculations for the category per county and Indian health care requirements under § 156.235(a)(2)(ii), but will not receive credit as part of the calculations for the threshold requirements under § 156.235(a)(2)(i) and (b)(2)(i), which require that contract offers be fully executed with an ECP to receive credit. We stated that overall, collecting these contract statuses within the ECP UI in MPMS has allowed us to conduct ECP certification reviews that are as fulsome as certification reviews informed by narrative justifications, since the same information previously collected through narrative justifications is still received within MPMS but submitted by issuers in a simplified format through pre-populated contract status options that reduces issuer burden without written narratives required.
Moreover, we stated that this data had previously been collected through ECP narrative justifications, but the ECP UI enhancement now allows us to gather this information from issuers in a simplified and standardized format through various pre-populated fields, which eliminates the need for issuers to provide open-ended written descriptions that may be more time consuming for issuers that are continuing to work toward satisfaction of the ECP standard. In the ECP UI, this data is mainly collected from the status of contract negotiations. For example, the issuer could designate in its QHP application the contract negotiation status with an ECP for its networks by selecting if a contract was executed, a contract offer was made and awaiting a response, or a contract was not offered due to no response following issuer outreach, as some of the available standardized options.
Additionally, we noted that issuers are not required to designate the contract negotiation status for all available ECPs within their service area in their QHP application. We stated that we understand the total number of ECPs
We sought comment on this proposal to modify the existing narrative justification requirement to be consistent with current ECP data submission requirements as part of QHP certification.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on this proposal below.
In addition to outreach efforts and MPMS modifications to collect justification-related information from issuers, we have implemented more widespread supports and resources that have effectively assisted issuers in meeting ECP requirements and reduced the number of issuers who have needed to submit detailed narratives for not meeting the ECP requirements under § 156.235. When we first codified narrative justification requirements at § 156.235(a)(3) and § 156.235(b)(3) in the 2016 Payment Notice (80 FR 10838), we stated that “[w]e expect the need for issuers to submit such [narrative] justifications to decrease over time as issuers further develop their networks in adherence to HHS standards.” Since then, we launched our ECP Annual Application and Renewal Form (formerly called “ECP Petition Site”) initiative on December of 2015 to allow providers the opportunity to request to be added to the HHS ECP List and update their provider data on the ECP List. We have actively maintained and strengthened the HHS ECP List since the establishment of this initiative by ensuring the list more actively reflects the universe of qualified available ECPs in each service area, conducting outreach to providers to verify their information, and confirming prospective providers satisfy certain criteria prior to receiving a qualified ECP status. These efforts have provided issuers with a useful resource to identify providers that qualify for inclusion in an QHP issuer's plan network toward satisfaction of the ECP standard under § 156.235, which has assisted more QHP issuers in meeting the ECP standard and decreasing the number of QHP issuers needing to submit narrative justifications. Therefore, we continue to believe that the proposed modifications to § 156.235(a)(3) and § 156.235(b)(3) are appropriate, and we are finalizing these modifications so that the regulatory language simply requires that an issuer include as part of its QHP application the status of contract offers to qualified ECPs available in the network plan's service area.
To align with proposals in sections III.D.18 and III.E.10 of the proposed rule that would provide FFE States with additional flexibilities to conduct their own network adequacy reviews of QHP issuers operating in their States as long as they have sufficient authority and the technical capacity to conduct these reviews, demonstrated by satisfying criteria established by HHS to be considered an Effective Provider Access Review Program, we proposed to adopt new flexibilities for FFE States to conduct ECP certification reviews of QHP issuers' plans in their States provided that the State is determined by HHS to have an Effective ECP Review Program, as discussed later in this section. In proposing flexibilities for
Thus, beginning with PY 2027, we proposed to provide the opportunity for FFE States, including States performing plan management, to elect to conduct their own ECP certification reviews of QHP issuers' plans provided that the State demonstrates it has sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria established by HHS to have an Effective ECP Review Program to ensure reasonable and timely access to ECPs for low-income, medically underserved individuals. We set forth this proposal at new § 155.1051.
Over the years, we have deferred network adequacy reviews of QHPs to FFE States that were determined to have a sufficient network adequacy review process (82 FR 18346, 83 FR 16930). In determining whether it was appropriate to defer network adequacy reviews to FFE States, we considered a States' legal authority to enforce network adequacy standards and conduct network adequacy reviews, the means to conduct assessments on the adequacy of plans' provider networks, and the ability of States to enforce minimum access standards established by HHS (for example, reasonable access standards defined under § 156.230). In contrast, we have not historically deferred ECP certification reviews wholly to FFE States, in part due to the complexity of conducting ECP certification reviews, which require sufficient technical capacity and resources that may not be readily available to States. However, as we stated in the proposed rule, given the prior experience of many FFE States in reviewing issuer submitted network adequacy data and some FFE States in reviewing ECP data (for example, States performing plan management), we believe it is appropriate to reconsider a FFE State's desire, legal authority, and technical capability to effectively conduct ECP certification reviews. We noted that some States performing plan management have experience conducting ECP certification reviews prior to PY 2026 due to previous data integration and system limitations that prevented HHS from being able to conduct these reviews before we implemented the ECP UI in MPMS, which eventually allowed us to effectively conduct these reviews for issuers operating in States performing plan management.
In the proposed rule, we recognized that States possess unique knowledge on local factors related to ECP reviews, such as on market conditions, geographic constraints, areas in the State with limited economic resources, provider shortages, workforce issues, and population demographics. We stated that the States' unique knowledge of these various local factors, in particular, could strengthen ECP certification reviews, which often involve identifying low-income areas and geographic areas with health professional shortages. We further stated that a State's local knowledge of low-income areas and geographic areas with health professional shortages within the State could effectively help locate facilities in these areas that may qualify as ECPs to both measure access to ECPs across the State and for possible inclusion of these ECPs within an issuer's network towards satisfaction of the ECP standard under § 156.235. Lastly, we stated that a State's unique knowledge of local factors may allow States to innovate their approach to conduct ECP certification reviews that are more sensitive and tailored to local conditions and provider capacity in the State. We noted, for example, that a State may choose to implement additional or alternative access standards for mental health facilities, a type of ECP, and consider these standards during ECP certification reviews if the State is experiencing many Mental Health Professional Shortage Areas that necessitate tailored approaches to ensure consumers have increased access to mental health facilities within their networks.
Additionally, we stated that we believe several States already have robust ECP requirements in place, including quantitative measures to oversee the number or percentage of ECPs included in an issuer's network operating in their State. We noted, for example, that a Government Accountability Office (GAO) report in 2022 found evidence that approximately 19 States reported having a quantitative standard for ECPs when reviewing individual and group plans.
Lastly, we noted (91 FR 6402) that States have stated interest in the past for us to grant them with additional flexibility to conduct reviews of ECP data. For example, in response to our proposal in the 2026 Payment Notice proposed rule (90 FR 4506) to allow HHS to conduct ECP certification reviews of QHP issuers in States performing plan management, one State that operates a State Exchange stated that each State's market demands tailored approaches to meet their unique needs, which may be more effectively addressed through State-level decision making and reviews of issuer-submitted ECP data.
For all these reasons, we stated that we believe FFE States may have the legal authority, technical capacity, expertise, and interest to conduct their own ECP certification reviews. Thus, beginning PY 2027 and thereafter, we proposed to allow FFE States, including States performing plan management, to elect to perform their own State reviews of issuer-submitted ECP data provided the State demonstrates sufficient authority and technical capacity by meeting the applicable criteria, as determined by HHS, to have an Effective ECP Review Program. We stated that an FFE State would be granted an Effective ECP Review Program designation if we determine it meets all applicable requirements described for this program under proposed § 155.1051. We stated that we believed establishing applicable requirements under proposed § 155.1051 for FFE States to demonstrate they have an Effective ECP Review Program is necessary to ensure States have the authority and technical capacity to conduct these ECP certification reviews in a way that
We stated that we continued to believe that HHS should continue to primarily conduct ECP certification reviews as the default approach for issuers' plans applying for certification to be offered as QHPs through an FFE, including States performing plan management, except if an FFE State elects to conduct ECP certification reviews and is determined to have sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria to be considered to have an Effective ECP Review Program. We stated that we believed Federal ECP certification reviews are highly valuable for several reasons.
First, we noted (91 FR 6403) that ECPs serve predominately low-income, medically underserved individuals, and these populations often experience higher rates of illness and are less equipped to field high out-of-pocket costs; additionally, the services furnished by ECP facilities are often more highly specialized with greater levels of acuity and expense,
Second, we stated that while we were aware of many States that have qualitative and/or quantitative network adequacy regulatory standards that are comparable to standards under § 156.230 (including with respect to time and distance and appointment wait time requirements) and experience conducting such reviews, less is known about to what extent States may have different and separate requirements for ECPs, integrate ECP and network adequacy requirements together under one standard, or do not have standalone ECP requirements at all. For this reason, we stated that we believed HHS retaining primary responsibility over conducting ECP certification reviews as the default approach is appropriate, at least until we learn additional information from FFE States on their ECP requirements as part of the Effective ECP Review Program determination process. To broaden knowledge on this issue, we solicited comments on different ways that FFE States, including States performing plan management, currently implement State-specific requirements for ECP standards and how these requirements may be comparable to or different from ECP requirements implemented at § 156.235.
Third, we stated that through interested party engagement throughout the years, we are also aware that some State Departments of Insurance may have limited resources and bandwidth to conduct ECP certification reviews, which are highly complex and data intensive. We stated that in the past, these State Departments of Insurance supported HHS conducting ECP certification reviews due to State resource limitations. We further stated that we have expanded our data collection capabilities and means to efficiently and adequately conduct ECP certification reviews over the years, such as through the development of the ECP List
Accordingly, we proposed to set forth the criteria for an Effective ECP Review Program by adding § 155.1051 to part
In alignment with the proposal in section III.E.12. of the proposed rule to allow plans that do not use a network (non-network plans) to receive QHP certification, we stated that we would also provide additional flexibilities to FFE States to conduct ECP certification reviews of non-network plans if they are determined to have an Effective ECP Review Program. We further stated that, similar to the approach for network plans, we would perform ECP certification reviews for non-network plans under proposed § 156.236 if FFE States do not satisfy criteria for having an Effective ECP Review Program. We stated that an FFE State would need to demonstrate that it meets applicable criteria for both network plans and non-network plans (under proposed § 155.1051(b) through (c)), and the sufficient authority and technical capacity to conduct reviews of such plans (as assessed under proposed § 155.1051(e)), if they decide to certify non-network plans, to receive a designation as having an Effective ECP Review Program. We also stated that this would mean an FFE State would not be permitted to elect to conduct ECP certification reviews for only network plans and not non-network plans, if they certify non-network plans, or vice versa. However, we stated that if an FFE State notifies us that it does not intend to certify non-network plans within their State and consequently does not offer these plans to consumers on the FFEs operating in their State altogether (regardless of if the State or HHS would conduct ECP certification reviews), then we would continue to review whether an FFE State meets all applicable criteria for only network plans during the Effective ECP Review Program determination process. For additional details regarding the criteria for the Effective ECP Review Program under proposed § 155.1051 and how these criteria would pertain to reviews of non-network plans in FFE States electing to conduct ECP certification reviews, we referred readers to the discussion under sections III.D.19 and III.E.12.e of the proposed rule.
Furthermore, to ensure that issuers in FFE States continue to meet ECP requirements issued under section 1311(c)(1)(C) of the Affordable Care Act, and consistent with § 156.235 for network plans, we proposed in § 155.1051(b) that FFE States with an Effective ECP Review Program must ensure that a QHP issuer with a provider network includes in its provider network a sufficient number and geographic distribution of ECPs, where available, to ensure reasonable and timely access to a broad range of such providers for low-income individuals or individuals residing in Health Professional Shortage Areas within the QHP's service area, in accordance with the Exchange's network adequacy standards. Furthermore, we stated that we continue to believe that to protect low-income, medically underserved populations, and to ensure that enrollees in all FFEs have a minimum standard for consumer protections on reasonable access to providers and that disparities in access are minimized across FFE States, issuers in FFE States with an Effective ECP Review Programs must continue to demonstrate that they meet State requirements to ensure reasonable and timely access to ECPs that are consistent with requirements of the ECP Standard under § 156.235. Thus, we proposed in § 155.1051(c) that FFE States with an Effective ECP Review Program must have established ECP requirements that are set forth in State statute or regulation. We stated that FFE States must demonstrate that these established ECP requirements ensure that issuers with a provider network in their State meet all of the following requirements that promote a sufficient number and geographic distribution of ECPs: the minimum percentage requirements under § 156.235(a)(2)(i), the Indian health care provider requirement under § 156.235(a)(2)(ii)(A), and the category per county requirements for each of the eight ECP category types described under § 156.235(a)(2)(ii)(B). In this manner, we stated that we believe that FFE States having ECP requirements consistent with the three aforementioned requirements would help maintain access to ECPs.
However, we recognized that FFE States may have alternative, distinct ECP requirements to ensure a sufficient number and geographic distribution of ECPs are included within an issuer's network to address various local conditions unique to each State. We stated, for example, some FFE States may have time and distance requirements that issuers must satisfy for enrollees to access certain types of ECPs; some FFE States may have different minimum percentage requirements than those described under § 156.235(a)(2)(i),
In addition, we stated that for an FFE State to conduct ECP certification reviews, under our proposal, the FFE State would need to first express its interest to HHS and submit an attestation for having an Effective ECP Review Program. We stated that an FFE State would have the choice to submit an attestation for an Effective ECP Review Program, Effective Provider Access Review Program (described in section III.E.10. of the proposed rule), or both. We further stated that this means that an FFE State can elect to conduct their own ECP certification reviews, provider access certification reviews, or
(1) The State's legal authority to review whether plans applying for QHP certification meet ECP requirements, including relevant State regulations and statutes;
(2) Evidence that the State's requirements are consistent with ECP requirements under proposed § 155.1051(c)(1) through (c)(3) that promote a sufficient number and geographic distribution of ECPs, or the State's explanation of how its alternative ECP requirements promote a sufficient number and geographic distribution of ECPs to ensure reasonable and timely access to ECPs;
(3) A description of the State's definition of an ECP, if different from the definition under § 156.235(c), including relevant categories and eligibility criteria that the State uses to determine whether a facility qualifies as an ECP;
(4) Whether the State utilizes the Federal ECP List or has a process it uses to identify qualified ECPs that may be included within a network plan's provider network;
(5) Whether the State utilizes the Federal ECP List or has a process it uses to identify qualified ECPs that may accept a non-network plan's benefit amount as payment in full;
(6) A description of data collection systems, resources, templates, or methodologies used by the State to collect and review ECP data;
(7) Whether the State generally collects information from QHP issuers regarding the status of contract offers for network plans or offers of benefit amounts as payment in full to an ECP for non-network plans;
(8) Whether the State has delegated authority to some other entity other than the State Department of Insurance to perform ECP any or all review activities;
(9) Whether the State has compliance reviews, follow-up procedures, and enforcement frameworks applicable to issuers that demonstrate inadequate networks of ECPs so that those issuers come into compliance with State ECP requirements, including standardized processes to assess efforts the issuer is pursuing to come into compliance with State ECP requirements and any justification and exception processes for issuers that have not yet or cannot meet ECP requirements;
(10) Whether the State has a process for monitoring and addressing consumer-related complaints regarding access to ECPs to ensure sufficient access to ECPs consistent with section 1311(c)(1)(C) of the Affordable Care Act and set forth in State statute.
The first proposed factor under § 155.1051(e)(1) requires that the FFE State has established ECP requirements that are set forth in State statute or regulation. We stated (91 FR 6405) that this factor is crucial since it identifies whether the FFE State has sufficient legal authority to issue regulations to establish ECP requirements, and that it has the authority to conduct ECP certification reviews to ensure QHP issuers meet such requirements.
The second proposed factor under § 155.1051(e)(2) requires evidence that the FFE State's ECP requirements are consistent with ECP requirements under proposed § 155.1051(c)(1) through (c)(3) that promote a sufficient number and geographic distribution of ECPs, or the FFE State provides a rationale to describe how its alternative State ECP requirements promote a sufficient number and geographic distribution of ECPs to ensure reasonable and timely access to ECPs. We stated that this factor is important to ensure that an FFE State's requirements are consistent with those under § 156.235 for network plans and under proposed § 156.236 for non-network plans, so that these requirements continue to maintain access to ECPs especially if they differ from those ECP requirements under § 156.235 and proposed § 156.236.
The third proposed factor under § 155.1051(e)(3) considers the FFE State's definition of an ECP, if different from the definition under § 156.235(c), and relevant categories and eligibility criteria that the FFE State uses to determine whether a facility qualifies as an ECP. We stated that this factor acknowledges that FFE States may have different categories of ECPs compared to those described under § 156.235(c), including that some FFE States may have chosen to expand the categories of facilities that may qualify to be an ECP in the State. We stated that an understanding of the FFE State's definition of an ECP is necessary to ensure the State satisfies statutory requirements under section 1311(c)(1)(C) of the Affordable Care Act which requires the Secretary to issue regulations to ensure QHPs include within their networks certain categories of ECPs, such as those specified in section 340B(a)(4) of the PHS Act and entities described in section 1927(c)(1)(D)(i)(IV) of the Act.
The fourth and fifth proposed factors under § 155.1051(e)(4) and (e)(5) evaluate an FFE State's process to identify qualified ECPs that may be included within a network plan's provider network, or qualified ECPs that accept a non-network plan's benefit amount as payment in full, respectively; or whether it utilizes the Federal ECP List to identify qualified ECPs. As stated in the discussions above, we stated that we believe it is critical for the FFE State to have a process to identify qualified ECPs, “where available.” We stated that understanding whether the FFE State utilizes the Federal ECP List or has its own process to identify qualified ECPs is crucial to evaluate the FFE State's satisfaction of the requirements under section 1311(c)(1)(C) of the Affordable Care Act which requires the Secretary to issue regulations to ensure QHP issuers include within health insurance plan networks those ECPs, “where available,” that serve predominately low-income, medically underserved individuals. We also stated that an FFE State implementing a process to identify qualified ECPs, or even the FFE State's
The sixth proposed factor under § 155.1051(e)(6) considers if the FFE State has data collection systems, resources, templates, or methodologies to collect and review ECP data. We stated that this information would be important for HHS to understand processes a FFE State has in place to efficiently collect large, complex amounts of an issuer's ECP data and their ability to meaningfully leverage that data to apply assessment methodologies to measure access to ECPs across the State. We also stated that this information would offer additional evidence to demonstrate an FFE State's technical capacity by indicating the different documentation, resources, and expertise it has developed to have the means to conduct an effective, timely examination of ECP data.
The seventh proposed factor under § 155.1051(e)(7) considers if the FFE State collects information from QHP issuers regarding the status of contract offers for network plans or offers of benefit amounts as payment in full to an ECP for non-network plans. We stated that we believe this type of ECP data is important for an FFE State to collect from QHP issuers during its assessment of the adequacy of an issuer's network of ECPs or during its assessment to ensure access to a sufficient choice of ECPs that would accept a non-network plan's benefit amount in full. We stated that an FFE State collecting this type of data would demonstrate that it has the technical capacity to validate a QHP issuer's progress towards contracting with ECPs, which allows the FFE State to track an issuer's effort in pursuing to build a sufficient network of ECPs so that consumers in network plans have reasonable and timely access to a broad range of ECPs. Similarly, we stated that an FFE State collecting data from QHP issuers with non-network plans regarding the status of offering benefit amounts as payment in full to ECPs would allow the State to assess the issuer's commitment to facilitating access to a sufficient number of ECPs that an enrollee can access in their service area without needing to pay charges in excess of the benefit amount for an array of services. We stated that these contract statuses would serve as important metrics during an FFE State's assessment of ensuring access to ECPs, where available, including by allowing States to measure an issuer's compliance with the minimum threshold percentage, category per county, and Indian health care requirements under proposed § 156.236(b)(1) through (b)(3), which would be evaluated based on measurements of contracts offered or executed, and benefit amounts as payment in full that were offered to or accepted by an ECP.
The eighth proposed factor under § 155.1051(e)(8) considers whether the FFE State has delegated authority to some other entity other than the State Department of Insurance to perform any or all ECP review activities. We stated that it would be important for an FFE State to report to us any delegated authority to other entities to perform ECP review activities, so we understand how the FFE State is handling ECP review data and to whom it entrusts such data. In addition, we stated that it is important to review whether entities conducting such reviews have sufficient expertise to competently handle ECP reviews and that these entities would be able to conduct ECP reviews in such a way that would allow the FFE State to still satisfy all applicable criteria in proposed § 155.1051 as part of having an Effective ECP Review Program.
The ninth proposed factor under § 155.1051(e)(9) considers whether the FFE State has compliance reviews, follow-up procedures, and enforcement frameworks applicable to issuers that demonstrate inadequate networks of ECPs or inadequate access to ECPs that accept benefit amounts as payment in full, so that those issuers come into compliance with State ECP requirements. We stated that this factor would also consider whether the FFE State has standardized processes to assess efforts the issuer is pursuing to come into compliance with State ECP requirements and any justification and exception processes for issuers that have not yet or cannot meet ECP requirements. We explained that we believe the existence of these processes is critical for an FFE State to demonstrate sufficient enforcement authority, while maintaining the ability to evaluate the integrity and outcome of ECP certification reviews, which aims to ensure that low-income, medically underserved populations traditionally served by ECPs have sufficient access to these ECPs through their plans, where available. We stated that overall, these processes would ensure an FFE State has the ability to require that QHP issuers continue to meet state ECP requirements and comply with ECP statutory requirements under section 1311(c)(1)(C) of the Affordable Care Act.
The tenth proposed factor under § 155.1051(e)(10) considers whether the FFE State has a process for monitoring and addressing consumer-related complaints regarding access to ECPs to ensure sufficient access to ECPs consistent with section 1311(c)(1)(C) of the Affordable Care Act and as set forth in State statute. We stated that this factor is important since it would indicate the FFE State has a process to continuously monitor access to ECPs and ensure that State ECP requirements aimed to promote access to ECPs have their intended effect among consumers. We noted that access to ECPs can change during the year for a multitude of factors, including due to facility closures, network terminations, changes in services offered by ECPs, financial stability and funding reductions, and staffing shortages. We further noted that for plans using a provider network, contracts may be executed or terminated throughout a plan year for various reasons. Also, we stated that any inaccuracies or out-of-date information contained in provider directories can create confusion or be misleading to consumers. Additionally, we stated that consumers may have trouble making appointments with network providers due to lack of availability of appointments. We also stated that for plans without a provider network, we anticipate that ECPs that accept a benefit amount as payment in full could change depending on market conditions, negotiations, and competition, or that consumers may require additional assistance in understanding how to utilize plan benefit amounts to meet their health care needs in such a way that does not increase out-of-pocket costs beyond the plan's benefit amount.
Lastly, in § 155.1051(f), we proposed that we would notify the FFE State electing to conduct ECP certification reviews of our decision in writing prior to the start of the QHP certification cycle whether the FFE State is determined to have an Effective ECP Review Program and can therefore conduct its own ECP certification reviews for the plan year. We stated that in subsequent years and prior to the
Additionally, we clarified that we would be available to provide technical assistance to FFE States on any issues related to the Effective ECP Review Program. We stated that we remain open to assisting FFE States at any point of the process, from electing to conduct their own ECP certification reviews to performing ECP certification reviews as an Effective ECP Review Program State, to ensure an FFE State's ECP requirements and certification review process continue to protect access to ECPs for low-income, medically underserved populations. We further stated that we would also continue to make ECP resources publicly available, including for those FFE States that are determined to have an Effective ECP Review Program and wish to utilize these resources as part of their ECP certification reviews. We noted that these resources include the Final Plan Year ECP List and Rolling Draft ECP List, medical QHP and SADP ECP tools, the Available ECP Write-in List, the Plan Validation workspace in MPMS, and guidance on the QHP certification website.
We further stated (91 FR 6407) that in addition to the aforementioned resources and technical assistance that we would provide to FFE States, we would continue collecting ECP data from FFE issuers in FFE States with an Effective ECP Review Program, similar to the proposed approach for network adequacy in section III.E.10. of the proposed rule. We stated that we believe this data would provide additional insight to assess how QHP issuers are performing across the FFE, including in FFE States with an Effective ECP Review Program, to consistently compare issuer performance. We further stated that collecting this data would also provide us with the ability to continue to monitor consumer access to ECPs across the FFE. We also stated that the data would also be available in a standardized format to FFE States with an Effective ECP Review Program, which could be utilized to inform their ECP certification reviews and to perform additional analyses to analyze access to ECPs across the State. We stated that we believe this proposed approach would support FFE States in their capacity to conduct these complex ECP reviews.
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy with modifications. Specifically, as discussed in section III.E.12. of this final rule, we are delaying implementation of QHP certification of non-network plans to PY 2028, which means that we will also delay implementation of the provisions allowing FFE States with an Effective ECP Review Program to conduct ECP certification reviews for non-network plans under § 155.1051. Also, in response to comments, we are finalizing adding § 155.1051(e)(11) to state that, in our review to determine if an FFE State has an Effective ECP Review Program, we will consider whether the FFE State collects the information described under § 156.236(b)(4) through (b)(9) from non-network plans, which issuers of non-network plans must submit to the FFE for a determination that the plan provides reasonable and timely access to ECPs that accept the plan's benefit amount as payment in full. We refer readers to section III.E.12.e. of this final rule where we discuss and respond to a comment regarding QHP certification of non-network plans and ECP certification reviews of non-network plans by FFE States with an Effective ECP Review Program.
In the sections below, we summarize and respond to public comments received on the proposals above to allow FFE States, including States performing plan management, to elect to conduct their own ECP certification reviews of QHP issuers' plans provided that the State demonstrates it has sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria established by HHS to have an Effective ECP Review Program under § 155.1051.
In contrast, multiple commenters stated that States are best positioned to assess access to ECPs within an issuer's network, and that States possess special insight on local markets, community needs, provider availability, and geographic conditions relevant to performing ECP certification reviews. Commenters also noted that proximity makes States best suited to design ECP requirements that address the specific needs of consumers; and that geographic distribution of ECPs varies significantly across States, so States have the expertise to evaluate whether issuers are
Nevertheless, the majority of commenters agreed that if FFE States are permitted to conduct ECP certification reviews, it would be essential to ensure Federal oversight of FFE States conducting ECP reviews and to establish clearly-defined, minimum requirements that FFE States must satisfy to demonstrate having an Effective ECP Review Program, which would promote consistent access to ECPs across FFE States and preserve consumer protections. These commenters stated that this Federal oversight includes HHS determining that FFE States demonstrate sufficient authority and the technical capacity to have an Effective ECP Review Program. One commenter noted that States being well-suited to now conduct ECP certification reviews as an Effective ECP Review Program is rooted in the establishment of Federal ECP requirements that have been strengthened through years of rulemaking and refined implementation. The commenter stated that the establishment of robust Federal ECP requirements over time has provided an acceptable model for States to understand best practices for formulating ECP requirements and ensuring that issuers meet these requirements, now setting States up for success to have autonomy over ECP certification reviews. The commenter further added that State flexibility, combined with a defined, minimum Federal standard are complementary, not incompatible.
In response to commenters that remain concerned about a “patchwork” of ECP requirements across the FFE if FFE States implement alternative ECP requirements, we believe that our proposal establishes a Federal floor of baseline ECP requirements that apply across the FFE to ensure reasonable consumer access across FFE States, even if FFE States have different ECP certification review processes or requirements. In particular, we remind commenters that under § 155.1051(c) through (e), during HHS' evaluation of whether an FFE State has an Effective ECP Review Program, HHS will closely examine whether FFE State ECP requirements and processes differ from those on the Federal level, and analyze whether identified differences will continue to promote a sufficient number and geographic distribution of ECPs or even strengthen access to ECPs. In addition, to help reduce potential variability in ECP access across FFE States if FFE States conduct ECP certification reviews, we proposed to continue collecting ECP data from issuers in FFE States with an Effective ECP Review Program. As we stated, this would help ensure we can continue to compare QHP issuer performance across the FFE, so that we can monitor consumer access to ECPs across the FFE and take additional actions if disparities emerge that could endanger consumer access.
Additionally, we recognize commenters' concerns that not all FFE States may possess the resources and ability to conduct ECP certification reviews. If we were to find during the Effective ECP Review Program determination process that an electing FFE State does not demonstrate sufficient authority and technical capacity to conduct ECP reviews due to insufficient resources and processes, then we would not permit the FFE State to conduct its own ECP certification reviews.
Furthermore, regarding concerns that this proposal may create additional administrative complexity and burden among issuers, we will continue to collaborate with FFE States approved to conduct their own ECP certification reviews to promptly communicate important information to QHP issuers and make resources widely available to facilitate a less burdensome, clear, and seamless QHP certification process. To help mitigate this burden, we will also continue to make MPMS available to FFE States should they wish to utilize the ECP UI in MPMS for their ECP certification reviews, which may reduce issuer burden if issuers submit ECP data through a centralized platform.
Lastly, in regard to commenters' suggestion to revisit this proposal once more information is gathered from FFE States on their authority and technical capacity to conduct ECP certification reviews, we do not believe there is a risk to consumers if HHS finalizes this proposal with a PY 2027 effective date. This is because HHS will only allow FFE States to conduct ECP certification reviews if they satisfy all the requirements under proposed § 155.1051 to demonstrate they have an Effective ECP Review Program with the sufficient authority and the technical capacity needed to ensure access to ECPs is maintained or expanded for consumers enrolled in QHPs in the State. Also, we believe that the Effective ECP Review Program determination process will provide HHS a unique opportunity to learn more in-depth information from FFE States when electing States submit information to HHS to demonstrate having an Effective ECP Review Program, since this detailed information will provide HHS insight into the FFE States' ECP requirements and processes to enforce these requirements. In addition, we acknowledged in the proposed rule (91 FR 6402) that we had evidence to believe several States already have robust ECP requirements and review processes, and this was one of the reasons that we proposed to allow FFE States flexibility to conduct ECP certification reviews if determined to have an Effective ECP Review Program.
Furthermore, we agree with the majority of commenters that Federal oversight combined with a minimum, clearly defined Federal ECP baseline would be essential to ensure consistent access to ECPs across FFE States if FFE States were permitted to conduct their own ECP certification reviews. In fact, this proposal would effectively establish a robust Federal floor for minimum
Furthermore, in response to the concern that an FFE State's alternative ECP requirements may not require issuers to offer contracts to all available Indian health care providers in the service area, consistent with proposed § 155.1051(d), we assure the commenter that if FFE States do have alternative ECP requirements to those described under § 155.1051(c)(1) through (c)(3), including requirements that ensure network plans meet Indian health care requirements under § 156.235(a)(2)(ii)(A) that require issuers to offer contracts to all available Indian health care providers in the service area, FFE States must submit additional information to HHS. FFE States would need to describe these alternative ECP requirements, explain how the FFE State collects ECP data from issuers to measure compliance with the alternative ECP requirements, and include a detailed explanation of how the FFE State uses this ECP data to analyze access to ECPs within an issuer's network. During this review, we would assess how this alternative ECP requirement compares to existing Federal ECP requirements, especially as it relates to maintaining access to care for tribal populations. If we identify during this review that the FFE State possesses an alternative ECP requirement related to Indian health care providers, we will not consider the FFE State to have an Effective ECP Review Program if the alternative requirement does not promote a sufficient number and geographic distribution of Indian health care providers and is not adequate to at least maintain or strengthen access to Indian health care providers. If the FFE State is determined to have an Effective ECP Review Program and is permitted to conduct its own ECP certification reviews while also having alternative ECP requirements, we will continue to collect ECP data from QHP issuers in these FFE States. This ECP data will quantitatively assess that a QHP issuer offers contracts to all available Indian health care providers in its service area. If HHS were to identify trends that issuers in the FFE State have poorer performance related to ensuring access to Indian health care providers, HHS may determine that the FFE State has ceased to satisfy criteria under proposed § 155.1051(d) and, under § 155.1051(f), revoke its prior determination that the FFE State has an Effective ECP Review Program. While we do not intend to adopt the commenter's proposed regulation text modification at this time, if we identify disparities in access to Indian health care providers within an FFE State that has an alternative ECP requirement for Indian health care providers, we will consider additional actions to remedy these disparities, which could include future rulemaking, as applicable.
We do not intend to establish a formal appeal process at this time. We may consider this recommendation for future plan years, especially if FFE States state a need for an appeal process during the first plan year for PY 2027. Since we will remain available to FFE States throughout the determination process should the FFE State reach out to us for further assistance, we do not see a need to adopt an appeals process at this time. We will provide technical assistance to the FFE State should the State require more tailored feedback on how to expand its authority and technical capacity to demonstrate having an Effective ECP Review Program. If we determine that an FFE State did not adequately demonstrate having an Effective ECP Review Program, the FFE State may request to meet with us to request additional feedback. The FFE State may resubmit an updated attestation form to us to elect to conduct ECP certification reviews during the following plan year's QHP certification cycle. Prior to the beginning of the following plan year's QHP certification cycle, we will communicate information to FFE States to assess if FFE States conducting ECP certification reviews wish to continue conducting these reviews and will provide a timeline for the Effective ECP Review Program determination process for the upcoming plan year to newly electing FFE States.
Furthermore, as we proposed under § 155.1051(f), we reserve the right to evaluate at any time whether, and to what extent, an FFE State's circumstances have changed such that it has begun to or has ceased to satisfy the criteria established by us and consequently no longer has an Effective ECP Review Program. For example, these circumstances may include significant changes in the FFE State's authority and technical capacity to conduct ECP certification reviews such that it no longer can do so in a timely and effective manner, or if we identify data (after collecting issuer data from FFE States with an Effective ECP Review Program) indicating that consumers in the FFE State have inadequate access to ECPs, consistent with § 155.1051(f).
Regarding the commenters' suggestion to require FFE States to report issuer data on ECP category type, we will continue to collect issuer ECP data from those QHP issuers operating in FFE States with an Effective ECP Review Program. Thus, HHS already has the analytic capability to identify individual ECP category types that may be included within a QHP issuer's network of ECPs, which diminishes the necessity to require FFE States to provide this to HHS or the public. HHS plans to make this data available in a standardized format to FFE States with an Effective ECP Review Program, which FFE States may utilize to perform additional analyses to analyze access to ECPs across the State (including by category). We hope that providing issuer ECP data to FFE States with an Effective ECP Review Program in this manner will foster Federal and State collaboration and promote data exchange between HHS and FFE States, which may naturally allow us to receive additional data on individual ECP category types included within a QHP issuer's network of ECPs that were not identified by HHS.
HHS also does not intend to require FFE States to publicly report issuer ECP data on appointment availability and wait times to HHS, since we do not currently require issuers to separately meet these requirements and report associated data on ECP appointment availability and wait time requirements under § 156.235. For FFE States to publicly report this issuer ECP data, they would need to collect this data directly from issuers as part of ECP certification reviews. To facilitate this data collection, HHS would likely have to impose an additional requirement for FFE States to collect this data on appointment availability and wait times at ECPs to ensure it can be reported by FFE States. Overall, imposing these additional requirements on FFE States that are inconsistent with existing Federal ECP requirements and review processes would conflict with the goals of establishing a Federal floor of minimum standards for ECP certification reviews. However, if FFE States have ECP appointment availability and wait time requirements, these would constitute alternative ECP requirements compared to threshold, category per county, and Indian health care requirements (under § 155.1051(c)(1) through (c)(3)) that States must describe to us, consistent with requirements at § 155.1051(d). That is, the FFE State must disclose these alternative ECP requirements in its attestation form when electing to conduct ECP certification reviews. If the FFE State is determined to have an Effective ECP Review Program and conducts their own ECP certification reviews, at the minimum, the FFE State should communicate these alternative ECP requirements to issuers so issuers understand the types of ECP data that must be submitted to meet these requirements. The FFE State then has discretion to publicly disseminate this data, as appropriate.
Lastly, for the reasons above regarding the need to establish a Federal floor consistent with ECP requirements and review processes under § 156.235, we do not believe it would be appropriate to require FFE States to highlight issuers with found ghost networks. While we agree that this type of information could be useful to the public, we believe HHS would first need to understand different initiatives and processes FFE States are currently taking to address issuer ghost networks within their State prior to HHS considering any additional requirement related to ghost networks. We also believe this specific requirement is beyond the scope of this proposal and would be more appropriate to contemplate through potential future rulemaking along with other policy solutions related to ghost networks.
Lastly, in response to the commenter that requested HHS require FFE States to coordinate with QHP issuers in developing any new ECP requirements, we believe finalizing this requirement would interfere with State-specific rulemaking procedures and outreach processes which are beyond the scope or intention of our proposal, which aims to set a pathway for an FFE State to conduct their own ECP certification reviews. Nevertheless, we believe that any new ECP requirements issued at the State level would likely require some coordination with QHP issuers that would need to submit ECP data and documentation to demonstrate meeting such requirements during certification. We would encourage FFE States that are approved to conduct ECP certification reviews as an Effective ECP Review Program to communicate State-specific ECP requirements to QHP issuers and consider QHP issuers' feedback on those requirements.
Altogether, we summarize below our finalized policies under this section related to ECP requirements. We are not finalizing our proposal to reduce ECP minimum percentage requirements for the overall ECP threshold, family planning provider threshold, and FQHC threshold from 35 to 20 percent. Thus, the minimum percentage requirement will remain 35 percent. We are finalizing our proposal to amend narrative justification requirements at § 156.235(a)(3) and (b)(3) to be consistent with current ECP data submission requirements as part of QHP certification, which require issuers to include as part of its QHP application the status of contract offers to qualified ECPs available in the network plan's service area. Lastly, we are finalizing under § 155.1051 our proposal to allow FFE States, including States performing plan management, to elect to conduct their own ECP certification reviews of QHP issuers, with or without a network, provided that HHS determines the FFE State has sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria be considered to have an Effective ECP Review Program. However, consistent with our decision to delay implementation of our finalized policy (as discussed in section III.E.12. of this final rule) to permit certification of non-network plans as QHPs to PY 2028, FFE States that we determine to have an Effective ECP Review Program will be permitted to conduct ECP certification reviews of non-network plans effective beginning PY 2028. Lastly, we will also continue to collect ECP data from all FFE issuers for monitoring purposes and remain available to provide technical assistance and publicly available ECP resources to all States.
In the 2027 Payment Notice proposed rule (91 FR 6407), we proposed a number of revisions to parts 155 and 156 to allow plans that do not use a network (non-network plans) to receive QHP certification beginning in PY 2027 by demonstrating that they ensure a sufficient choice of providers in a manner consistent with section 1311(c)(1)(B) and (C) of the Affordable Care Act. In addition, to ensure that non-network plans are subject to similar requirements as network plans, we proposed that (1) FFE States that elect to conduct provider access certification reviews and are determined by HHS to have an Effective Provider Access Review Program under proposed § 155.1050(d) would be permitted to perform provider access reviews of non-network plans if the State satisfies all applicable criteria under § 155.1050(d); and (2) FFE States that elect to conduct ECP certification reviews and are determined by HHS to have an Effective ECP Review Program under proposed § 155.1051 would be permitted to perform ECP certification reviews of non-network plans if the State satisfies all applicable criteria under § 155.1051. For additional details on how the Effective Provider Access Review Program and Effective ECP Review Program proposals would apply to FFE States conducting reviews of non-network plans, we referred readers to these discussions in section III.E.12.d and section III.E.12.e of the proposed rule.
Together, section 1311(c)(1), 1311(c)(1)(B), and 1311(c)(1)(C) of the Affordable Care Act directs HHS to establish by regulation certification criteria for QHPs, which include (but are not limited to) criteria that require QHPs to ensure a sufficient choice of providers, provide information to enrollees and prospective enrollees on the availability of in-network and out-of-network providers, and include within health insurance plan networks those ECPs, where available, that serve predominantly low-income, medically-underserved individuals. We have historically implemented these provisions through our network adequacy and ECP requirements for network plans at § 156.230 and § 156.235, respectively.
In the Exchange Establishment Rule (77 FR 18310), we finalized the minimum network adequacy criteria that plans, including medical plans and SADPs, must meet to be certified as QHPs at § 156.230. In the 2016 Payment Notice (80 FR 10749), we revised § 156.230(a) to specify that network adequacy requirements apply only to QHPs that use a provider network (network plans) to deliver services to enrollees and that a provider network includes only providers that are contracted as in-network. We also revised § 156.235(a) to state that the ECP criteria apply only to QHPs that use a provider network. In part 1 of the 2022 Payment Notice (86 FR 6138), we added paragraph (f) to § 156.230 to clarify that a plan for which an issuer seeks QHP certification or any certified QHP that does not use a provider network (or non-network plan) is not required to comply with the network adequacy standards at paragraphs (a) through (e) of § 156.230 to qualify for certification as a QHP. Unlike network-based plans, non-network health 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. The plan may determine the benefit amount based on an established methodology such as a percentage of a publicly available benchmark, a reference-based pricing structure, or another reimbursement standard (that is, Medicare or private payor rates, etc.).
In the 2024 Payment Notice (88 FR 25872 through 25879), we exercised the authority delegated to us by section 1311(c)(1) of the Affordable Care Act to establish criteria for the certification of health plans as QHPs to revise §§ 156.230 and 156.235 to require all individual market QHPs and SADPs and all SHOP QHPs across all Exchanges to utilize a network of providers that complies with the standards described in §§ 156.230 and 156.235. In doing so, we acknowledged that we had previously stated that “nothing in [the Affordable Care Act] requires a QHP issuer to use a provider network” because there is no explicit standalone network requirement (88 FR 25872 (quoting 84 FR 6154)). But we still stated concerns over whether a plan without a network would be able to comply with Affordable Care Act section 1311(c)(1)(C)'s requirement that plans “shall, at minimum . . . include within health insurance plan networks those essential community providers, where available, that serve predominately low-income, medically-underserved individuals,” which we read to imply that access to ECPs would be provided “within health insurance networks” (88 FR at 25873). We also solicited comment on alternative administrable regulatory standards under which non-network plans could “ensure a sufficient choice of providers” consistent with section 1311(c)(1)(B) of the Affordable Care Act. At the time, neither commenters to the 2024 Payment Notice nor HHS had enough information to devise such an administrable regulatory standard to enable non-network plans to demonstrate a sufficient choice of providers to receive QHP certification. On these bases, in the 2024 Payment Notice (88 FR 25876), we finalized the requirement that all QHPs (except certain SADPs)
As a preliminary matter, in the proposed rule (91 FR 6408), we first explained why we were revisiting our existing blanket prohibition of non-network plans as QHPs, including our approach to ensure non-network plans meet requirements to ensure a sufficient choice of providers in a manner consistent with section 1311(c)(1)(B) and (C) of the Affordable Care Act. We stated that one justification for revisiting our existing prohibition of non-network plans as QHPs is that circumstances have changed: when we finalized our blanket prohibition of non-network plans as QHPs, we had not developed an effective, administrable approach at the time we adopted the prohibition through which we could adequately measure whether non-network plans could ensure a “sufficient choice of providers” under section 1311(c)(1)(B) of the Affordable Care Act, or include ECPs through their plans, where available, under section 1311(c)(1)(C) of the Affordable Care Act. We stated that we continue to believe that consumers shopping on the Exchanges must be assured of the ability of every QHP to provide a sufficient choice of providers under section 1311(c)(1)(B) of the Affordable Care Act, and that a non-network plan should not be given a “pass” on demonstrating that it provides access to a sufficient choice of providers because it does not utilize a provider network. As described further below and in the next subpart, we proposed a new approach to measuring a non-network plan's compliance with section 1311(c)(1)(B) and (C) of the Affordable Care Act, which addresses our prior concerns. In doing so, we also revisited our original interpretation of section 1311(c)(1)(C) of the Affordable Care Act, including how our proposed approach would mitigate prior concerns over non-network plans being able to provide access to ECPs in a manner consistent with this provision.
First, we acknowledged that provider networks serve as a critical cost control tool, which has downstream impacts on a consumer's out-of-pocket costs that are important to consider when devising an alternative regulatory standard to continue to ensure broader access to care. We noted that insurers with a provider network often have different cost-sharing requirements depending on if an enrollee sees a provider that is in-network versus out-of-network. We stated that a traditional network plan typically contracts with a certain number of providers (but rarely all) in each area who agree to accept the plan's negotiated rates as payment in full for covered services, ensuring that enrollees have reasonable access to a certain number of providers who will render services at specified costs; and often,
We stated that, in contrast, a non-network plan sets specified benefit amounts for covered services and communicates those benefit amounts to its enrollees in advance. We stated that non-network plan enrollees use this benefit amount as a reference price for how much they should expect to pay for the receipt of covered services under the plan. We further stated that with it, they can choose any provider for their care and compare and negotiate prices among available providers to find a provider who will accept the plan's benefit amount as payment in full, such that the provider will not balance bill the enrollee for additional amounts beyond the plan's benefit amount. We noted that this interaction between the enrollee and provider before services are rendered could limit the enrollee from incurring additional unforeseen out-of-pocket costs, particularly if the enrollee decides to pursue care with the provider at a cost below or equal to the plan's benefit amount. Thus, we stated that both plan models are capable of providing a pathway for enrollees to limit out-of-pocket costs. We stated that non-network plans are capable of providing an opportunity for individual enrollees to participate in efforts to lower their health care costs through individualized price comparisons and negotiations, while network plans rely heavily on health insurers to do so.
However, we stated that while enrollees in a non-network plan can receive some benefit for covered services from virtually any provider, there is no guarantee that the plan's benefit amounts are actually sufficient to cover the provider's full charges, and there is no requirement imposed by the non-network plan on providers to accept the plan's benefit amount as payment in full. We stated that as a result, if or when these benefit amounts are too low, non-network plans can leave enrollees with additional out-of-pocket costs that make certain providers, as a practical matter, unavailable. We further stated that can be problematic for services that an enrollee could not have reasonably anticipated needing to negotiate for in advance. And we noted that it can have a particular impact on low-income, medically underserved populations who may face disproportionate challenges in paying for large out-of-pocket costs.
Furthermore, we stated that if a non-network plan's benefit amount for a covered service is so low that virtually no providers in a particular area accept the benefit amount as payment in full, the non-network plan cannot credibly claim to provide a sufficient choice of providers of those services, and the non-network plan does not provide access to a sufficient choice of providers under section 1311(c)(1)(B) of the Affordable Care Act. Conversely, we noted that if the benefit amount is sufficient such that many providers in the area accept the benefit amount as payment in full, enrollees may choose between providers in their area who will accept the non-network plan's benefit amount as payment in full without incurring additional out-of-pocket costs. We stated that in this case, a non-network plan may be able to provide access to a sufficient choice of providers for those services. In other words, we stated that the set of providers in the applicable area that would accept the plan's benefit amount as payment in full is like a network plan's network. We stated that so long as that set of providers is adequate, a non-network plan can comply with requirements to ensure a sufficient choice of providers, and we described our proposed method to measure that compliance in the next section.
As we stated in the discussions above, we raised concerns in the 2024 Payment Notice regarding the ability of a non-network plan to comply with section 1311(c)(1)(C) of the Affordable Care Act, due to our understanding that access to ECPs should be provided “within health insurance networks.” We inferred from Affordable Care Act section 1311(c)(1)(C)'s use of the word “network” that the statute meant that Exchanges could certify, as QHPs, only plans that have a contractual network of providers, not inclusive of non-network plans. Though, we recognized that the term “network” is never defined in the statute. And, as we have consistently noted, we stated that Congress never imposed a standalone requirement that QHPs structure their plans via contracts with providers nor was Congress specific on the requirements needed to constitute a network. We stated that we now interpret the statute to offer broad flexibility governing the status of a contractual relationship between a plan and provider as a precondition to constitute a network under section 1311(c)(1)(C) of the Affordable Care Act. In this regard, we stated that we believe that so long as non-network plans provide sufficient access to ECPs, where available, that serve predominately low-income, medically underserved individuals, a non-network plan could comply with requirements under section 1311(c)(1)(C) of the Affordable Care Act. We stated that this may be accomplished through a non-network plan demonstrating access to ECPs within their service area that would accept the plan's benefit amount as payment in full.
Furthermore, we stated that we have evaluated traditional networks to ensure enrollees have access to a sufficient choice of providers, consistent with section 1311(c)(1)(B) of the Affordable Care Act, and to promote access to ECPs, where available, for low-income, medically underserved individuals, consistent with section 1311(c)(1)(C) of the Affordable Care Act. To that effect, we noted that networks facilitate a multitude of different relationships between providers, insurers, and enrollees to ensure sufficient access to care, which can still be maintained through non-network plans through their greater focus on enrollees more directly participating in lowering the price of their care. Specifically, we stated that a non-network plan's “network” consists of the providers in the applicable area that would accept the plan's benefit amount as payment in full. We further stated that by establishing payment amounts that providers can choose to accept as payment in full, non-network plans are capable of creating a
Thus, we stated (91 FR 6409) that a non-network plan can comply with section 1311(c)(1)(C) of the Affordable Care Act by ensuring that a sufficient number of ECPs accept the plan's benefit amounts as payment in full. However, we noted that a non-network plan would not satisfy that requirement if its benefit amount is so low that many ECPs would not accept the benefit amount as payment in full from enrollees, because section 1311(c)(1)(C) of the Affordable Care Act would still require an Exchange to consider the practical availability of services from ECPs before certifying a QHP, including ECPs, where available. We stated that it would not be sufficient for an Exchange to simply conclude that a non-network plan provides access to providers in a manner consistent with section 1311(c)(1)(B) and (C) of the Affordable Care Act because the plan provides some benefit amount for covered services rendered by any provider. Thus, we stated that the availability of providers in a particular area that accept the benefit amount as payment in full is important to constitute a sufficient choice of providers consistent with section 1311(c)(1)(B) and (C) of the Affordable Care Act.
Moreover, we stated that there are additional reasons for our reconsideration of our blanket prohibition of non-network plans as QHPs. Specifically, we stated that recent efforts to improve health price transparency and its implementation across the health care system present an opportunity to reshape how health care services are delivered, and when enrollees have easier access to health care pricing information, market forces can and often do drive down costs through increased competition among providers.
We further stated that overall, non-network plans have great potential to reduce overall health care costs. First, we stated that they can empower enrollees to use price information on benefit amounts, when available, to shop for lower prices and negotiate directly with providers, fostering increased competition and potentially driving down prices across the market. When enrollees have access to accurate, timely health care pricing information, they can make informed decisions about their health care spending and actively seek the best value for medically necessary services. We anticipated that this consumer-driven approach would create a more competitive marketplace where providers would need to consider their pricing strategies more carefully to attract and retain patients. Additionally, we stated that as more enrollees engage in shopping and direct price negotiations, providers may be incentivized to proactively offer more competitive rates to maintain their market share, potentially leading to broader market-wide price reductions that benefit many enrollees.
Second, we stated (91 FR 6410) that non-network plans eliminate substantial administrative overhead associated with traditional network management, which in turn can result in lower premiums. We stated that the administrative cost savings are realized through four key areas, based on our internal research into existing non-network plans: (1) the elimination of provider contract management costs (including legal fees, staff, and provider relationship development and maintenance); (2) the removal of provider credentialing expenses and directory maintenance; (3) reduction in claims processing complexity and network-specific prior authorization requirements; and (4) streamlined organizational structure with resources redirected to consumer support tools and education.
Based on these legal principles, in the proposed rule (91 FR 6410), we proposed the following regulatory standards for non-network plans to demonstrate that they provide access to a sufficient choice of providers (including ECPs) to ensure compliance with section 1311(c)(1)(B) and, as relevant, section 1311(c)(1)(C) of the Affordable Care Act. First, we proposed to add a new section to part 156, § 156.236, that contains the provider access sufficiency standards (including ECP access) specific to non-network plans, and to revise §§ 156.230 and 156.235 to make clear that those sections address the provider access sufficiency standards (including ECP access) for network plans.
We proposed to add § 156.236(a) to state that a non-network QHP must 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. Additionally, as discussed in sections III.D.18., III.D.19., III.E.10., and III.E.11.c of the proposed rule, we proposed to allow FFE States, including States performing plan management, to conduct their own provider access and/or ECP certification reviews provided the State demonstrates sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program (for provider access reviews) and/or an Effective ECP Review Program (for ECP reviews). We stated that FFE States that elect to conduct provider access certification reviews and are determined by HHS to have an Effective Provider Access Review Program under proposed § 155.1050(d) would be permitted to perform such reviews of non-network plans if the State satisfies all applicable criteria. Similarly, we stated that FFE States that elect to conduct ECP certification reviews and are determined by HHS to have an Effective ECP Review Program under proposed § 155.1051 would be permitted to perform such reviews of non-network plans if the State satisfies all applicable criteria. For additional detail on the applicability of the proposed Effective Provider Access Review Program and Effective ECP Review Program to non-network plans under proposed § 156.236, we referred readers to the discussions in sections III.D.18., III.D.19., III.E.10., and III.E.11.c. of the proposed rule.
Furthermore, under § 156.236(b), we proposed that a non-network plan applying for certification to be offered as a QHP through an FFE must report the following information to the FFE for the FFE's determination whether a non-network plan provides a sufficient choice 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:
(1) The non-network plan's assessed percentage of available providers in each plan's service area that accept the plan's benefit amount as payment in full; and for ECPs, whether the non-network plan meets at least a minimum percentage, as specified by HHS, of available ECPs that accept the plan's benefit amount as payment in full in each plan's service area, collectively across all ECP categories defined under § 156.235(a)(2)(ii)(B), and at least a minimum percentage of available ECPs that accept the plan's benefit amount as
(2) For ECPs, whether the non-network plan offers the benefit amount as payment in full to at least one ECP in each of the eight ECP categories per county in the plan's service area described in § 156.235(a)(2)(ii)(B);
(3) For ECPs, whether the non-network plan offers the benefit amount as payment in full to all available Indian health care providers in the plan's service area;
(4) The non-network plan's strategy for conducting continuous outreach to available providers (including ECPs) in the plan's service area to determine whether they would accept the plan's benefit amount as payment in full;
(5) The non-network plan's strategy for making benefit amounts available to the public, including plan enrollees, potential enrollees, and providers (including ECPs), in an easily accessible and understandable format;
(6) The non-network plan's methodology for determining benefit amounts;
(7) The non-network plan's strategy for providing consumer-friendly and public information about potential balance billing scenarios and expected out-of-pocket costs, including historical data on actual out-of-pocket costs incurred by its enrollees while accessing providers (including ECPs) in the area;
(8) The availability of an exceptions process under the non-network program for enrollees who cannot find providers (including ECPs) willing to accept the benefit amount as payment in full;
(9) The non-network plan's strategy for providing adequate customer service or online provider directory assistance resources to assist plan enrollees and potential enrollees in finding providers (including ECPs) in their area who will accept the plan's benefit amount as payment in full.
We stated that these are among the factors that we have historically found useful in considering whether a non-network plan provides access to a sufficient choice of providers, including ECPs, to warrant the certification of non-network plans for the FFEs. We noted that HHS, as operator of the FFEs, considered the QHP application submitted by a non-network plan for PYs 2021 and 2022 in Ohio. In assessing whether the plan was in the interests of qualified individuals on the FFE in Ohio (under § 155.1000(c)), we used similar factors to assess whether the non-network plan provided protection against additional out-of-pocket costs for EHB in a manner consistent with § 156.130, and we believe this was appropriate because these factors provide a more complete picture of how well a non-network plan actually limits enrollees' out-of-pocket costs.
We stated that the first proposed factor, the non-network plan's assessed percentage of available providers in each plan's service area that accept the plan's benefit amount as payment in full and, for ECPs, whether the non-network plan meets separate minimum percentage requirements of available ECPs that accept the plan's benefit amount as payment in full in each plan's service area, is an important indicator of how generous the non-network plan's benefit amounts actually are. We stated that it would provide an Exchange greater assurance that enrollees can actually access a sufficient number of providers, including ECPs, who will not seek additional payment from the enrollee after receiving the benefit amount from the plan. We further stated that requiring the non-network plan to have assessed the anticipated percentage of providers in the area who would accept the plan's benefit amount as payment in full also would provide Exchanges with assurance that the non-network plan issuer performed sufficient research and analysis in advance to determine sufficient benefit amounts for a relevant area. We stated that this would help ensure benefit amounts are generally sufficient to limit unanticipated additional out-of-pocket costs for enrollees.
We stated (91 FR 6411) that the second proposed factor, whether the non-network plan offers its benefit amount as payment in full to at least one ECP in each of the eight ECP categories per county in the plan's service area described in § 156.235(a)(2)(ii)(B), is an important indicator of the plan's ability to cater to enrollee needs across a wide array of priority health needs and socioeconomic factors, which is required by the Affordable Care Act as a condition of QHP certification. Section 1311(c)(1)(C) of the Affordable Care Act requires access to ECPs, where available, that serve predominately-low income, medically underserved individuals, such as health care providers defined in section 340B(a)(4) of the PHS Act and providers described in section 1927(c)(1)(D)(i)(IV) of the Act. We stated that to demonstrate that non-network plans comply with section 1311(c)(1)(C) of the Affordable Care Act and accordingly provide access to ECPs, where available, such as those under sections 340B(a)(4) of the PHS Act and 1927(c)(1)(D)(i)(IV) of the Act, Exchanges must be assured that the plan's benefit amounts are sufficient enough such that at least one ECP in each of the eight ECP categories per county within the plan's service area would accept the plan's benefit amount as payment in full.
We stated that the third proposed factor, whether the non-network plan offers its benefit amount as payment in full to all available Indian health care providers in the plan's service area, is an important indicator of the plan's ability to ensure Indian enrollees are able to receive applicable cost-sharing reductions for the plan variations described at §§ 156.420(b)(1) and (2) without incurring additional out-of-pocket costs. Additionally, we noted that Indian health care providers are among the providers described under section 340B(a)(4) of the PHS Act, which plans must demonstrate access to under § 156.235(a)(2)(ii), (b)(2)(ii), and (c), consistent with section 1311(c)(1)(C) of the Affordable Care Act.
We stated that the fourth proposed factor (91 FR 6411), the non-network plan's strategy for conducting outreach to available providers (including ECPs) in a particular area to determine whether they would accept the plan's benefit amount as payment in full, is an important indication of the non-network plan's recognition that whether any particular provider will accept a benefit amount as payment in full is a moving target. We noted that providers that are not under contract to accept a non-network plan's payment as payment in full are generally not bound by any contract or law in setting prices. We also noted that they may choose to change their charges for their services based on any multitude of factors, including changes in their operating expenses, changes in medical advancement, competitive pressure, or for no particular reason at all. And, they may choose to change this amount at any time. We stated that, as a result, it is imperative that a non-network plan have in place a strategy for conducting continuous outreach to available providers (including ECPs) in a particular area to determine whether they would accept the plan's benefit amount as payment in full, so that the plan can make adjustments to its benefit amounts to ensure that enrollees can access a sufficient number of providers.
We stated that the fifth proposed factor, the non-network plan's strategy
We stated that the sixth proposed factor (91 FR 6411), the non-network plan's methodology for determining benefit amounts, is an important indicator that the non-network plan is not setting arbitrary benefit amounts for covered services; and, that the benefit amounts are well-informed through various analyses and research, so that the amounts reasonably cover costs associated with a particular service.
We stated that the seventh proposed factor, the non-network plan's strategy for providing consumer-friendly information to plan enrollees and potential enrollees about potential balance billing scenarios and expected out-of-pocket costs, including historical data on actual out-of-pocket costs incurred by its enrollees while accessing ECPs in the area, is an important indicator of the plan's ability to educate its enrollees about the plan's expectations on how the plan may be best utilized to minimize additional out-of-pocket costs. We noted that non-network health plans do not currently exist in the individual and small group market, and are less commonly offered in the large group market and as excepted benefits products, so the plan design may not be immediately intuitive to enrollees. We stated that, as such, it would be imperative that non-network plans have in place a cohesive strategy for providing consumer-friendly information about how the plan may be most effectively used to limit out-of-pocket costs and the impact of seeking care from providers who charge more than the plan's benefit amount.
We stated that the eighth proposed factor, the availability of an exceptions process under the non-network plan for enrollees who cannot find providers (including ECPs) willing to accept the benefit amount as payment in full, is an important indicator of the plan's commitment to be flexible for enrollees who have little choice in providers. We stated that the provision of such an exceptions process would recognize that there may be some circumstances where a non-network plan may be unable to adequately protect consumers against out-of-pocket costs in circumstances where large numbers of providers refuse the plan's payment as payment in full. We stated that in recognition of this possibility, such an exceptions process would be able to shift the burden of paying any unavoidable, additional out-of-pocket costs from the enrollee to the non-network plan.
We stated that the ninth proposed factor, the non-network plan's strategy for providing adequate customer service or online provider directory assistance resources to assist plan enrollees and potential enrollees in finding providers (including ECPs) in their area who will accept the plan's benefit amount as payment in full, is another important indicator of the plan's ability to educate its enrollees about the plan's expectations on how the plan may be best utilized to minimize additional out-of-pocket costs.
We stated (91 FR 6412) that under this proposal, non-network plans would be subject to and allowed to demonstrate that they meet all the general certification criteria at § 155.1000(c), which would allow Exchanges the ability to certify non-network plans as QHPs. These general certification criteria include the minimum certification requirements outlined in subpart C of part 156,
In addition, we stated that non-network plans that are applying for QHP certification or are QHPs would also be required to structure their plans so that they provide all the consumer protections that apply to individual and small group health coverage including, but not limited to, those specified in PHS Act title XXVII parts A through D, as all other plans applying for QHP certification are subject to providing. We also stated that under this proposal, a non-network plan would not be able to claim exemption from such protections merely because it does not enter into contracts with providers. We stated that failure to offer these protections would also result in denial of certification in accordance with § 155.1000(e) and decertification in accordance with § 155.1080(c), even though they are not explicitly included in the minimum certification requirements outlined in subpart C of part 156. We noted that under section 1311(e)(1)(B) of the Affordable Care Act and § 155.1000(c)(2), Exchanges have broad discretion to determine whether a plan is in the interest of qualified individuals and qualified employers, regardless of whether the plan meets other minimum certification requirements consistent with § 155.1000(c)(1). We confirmed that an Exchange may use this authority to deny certification to a non-network plan that is not structured in a manner that provides all the consumer protections that apply to individual and small group health insurance coverage including, but not limited to, those specified in PHS Act title XXVII parts A through D. We stated, for example, that the breadth of an Exchange's authority to deny certification under the interest standard extends to determinations that a non-network plan's benefit structure fails to provide protections against surprise medical bills in a manner similar to a network plan.
We noted that the certification criteria at § 155.1000(c)(2) include the requirement that the Exchange determine that making the health plan
We reaffirmed these flexibilities under this proposal; we stated (91 FR 6412) that Exchanges would be able to require non-network plans to meet additional criteria beyond those described in the approach outlined above to be certified as QHPs, and they may determine that such plans are not in the interests of qualified individuals and qualified employers in the State, regardless of whether the non-network plan otherwise meets the certification criteria at § 155.1000(c)(1), and refuse them certification.
We sought comment regarding the PY 2027 effective date of this proposal. We noted that this includes comments from any QHP issuers that may be interested in submitting non-network plans for QHP certification for PY 2027, or whether PY 2028 may be the soonest that any QHP issuer could realistically consider submitting non-network plans for QHP certification.
We stated that, in connection with this proposal, we had not identified any barriers to non-network plans' participation in the HHS-operated risk adjustment program. However, we stated that because these plans are not under contractual relationships with providers, we recognize that they may have difficulty obtaining medical records from providers for the purposes of HHS-RADV, which is a requirement for risk adjustment covered plans under § 153.630. We noted that EDGE-reported diagnoses for which no medical record can be obtained are considered to be non-validated diagnoses in the HHS-RADV process and would result in higher error rates and higher HHS-RADV adjustments. As such, we sought comment on considerations for non-network plans in the HHS-RADV process.
Under sections III.D.18. and III.E.10. of the proposed rule, we proposed to allow FFE States, including States performing plan management, to elect to conduct their own provider access certification reviews of issuers' plans applying for certification as a QHP through an FFE, provided the State determines it has sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program under proposed § 155.1050(d)(2) through (d)(4), as determined by HHS. We proposed that in FFE States that do not elect to conduct provider access reviews or that we determine do not have an Effective Provider Access Review Program, we would continue to conduct provider access certification reviews consistent with § 156.230 for network plans.
To ensure that non-network plans would be held to similar requirements as network plans in meeting regulatory requirements to provide sufficient choice of providers under section 1311(c)(1)(B) of the Affordable Care Act, in the proposed rule (91 FR 6413), we also proposed to apply the Effective Provider Access Review Program to FFE States, including States performing plan management, that wish to conduct provider access reviews of non-network plans. We stated that this means that if an FFE State elects to conduct their own provider access certification reviews of issuers' plans applying for certification to be offered as a QHP through an FFE and we determine that the State has satisfied all the applicable criteria to be considered to have an Effective Provider Access Review Program, then the State would have the ability to conduct provider access certification reviews of non-network plans. We also stated that an FFE State would need to demonstrate that it meets applicable criteria for both network and non-network plans under proposed § 155.1050(d)(2) through (d)(4) prior to HHS determining that a State has an Effective Provider Access Review Program. We stated that this would mean an FFE State would not be permitted to elect to conduct provider access certification reviews for only network plans and not non-network plans, if they certify both such plans, or vice versa. However, we noted that should an FFE State notify us that it chooses not to certify non-network plans, and so does not offer non-network plans through the FFE operating in their State (regardless of if the State or HHS conducts the review), then we would determine whether it satisfies applicable criteria to be considered to have an Effective Provider Access Review Program under proposed § 155.1050(d)(2) through (d)(4) for network plans only. We sought comment on this approach. Additionally, we stated that similar to the approach for network plans, if we determine FFE States do not satisfy applicable criteria to be considered to have an Effective Provider Access Review Program, then we would conduct provider access certification reviews for non-network plans under new standards proposed at § 156.236.
We proposed (91 FR 6413) that an FFE State would need to demonstrate that it meets applicable criteria for both network plans and non-network plans under proposed § 155.1050(d)(2) through (d)(4), if they decide to certify such plans, to receive the designation to have an Effective Provider Access
We proposed to implement requirements for non-network plans that were similar to the requirements for network plans under the Effective Provider Access Review Program at proposed § 155.1050(d). We stated that an FFE State must demonstrate it has sufficient authority and the technical capacity to conduct provider access certification reviews for non-network plans by satisfying all applicable criteria to be considered to have an Effective Provider Access Review Program under proposed § 155.1050(d)(2) through (d)(4), including criteria specific to non-network plans. We also stated that, just as with network plans, an FFE State determined to have an Effective Provider Access Review Program would be expected to ensure sufficient access to providers under non-network plans. We stated that in this case, the FFE State would need to ensure that a QHP 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.
We also stated that, under our proposal, as with network plans, a State operating an FFE that elects to conduct its own provider access reviews, and which deems to certify non-network plans, must demonstrate it has established provider access standards that are set forth in State statute or regulation which are consistent with provider access standards set forth in § 156.230(a)(1)(ii) and (iii) and are relevant to non-network plans. We stated that the FFE State would also need to demonstrate that the State's provider access review process includes reporting systems for State required provider access metrics related to non-network plans as well as documentation of methodology associated with non-network plan review; and that the State provides descriptions of all data collection systems, templates and methodologies used by the State, or the State's delegated entity, to collect and review provider access data for non-network plans and that this data and documentation received is sufficient to conduct an examination of non-network plans. We noted that the FFE State would also be required to establish and maintain clear procedures and timeline requirements for regular provider access reviews related to non-network plans, including processes that ensure reviews occur prior to each plan year's QHP certification cycle.
Additionally, we stated that the FFE State would be required to have a process for monitoring and addressing consumer-related provider access complaints for non-network plans to ensure sufficient access to providers consistent with section 1311(c)(1)(B) of the Affordable Care Act and as set forth in State statute. We further stated that the FFE State would also be required to have a process to collect and review information capable of demonstrating whether non-network plans provide access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full. We stated that we sought to understand whether the FFE State has a process for collecting and analyzing this information to demonstrate technical capacity during Effective Provider Access Review Program determinations. Additionally, we considered enumerating the information that non-network plans must submit to the FFE listed at § 156.236(b)(4) through (b)(9) within § 155.1050(d)(4)(vi) as requirements for FFE States with an Effective Provider Access Review Program to review non-network plans to ensure they are in alignment with HHS' proposed approach in an effort to further support consumer protectiveness in this novel plan design. We noted that these factors would include assessing a non-network plan's strategy for conducting outreach to providers in their area, making benefit amounts public to enrollees, methodologies for determining benefit amounts, strategy for publishing consumer-friendly information on balance billing and potential out-of-pocket costs, availability of exceptions processes for enrollees unable to locate providers who accept benefit amounts as payment in full, and customer services resources. However, we stated that, as HHS is seeking to broadly restore flexibilities to FFE States as a part of some QHP certification reviews and empower FFE States who understand their consumer needs and local conditions best, we opted in this proposal to provide deference to FFE States in how they will review non-network plans for a sufficient choice of providers who accept the plans benefit amount as payment in full in accordance with information listed at § 156.236(b)(4) through (b)(9). We sought comment on whether HHS should better align the reviews of non-network plans for QHP certification as described above.
We stated that while these factors for assessing whether a State has an Effective Provider Access Review Program, as related to non-network provider access reviews, are comprehensive, we believe this approach would provide ample flexibility to States to determine the best methodology to assess provider access under non-network plans within the State. We anticipated that each State's approach would be dependent on available resources and population needs unique to each State and that these proposed factors would serve to appropriately evaluate overall State processes for review of non-network plans to ensure sufficient consumer protection.
Under sections III.D.19 and III.E.11.c. of the proposed rule, we proposed to allow FFE States, including States
Furthermore, we stated that we believe HHS should primarily conduct ECP certification reviews as the default approach for issuers with non-network plans applying for certification as a QHP to be offered through an FFE, including States performing plan management, except if an FFE State elects to conduct ECP certification reviews and is determined to have an Effective ECP Review Program. We stated that we believe this is valuable for most of the same reasons that we proposed to adopt this same approach for network plans under section III.E.11.c. of the proposed rule. In addition, as we stated in discussions above describing various characteristics of non-network plans, we stated that there is no guarantee that a non-network plan's benefit amount is actually sufficient to cover the provider's full charges, which can leave enrollees with additional out-of-pocket costs that may disproportionately challenge low-income, medically underserved populations. We noted that these populations typically served by ECPs are often at a greater risk for lower health insurance coverage literacy and an increased risk for illness,
Additionally, we stated that based on our experience conducting ECP certification reviews of network plans, we believe having adequate and accurate data on available ECPs in a geographic area, sufficient tools to collect and calculate issuer submitted ECP data, and sound methodologies to quantitatively assess this data to ensure access to ECPs in accordance with section 1311(c)(1)(C) of the Affordable Care Act would be crucial for any FFE State to demonstrate the technical capacity to also conduct their own ECP certification reviews of non-network plans. We stated that this would include
Moreover, we proposed that an FFE State would need to demonstrate that it meets applicable criteria for both network plans and non-network plans under proposed § 155.1051(b) through (d), and the sufficient authority and technical capacity to conduct reviews of such plans (as assessed by HHS under § 155.1051(e)), to receive a designation as having an Effective ECP Review Program under proposed § 155.1051, as they decide to certify such plans. We stated that this would mean that an FFE State would not be permitted to elect to conduct ECP certification reviews for only network plans and not non-network plans, or vice versa. We stated that we believe this is important for several reasons. We stated that some QHP issuers may choose to offer both network and non-network plans and centralizing the reviews to either the FFE State or HHS for the same issuer would reduce administrative inefficiencies that may result when FFE States and HHS have to coordinate ECP certification review results across a range of plans that may be offered by the same issuer.
Additionally, we stated (91 FR 6415) that we believe delegating reviews of both network and non-network plans to either the FFE State or HHS would allow both plan types to undergo consistent, standardized reviews conducted by the same reviewing entity, so that similar requirements and methodologies are applied fairly across all plan types to reduce differences in ECP certification review results. We stated that this may also reduce variabilities in access across the FFE State between enrollees in non-network plans versus network plans that may result if these plans undergo different levels and types of ECP certification reviews by separate review entities, and it could make it more difficult to effectively compare ECP review results between network and non-network plans during certification if alternative review methods are applied within the same FFE State. We noted that under our proposal, non-network plans must still ensure sufficient access to ECPs in a manner consistent with section 1311(c)(1)(C) of the Affordable Care Act and must be held in parity with network plans to provide reasonable and timely access to ECPs.
Accordingly, we proposed requirements at § 155.1051 that an FFE State must meet to be considered to have an Effective ECP Review Program and conduct ECP certification reviews of non-network plans. We proposed that an FFE State must demonstrate that it has sufficient authority and the technical capacity to conduct ECP certification reviews of non-network plans by meeting all the applicable criteria to be considered to have an Effective ECP Review Program under § 155.1051, including criteria specific to non-network plans. We stated that we continue to believe that to protect low-income, medically underserved populations, and to ensure that enrollees in all FFEs are provided a minimum standard of consumer protection for reasonable access to providers and that disparities in access are minimized across States, Effective ECP Review Program States must continue to demonstrate that issuers without a network of providers applying for certification as a QHP through the FFE operating in their State meet various requirements described in this section. We proposed under § 155.1051(b) that FFE States with an Effective ECP Review Program must ensure that a non-network plan applying for certification to be offered as a QHP through an FFE demonstrates that it provides reasonable and timely access to ECPs that accept the plan's benefit amount as payment in full to ensure that services will be accessible without unreasonable delay. We stated that in lieu of the requirements for network plans that are based on contracts executed with and/or offered to an ECP, non-network plans would instead be required to indicate benefit amounts as payment in full that were accepted by and/or offered to an ECP, as reflected under proposed § 156.236(b)(1) through (b)(3). Thus, under § 155.1051(c), we proposed that FFE States with an Effective ECP Review Program must also demonstrate that their ECP requirements are comparable to ECP requirements under proposed § 156.236 for issuers' plans without a provider network so that plans: meet the minimum percentage requirements under proposed § 156.236(b)(1) for non-network plans; meet the Indian health care provider requirement under proposed § 156.236(b)(3) for non-network plans; and meet the category per county requirements under proposed § 156.236(b)(2) for non-network plans. Similarly, we stated that our proposal under § 155.1051(d) would also apply to non-network plans. Specifically, we proposed that FFE States with an Effective ECP Review Program that have alternative ECP requirements, including ECP requirements specific to non-network plans, compared to those requirements described under proposed § 155.1051(c)(1) through (c)(3), must demonstrate how their requirements would continue to promote a sufficient number and geographic distribution of ECPs to ensure reasonable and timely access to ECPs, and an adequate level of service for low-income enrollees or individuals residing in Health Professional Shortage Areas. We stated that we understand that due to the newness of these plans, if this proposal were finalized, many FFE States would still be in the earlier stages of implementing new requirements for these plans. Thus, we stated that we would continue to work with FFE States to provide technical assistance to ensure any State ECP requirements (including alternative requirements) for non-network plans continue to ensure reasonable and timely access to ECPs across the State before and after making an Effective ECP Review Program determination.
Furthermore, consistent with the discussion in section III.E.11.c. of the proposed rule for network plans, we stated that we would review information submitted by the FFE State to ensure the State receives adequate issuer data and documentation to conduct an examination of ECP requirements described in proposed
However, we noted that there are several additional criteria we would consider during our review of FFE States specific to only non-network plans. First, we proposed under § 155.1051(e)(5) that we would consider if the FFE State utilizes the Federal ECP List or has a process they use to identify qualified ECPs that may accept a non-network plan's benefit amount as payment in full. We stated that we believe it is essential to have a means to identify the exact geographic location and distribution of ECPs that may be available within an issuer's service area that may accept a non-network plan's benefit amount as payment in full; we noted that this would ensure issuers fulfill statutory requirements under section 1311(c)(1)(C) of the Affordable Care Act to include ECPs “where available” so that enrollees have sufficient access to ECPs through their plans. Additionally, we proposed to consider under § 155.1051(e)(7) whether the FFE State collects information from issuers regarding the status of offers of benefit amounts as payment in full to an ECP. We stated that we believe this type of data is an important metric to assess an issuer's compliance with the minimum percentage, category per county, and Indian health care requirements under proposed § 156.236(b)(1) through (b)(3), which would be evaluated based on measurements of benefit amounts as payment in full that were offered to or accepted by an ECP.
Moreover, as we stated under section III.E.11.c of the proposed rule, we noted that States possess unique knowledge on local factors that could strengthen ECP reviews, such as on market conditions, geographic constraints, areas in the State with limited economic resources, provider shortages, workforce issues, and population demographics, and we stated that we believe States can leverage this same knowledge on local factors when conducting ECP reviews of non-network plans. However, we considered enumerating the information that non-network plans must submit to the FFE listed at § 156.236(b)(4) through (b)(9) as requirements for FFE States with an Effective ECP Review Program to review non-network plans to ensure they are in alignment with HHS' proposed approach in an effort to further support consumer protectiveness in this novel plan design. We stated that information described under proposed § 156.236(b)(4) through (9) is specific to non-network plans and reflect additional safeguards to ensure these plans maintain access to providers without traditional network arrangements. We noted that these factors would include assessing a non-network plan's strategy for conducting outreach to ECPs in their area and for making benefit amounts public to enrollees, methodologies for determining benefit amounts, strategy for publishing consumer-friendly information on balance billing and potential out-of-pocket costs, availability of exceptions processes for enrollees unable to locate providers who accept benefit amounts as payment in full, and customer services resources. We stated that these reflect more qualitative measures that would likely require different data collection methods compared to the more quantitative measures of minimum percentage, category per county, and Indian health care requirements under proposed § 156.236(b)(1) through (b)(3). We further stated that, as HHS is seeking to broadly restore flexibilities to FFE States as a part of ECP certification reviews and empower FFE States who understand their consumer needs and local conditions best, we opted to defer to FFE States in how they wish to review non-network plans for this type of information, as applicable. Though, we sought comment on whether HHS should better align the reviews of non-network plans across the FFE, regardless of whether HHS or an FFE State is conducting ECP certification reviews, by enumerating the factors under §§ 156.236(b)(4) through (b)(9).
Altogether, in addition to the proposal to revise §§ 156.230 and 156.235, and add §§ 156.236 and 155.1051, we proposed revisions to §§ 155.1050 (including its section heading), 156.275, and 156.810 to clarify that provisions within these sections would apply to the certification of non-network plans in the same manner that they apply to network plans.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy with a modification to delay implementation of this proposal to PY 2028. We are also modifying § 156.236(b)(5) to include the non-network plan's strategy for regularly updating any changes to benefit amounts, § 156.236(b)(7) to include the non-network plan's strategy for providing information on navigating episodes of care with multiple benefit amounts (including for ancillary providers and services), and § 156.236(b)(9) to include the non-network plan's strategy to assist plan enrollees in receiving real-time cost estimates prior to care being furnished, as information non-network plans must submit to the FFE for a determination that it provides access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full.
Lastly, we clarify that the finalized non-network plan requirements under § 156.236 are applicable to issuers with non-network plans seeking QHP certification to be offered on the FFE. We are not requiring FFE States to offer non-network plans on the FFE within their State, nor are we requiring States operating their own Exchanges to certify and offer these plans. States retain full discretion and authority to determine whether non-network plan designs are appropriate for their markets, consistent with applicable State laws and regulations. The requirements under § 156.236 lay out a clear regulatory framework that HHS will apply to conduct certification reviews of issuers with non-network plans seeking to be certified as a QHP on the FFE. States operating their own Exchanges (State Exchanges and SBE-FPs) are welcome to use the principles of this framework but have flexibility to determine the specific parameters for non-network plan certification requirements within their State, provided they ensure issuers provide sufficient access to providers consistent with standards under § 156.236(a). While HHS is delaying implementation of allowing non-network plans to receive QHP certification to be offered as QHPs through the FFE beginning PY 2028,
Current non-network plan enrollees shared their positive experiences in relation to finding and receiving care under their plans. These commenters appreciated that their plan offered choice of any provider without referrals and prior authorization requirements as well as transparent information on the cost, quality ratings, availability, and location of providers to support cost-conscious, informed decision-making. Some commenters shared positive experiences utilizing their non-network plans to receive specialty care (for example, cancer care), including the receipt of specialized treatments and medications without delay, denial, or restriction contingent on provider network participation. Some commenters pointed to non-network plans as a viable solution to the current limitations of existing provider networks, including narrow networks and inaccuracy in provider directory information.
Furthermore, several commenters stated that suggested savings from price transparency efforts and related policies would be small, as limited evidence demonstrates uptake of price transparency efforts by consumers and compliance against providers is limited in practice, and other systemic issues exist in the health care system that reduce the effectiveness of price transparency efforts. Commenters suggested that HHS focus on other activities to address these issues. For example, commenters urged HHS to develop stronger price transparency guidelines on “Good Faith Estimates” under the No Surprises Act and improve how providers display standard charges which often reflect an average of negotiated prices, so that price transparency information can be trusted. Commenters also urged HHS to develop a Federal all-payer claims database, so that nationwide price transparency information would be accessible across markets and to consumers enrolled in different plan types. Commenters also supported stronger legal requirements that target barriers limiting cross-data exchange on pricing information between billing departments at the provider and insurer level.
Lastly, we recognize that systemic issues exist in the health care system that currently could limit the full potential of price transparency initiatives. While we appreciate commenters' suggestions of other activities we could pursue to improve pricing information for consumers, these suggestions were outside the scope of this rulemaking as they do not relate to our specific proposal. However, we do believe a combination of various solutions would have the most systemic impact on price transparency, which we believe includes the availability of non-network plans. Since non-network plans often present transparent price information to their enrollees by making benefit amounts and providers' acceptance of those benefit amounts available, these plans can promote additional price transparency if plans compete by implementing more transparent price information to attract price-sensitive consumers. Non-network plans may further encourage providers to lower prices to attract enrollees shopping for care who would have access to compare providers' acceptance of benefit amounts and health care prices in their service area. Several factors relevant to the non-network plan regulatory framework promote an ecosystem which we believe will further encourage price transparency efforts, including those under § 156.236(b)(4) through (9) which include making benefit amounts publicly available, the methodology for determining benefit amounts, provider outreach to
Many commenters noted that consumers cannot predict all the medical services (for example, tests, procedures, referrals, drugs, etc.) they will need prior to the point of care, making it difficult to evaluate whether a non-network plan would meet their health care needs before enrolling in a non-network plan. Commenters explained that this uncertainty is particularly problematic for patients with serious, chronic, or disabling conditions, whose care is ongoing, expensive, and reliant on continuity of care with specific providers; and, these patients are unlikely to compare services from different providers while managing their illness.
Commenters also highlighted that the existing healthcare system is already complex, with many consumers—particularly those with language barriers, chronic conditions, low-income individuals, and caregivers—lacking health literacy and subsequently struggling to navigate covered benefits, formularies, diagnosis and procedure codes, claims processing and utilization management. They stated a non-network plan would add further confusion to an already burdensome system and risk consumers failing to understand the fundamental differences between network and non-network plans during plan selection.
Moreover, we support ensuring that clear information about non-network plans—including their benefits, risks, and how to utilize these plans to meet health needs—is available to consumers prior to enrollment. We aim to clearly identify and differentiate non-network plans during plan selection to support informed consumer decision-making and ensure consumers understand the administrative tasks they must take on should they choose to enroll in a non-network plan. To address commenters' concerns regarding the effort required to navigate these plans, potential confusion over this novel plan design, and uncertainty about meeting unpredictable medical needs, we are finalizing, with modifications, multiple provisions to promote adequate consumer support. These provisions require non-network plans to make benefit amounts for services publicly available, provide consumer-friendly and publicly-available information on expected out-of-pocket costs, make an exceptions process available to enrollees who cannot find providers willing to accept the benefit amount as payment in full, and provide adequate customer service or online provider directory assistance resources to assist plan enrollees and potential enrollees in finding providers in their area who will accept the plan's benefit amount as payment in full. We further expect that non-network plans should provide consumers with relevant information related to claims submission, understanding costs, comparing price information, documentation requirements, and all other administrative processes consumers may expect when using a non-network plan consistent with information requested under § 156.236(b). As part of the QHP certification data submission process, non-network plan issuers will also be required to provide URLs that make benefit amounts publicly available, ensuring consumers have adequate information enabling them to understand the price of services and locate providers who will accept the plan's benefit amount as payment in full.
Commenters further conveyed that unforeseen medical costs could be substantive for those receiving expensive specialty therapies, seeking emergency care, and those not accounting for additional charges of ancillary providers or services that may not accept the benefit amount as payment in full (for example, assistants, anesthesiologists, surgeons, pathologists, radiologists, diagnostic imaging, outside laboratories, laboratory tests, etc.). One commenter recommended that HHS require plans to ensure that the benefit amount as payment in full is accessed across all rendered services and providers involved in a covered episode of care, as long as the primary provider agreed to accept the benefit amount as payment in full.
Commenters also requested additional clarification on how non-network plans would satisfy applicable provisions of the No Surprises Act, and some posited that non-network plans may be incompatible with provisions of the No Surprises Act. However, one issuer that currently offers non-network plans stated that these plans are indeed subject to the No Surprises Act and comply with all applicable provisions, including provisions related to emergency and air ambulance services. The issuer stated that enrollees would not be subject to balance billing for these services and that providers would have access to independent dispute resolution processes.
In addition to this provision, we proposed multiple provisions under § 156.236 to ensure non-network plans provide adequate support to consumers, including by making benefit amounts publicly available (§ 156.236(b)(5)), providing consumer-friendly and public information on expected out-of-pocket costs (§ 156.236(b)(7)), making an exceptions process available to enrollees who cannot find providers willing to accept the benefit amount as payment in full (§ 156.236(b)(8)), and providing adequate customer service or online provider directory assistance resources to assist plan enrollees and potential enrollees in finding providers in their area who will accept the plan's benefit amount as payment in full (§ 156.236(b)(9)). For the reasons stated earlier in this section of this final rule, we believe these additional provisions will ensure issuers provide clear information and resources so that enrollees understand potential out-of-pocket costs prior to receiving care and would be aware of any charges exceeding the benefit amount.
Furthermore, non-network plans that are applying for QHP certification will be required to structure their plans so that they provide all the consumer protections that apply to individual and small group health coverage including, but not limited to, those specified in PHS Act, title XXVII, parts A through D, as all other plans applying for QHP certification are subject to providing. A non-network plan will not be exempt from providing such protections to its enrollees merely because it does not contract with providers, and failure to offer these protections would result in denial of certification in accordance with § 155.1000(e) and decertification in accordance with § 155.1080(c). Additionally, as we have previously stated, HHS, as the operator of the FFE, has broad discretion to determine whether a plan is in the interest of qualified individuals and qualified employers, regardless of whether the plan meets other minimum certification requirements consistent with § 155.1000(c)(1). Thus, we believe our authority to deny certification of a non-network plan applying to be offered as a QHP on the FFE under the interest standard extends to determinations that a non-network plan's benefit structure fails to provide protections against surprise medical bills in a manner like a network plan.
Moreover, commenters requested additional clarification on how non-network plans would be required to comply with applicable provisions of the No Surprises Act. The Departments of Health and Human Services, Labor, and the Treasury have previously issued guidance stating that the surprise billing provisions of the No Surprises Act apply to plans and issuers that do not have a network of providers with respect to emergency services and air ambulance services.
However, provisions of the No Surprises Act that prohibit balance billing and limit cost sharing for non-emergency services apply only to services provided by a non-participating provider with respect to a visit to a participating health care facility. A participating health care facility is health care facility that has a contractual relationship with a plan or issuer, directly or indirectly, setting forth the terms and conditions upon which the relevant item or service is furnished to the participant, beneficiary, or enrollee under the plan or coverage.
Nevertheless, we believe that the concerns raised by commenters require additional consideration. For example, the concerns stated by commenters pertaining to episodes of care that may trigger multiple benefit amounts that consumers could not reasonably anticipate prior to receiving care warrants additional consideration. This includes care by ancillary providers (for example, diagnostic services, laboratory services, radiology, pathology, anesthesiology, etc.). We believe that it is a common occurrence that when a consumer visits a provider for a health concern or complaint, ancillary services may be required in the recommended course of treatment. A consumer being able to recognize the need for ancillary services likely requires a level of advanced medical knowledge that is more appropriate for providers. The selection of ancillary providers and services are often determinations made during a clinical episode and driven by real-time clinical decision making and medical necessity (for example, a surgical patient utilizing anesthesia or pathology services during an operation). In this example, the patient may be unable to assess if the anesthesiologist and pathologist accepted the benefit amount as payment in full prior to or during the surgery. Therefore, it would not be reasonable for a patient to anticipate ancillary providers and services as these are often determined by the provider (for example, the surgeon) and not known in advance. For this reason, we are finalizing additional language at § 156.236(b)(7) to promote additional consumer protection by ensuring non-network plans have a strategy for providing consumer-friendly information to enrollees on navigating episodes of care with multiple benefit amounts (including for ancillary providers and services). This information is important so that non-network plans can assist enrollees in avoiding balance billing and additional out-of-pocket costs beyond their control when receiving care that may trigger multiple benefit amounts that could not be reasonably anticipated. However, considering the novelty of these plan types, and the related complexity associated with potential out-of-pocket costs and balance billing scenarios, we will continue to consider if additional regulatory refinements around consumer protections are necessary and welcome recommendations.
In addition, commenters stated that without direct insurer-provider exchanges within a non-network plan, providers would experience less predictability and fewer estimates on patient volume in advance. Some commenters also stated concerns that if patients, especially those in need of specialty care, cannot regularly locate providers willing to accept the plan's benefit amount as payment in full, then more care could shift to safety-net providers and emergency departments that are obligated to treat patients regardless of insurance status or ability to pay. Some commenters shared concerns that, over time, a non-network plan could impact trust between providers and consumers if such plans lead to disputes (including disputes in court) between patients and providers on billing, eligibility, payment sufficiency, and coverage; and that these disputes could be mitigated through provider and insurer contracting.
In contrast, an insurer currently offering a non-network plan stated that providers had positive experiences with the plan due to increased freedom to treat patients without restrictions caused by prior authorization, step-therapy protocols, and formulary restrictions, along with the prompt payment upon rendering services.
We acknowledge the concerns from providers that they may be influenced to accept the benefit amount as payment in full without an ability to directly negotiate with the non-network plan, and the impacts this may have on rural and safety net providers. However, it is our understanding that non-network plans perform comprehensive research prior to setting benefit amounts, as would any other network plan prior to negotiating payment rates. This includes directly gathering pricing information from providers, leveraging both Medicare and private payor rates, utilizing publicly available data, identifying regional factors to adjust for health care prices, and reviewing
We cannot require that providers accept a network agreement from an issuer; likewise, we cannot require that providers accept a non-network plan's benefit amount as payment in full. If there is not a sufficient choice of providers, including specialty care, available in an enrollee's service area that agree to accept the benefit amount as payment in full, then a non-network plan could not reasonably satisfy the proposed regulatory requirements under § 156.236, in which case we would not certify a non-network plan as a QHP to be offered through the FFE. Likewise, State Exchanges and SBE-FPs allowing non-network plans to be offered on their Exchanges may deny QHP certification to a non-network plan in this circumstance for not meeting requirements under § 156.236(a) to ensure access to a range of providers that accept the non-network plan's benefit amount as payment in full consistent with § 155.1050(a)(2). We also acknowledge concerns that providers would experience less predictability and fewer estimates on patient volume in advance without direct insurer-provider interactions in non-network plans but remind commenters that the existence of non-network plans in their area by no means precludes the existence of network plans. As most plans have traditionally operated with a provider network, and these plans are likely most familiar to consumers, we expect many consumers will continue to enroll in network plans, and providers may continue to contract with network plans as they see fit, which may provide more certainty regarding expected patient volume for providers for whom this is a concern. We also understand concerns providers may have in potential erosion of trust with consumers over potential billing disputes. If a provider understands a consumer is enrolled in a non-network plan, we recommend that the provider communicate expected costs clearly with consumers, as they would with self-pay or uninsured individuals.
Though we acknowledge provider concerns with our proposal, there are also potential benefits to providers related to non-network plans, including increased freedom to treat patients without restrictions caused by prior authorization, step-therapy protocols, and formulary restrictions, along with the prompt payment upon rendering services, as verified by the one commenter providing non-network plans and based on our research into non-network plans. We believe some of these benefits may also reduce billing disputes experienced between providers and issuers when services are not covered and impact treatment due to these restrictions.
However, one consumer enrolled in a non-network plan shared that they switched to a non-network plan after previously experiencing an increase in premiums within a network plan, leading to a reduction in premium costs within the non-network plan. Another commenter thought both patients and providers would experience administrative cost savings resulting from no network limitations or prior authorization, leading to care that is not subject to administrative delays. In contrast, another commenter did not believe a non-network plan would produce enough administrative cost savings that would allow for enrollees to receive larger premium reductions.
While a non-network plan may reduce administrative costs associated with provider network management, we do not believe a non-network plan would evade responsibility to ensure access to care, as again, the non-network plan
Lastly, while we appreciate commenters expressing concerns that a non-network plan may drive patients to more expensive care settings, we do not believe there is substantive evidence of this claim at this time. Again, we reiterate that we believe the structure of non-network plans, in which consumers are “shopping” for health care and potentially negotiating costs directly with providers, will encourage thoughtful use of health care services by consumers and potentially create a more competitive environment for healthcare services. However, we will monitor consumer complaints from individuals enrolled in these plans to ensure enrollees have access to a range of providers as required under § 156.236(a) and, if appropriate, decertify the plan under § 155.1080(c) or deny certification to the plan under § 155.1000(c)(1).
For the reasons explained earlier in this section of this final rule, we believe that non-network plans do provide a certain level of guarantee that enrollees can choose a provider of their choice and receive publicized benefit amounts for covered services. So long as non-network plans set benefit amounts in such a way that consumers have access to a sufficient choice of providers within their service area that accept the benefit amount as payment in full, then consumers should be able to locate necessary care while limiting out-of-pocket costs. Non-network plans are also required to make information available regarding exceptions processes for consumers who cannot find providers willing to accept the benefit amount as payment in full, under § 156.236(b)(8) and provide adequate customer service supporting consumers in finding providers who will accept the plan's benefit amount as payment in full under § 156.236(b)(9). We acknowledge commenters' concerns regarding worries that issuers may be disincentivized from signing long-term, stable contracts that may affect overall market stability. However, we do not believe that non-network plans will wholly replace network plans. Many consumers are familiar with, and will prefer to remain in network plans, and issuers will likely continue to offer network plans with contracted providers. Network plans do offer valuable benefits to consumers and should continue to be available through the FFE. However, we will continue to monitor the market for any potential effects on stability. Under § 155.1000(c)(2), like network plans, non-network plans, could be denied QHP certification if it is determined that making available such health plans through such Exchange is not in the interests of qualified individuals and qualified employers in the State. This also applies if non-network plans affect the integrity of plans offered through the FFE, including the availability of network plans.
In contrast, an issuer currently offering a non-network plan supported the requirement that non-network plans utilize benefit amounts to indicate enrollees have access to a sufficient range of providers who will accept the benefit amount as payment in full. The commenter added that benefit amounts are currently utilized by non-network plans and that benefit amounts are informed by real-world pricing data, including cash prices, commercial rates, and Medicare fee schedules, to ensure enrollees can access care that is fully covered by the plan.
A few commenters shared that requiring a non-network plan to ensure access to a range of providers, such as providers that specialize in mental health and substance use disorder services, that accept the non-network plan's benefit amount as payment in full would help expand access to behavioral health. Commenters noted that many mental health and substance use disorder providers choose not to contract with insurers, often due to inadequate reimbursement rates or only accept a small number of patients at a lower rate paid by the insurer while reserving the remainder of their appointments for those who pay a much higher cash rate. Another commenter stated that health plans often do not display payment rates for behavioral health providers, thus enrollees may lack information to make an informed choice on which plan may best suit their behavioral health needs.
Regarding concerns about insurers reporting lower payment reimbursement rates compared to actual charges received by consumers for their care, it is our understanding that non-network plans must have a process in place to assess whether a benefit amount was accepted by a particular provider when their enrollee seeks care, and that non-network plans build a repository over time of such providers accepting the benefit amount based on an enrollee's claims, which can inform non-network plans decisions to adjust or increase benefit amounts. To help reinforce this process, we proposed under § 156.236(b)(4) that non-network plans must report their strategy for conducting continuous outreach to available providers in a particular area to determine whether they would accept the plan's benefit amount as payment in full. Thus, we believe that non-network plans should be able to quantify the set of available providers in an applicable service area that accept the plan's benefit amount as payment in full. And by collecting this quantitative data as part of data submission requirements during QHP certification, we can measure access within a non-network plan's “network” consisting of the providers in the applicable area that would accept the plan's benefit amount as payment in full, even without formal contractual relationships.
We further clarify that we will not be requiring issuers to merely attest that their non-network plan has sufficient access to providers that accept the plan's benefit amount as payment in full. We will be collecting quantitative data from issuers that provide additional information regarding sufficient access to providers with non-network plans, including a numerical assessed percentage of providers that accept the plan's benefit amount as payment in full, and specific ECPs that have accepted the plan's benefit amount as payment in full. We also believe that the other information that non-network plans are required to submit work in concert to ensure sufficient access to providers that access the non-network plan's benefit amount as payment in full, including the strategy for making benefit amounts publicly available, methodology for determining benefit amounts, strategy for providing consumer-friendly and public information regarding costs, availability of exceptions processes, and strategy for providing adequate customer service to assist enrollees and potential enrollees in finding providers in their area who will accept the plan's benefit amount as payment in full. Together, we believe these factors constitute a framework that will ensure sufficient access to providers as they provide additional qualitative information on how the non-network plan has structured the plan, determines benefit amounts, and ensures consumers have sufficient access to care.
However, commenters raised valid recommendations on other data metrics to consider to measure provider access under a non-network plan, including a combination of provider acceptance data, binding provider acceptance agreements, historical claims data, and other objective indicators showing that enrollees can obtain services within reasonable timeframes and geographic distances. It is unclear to us how a provider acceptance agreement (a written agreement between the provider and non-network plans that the provider will accept a benefit amount as payment in full) may differ from traditional network contract agreements under a network plan. An explicit requirement to have provider acceptance agreements in place may also run counter to the premise underlying a non-network plan that distinguishes itself by not having formal agreements with providers. Part
In response to the commenter requesting clarification on how we will monitor access on an ongoing basis, we will monitor potential issues raised by consumers on the FFEs and escalate any identified access concerns by performing direct outreach to QHP issuers with non-network plans, as appropriate. We will also consider additional outreach initiatives, including conducting consumer focus groups with enrollees of non-network plans. If we were to identify that a non-network plan cannot meet all certification requirements under § 156.236, we would consider decertification of such plan. Likewise, if a State Exchange or SBE-FP that allows non-network plans on their Exchange finds that a non-network plan no longer meets standards under § 156.236(a) and State requirements for non-network plans to provide access to providers, as applicable, then the State Exchange or SBE-FP may choose to decertify the non-network plan.
Lastly, we appreciate commenters' support that non-network plans may provide meaningful coverage for behavioral health providers that often do not contract with network plans.
Moreover, commenters stated concerns regarding whether a reported assessed percentage of providers in each plan's service area that accepts the plan's benefit amount as payment in full would allow the non-network plan to adequately determine how many providers would be sufficient to ensure services will be accessible without unreasonable delay. Commenters encouraged HHS to define how this assessment must be conducted, and to establish additional guidance regarding acceptable verification methodologies, required documentation, reassessment frequency, cadence for re-reporting the assessed percentage during the plan year, and required updates when provider acceptance declines. Another commenter recommended that HHS require non-network plans to conduct regular, independent, and transparent audits of how many providers accept the benefit amounts as payment in full, including behavioral health providers and to make the results of such audits publicly available prior to being certified as a QHP each year. This same commenter recommended the establishment of behavioral health provider availability thresholds for non-network plans to ensure sufficient access to behavioral health providers. Lastly, commenters opposing this proposal stated concern that an assessed percentage of providers in each plan's service area that accepts the plan's benefit amount as payment in full would function only as a point-in-time estimate that is subject to change, as there is no obligation that a provider would continuously accept the plan's benefit amount.
In addition, we acknowledge commenters' concerns that an assessed percentage of providers that accept the plan's benefit amount as payment in full could potentially represent only a point-in-time estimate that could change if a provider no longer accepts the plan's benefit amount as payment in full. Though, we believe that this issue is common in the existing health care market and is not only unique to a non-network plan, as issuers with network plans and providers may decide to terminate a contract during the plan year or a provider may change payment rates to adapt to shifts in health care prices outside of our purview. Nevertheless, this is one reason that we require plans to re-submit data each year as part of a new certification cycle,
Moreover, we appreciate commenters' request for additional information on how to perform a reasonable assessment of the assessed percentage of providers that accept the plan's benefit amount as payment in full, such as acceptable methodologies, reassessment frequencies, and documentation requirements. Similar to the reasons that we seek to learn more about the methodologies non-network plans utilize to determine an assessed percentage of providers prior to potentially establishing a minimum assessed percentage, we likewise believe it is premature to disseminate additional guidance on acceptable assessment methodologies until we gather more information on effective methodologies. We also believe that collecting more information on a non-network plan's assessed percentage of providers is important prior to considering establishing minimum thresholds for behavioral health providers or other specialty types. Collecting more information first would allow us to establish more evidence-based minimum thresholds that effectively promote access to providers, including in geographic areas that lack access to various specialty types. We also believe establishing separate thresholds for specific specialty types that must accept the non-network plan's benefit amount as payment in full would benefit from notice and comment rulemaking, just as we have historically done for proposing new provider-specific requirements and expanding provider types for network adequacy (under § 156.230) and ECP (under § 156.235). This would allow the public an opportunity to provide feedback on specific threshold percentages proposed by HHS and to assess if appropriate specialty type categories are adequately represented in a way that would promote access. However, for the reasons stated earlier in this section of this final rule, we believe the other information requested under § 156.236(b)(1) through (b)(9) works together to ensure a sufficient choice of providers in non-network plans, despite no specified minimum percentage being designated at this time.
As we learn more information prior to PY 2028, including after interested party engagement activities, we will consider commenters' suggestions to issue any additional guidance that may be necessary to provide to issuers offering non-network plans prior to implementation in PY 2028. While we do not intend to prescribe specific methods a non-network plan may use, we encourage non-network plans to consider a variety of methods, including, but not limited to, provider outreach, historical claims data, public data sources on available providers within the plan's service area, and other payor data.
We also acknowledge commenters' suggestion to require non-network plans to conduct regular, independent audits of how many providers accept the plan's benefit amounts as payment in full. However, we do not intend to require non-network plans to conduct audits and make this information publicly available at this time. We do not currently publicly report similar issuer certification review results as part of network adequacy and ECP reviews. If we determine that additional information is necessary to verify how many providers accept a non-network plan's benefit amount as payment in full beyond the information the issuer and HHS collect, then we may consider proposing this additional requirement through future rulemaking.
We believe that adequate outreach may consist of, but is not necessarily limited to, direct outreach to providers within the issuer's service area by utilizing multiple communication channels (for example, email, phone, in-person), collecting pricing information on a variety of different services from a meaningful sample of different provider types across various geographical areas, maintaining detailed documentation on the outcomes of such outreach (including verbal acceptance from providers that they accept benefit amounts as payment in full), and conducting this outreach at least annually to ensure that benefit amounts are routinely updated and current. Through engagement with issuers, these are common strategies that issuers with network plans conduct to ensure access to providers, thus we believe these strategies would also be appropriate to non-network plans. As an example, we will not consider it sufficient if the issuer were to only contact a single provider that accepts a benefit amount as payment in full and base any subsequent rates based on that single provider. Overall, we believe that conducting outreach is an essential tool along with other data sources (for example, claims, private payor rates, etc.) to assess acceptance of a non-network plan's benefit amount by providers.
Lastly, while it could be true in some cases that providers may not provide price information to non-network plans that they do not contract with, as they often are handling significant patient volumes and administrative processes, under no formal contract with the issuer, and may not see the benefit in doing so, we do believe that some providers may be incentivized to provide this information to attract new consumers. This may especially occur if non-network plans appropriately communicate the potential benefits of these plans to providers, including those mentioned by some providers currently accepting non-network plans, such as no need for prior authorization, step therapy protocols, and prompt payment upon services provided that often serve as barriers to providers furnishing care. We also believe that in practice, providers may already be required to disclose some price information since consumers have a right to request advance cost estimates for their services due to existing Federal price transparency requirements under the No Surprises Act and due to patients seeking to pay cash for services.
Lastly, we appreciate commenters' suggestions on ways to improve the standardization of benefit amounts. However, consistent with our interpretation of our statutory authority under section 1311(c)(1)(B) and (c)(1)(C) of the Affordable Care Act, we do not believe it would be appropriate to dictate specific billing codes a non-network plan must utilize, even for the purposes of standardization. Given their expertise in this area, we also believe specific billing codes plans should use are more appropriately determined jointly by issuers and providers. Lastly,
Moreover, one commenter stated that requiring a non-network plan to report the strategy for providing consumer-friendly information about balance-billing scenarios is not a substitute for protecting against these balance-billing scenarios. Many commenters raised concerns that many medical interactions pose significant balance-billing risks, including in ways that may violate provisions of the NSA, due to consumer uncertainty regarding what medical services a patient will actually need since most consumers lack detailed medical knowledge. Thus, commenters shared that consumers need more information beyond potential out-of-pocket costs.
Furthermore, and as stated in the discussions above, we understand that commenters have concerns about the ability of enrollees to predict all the required health services they will need during an episode of care, prior to receiving services. Many medical interactions result in the need for additional ancillary services that a consumer may not be able to reasonably predict, including diagnostic and laboratory tests, imaging tests, and recommendations for necessary services from ancillary providers such as pathologists, anesthesiologists, and radiologists. As we previously stated in discussions above, consumers should not be expected to understand and anticipate all the ancillary providers and services their provider may recommend during their episode of care, as this anticipation likely requires a level of advanced medical knowledge that is more appropriate for providers. And, the selection of ancillary providers and services are often determinations made during a clinical episode by providers (not patients) and are driven by real-time clinical decision making and medical necessity. When we proposed this factor in the proposed rule, we stated that this factor is important to ensure non-network plans have in place a cohesive strategy for providing consumer-friendly information about how the plan may be most effectively used to limit out-of-pocket costs and the impact of seeking care from providers who charge more than the plan's benefit amount, since this plan design may not be immediately intuitive to enrollees (91 FR 6411). An enrollee receiving additional ancillary services and care from ancillary providers would likely impose additional out-of-pocket costs, especially if the enrollee initially proceeded with care due to a benefit amount wholly accepted by the primary provider. But, the enrollee did not foresee the care furnished by ancillary providers and ancillary services costing more than the plan's benefit amount when selecting the primary provider, which would constitute additional out-of-pocket costs. Thus, we are finalizing additional language in § 156.236(b)(7) to ensure non-network plans have a strategy for providing consumer-friendly information to enrollees on navigating episodes of care with multiple benefit amounts (including for ancillary providers and services). We believe modifying this factor to reflect consumer-friendly information on costs associated with ancillary providers and services would be consistent with our expectation when initially proposing this factor that plans should provide information about how the plan may be most effectively used to limit out-of-pocket costs and the impact of seeking care from providers who charge more than the plan's benefit amount. This type of information would be required to be disseminated to consumers along with other information on potential out-of-pocket costs and balance-billing
An issuer currently offering a non-network plan described that the plan's exceptions process ensures that enrollees have access to care at or below the plan's benefit amount, or the non-network plan would increase the benefit amount to fill gaps in access to care. The commenter stated that diligent adjustments of the benefit amount help promote consumer protections.
As we previously stated (91 FR 6411), it is important that the non-network plan remains flexible for enrollees who have little choice in providers and cannot locate providers willing to accept the benefit amount as payment in full. If a non-network plan cannot protect consumers against out-of-pocket costs in situations where many providers refuse to accept the plan's benefit amount as payment in full, an effective exceptions process should be able to shift the burden of paying any unavoidable, additional out-of-pocket costs from the enrollee to the non-network plan. We expect that the non-network plan's exceptions process can appropriately assist consumer's in limiting out-of-pocket costs if assisting the consumer in locating additional providers that accept the plan's benefit amount, increasing the benefit amount so that providers in the consumer's service area accept the benefit amount as payment in full, or by some other means. As these plans become available through the FFEs, we will consider whether additional requirements may be needed as part of an exceptions process including if complaints from non-network plan enrollees are identified through regular HHS monitoring that can be mitigated by proposing more requirements on a non-network plan's exceptions process. We may also assess exceptions processes that may potentially be adopted by State Exchanges and SBE-FPs offering non-network plans through their Exchanges to consider the application of these processes on the Federal level.
Overall, we appreciate commenters' suggestions to mandate more prescriptive standards surrounding the exceptions process. We believe that well-established exceptions processes that already exist for enrollees in network plans to receive coverage for an out-of-network provider when an in-network provider is not available, should also be extended to enrollees in non-network plans when enrollees cannot locate a provider that will accept the benefit amount as payment in full. For example, just as issuers with network plans must provide access to covered services when in-network providers are unavailable, non-network plans must maintain an exceptions process to ensure that enrollees are able to obtain covered services at or below the plan's benefit amount when there is not sufficient access to providers accepting the plan's benefit amount as payment in full.
Lastly, in response to commenters that advocated for more guidelines on the exceptions and appeals processes to promote more consumer protections, we affirm that non-network plans must provide all the same consumer protections that apply to individual and small group health insurance coverage, including, but not limited to, those specified in PHS Act title XXVII parts A through D, as all other plans applying for QHP certification are subject to providing. These consumer protections that non-network plans must provide include both an exceptions processes for non-covered services by providers, and formal appeal processes to allow enrollees to appeal coverage and benefit determinations. Lastly, we note that the requirement under § 156.236(b)(8) under which non-network plans must submit information to HHS regarding whether the plan has an exceptions process for enrollees who cannot find providers willing to accept the benefit amount as payment in full, does not exempt non-network plans from also ensuring their enrollees have access to formal appeals processes consistent with consumer protections specified in PHS Act title XXVII parts A through D.
Additionally, some commenters stated that consumers need more customer service resources, such as tools to provide enrollees real-time information on the cost of care, so consumers fully understand their financial liabilities before services are furnished or at the point of service. One commenter stated that medical technology has expanded, such that
Additionally, we understand the importance for consumers to understand potential costs associated with receiving care prior to the point of service, especially since a single episode of care could trigger multiple benefit amounts that consumers may not be able to sufficiently anticipate. We appreciate commenters noting that technology to provide consumers that real-time information is becoming more accessible, and that non-network plans have already implemented efforts to provide these services to consumers, as the issuer currently offering non-network plans shared that the plan provides online tools so consumers have real-time information on local providers, anticipated costs, and benefit amounts. Therefore, we are finalizing additional language at § 156.236(b)(9) to ensure non-network plans have a strategy to assist enrollees in receiving real-time cost estimates prior to care being furnished. We believe this would further address commenters' concerns about balance-billing risks and unanticipated out-of-pocket costs, as outlined in discussions above, as it would help enrollees more appropriately determine healthcare costs in advance of seeking care so a consumer can make an informed decision on seeing a provider after evaluating a real-time cost estimate. And, we believe it is feasible as one issuer with a non-network plan confirmed the plan already has online tools to perform these real-time cost estimates to inform consumers. In addition, there is robust evidence that real-time cost estimate technology has already been widely adopted by both issuers and providers, thus we maintain that this requirement is reasonable for non-network plan issuers to meet.
Lastly, a large portion of commenters recommended that HHS delay implementation of this proposal to PY 2028, and some encouraged separate notice-and-comment rulemaking or a request for information (RFI) on non-network plans. One commenter suggested phasing in certification of non-network plans over time. Commenters reasoned that after the finalization of this payment notice, there would be a short turnaround time
Moreover, we recognize that commenters may need additional time to learn about this novel plan type (especially consumers) and to adequately prepare infrastructure for the entry of these plans. We also believe that commenters have raised valid concerns in response to this proposal that warrant further consideration and analysis—principally, concerns on consumer out-of-pocket costs, impact of non-network plans on providers, risk-adjustment, and alternative methods to measure access to providers within non-network plans. For this reason, we agree that it is appropriate to delay implementation of this proposal until PY 2028. We remain open to further engaging interested parties to discuss potential concerns with non-network plans and modifications to finalized policies under § 156.236 to ensure these plans provide meaningful access to care to enrollees enrolled in QHPs on the FFE.
Commenters also requested additional clarity on how non-network plans would need to demonstrate coverage of each EHB, including coverage of preventive services without cost sharing and additional costs beyond the plan's benefit amount. One commenter stated concern that if non-network plans cannot guarantee access to preventive services without cost sharing, enrollees may be disincentivized from seeking preventive services. Another commenter questioned how a non-network plan would comply with non-quantitative treatment limitation requirements under MHPAEA, so that non-network plans do not impose more restrictive non-quantitative treatment limitations on mental health and substance use disorder services than on medical/surgical services.
Furthermore, to receive certification as a QHP, a non-network plan must provide the EHB package in accordance with § 156.115, and comply with benefit design standards defined in § 156.20, the cost-sharing requirements at § 156.130, and the levels of coverage requirement at § 156.140. The requirement to provide EHB in accordance with § 156.115 means that the non-network plan must, among other things, provide benefits that are substantially equal to the relevant State's EHB-benchmark plan. As part of QHP certification, non-network plans must submit the Plans and Benefits Template as any other network plans, which will allow us to ensure all EHBs are covered.
Additionally, it is our understanding that non-network plans currently do not place restrictions on medical necessity, nor do they require prior authorization for covered services, as verified by the one commenter currently providing non-network plans and based on our research into non-network plans. A non-network must provide consumers appropriate information on the plan's benefit amount for covered services, whether a provider would accept the plan's benefit amount, and information on a consumer's out-of-pocket costs. Overall, we believe delaying implementation of this proposal until PY 2028 will provide time for us to conduct additional analysis on these thoughtful questions about how non-network plans intersect with other policy areas more fully and how non-network plans would demonstrate compliance with requirements, including through additional guidance.
Commenters also questioned a non-network plan's compatibility with the AV Calculator, with some commenters requesting that HHS require non-network plans to demonstrate compliance with metal level actuarial value (AV) requirements using the existing AV Calculator. Some commenters sought to understand how non-network plans would calculate AV when the AV Calculator uses in-network benefits. One commenter reasoned that since non-network plans set benefit amounts for a particular service, the structure of the AV Calculator may need to be modified to appropriately capture the value of benefits in absence of a non-network plan inputting coinsurance and copayment amounts. One commenter reasoned that if HHS did not require non-network plans to utilize the existing AV Calculator, the non-network plan type may appear affordable to consumers, while lacking adequate coverage.
In addition, non-network plans must comply with the levels of coverage requirement at § 156.140 as a condition of QHP certification similar to network plans. Regarding use of the AV Calculator, we maintain that a non-network plan will still be required to meet Federal standards for AV calculation for determining level of coverage, per § 156.135. We may consider additional refinements to AV calculation requirements under § 156.135 and alternative methodologies for a non-network plan to estimate AV through future rulemaking, as appropriate. The Affordable Care Act's MOOP requirement under section 1302(c)(1) does not set forth a specific exception for non-grandfathered, non-network plans.
While we understand the need for consumers to understand the applicability of benefit amounts to various elements of plan design in more detail, we believe this would require additional clarifications on how benefit amounts would fit within the Federal definition of cost sharing, which is beyond the scope of this final rule. However, the Departments have previously addressed the application of MOOP requirements pertaining to reference-based pricing arrangements in Affordable Care Act Implementation FAQs (Part XIX and Part XXI).
We also acknowledge concerns related to consumers who may be attracted by lower premiums who do not fully understand the plan. To this extent, we reiterate we intend to ensure non-network plans are clearly differentiated from network plans during plan selection on
In addition, a few commenters responded to HHS' comment solicitation on considerations for non-network plans in the HHS-RADV process. One commenter raised concerns that if a non-network plan was not able to report diagnoses with claims as part of the risk adjustment process, this may result in “significant risk adjustment payables, and potentially very large RADV transfer adjustments.” The commenter stated concern that if the non-network plans would not be able to financially cover these transfer amounts, then other plans would not receive the risk adjustment amounts they are owed. The commenter did not believe it would be appropriate to exempt non-network plans from HHS-RADV, as it could incentivize plans to avoid covering individuals with greater health needs.
A different commenter recommended that HHS consider flexibility in the data sources utilized for the HHS-operated risk adjustment program and HHS-RADV, including direct payment to providers via invoices, medical records, cash-pay transactions, encounter data, or third-party data to submit verified diagnosis information. The commenter also requested HHS to allow the use of centralized, independent data integrators or aggregators that can make objective determinations of enrollee risk across all issuers by utilizing data already available through data-exchanges and other Federal sources. The commenter noted their belief that this recommended approach would more fairly support newer plans entering the market that do not have the resources and data aggregation capabilities that larger health plans may have developed to maximize risk adjustment payments by using sophisticated data methods to increase the number of diagnostic codes summitted through issuers' EDGE servers.
We appreciate the comments regarding non-network plans' potential impacts on the HHS-operated risk adjustment program. We acknowledge commenters' concern that non-network plans are likely to attract healthier enrollees. However, we do not believe this will have the impact of suppressing the statewide average premium used in the State payment transfer formula. The statewide average premium is a weighted average based on enrollment in each plan in a State market risk pool. If non-network plans offer lower premiums and attract healthier enrollees away from other plans, the statewide average premium should remain around the same value, assuming roughly the same population of enrollees remain enrolled statewide. Nevertheless, it would be likely that under such a scenario, non-network plans, if they attract healthier enrollees, would generally owe risk adjustment charges to other issuers in the relevant State market risk pool. We therefore caution issuers considering offering non-network plans to carefully weigh the impact of risk adjustment in their rating decisions.
One issuer currently offering a non-network plan shared that States generally possess unique knowledge of local market conditions, geographic constraints, provider availability, and population demographics which may make States well positioned to review non-network plans. A few commenters noted that some FFE States may already have existing regulatory frameworks or experience reviewing non-network plans. For example, one commenter shared that Ohio has experience in reviewing non-network plans, which could be leveraged by HHS and Exchanges to inform the development of effective review processes for non-network plans. However, some commenters cautioned that some FFE States currently may not be equipped to conduct their own reviews without more specific guidance from HHS regarding processes and assessment methodologies for evaluating a sufficient choice of providers under a non-network plan.
Additionally as part of this proposal, we intended to propose an regulatory framework for non-network plans to demonstrate a sufficient choice of providers consistent with section 1311(c)(1)(B) and (c)(1)(C) of the Affordable Care Act that is distinct from existing provider access and ECP requirements for network plans under § 156.230 and § 156.235, but also complementary to these existing requirements by proposing an alternative methodology to measure access to providers without traditional provider networks. Thus, we do not intend to prescribe billing and payment requirements by defining benefit amount percentiles that non-network plans must meet relative to an ECPs' service charges. Rather, we aim to capture facility-level data (and not service charge data from ECPs) on the number of ECPs that accept the non-network plan's benefit amount as payment in full, similar to how we currently collect how many ECPs in an issuer's network and service area accepted or were offered a contract. And, since for the reasons stated earlier in this final rule we believe it is appropriate to establish a Federal floor of baseline ECP requirements that apply across the FFE through the Effective ECP Review Program under § 155.1051, we do not intend to create more stringent requirements for FFE States than proposed Federal ECP requirements for non-network plans at this time. However, we are not limiting an FFE State's ability to create more stringent requirements than those under § 155.1051 or limiting an FFE State's ability to require a non-network plan to submit this type of data. Commenters sharing these various ways that non-network plans may demonstrate reasonable and timely access to ECPs affirms our decision to not be prescriptive in setting these requirements. We are implementing these requirements beginning in PY 2028. Additional details about these ECP requirements related to non-network plans will be detailed in the 2027 Final Letter to Issuers.
Finally, while we understand commenter's desire for a State not to limit the types of plans it allows (network vs. non-network plans), we affirm that we will not require FFE States to offer non-network plans in their State. We believe that States, that know their population and local markets best, should be able to make a final determination about whether or not non-network plans are appropriate for their State. Should an FFE State choose not to allow these plans, a State would only be required to demonstrate sufficient authority and the technical capacity to review network plans to be determined to have an Effective Provider Access Review Program or an Effective ECP Review Program.
However, we believe the suggested approach to publicize the outcomes of non-network reviews, which would be inconsistent with current network adequacy and ECP review procedures which do not currently publicize the outcomes of network adequacy or ECP reviews for network plans, would be inappropriate because private, market proprietary information may be published in the process. A number of public use files (PUFs) are made available to the public as part of the QHP certification process, and the Plan Attributes PUF will reflect plan attributes for non-network plans, including data originating from the issuer's Plans and Benefits Template which the issuer submits to detail plan data, including information about benefit packages, cost-sharing, and EHBs. Information on what is included in the Plan Attributes PUF can be found at the Health Insurance Exchange Public Use Files website.
In response to the commenter's support for enumerating the information these FFE States must collect to promote consistency across the FFE in how non-network plans are reviewed, we are adding an additional factor related to the Effective ECP Review Program under § 155.1051(e)(11) and modifying an existing factor related to the Effective Provider Access Review Program under § 155.1050(d)(4)(vi) to indicate the State has a process to collect and review information described under § 156.236(b)(4) through (9) from non-network plans, which the non-network plan must submit for a determination that it provides access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full. We believe adding these additional factors is crucial to ensure safeguards are in place across the FFE so that non-network plans remain consumer protective, regardless of the entity (HHS or the FFE State) conducting the review. Requirements described under § 156.236(b)(4) through (9) are specific to non-network plans and reflect additional safeguards to ensure these plans maintain access to providers without traditional network arrangements. These requirements include assessing a non-network plan's strategy for conducting outreach to providers in their area, making benefit amounts public to enrollees, methodologies for determining benefit amounts, publishing consumer-friendly information on balance billing and potential out-of-pocket costs, the availability of exceptions processes for enrollees unable to locate providers who accept benefit amounts as payment in full, and customer services resources. As evidenced in the discussions above related to public comments received on these specific factors, it is important that non-network plans across the FFEs consistently report this information so that we and/or the FFE State can assess whether the non-network plan: (1) provides a sufficient choice of providers; (2) executes the necessary steps to effectively set data-driven benefit amounts that providers would accept in full to limit enrollee out-of-pocket costs; and (3) disseminates all the resources enrollees need to leverage non-network plans to meet their health needs.
Several commenters also recommended that HHS work with States and NAIC to ensure that non-network plans remain financially stable and that their issuers understand financial obligations associated with QHP participation. They also requested that States retain full plan approval authority, with a number of States commenting that they were grateful that HHS was not requiring States to offer non-network plans and stating that they would assess interested party interest before making any determination on whether or not they would offer non-network plans in their State. Commenters also encouraged greater coordination among CMS, State insurance regulators, and Exchanges to identify and establish realistic, actionable policies to address concerns related to non-network plans. One commenter also recommended that we extend requirements for non-network plans under § 156.236(b) to State Exchanges and SBE-FPs.
We also acknowledge the concerns raised regarding the ability of States to monitor ongoing provider availability in non-network plans, especially in the absence of a mechanism to ensure that providers will continue to accept the non-network plan's benefit amount for the duration of a consumer's plan year. We recognize that the absence of traditional network contracting structures presents unique oversight challenges and that we are not able to dictate what a provider charges for services. Providers may choose to modify charges for their services based on any number of factors, including changes in their operating expenses, changes in medical advancement, competitive pressure, or for no particular reason at all. And, they may choose to change this amount at any time. We stated that, consistent with § 156.236(b)(4), it is imperative that a non-network plan have in place a strategy for conducting continuous outreach to available providers (including ECPs) in a particular area to determine whether they would accept the plan's benefit amount as payment in full, so that the plan can make adjustments to its benefit amounts to ensure that enrollees can access a sufficient number of providers. Additionally, for the reasons stated earlier in this section of this final rule, we are confident that all the factors laid out under § 156.236(b)(1) through (b)(9) provide a means to appropriately determine if a non-network plan is providing sufficient access to providers (including ECPs), whether HHS or an FFE State is conducting the review.
Regarding the recommendation that we apply the requirements under § 156.236(b) to State Exchanges and SBE-FPs, we are declining to do so to remain consistent with the proposal to restore aspects of network adequacy authority back to these Exchanges. As we discuss in more detail in section III.D.18 of this final rule, State Exchanges and SBE-FPs have significant experience conducting provider access reviews and are well-positioned to account for the unique needs of their specific populations and markets. Accordingly, while we continue to require that State Exchanges and SBE-FPs provide sufficient access to providers in a manner that meets standards under § 156.230(a)(1)(ii) and (iii) for network plans, and under § 156.236(a) for non-network plans, as applicable, we are affording these Exchanges the flexibility to determine the specific parameters for meeting these requirements.
Regarding implementation challenges raised by commenters, we sought comment regarding the effective date of this proposal in the proposed rule, requesting comments from QHP issuers that may be interested in submitting non-network plans for QHP certification for PY 2027 or whether PY 2028 may be the soonest that any QHP issuer could realistically consider submitting non-network plans for QHP certification. We acknowledge the implementation challenges raised by commenters, especially considering the timing of the release of this final rule and the time it takes for States and issuers to develop and design plans to be submitted to us for consideration for QHP certification. In recognition of these comments that pushed for delayed implementation, and to allow States, issuers, and other interested parties sufficient time to prepare for potential certification of non-network plans as QHPs across the FFEs, we are delaying implementation of this non-network plan certification proposal to PY 2028. We believe this will allow additional, sufficient time for issuers to fully consider the finalized policies and make adequate preparations for the next QHP certification cycle to meet regulatory requirements, including but not limited to modifications to plan design, additional outreach to providers regarding benefit amounts, and developing consumer-facing materials. States would also have an additional year to consider whether they wish to allow non-network plans in their State and if any State-level legislative or regulatory actions are required before non-network plans can enter State markets. It will further provide us more time to conduct additional analyses on more complex issues raised by commenters in this final rule and engage interested parties to boost operational readiness and incorporate additional feedback prior to implementation of non-network plans. We are committed to working with States, issuers, and other interested parties during this period through interested parties outreach to support successful implementation in a manner that minimizes operational burden and reduces the risk of adverse outcomes for consumers and systems operations.
Lastly, while HHS is delaying implementation of this policy to allow non-network plans to receive certification to be offered as QHPs through the FFE beginning PY 2028, HHS is not requiring State Exchanges or SBE-FPs to also delay implementation of allowing non-network plans to be offered as QHPs through their Exchanges beginning PY 2028. Rather, State Exchanges and SBE-FPs retain full discretion and authority to not only assess whether non-network plan designs are appropriate for their markets, but also to independently determine the appropriate implementation timeline for their States if allowing non-network plans to be offered through their Exchanges. Consistent with discussions in this final rule to restore aspects of network adequacy back to State Exchanges (see section III.D.18 of this final rule), both State Exchanges and SBE-FPs have unique knowledge on local factors (for example, market conditions, geographic constraints, provider shortages, etc.) that have been consistently leveraged to conduct their own network adequacy certification reviews, which can also be utilized to conduct reviews of non-network plans. Thus, we believe these States may already possess the knowledge and expertise to begin conducting reviews of non-network plans and offering these plans through State Exchanges or SBE-FPs. For this reason, we do not desire to limit these States in proceeding with offering these non-network plans if States already allow these plans in State Exchanges or SBE-FPs or are well-positioned to begin doing so effective PY 2027. Accordingly, we are finalizing under § 155.1050(a)(2) that State Exchanges and SBE-FPs must ensure that each QHP provides sufficient access to providers in a manner that meets standards under § 156.236(a) for non-network plans for plan years beginning on or after January 1, 2027, if such plans are allowed to be offered through the Exchange, as applicable. State Exchanges and SBE-FPs still have autonomy to target implementation dates after PY 2027, if they desire.
In the 2027 Payment Notice proposed rule (91 FR 6417), we proposed two proposals related to § 156.480. First, we proposed to modify § 156.480 to clarify HHS' authority to audit or conduct a compliance review of an issuer that offers a QHP through an Exchange for the purposes of administering and providing oversight of the APTC, CSR, and user fee programs. Specifically, we proposed to amend § 156.480(c) to provide that HHS or its designee may audit or conduct a compliance review to assess compliance with all requirements related to APTC, CSR, and user fee programs applicable to issuers offering a QHP in an Exchange, rather than only
To explain our first proposal, in the 2014 Payment Notice (78 FR 65078), we established HHS' authority at § 156.480(c) to assess issuers' compliance with requirements in 45 CFR part 156, subpart E through audits to ensure the appropriate use of Federal funds related to the APTC and CSR programs. After several years of experience with operating the Exchanges, in part 2 of the 2022 Payment Notice (86 FR 24244, 24246), we expanded HHS' oversight tools at § 156.480(c) to include the authority for HHS to conduct compliance reviews, in addition to audits, and expanded the scope of such audits and compliance reviews to include requirements in § 156.50 related to the user fee program, in addition to those previously referenced in part 156, subpart E. We also provided that compliance reviews conducted under this oversight authority would follow the standards set forth in § 156.715. In the proposed rule, we considered additional clarifications to HHS' authority on compliance reviews under § 156.480.
Currently, § 156.480(c) provides that in conducting APTC, CSR, and user fee audits or compliance reviews, HHS may assess an issuer's compliance with the requirements in 45 CFR part 156, subpart E and § 156.50. The regulatory text does not currently reference assessment of an issuer's compliance with other Exchange requirements related to administration of the APTC, CSR, and user fee programs that are outside of subpart E and § 156.50. For example, it does not include the assessment of grace period requirements at § 156.270(g), located in part 156, subpart C, which mandates that an issuer terminate an enrollee's enrollment after not receiving payments for any outstanding premium balance, or an amount within an issuer-established premium payment threshold, within the 3-month grace period. Noncompliance with this, and other enrollment and payment requirements, can result in an issuer receiving APTCs on behalf of an enrollee who is not eligible for APTC due to nonpayment of premiums. To prevent these improper payments, we stated in the proposed rule that it follows that HHS' administration and oversight of the APTC program should include assessment of issuers' compliance with these requirements.
To further explain, we have historically interpreted section 1313(a)(5) of the Affordable Care Act, which states that the Secretary shall implement any measure or procedure that the Secretary has authority to implement in title I of the Affordable Care Act or any other Act, to protect against fraud and abuse, and section 1321(c) of the Affordable Care Act to provide HHS with broad authority to implement oversight activities to assess compliance with all Exchange standards issued in accordance with section 1321(a)(1) of the Affordable Care Act. For example, compliance reviews conducted in accordance with § 156.715 as part of HHS' financial integrity oversight of QHP issuers in the FFE, and under the authority of Affordable Care Act section 1321(c), are not limited in scope to a set of listed regulatory requirements. Instead, § 156.715(a) identifies the scope of such compliance reviews as tools to generally ensure “ongoing compliance with Exchange standards applicable to issuers offering QHPs in a Federally-facilitated Exchange.” Audits and compliance reviews conducted as part of HHS' oversight of the APTC, CSR, and user fee programs, which ensure fiscal responsibility of issuers and compliance with the requirements for QHP issuers, fall under this same broad statutory authority. We stated in the proposed rule that while requirements related to the APTC, CSR, and user fee programs are concentrated in § 156.50 and subpart E, it was an unintended limitation to confine the scope of audits and compliance reviews conducted in accordance with § 156.480(c) to only these requirements. We noted that HHS has issued regulations that impact administration of these programs in other regulatory sections. For example, noncompliance with the premium payment requirements established in subpart C of part 156 may result in an issuer's receipt of improper APTCs on behalf of ineligible enrollees.
We stated in the proposed rule that as we continue to conduct audits and compliance reviews, we want to ensure that we are clear on our authority to assess and enforce compliance with requirements related to the APTC, CSR, and user fee programs that are outside subpart E and § 156.50. Therefore, to provide this clarity, we will revise the introductory text in § 156.480(c) and make conforming revisions to paragraph (c)(6) to state that HHS may audit or conduct compliance reviews and enforce issuer compliance with all applicable requirements related to the APTC, CSR, and user fee programs.
To explain our second proposal, we proposed to revise our current position in the preamble of part 2 of the 2022 Payment Notice (86 FR 24244 through 24247), stating that HHS conducts compliance reviews on an ad hoc basis, to provide that HHS may conduct compliance reviews as needed, including on an annual basis based on HHS' assessment of noncompliance with the applicable requirements and any identified issues related to noncompliance.
In part 2 of the 2022 Payment Notice (86 FR 24244 through 24247), we stated that compliance reviews would be conducted on an ad hoc basis to provide HHS with a mechanism to address situations where a systemic error or issue is identified during an audit, and if HHS suspects similarly situated issuers may have experienced the same systemic error or issue but were not selected for audit in the year in question. However, we stated in the proposed rule that we have found that this approach is insufficient. We noted, for example, that annual APTC, CSR, and user fee program audits of issuers in State Exchanges often identify data inaccuracies in issuers' enrollment and payment data that resulted in APTC over- or underpayments. While annual, these audits are conducted on benefit year data after the close of the 3-year window for resolution of payment inaccuracies described in § 156.1210(c).
In summary, we proposed to add language to the introductory text of § 156.480(c) which states that HHS may audit or conduct a compliance review of an issuer offering a QHP through an Exchange to assess its compliance with the applicable requirements related to administration of the APTC, CSR, and user fee programs. We also proposed to add conforming language to § 156.480(c)(6) to state that in instances where HHS enforces compliance with any requirement related to APTC, CSR, and user fee programs for QHP issuers participating in State Exchanges or SBE-FPs, HHS may do so in accordance with § 156.805. Finally, as discussed above, we proposed to revise our position on the frequency of compliance reviews such that HHS would conduct compliance reviews as needed, including on an annual basis based on its assessment of identified issues related to noncompliance; however, we did not propose amendments to regulation text at § 156.480(c) to address this.
We sought comment on these proposals.
After consideration of comments, and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these policies as proposed. We summarize and respond below to public comments received on the proposed clarification that HHS may audit or conduct a compliance review of an issuer offering a QHP through an Exchange to assess its compliance with the applicable requirements related to administration of the APTC, CSR, and user fee programs, and the proposal that HHS may conduct compliance reviews on an as needed or annual basis, rather than just on an ad hoc basis.
Some commenters were concerned that if compliance reviews occur on an as needed or annual basis, the reviews may place significant administrative burdens on issuers. Several commenters provided recommendations for how HHS should conduct compliance reviews to prevent administrative burdens on issuers. One commenter encouraged HHS to consider operational impacts and ensure that the timing, scope, and frequency of reviews remain predictable and risk-based to avoid administratively and financially burdening issuers. Another commenter recommended that HHS establish a predictable, risk-based audit cadence every three years while preserving targeted review authority in response to certain data inaccuracies, complaints, or identified compliance risks. Another commenter noted that between existing statutory safeguards, current CMP authority, and State insurance oversight, there are multiple layers of oversight and that expanding review frequency or adding duplicative Federal audit processes would increase administrative burden and costs, since it would divert resources from other activities, and recommended that HHS reconsider the scope of these proposed enforcement expansions to ensure they align with the Administration's commitment to reducing unnecessary regulatory complexity.
In terms of compliance reviews, we believe that it is important that we safeguard Federal funds, and conducting compliance reviews on an as needed or annual basis is an important part of these safeguards. By conducting compliance reviews on an as needed or annual basis, we are ensuring that issuers resolve data inaccuracies on a timely basis, which may result in over- or underpayments of Federal funds, such as APTC, on behalf of enrollees to issuers. Compliance reviews, alongside audits and other enforcement mechanisms such as CMPs, are a necessary oversight tool to aid both issuers and HHS in ensuring compliance with the applicable APTC, CSR, and user fee program requirements. Further, we do not believe that compliance reviews occurring on an annual or as needed basis will create additional burdens on issuers.
Moreover, as discussed in the proposed rule (91 FR 6418), experience with past audits that occur after the close of the 3-year window for resolution of payment inaccuracies described in § 156.1210(c) are still finding systemic errors and numerous data inaccuracies. For example, annual APTC, CSR, and user fee program audits of issuers in State Exchanges often identify data inaccuracies in issuers' enrollment and payment data that resulted in APTC over- or underpayments. Therefore, we believe that it is in the best interest of the issuer, State, and HHS to conduct compliance reviews on an annual or as needed basis, to provide timely reporting to issuers and States and allow the issuer to proactively resolve data inaccuracies or any issues of noncompliance resulting from systemic errors prior to the annual audit process (and the 3-year cutoff after which issuers would not receive additional APTCs as a result of data inaccuracies). We also believe that conducting compliance reviews on an as needed or annual basis and providing issuers and States information to resolve payment inaccuracies within the 3-year window will help to reduce many burdens that arise during the audit process. We will work with States and issuers during compliance reviews, which will be conducted annually or as needed, to conduct the reviews efficiently and without undue administrative burden. As with audits, issuers will have an opportunity to provide feedback that HHS considers to improve future compliance reviews and ensure that the process is not overly burdensome.
In the 2027 Payment Notice proposed rule (91 FR 6418), we proposed two proposals related to § 156.805. First, we proposed to amend § 156.805(b) to reiterate what factors HHS considers when determining the amount of CMPs as enforcement remedies against QHP issuers in Exchanges. Specifically, to
Second, we proposed to amend § 156.805(f) to clarify the authority HHS has to impose CMPs against issuers in State Exchanges or SBE-FPs for identified violations. Specifically, we proposed to amend § 156.805(f) to clarify that HHS' authority to impose CMPs against issuers in State Exchanges or SBE-FPs includes the authority to impose CMPs for identified violations of any Exchange requirements and standards applicable to issuers offering a QHP in an Exchange, when a State notifies HHS that it is not enforcing these requirements or HHS determines that a State is failing to substantially enforce these requirements. As detailed further below, we did not propose any other changes to the legal bases for imposing CMPs against issuers in FFEs nor the circumstances in which HHS may exercise its enforcement authority against issuers in State Exchanges or SBE-FPs.
Under the first proposal, sections 2723(b)(2), 2718(b)(3), and 2761(b) of the PHS Act and section 1321(c)(2) of the Affordable Care Act authorize the Secretary to impose CMPs when a QHP issuer fails to meet the required standards.
Since 2014, Exchange regulations have imposed standards and requirements on issuers offering QHPs participating in Exchanges, including, but not limited to, standards and requirements under 45 CFR subtitle A, subchapter B, parts 153 and 156,
We proposed to amend § 156.805 to reiterate that HHS would identify the lawful purpose or purposes of the CMP when calculating CMP amounts. As noted above, section 2723(b)(2) of the PHS Act and section 1321(c)(2) of the Affordable Care Act authorize HHS to impose CMPs to enforce Exchange standards and requirements applicable to issuers offering QHPs participating in Exchanges. Section 2723(b)(2)(C)(i) of the PHS Act caps the amount of the CMP at $100 (as adjusted annually under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and other relevant laws)
As discussed in the proposed rule, that broad delegation of enforcement authority can encompass several traditional purposes of monetary
We stated that these purposes for which HHS imposes CMPs related to enforcement of Exchange standards and requirements applicable to issuers offering QHPs participating in Exchanges are not mutually exclusive. To increase transparency in how HHS calculates the amounts of CMPs imposed against QHP issuers for violations described in § 156.805(a), including but not limited to substantial noncompliance with Exchange standards under parts 153 and 156 of title 45, we proposed to clarify that HHS will identify the underlying lawful purpose or purposes of a CMP when calculating the relevant amount.
We stated that QHP issuers have been on notice of possible CMPs for noncompliance since the inception of the Exchange, through regulations, and directly through subsequent HHS communications. We noted, for example, that in the 2019 CMS Program Integrity letter to FFE issuers,
Second, we proposed to clarify the authority that HHS has to impose CMPs against issuers in State Exchanges or SBE-FPs when a State notifies HHS that it is not enforcing the applicable requirements or HHS determines that a State is failing to substantially enforce these requirements. Specifically, we proposed to amend § 156.805(f) to clarify that HHS' authority to impose CMPs against issuers in State Exchanges or SBE-FPs includes authority to impose CMPs for identified violations of the requirements applicable to the noncompliant actions described in § 156.805(a) that are applicable to issuers offering a QHP in a State Exchange or SBE-FP, including substantial noncompliance with issuer standards and requirements under parts 153 and 156 of title 45, as opposed to just those requirements in subpart E or § 156.50, as currently written. We also proposed a conforming change to § 156.800.
In prior rulemaking (86 FR 24248 through 24252), we set forth the framework, consistent with section 2723(b) of the PHS Act and section 1321(c)(2) of the Affordable Care Act, for HHS' authority to enforce applicable Exchange standards for QHP issuers participating in State Exchanges and SBE-FPs. We further clarified that this enforcement authority arises when a State authority notifies HHS that it is not enforcing these standards or HHS determines that a State has failed to substantially enforce these standards, and that if HHS has this enforcement authority, HHS could impose a CMP. However, as we stated in the proposed rule, when establishing this framework, we inadvertently limited the scope of HHS' authority under § 156.805(f) to enforcement of only those requirements in subpart E of part 156 or in § 156.50.
To align with HHS' statutory authority, we proposed to amend § 156.805(f) to expressly provide that when appropriately triggered, HHS has the authority to enforce the requirements applicable to the noncompliant actions described in § 156.805(a) that are applicable to issuers offering a QHP in a State Exchange or SBE-FP, as well as the authority to impose CMPs against a QHP issuer in a State Exchange or SBE-FP on the same grounds for which it can impose CMPs for QHP issuers in a FFE under § 156.805. We further stated that amending the language to expressly address HHS' enforcement authority for these requirements would help to ensure that HHS can hold all issuers accountable for violations of requirements that result in improper APTC payments.
We stated that this proposed amendment would not usurp the States' power to enforce these requirements in their own Exchanges. As previously established in prior rulemaking, the process for imposing CMPs must either require that the State notify HHS that it is failing to enforce the requirements of subpart E or § 156.50 or that HHS make its own determination, following the standards in § 150.201,
In summary, we proposed to amend § 156.805(b) to reiterate that in determining the amount of CMPs, in addition to the factors HHS takes into account when determining a CMP amount listed in § 156.805(b)(1) through (3), HHS would identify the lawful purpose or purposes of the CMP amount. We also proposed to amend § 156.805(f) to provide that when appropriately triggered, HHS would enforce the requirements applicable to the noncompliant actions described in § 156.805(a) that are applicable to issuers offering a QHP in a State Exchange or SBE-FP, and has the authority to impose CMPs against a QHP issuer in a State Exchange or SBE-FP on the same grounds for which it can impose CMPs for QHP issuers in an FFE.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing the amendments to § 156.805(b) and (f) as proposed. We
Additionally, in accordance with regulations at § 156.480(c), HHS conducts entrance and exit conferences for audits (including those which may result in CMPs) and provides issuers with documentation such as preliminary
Further, as discussed above, HHS may impose CMPs if an issuer has engaged in actions where there is misconduct or substantial noncompliance with Exchange standards and requirements applicable to QHP issuers, which includes requirements and standards for QHP issuers under 45 CFR parts 153 and 156. HHS has discretion in determining whether to impose a CMP. As described in § 156.805(b)(3), HHS may consider any aggravating or mitigating circumstances or other such factors as justice may require. Conduct outside of the issuer's control could be considered a mitigating circumstance that HHS could consider when determining the CMP amount.
Several commenters opposed the proposal, stated concerns about expanding HHS' enforcement authority beyond statutory limits, and stated that the proposed clarification encroaches upon State authority. One commenter noted that it would be contrary to section 1321 of the Affordable Care Act to penalize issuers for failing to comply with State guidance or for violations stemming from State Exchange failures, recommending that HHS refrain from expanding its CMP authority. Another
A few commenters recommended that, if these proposals are finalized, HHS defer the applicability of these provisions to give State Exchanges, SBE-FPs, and issuers time to make necessary adjustments. One commenter recommended allowing a safe-harbor period of 1 year to allow time for State Exchanges, SBE-FPs, and issuers to address any changes in regulatory scope and obligations. Another commenter recommended deferring enforcement of CMPs against issuers in State Exchanges or SBE-FPs for 6 months following the applicability date for these provisions to allow issuers time to update compliance processes, seek appropriate guidance, and align internal controls to avoid the risk of inadvertent noncompliance.
One commenter recommended publishing implementation guidance and considering implementing phase-in periods for the new enforcement procedures to allow time for issuers, agents, and brokers to adapt their operational processes and internal compliance systems.
As stated above, we did not propose any changes to the circumstances in which HHS may exercise its enforcement authority against issuers in State Exchanges or SBE-FPs. We are not expanding HHS' enforcement authority beyond statutory limits and are merely reiterating current authority governing when HHS can take enforcement actions against issuers in State Exchanges and SBE-FPs. In the proposed rule (91 FR 6420), we stated that this proposed amendment would not usurp States' power to enforce these requirements in their own Exchanges and therefore, this proposal would align with section 1321 of the Affordable Care Act. As previously established in prior rulemaking (86 FR 24248 through 24252), HHS may not impose CMPs unless either the State notifies HHS that it is failing to enforce Exchange requirements or HHS makes its own determination, following the standards in § 150.201,
When developing the State-Federal regulatory framework for CMPs, we set forth the framework to be consistent with section 2723(b) of the PHS Act and section 1321(c)(2) of the Affordable Care Act, which allows the Secretary to implement Exchange standards in a State when directly authorized to do so. The PHS Act and Affordable Care Act authorize the Secretary to do so when a State has failed to substantially enforce provisions for health insurance issuers in the State. This authority includes imposing CMPs for issuers' failure to comply with Exchange requirements, such as APTC, CSR, and user fee program requirements. Additionally, the regulatory framework takes into consideration States' powers to regulate their own Exchanges, as HHS is unable to impose CMPs against issuers in State Exchanges or SBE-FPs unless specific statutory and regulatory requirements are met, and noncompliance is identified for requirements enforceable by HHS under § 156.805(f). As such, we do not believe that there is conflicting or duplicative enforcement.
For the comments suggesting HHS delay the applicability date of HHS enforcing requirements in State Exchanges or SBE-FPs, we do not agree. This policy only clarifies current HHS authority and is not making any changes to the Exchange requirements with which issuers are required to comply. Issuers and States have been on notice prior to this rulemaking
Lastly, we are finalizing HHS' authority under § 156.805(f), which allows for the imposition of CMPs against QHP issuers for certain actions. We note that the comment regarding guidance and an implementation phase for agents and brokers to adapt their operational processes and internal systems is out of scope of this final rule because it does not relate to our proposal—these amendments will impact issuers and not agents and brokers. However, we appreciate the commenter's attention and feedback.
Commenters also provided recommendations on how to best implement a framework for imposing CMPs against issuers in State Exchanges or SBE-FPs. One commenter
Additionally, as discussed above, HHS' authority comes from statutory provisions which grant it enforcement authority over Exchange requirements, including those related to the APTC, CSR, and user fee programs, when a State does not substantially enforce them. Further, regardless of whether a State Exchange or SBE-FP is responsible for enforcing requirements against issuers within its Exchange or HHS is responsible for such enforcement, the requirements do not change; rather, it is merely the entity responsible for enforcement that would change. Further, section 1321(d) of the Affordable Care Act provides that there would be no interference with State regulatory authority. Therefore, there would not be any conflicts between State and Federal law if HHS is responsible for enforcement, as the requirements would be applied equally, just as they would be if the State is enforcing the requirements.
In the 2027 Payment Notice proposed rule (91 FR 6420), to improve the accuracy of hearing decisions and increase hearing efficiency, we proposed to amend the review process that governs administrative appeals of QHP issuer sanctions imposed under § 156.800, including QHP decertification actions and CMPs imposed against QHP issuers for, among other actions, violations of Exchange standards. First, under § 156.903, we proposed to allow an administrative law judge (ALJ) who presides over an administrative appeal of a QHP issuer sanction imposed in accordance with § 156.800 to issue subpoenas, upon his or her own motion or at the request of a party, if the subpoenas are reasonably necessary for the full presentation of a case. Second, to expedite the process of appeals and limit duplication, we proposed to amend § 156.935 so that the discovery provisions set forth therein do not apply to administrative appeals of proposed CMPs for violations identified through audits of the APTC, CSR, or user fee programs conducted in accordance with § 156.480(c). We stated that if finalized as proposed, these amendments would apply to appeals filed on or after the effective date of the final rule.
In the 2014 Payment Notice (78 FR 65079), we codified the administrative appeals process for QHP issuers in an FFE to challenge the imposition of a sanction, as described in § 156.800. These procedures include the opportunity for a hearing before an ALJ of the HHS Departmental Appeals Board (DAB). In part 2 of the 2022 Payment Notice (86 FR 24253), we further amended these procedures to affirm that the process applies to appeals of sanctions imposed against QHP issuers participating in any Exchange and to align with the DAB's internal practices for administrative hearings to appeal CMPs.
The DAB's internal practices include procedures that ALJs and parties must follow for appeals and administrative hearings, and ALJs and parties must also follow any relevant agency's administrative hearing procedures as prescribed by the agency through regulation for the agency's programs.
As part of this provision, we also proposed that a party must file a written request for a subpoena with the ALJ at least 5 calendar days before the date set for the hearing and that the request must identify the witness(es) or documents to be produced, describe their address(es) or location(s) with sufficient particularity to permit them to be found, specify the pertinent facts the party expects to establish by the witness(es) or documents, and indicate why those facts could not be established without use of a subpoena. We stated that establishing these requirements in regulation would provide structure to the subpoena request, thereby increasing the efficiency with which ALJs can exercise the proposed subpoena authority. We further stated that these requirements would also ensure that parties requesting subpoenas provide ALJs with all relevant information ALJs will need to determine if the subpoena is reasonably necessary for full presentation of the case.
Second, to expedite the process of appeals and limit duplication, we proposed to amend § 156.935 to ensure that the discovery provisions set forth therein do not apply to administrative appeals of notices of proposed CMP assessments for violations identified through audits of the APTC, CSR, or user fee programs conducted in accordance with § 156.480(c). To explain, current audit processes under § 156.480(c)(3) require that HHS (1) conduct an audit entrance conference with each issuer selected for audit to discuss the scope of the audit, (2) provide issuers with preliminary audit
During the established audit processes, HHS makes available to issuers relevant information that HHS relies on in making final audit determinations, including written audit procedures, and provides issuers with multiple opportunities to ask HHS questions about the audit procedures and audit findings. Should HHS determine that a CMP is appropriate, HHS would also make relevant information that HHS relied on to determine the CMP amount available to the issuer during the audit process. Therefore, as we stated in the proposed rule, under these established audit processes, issuers are able to develop an extensive record that can inform a CMP appeal. For these reasons, we stated that we believe issuers would not need to rely on the time-consuming process of discovery for information to develop a record for an administrative appeal of a notice of proposed CMP assessment for violations identified through audits of the APTC, CSR, or user fee programs.
Similarly, we stated that these established audit procedures already allow HHS to obtain information necessary to inform final audit findings from the issuer during the audit process, limiting the need for discovery of information. Therefore, to prevent duplicative efforts for gathering documentation and information and to reduce burden on both parties to an appeal, we proposed adding a new paragraph to § 156.935 which would exclude appeals of CMPs resulting from audits at § 156.480(c) from the process of discovery.
In summary, we proposed to add a new paragraph to § 156.903 which provides the ALJ with the authority to issue subpoenas, upon his or her own motion or at the request of a party, if they are reasonably necessary for the full presentation of a case for an administrative appeal brought under § 156.805 or § 156.810. We also proposed to add a new paragraph to § 156.935 to ensure that the discovery provisions set forth therein do not apply to appeals of proposed CMPs imposed under § 156.805 resulting from audits at § 156.480(c). We stated that, if finalized as proposed, these amendments would apply to appeals filed on or after the effective date of the final rule.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond below to public comments received on the proposed additions to § 156.903 to grant ALJs the authority to issue subpoenas and the proposed additions to § 156.935 to ensure that the discovery provisions set forth therein do not apply to appeals of proposed CMPs imposed under § 156.805 resulting from audits at § 156.480(c).
Audit procedures under § 156.480(c)(1) and (3) require that HHS conduct an audit entrance conference with each issuer selected for audit to discuss the scope of the audit and provide issuers with preliminary audit findings and an opportunity to refute the preliminary findings prior to receiving the final audit report. Issuers are also provided with an opportunity to discuss final audit findings during an exit conference. In addition to these opportunities, HHS provides issuers with documentation throughout the audit, including the audit sampling and extrapolation methodology, audit notification letters, entrance conference slides, instructions for completing the audit, a discrepancy process to provide additional documentation or justification of findings, the Notice of Noncompliance Preliminary Findings Audit Report (which includes the methodology for determining CMP amounts), and the Final Findings Audit Report (which includes written responses to refutations). For example, under § 156.806, prior to imposing CMPs, if there is a potential violation identified under § 156.800 which may result in a CMP, HHS provides the Noncompliance Preliminary Findings Audit Report. This report includes the methodology for determining CMP amounts; describes each violation, including the issuer's explanation of the circumstances surrounding the violation; provides the issuer with 30 days to refute the violation; and notifies the issuer that CMPs may be assessed if violations are not refuted. Therefore, throughout the audit, issuers receive the administrative record and have ample opportunities to both share information with HHS and request information from HHS to better understand why HHS has identified violations due to noncompliance and why a CMP may be assessed, allowing issuers to develop a full case to present in front of the DAB and ALJ if necessary. Thus, the removal of discovery will not prevent issuers from having a fair opportunity to
In the 2027 Payment Notice proposed rule (91 FR 6421), we proposed to require QHP issuers to submit quality improvement strategies (QISs) addressing any two of the five topic areas listed in section 1311(g)(1) of the Affordable Care Act, without mandating which specific topic areas a QHP issuer would be required to address to meet the QIS statutory certification requirement beginning with PY 2027.
In accordance with section 1311(c)(1)(E) of the Affordable Care Act, QISs described in section 1311(g)(1) of the Affordable Care Act must be implemented across Exchanges as a QHP certification requirement. Section 1311(g)(1) of the Affordable Care Act defines a QIS as a payment structure that provides increased reimbursement or other market-based incentives for implementing activities related to five health care topic areas identified in statute: improving health outcomes of plan enrollees, preventing hospital readmissions, improving patient safety and reducing medical errors, promoting wellness and health, and reducing health and health care disparities. Under § 156.1130(a), an issuer participating in an Exchange for two or more consecutive years must implement and report on a QIS, including a payment structure that provides increased reimbursement or other market-based incentives in accordance with the health care topic areas in section 1311(g)(1) of the Affordable Care Act, for each QHP offered in an Exchange, consistent with the guidelines developed by HHS under section 1311(g) of the Affordable Care Act. In the 2016 Payment Notice (80 FR 10844 through 10848), we established a phase-in approach for QIS implementation standards and reporting requirements to provide QHP issuers time to understand the populations enrolling in a QHP offered through the Exchange and to build quality performance data on their respective QHP enrollees. In the 2023 Payment Notice (87 FR 27341 through 27345), we finalized a guideline to require QHP issuers to address health and health care disparities as a specific topic area within their QIS, in addition to at least one other topic area described in section 1311(g)(1) of the Affordable Care Act, beginning in 2023.
We proposed to modify the approach finalized in the 2023 Payment Notice (87 FR 27208) to instead require QHP issuers to submit QISs addressing any two of the five topic areas listed in section 1311(g)(1) of the Affordable Care Act, without mandating which specific topic areas a QHP issuer would be required to address to meet the QIS statutory certification requirement. We did not propose any amendments to the regulatory text outlined in § 156.1130.
We stated in the proposed rule that we believe this proposal would align with current Administration priorities, provide increased flexibility and reduced burden for QHP issuers that are required to submit QISs, and would better allow these QHP issuers to define the health outcome needs of their enrollees, set goals for improvement, and provide increased reimbursement to their providers or other market-based incentives to reward achievement of those goals, as initially described in the 2015 Payment Notice (79 FR 13744) when establishing the QIS program. Specifically, we stated that by allowing QHP issuers to select the two topic areas most relevant to their population and operational context, the proposal would empower issuers to focus resources on areas with the greatest potential for meaningful improvement, rather than adhering to a one-size-fits-all approach. We stated that this targeted flexibility would support innovative strategies for improving patient outcomes, encourage adoption of best practices across diverse settings, and help ensure that incentives are aligned with measurable progress on priority health outcomes, consistent with the objectives articulated in the 2015 Payment Notice (79 FR 13744) when establishing the QIS program.
We stated that we continue to believe that improving health care quality and outcomes for all is important. We stated that QHP issuers have a critical role in promoting high quality health care by designing QISs that tie provider payments or other market-based incentives to measures of performance, such as when providers meet quality indicators or when enrollees make certain choices associated with improved health. We further stated that for each QIS topic area, issuers may select quality measures, such as those from the Marketplace Quality Rating System, or other performance targets based on their programmatic goals and the needs of their enrollee populations, to monitor QIS progress.
We stated that although 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 under this proposal if finalized, they would be permitted to continue to choose this topic area as one of the two topic areas they address in their QIS. We further noted that health and health care disparities may relate to various factors such as geographic, economic, educational, disability status, and other factors that impact high quality health care for all.
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received on the proposed requirement that QHP issuers submit QISs addressing any two of the five topic areas described in section 1311(g)(1) of the Affordable Care Act, without mandating that issuers address health and health care disparities as a specific topic area below.
Many commenters opposed or stated concerns regarding the proposal to no longer require QHP issuers to address health and health care disparities as a specific topic area within their QISs. These commenters emphasized that maintaining a required focus on health and health care disparities is critical to advancing health equity across QHP issuers. Several commenters stated that making this topic area optional could reduce prioritization of health and health care disparity-related activities, lead to variability in QHP issuer implementation of QIS activities addressing health and health care disparities and weaken alignment with broader health equity goals. A few commenters recommended retaining the requirement to address health and health care disparities as a specific topic area within a QIS or establishing alternative mechanisms to ensure continued focus on health and health care disparities.
For commenters' recommendations to retain the requirement to address health and health care disparities as a specific topic area within a QIS or establish alternative mechanisms to ensure continued focus on reducing health and health care disparities, we are not adopting those recommendations at this time. We believe that continued flexibility is maintained for issuers to choose to address health and health care disparities in quality improvement efforts. Through educational webinars and technical guidance, we will ensure continued focus on reducing health and health care disparities, along with other QIS topic areas.
Several commenters requested additional clarity to support consistent implementation, while other commenters recommended that CMS monitor the effects of the policy change, including impacts on quality and health equity outcomes.
For commenters' concerns that removing prescriptive requirements could reduce consistency across QHP issuers and weaken QIS program effectiveness, we note that QHP issuers remain subject to the QIS requirements under § 156.1130, which require issuers to implement and report on strategies that include a payment structure tied to performance and quality improvement incentives. As discussed in the proposed rule, we believe that the statutory framework under sections 1311(c)(1)(E) and 1311(g)(1) of the Affordable Care Act, as implemented at § 156.1130, continues to provide a foundation for accountability and quality improvement regardless of which topic areas an issuer selects.
Regarding commenters' concerns about the removal of health and health care disparities as a specifically enumerated topic area and potential implications for alignment with broader quality goals, we reiterate that QHP issuers may continue to select health and health care disparities as a topic area under the revised framework, and we further encourage issuers to tailor their QIS activities as appropriate to the needs of their enrolled populations, which may appropriately include a focus on health and health care disparities where relevant. We continue to believe that providing issuers flexibility to determine how best to address the needs of their enrollees is consistent with the intent of the QIS program as established in the 2015 Payment Notice (79 FR 13744) and as subsequently modified in the 2023 Payment Notice (87 FR 27341 through 27345). This flexibility supports more targeted and effective quality improvement by enabling issuers to align QIS activities with population-specific needs and local performance data.
The QIS statutory framework under sections 1311(c)(1)(E) and 1311(g)(1) of the Affordable Care Act, as implemented at § 156.1130, provides a foundation for this approach by requiring issuers to implement and report on QISs that include a payment structure tied to performance and quality improvement incentives. This reporting requirement creates a mechanism for accountability in that CMS and Exchange authorities are able to review QHP issuer submissions to assess whether QHP issuers are actively implementing strategies designed to improve the quality of care and health outcomes for their enrollees.
For commenters' requests for additional clarity to support consistent implementation, we note that the comments did not identify with specificity the aspects of the revised framework for which additional clarity was sought. To the extent interested parties have questions regarding implementation of the revised QIS requirements under § 156.1130, we will consider addressing these implementation questions through sub-regulatory guidance, as appropriate, to promote consistency across QHP issuers. We encourage issuers and other interested parties to submit specific implementation questions through established CMS channels so that we may consider addressing them in future guidance as appropriate and necessary.
Finally, regarding commenters' recommendations that CMS monitor the effects of this policy change, we agree that ongoing oversight is appropriate and consistent with CMS' broader quality improvement objectives. We will continue to monitor QHP issuer selection of QIS topic areas, QIS activities, and associated outcomes, including those related to health and health care disparities, and may consider future policy changes or refinements, as needed. We agree that clear implementation and ongoing oversight are important and will continue to oversee QIS implementation through established reporting and review processes, and provide technical assistance, as needed, consistent with our authority under section 1311(g)(2) of the Affordable Care Act to develop guidelines for QIS implementation.
In the 2027 Payment Notice proposed rule (91 FR 6422), we proposed to amend the payment and collections processes set forth at § 156.1215. In particular, we proposed to amend § 156.1215(b) to provide that any CMPs assessed
In the proposed rule, we stated that since finalizing the netting rules at the beginning of the Affordable Care Act financial management programs (79 FR 13817, 81 FR 12317 through 12318), the programs under title XXVII of the PHS Act have evolved, and existing Exchange programs have matured and stabilized. We noted that we have undertaken efforts to adapt our payment and collections process to fit the current needs of the Exchange and other programs administered by HHS. We stated that as we work to enhance enforcement of these maturing programs, we believe that the payment and collections process should reflect this change by further evolving to provide that CMPs assessed against health insurance issuers, for violations of any applicable Exchange standards and requirements or PHS Act requirements, including the No Surprises Act, applicable to health insurance issuers, are also subject to netting as part of HHS' integrated monthly payment cycle.
Accordingly, we proposed to amend § 156.1215(c) to provide that any amount owed to the Federal Government by an issuer and its affiliates for these unpaid CMP amounts due to the Federal Government from these issuers and their affiliates, after HHS nets amounts owed by the Federal Government under these programs, would be the basis for calculating the determination of the debt.
We stated in the proposed rule that HHS' current integrated monthly payment and collections cycle is designed to streamline payment processing for both health insurance issuers and HHS, and includes statements to health insurance issuers that reflect how payments have been netted in the monthly payment and collections cycle. We stated that the proposed changes, to provide for netting of CMPs assessed against health insurance issuers and their affiliates, would ensure stability and consistency in the monthly payment and collections process and support HHS' continued ability to recover Federal debts by withholding funds payable to (or held by HHS for) issuers to satisfy an outstanding balance due to HHS for CMPs. We further stated that netting supports HHS' integrated monthly payment and collections cycle by limiting the number of charges flowing back and forth between HHS and issuers, mitigates the need for additional steps for Federal debt collection when internal netting may resolve the outstanding balance due to HHS from a determined debt, and may prevent inappropriately enriching an issuer if a payment is made from HHS when the issuer has an outstanding CMP.
In summary, we proposed to amend § 156.1215(b) to add language which applies the netting provisions of the payment and collections process to CMPs assessed for violations of any applicable Exchange standards and PHS Act requirements applicable to health insurance issuers. We also proposed to amend § 156.1215(c) to add language which provides that any amount owed to the Federal Government by an issuer and their affiliates for unpaid CMP amounts due to the Federal Government, after HHS nets amounts owed by the Federal Government under these programs, is a determination of debt.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these policies as proposed. We summarize and respond below to public comments received on the proposed amendments to the payment
Additionally, we do not believe that limiting discovery in proceedings for appeals of CMPs as set forth in § 156.935, in combination with this netting of CMPs as finalized in this rule, would further impact issuer insolvency, as the issuer will continue have the full administrative record from the audit even without discovery. For these reasons, we are finalizing these policies as proposed.
In the 2027 Payment Notice proposed rule (91 FR 6422), we proposed a technical correction to § 156.1220(b)(1) to update a cross-reference in the regulation text from paragraph (a)(5) to (a)(6). We noted that the process for administrative appeals consists of requests for reconsideration, described in § 156.1220(a), followed by informal hearings, described in § 156.1220(b). We stated that § 156.1220(b)(1) serves to explain the manner and timing of the request for an informal hearing, in the event that a request for reconsideration is not accepted by HHS. Currently § 156.1220(b)(1) references § 156.1220(a)(5), which is the scope of review of the reconsideration decision, and we proposed to correct this reference to § 156.1220(a)(6) on the reconsideration decision.
We sought comments on this technical correction.
We only received one comment that acknowledged the proposed technical correction to § 156.1220(b)(1) but did not express any support or opposition. After consideration of this comment and for the reasons outlined in the proposed rule and this final rule, we are finalizing this correction as proposed.
In the PY 2027 Payment Notice proposed rule (91 FR 6422), we sought comment on the impact of the Federal MLR standard on individual market stability, including the impact of MLR on costs and premiums and how such impact, if any, may affect individual market stability. We thank commenters for their feedback and will take these comments into consideration as we continue to consider potential adjustments to the Federal MLR standard for particular States' individual health insurance markets.+
In the 2027 Payment Notice proposed rule, we proposed that some policies, if finalized, would become applicable for plan years beginning on or after January 1, 2027.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing the applicability dates with the following modifications as provided in Table 13. We note that this rule is effective 30 days after publication in the
The 2027 Payment Notice proposed rule displayed at the
Commenters also raised concerns that the late publication of the proposed rule creates serious downstream implementation challenges, leaving State agencies, issuers, and other interested parties without enough time to address final rule policies before critical filing deadlines. One commenter stated that because the comment period would end just 2 months before the mid-May 2026 deadline for Affordable Care Act plans to file rates in their States, there would be little time for State insurance regulators to publish guidance for issuers that reflect the provisions of the final rule.
Further, we did not withhold information on which the proposals in the proposed rule relied. As commenters acknowledged, the proposed rule referenced data relevant to the proposed policies, including data we previously made available through public use files and other publications. To the extent any interested parties had questions about data cited in the proposed rule or required any further information, the proposed rule invited parties to contact HHS during the comment period. Notably, no commenter suggested they sought data from HHS during the comment period and was denied. For this reason, we do not agree that HHS withheld data impeding the public's ability to meaningfully comment on the proposed rule.
We acknowledge the importance of finalizing this rule as soon as possible and prior to critical deadlines for submission of health insurance rates to Federal and State regulators. Rate setting and plan finalization for PY 2027 depends on the finalization of the policies set forth in this final rule (such as permissible cost sharing parameters and the submission of rate filing justifications). Consistent with comments outlining concerns about impending critical rate filing deadlines, if we were to extend the comment period, the publication of the final rule would be further delayed. To provide individual and small group market issuers sufficient time to develop and price plan offerings for PY 2027 and because it is imperative that these rules be finalized as soon as possible, we set a 30-day comment period for the proposed rule.
We stated in the proposed rule that, as demonstrated by the number of distinct programs addressed in that rulemaking and the structure of the proposed rule in addressing them independently, we generally intended the rule's provisions, if finalized, to be severable from each other. For example, the proposed rule outlines proposed payment parameters and provisions for the HHS-operated risk adjustment program and HHS-RADV, the 2027 user fee rate for issuers in the risk adjustment program, the 2027 FFE and SBE-FP user fee rates, and provisions related to administration of CMPs. We also proposed, among other proposals, to disallow APTC for individuals who are ineligible for Medicaid due to their immigration status and have income below 100 percent of the FPL for taxable years beginning after December 31, 2025, limit APTC eligibility among aliens lawfully present who are not “eligible aliens” effective January 1, 2027, and extend the removal of the 150 percent FPL SEP beyond PY 2026 to align with the WFTC legislation. We stated that in the proposed rule that we believe the proposed provisions, if finalized, are generally capable of functioning sensibly on an independent basis. We stated that it is our intent that if any provision of the proposed rule, if finalized, is held to be invalid or unenforceable by its terms, or as applied to any person or circumstance, the other provisions in the proposed rule shall be construed so as to continue to give maximum effect as permitted by law, unless the holding shall be one of utter invalidity or unenforceability. We stated that in the event a provision if finalized is found to be utterly invalid or unenforceable, we intend for that provision to be severable.
We sought comment on the severability of these provisions in the proposed rule and did not receive any comments in response. For the reasons outlined in the proposed rule and in this final rule, we are finalizing this policy as proposed.
Under the Paperwork Reduction Act of 1995, we are required to provide notice in the
• The need for the information collection and its usefulness in carrying out the proper functions of the agency.
• The accuracy of our estimate of the information collection burden, including the validity of the methodology and assumptions used.
• The quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
We solicited public comment on each of these issues for the following sections of this document that contain information collection requirements (ICRs). The public comments and our responses appear in this section, and in the applicable ICR sections that follow.
To derive wage estimates, we generally use data from the Bureau of Labor Statistics to derive labor costs (including a 100 percent increase for the cost of fringe benefits and overhead) for estimating the burden associated with the ICRs.
As indicated, employee hourly wage estimates have been adjusted by a factor of 100 percent. This is necessarily a rough adjustment, both because fringe benefits and overhead costs vary significantly across employers, and because methods of estimating these costs vary widely across studies. Nonetheless, there is no practical alternative, and we believe that doubling the hourly wage to estimate total cost is a reasonably accurate estimation method.
We proposed to adopt an hourly value of time based on after-tax wages to quantify the opportunity cost of changes in time use for unpaid activities (91 FR 6424). This approach matches the default assumptions for valuing changes in time use for individuals undertaking administrative and other tasks on their own time, which are outlined in an Assistant Secretary for Planning and Evaluation (ASPE) report on “Valuing Time in U.S. Department of Health and Human Services Regulatory Impact Analyses: Conceptual Framework and Best Practices.”
We sought comment on these burden estimates and assumptions.
We did not receive any comments in response to these proposed burden estimates. For the reasons outlined in the proposed rule, we are finalizing these estimates as proposed.
In the proposed rule, we stated that under § 154.215(b)(1) through (3) and CMS' Unified Rate Review Instructions,
As discussed in the proposed rule, CSR loading is a permissible practice if permitted by the State and the amounts are actuarially justified plan-level adjustments which issuers must report when they submit a rate filing to the State or CMS for review, to ensure compliance with the Federal rating rules, including § 156.80. To provide regulators with information to help determine whether CSR loads are actuarially justified, this rule finalizes our proposal that the actual CSR amount paid on behalf of eligible enrollees and the additional revenue collected from the previously applied CSR load be reported on the URRT and calculated using the most recent annual data that
Assuming a cross-functional team, we estimate that issuers will incur an initial one-time cost and burden in 2026 to develop and implement a claim-level re-adjudication process using the standard methodology set forth in § 156.430 to produce the required values. We estimate that for each issuer it will require 2,400 hours (at an hourly rate of $120.94) for Actuaries to define the plan mappings and business rules and set reasonableness thresholds, 3,000 hours (at an hourly rate of $108.26) for Data Scientists to design the approach and data flows, prototype the logic, and validate results, 3,000 hours (at an hourly rate of $94.88) for Computer Programmers to develop and maintain the production code and workflows, automate runs, and ensure reliability and performance, 2,000 hours (at an hourly rate of $73.84) for Claims Specialists to assemble and interpret claims, eligibility, and accumulator data, and 1,000 hours (at an hourly rate of $96.88) for a Project Manager to coordinate timelines, handoffs, and deliverables to produce the experience-period actual CSR amount paid on behalf of eligible enrollees (using the most recent annual data available, generally 2 years before the upcoming plan year, using the CMS standard methodology set forth in § 156.430(c)(2)), the additional revenue collected from the previously applied CSR load from the most recent annual data available, the projection-period expected CSR amount to be paid on behalf of enrollees for the upcoming plan year, and the plan-level CSR load factor for the upcoming plan year, and additional revenue expected to be collected from the applied CSR load factor for the upcoming plan year for URRT reporting, resulting in a total one-time burden of 11,400 hours, with an associated cost of approximately $1,144,236. For all 366 issuers, we estimate a total burden of 4,172,400 hours, with an associated cost of approximately $418,790,376.
In subsequent years, we assume that issuers will require targeted updates to ensure their systems are accurately calculating the required values using the most recent data. We estimate that for each issuer it will require 1,200 hours (at an hourly rate of $120.94) for Actuaries to update plan parameters and CSR-to-standard-plan mappings using the most recent annual data that is available prior to the applicable filing year, 1,500 hours (at an hourly rate of $108.26) for Data Scientists to update specifications, oversee execution, and review outputs, 1,500 hours (at an hourly rate of $94.88) for Computer Programmers to reload data, apply configuration and code updates, and run and monitor the processing, 1,000 hours (at an hourly rate of $73.84) for Claims Specialists to reconcile corrected claims, and 500 hours (at an hourly rate of $96.88) for a Project Manager to manage review and sign-off for the cycle, resulting in an annual ongoing burden of 5,700 hours, with an associated cost of approximately $572,118. For all 366 issuers, we estimate a total burden of 2,086,200 hours, with an associated cost of approximately $209,395,188.
Some issuers may incur a lower one-time cost if they currently have a system in place that is able to calculate the load factor and other required values using the standard methodology, or if their systems only require updates and minor changes to function properly. We also acknowledge that some issuers may incur higher costs if they are required to develop and build a new system to meet the proposed requirements and calculate the appropriate values. We further acknowledge that some issuers may incur higher or lower annual costs depending on their volume of CSR-eligible claims.
As discussed in section III.C. of this final rule, this rule finalizes our proposal to change the instructions for the URRT so that issuers will enter the actual amount of CSRs they paid on behalf of eligible enrollees (using the most recent annual data that is available prior to the applicable filing year, generally two years prior to the upcoming plan year), the additional revenue collected from the previously applied CSR load, the amount of CSRs they expect to be paid on behalf of enrollees in the upcoming plan year, the CSR load factor for the upcoming plan year, and the additional revenue expected to be collected from the applied CSR load factor for the upcoming plan year.
Issuers will incur ongoing burden to gather all the required CSR-related data
As discussed in section III.C. of this final rule, this rule finalizes our proposal that information regarding CSR-related plan-level adjustments to the index rate should be provided in the URRT and also provided in the Actuarial Memorandum so that issuers provide numerical values in the URRT and explain how they reached those values in the Actuarial Memorandum.
Issuers will incur additional ongoing burden to develop, draft, and add the explanation of the methodology used to determine the load factor and an explanation of how the additional revenue expected to be collected from the applied CSR load factor for the upcoming plan year compares to the amount of CSRs expected to be paid on behalf of enrollees for the same period. We estimate that for each plan an issuer will require 2 hours (at an hourly rate of $120.94) for Actuaries to develop, draft the required explanations (the methodology used to determine the CSR load factor for the upcoming plan year and an explanation of how the additional revenue expected to be collected from the applied CSR load factor for the upcoming plan year compares to the amount of CSRs expected to be paid on behalf of enrollees for the same period), and add them to the Actuarial Memorandum for submission via SERFF and/or MPMS, resulting in an ongoing burden of 2 hours, with an associated cost of approximately $242 per plan. We estimate that each issuer will need to submit explanations for an average of 7 plans and thus would incur an estimated burden of approximately 14 hours, with an associated cost of approximately $1,718. For all 366 issuers, we estimate a total burden of 5,200 hours, with an associated cost of approximately $628,888.
The information collection described in this section will be submitted as a revision to the currently approved PRA package CMS-10379 (OMB Control Number 0938-1141) for OMB review under the Paperwork Reduction Act.
Table 19 aggregates the burden and costs from Tables 15 through 18. The 2026 burden (11,418 hours per respondent) includes the one-time implementation (11,400 hours) plus ongoing URRT and Actuarial Memorandum submissions (18 hours total). The 2027-2028 burden (5,718 hours per respondent) includes annual system updates (5,700 hours) plus ongoing URRT and Actuarial Memorandum submissions (18 hours total). The three-year averages are calculated by summing the annual figures and dividing by three.
In 2026 (for PY 2027 rate filings), the Federal Government will incur costs to review and evaluate the data and actuarial memoranda submitted by issuers into MPMS or SERFF. To conduct the review of all required CSR-related data elements and explanations submitted, the Federal Government, at a minimum, will require staff at GS-14 level (at an hourly rate of $154.76 for GS-14 step 5) 6 hours per plan to review the materials submitted by issuers. The Federal Government will incur a burden of 15,600 hours, with an associated estimated cost of $2,414,256 to review all URRT and actuarial memoranda related material related to CSR data and explanations.
We sought comment on these assumptions.
We did not receive any comments in response to the proposed burden estimates for this policy. For the reasons outlined in the proposed rule, we are finalizing these estimates as proposed.
As discussed in the preamble of this final rule, we are finalizing amendments to § 155.220(j)(2)(ii)(A) and (j)(2)(iii)(A) to require agents, brokers, and web-brokers to use the HHS-approved and -created consumer consent form to meet the eligibility application review documentation requirements and consent documentation requirements. We are finalizing this policy with a modification that it will be effective beginning with PY 2028 instead of PY 2027. Accordingly, we are also finalizing the redesignation of current § 155.220(j)(2)(ii)(A)(2) as § 155.220(j)(2)(ii)(A)(3) and current § 155.220(j)(2)(iii)(C) as § 155.220(j)(2)(iii)(D). We are also finalizing corresponding changes to §§ 155.220(j)(2)(ii)(A) and (j)(2)(iii)(A) to state that current documentation policies for eligibility application and review and consent are effective until PY 2028. Our finalized policy will eliminate the current broad allowances for meeting these requirements. The language in the regulation will also be changed to clarify what types of actions constitute “taking an action” to meet the regulatory requirements. As discussed in the proposed rule, the goal of this policy is to reduce confusion among agents, brokers, and web-brokers on what constitutes compliant eligibility application review documentation and what constitutes compliant consumer consent by ensuring objective standards, which ultimately protects consumers (91 FR 6427). These finalized policies will also greatly improve HHS' investigative abilities into agent, broker, and web-broker eligibility application review documentation and consumer consent documentation review by creating a clear and objective standard for all applications clearly outlining what HHS deems complaint.
We estimate there will be very minimal costs in time associated with this policy as agents, brokers, and web-brokers are already required to document and maintain eligibility application review documentation information and consumer consent documentation information. As a result, this policy will not add to those requirements, rather, it will only require that a specific form be used.
In the proposed rule, we stated that according to our records, as of September 18, 2025, there are a total of 105,988 agents, brokers, and web-brokers who have presently completed the FFE training who are registered to assist consumers on the Exchanges. Under our records, the percentage of agents, brokers, and web-brokers that currently submit only audio files for eligibility application review documentation and consumer consent documentation is approximately 24 percent, which equals 25,437 agents, brokers, and web-brokers who are utilizing this method. Additionally, per our records, the percentage of agents, brokers, and web-brokers that currently submit partial audio files in connection with eligibility application review documentation and consumer consent documentation is approximately 42 percent, which equals 44,514 agents, brokers, and web-brokers who are utilizing this method.
Regarding the costs related to requiring agents, brokers, and web-brokers to use the HHS-approved and -created consumer consent form to meet the eligibility application review
Under the finalized policy, HHS will require agents, brokers, and web-brokers to use the HHS-approved and -created consumer consent form to meet the eligibility application review documentation requirements and the consumer consent documentation requirements. The HHS-approved and -created consumer consent form can be submitted electronically, so there will be no costs associated with printing or mailing the HHS-approved and -created consumer consent form.
The estimated cost of requiring agents, brokers, and web-brokers to use the HHS-approved and -created consumer consent form to meet the eligibility application review documentation requirements and the consumer consent documentation requirements is $96,694,640.
Because we are finalizing this proposal, the new information collection requirements discussed in this section will be submitted for OMB review and approval in a new PRA package.
We sought comment on these burden estimates and assumptions.
We did not receive any comments in response to the proposed burden estimates for this policy. For the reasons outlined in the proposed and this final rule, we are finalizing these estimates with the modification to implement the policy effective PY 2028.
As discussed in the preamble of this final rule, we are finalizing amendments to § 155.220(j), creating new standards of conduct section on marketing requirements, which would be housed in § 155.220(j)(3). These new regulations will prohibit agents, brokers, and web-brokers from engaging in misleading marketing, while adhering to the requirements in newly proposed § 155.220(j)(3)(iii), and require agents, brokers, and web-brokers to provide marketing materials to HHS upon request. We estimate costs that would be associated with this finalized policy are mainly those involved in responding to HHS' requests for documentation. Producing such documentation will require the submission of electronic documents to HHS upon request.
As discussed in the proposed rule, we do not anticipate many costs for the agents, brokers, or web-brokers we investigate for misleading marketing (91 FR 6428). Based on our current investigative methods and volume of misleading advertisements we have uncovered thus far, we currently only plan to send 70 notifications annually to agents, brokers, and web-brokers for misleading marketing. Based on analysis of existing enforcement outreach conducted on misleading marketing, about
We believe responding to HHS requests to provide confirmation they removed the ads and/or reviewed the marketing guidelines would not be overly time-consuming or burdensome. Our notifications to the agents, brokers, or web-brokers detail what response is required and provide hyperlinks to the noncompliant ad(s). We estimate it would take each agent, broker, or web-broker one hour to remove any noncompliant ad(s), and/or review the marketing guidelines, and respond to HHS via email. This estimate incorporates the potential of HHS asking these 24 agents, brokers, and web-brokers to provide advertisements for HHS' review. Using the hourly wage rate for an insurance sales agent from Table 14, this means the total burden of responding to HHS regarding misleading marketing would be 24 hours at a cost of $1,392.96 ($58.04 per hour × 1 hour × 24 responses), beginning in 2027.
We sought comment on these burden estimates and assumptions.
We did not receive any comments in response to the proposed burden estimates for this policy. For the reasons outlined in the proposed rule, we are finalizing these estimates as proposed.
We are not finalizing our proposal to add § 155.221(k) to establish a new State Exchange enhanced direct enrollment (SBE-EDE) option by which State Exchanges can leverage direct enrollment technology to transition primarily to private sector-focused enrollment pathways operated by QHP issuers, web-brokers, and agents and brokers, instead of or in addition to a centralized eligibility and enrollment website operated by an Exchange. In the proposed rule, we stated that current State Exchanges that elect to implement the SBE-EDE option will need to revise their Exchange Blueprint to notify HHS that the State proposes to implement the SBE-EDE option in compliance with related requirements (91 FR 6428). We sought comment on the burden associated with this activity but did not receive any comments in response to the proposed burden estimates for this policy. For the reasons outlined in section III.D.4. of this final rule, we are not finalizing these estimates as HHS is not finalizing this policy.
The following changes will be submitted for review under OMB Control Number 0938-1218 for BHP. We explained in the proposed rule that because section 71301 of the WFTC legislation amended section 36B of the Code to provide that PTC is not allowed
We estimate that implementing this policy would require ongoing costs for States to submit additional enrollment data to CMS. We estimate that it would take a Business Operations Specialist 2.5 hours at $78.14 per hour and a General Manager 0.5 hours at $99 per hour to compile and submit additional quarterly estimated enrollment data. We estimate that it would take a Business Operations Specialist 25 hours at $78.14 per hour and a General Manager 2.5 hours at $99 per hour to compile and submit additional quarterly final enrollment data. For the three States and DC currently approved to operate a BHP in 2027 we estimate the total annual ongoing cost to be $39,133.60.
We sought comment on these burden estimates and assumptions.
We did not receive any comments in response to these proposed burden estimates. For the reasons outlined previously and in the proposed rule, we are finalizing these estimates as proposed.
The following changes will be submitted for review under OMB Control Number 0938-NEW for Exchanges and OMB Control Number 0938-1218 for BHP.
As discussed in section III.D.8. of this final rule, we are finalizing our proposal to align Exchange eligibility and verification rules with section 71301 of the WFTC legislation, which disallows PTC for the coverage of noncitizens other than “eligible aliens.” We are adding a new definition of “eligible noncitizen” at § 155.20 and updating our regulations at § 155.305(f)(1)(ii) to align with 26 CFR 1.36B-1(d) and § 155.305(f)(1)(ii)(C) to clarify that an Exchange must grant eligibility for APTC to individuals defined as “U.S. citizens, U.S. nationals, and eligible noncitizens,” provided the other APTC eligibility requirements are met. For BHP, we are finalizing our proposal to add a new definition of “eligible noncitizen” at 42 CFR 600.5 that cross-references to § 155.20. These changes are effective beginning in PY 2027 and will apply to the 22 State Exchanges expected to be operating in PY 2027, Exchanges on the Federal platform, and to the three States that are currently approved to operate a BHP (Minnesota, Oregon, and New York), as well as the District of Columbia.
To implement these changes, in the proposed rule we stated that the Federal Data Services Hub would need to make updates to its Verify Lawful Presence (VLP) service, to enable Exchanges to accurately verify whether an individual is an eligible noncitizen (91 FR 6429). In addition, we also stated that Exchanges on the Federal platform and the 22 State Exchanges would need to update their eligibility and enrollment systems to collect applicant attestations regarding eligible noncitizen status, to correctly determine APTC and income-based CSR eligibility on the basis of such attestations, to determine whether such attestations can be considered verified, to set and process new inconsistencies in cases where such attestations cannot be verified. Exchanges would also need to ensure that current enrollees who would no longer be eligible for APTC or income-based CSRs as a result of this finalized policy have their APTC and CSR eligibility ended accordingly.
We estimate that implementing this policy will require one-time costs for the Federal Government to make technical updates to its system. Based on preliminary analysis, we estimate that it would take the Federal Data Services Hub (the “Hub”) 2,000 hours in 2026 to make these technical updates. Of the 2,000 hours for Hub updates, we estimate it would take a database and network administrator and architect 500 hours at $103.34 per hour and a computer programmer 1,500 hours at $94.88 per hour. Given this, to make Hub updates, we estimate that the Federal Government would incur a one-time burden in 2026 of $193,990 [(500 hours × $103.34 + (1,500 hours × $94.88)] to make these system updates.
We also estimate that it will take Exchanges on the Federal platform 7,000 hours to make the updates required to implement this provision. Of the 7,000 hours required to make updates for Exchanges on the Federal platform, we estimate that it would take a database and network administrator and architect 1,750 hours at $103.34 per hour and a computer programmer 5,250 hours at $94.88 per hour. Given this, Exchanges on the Federal platform would incur a one-time burden of $678,965 [(1,750 hours × $103.34) + (5,250 hours × $94.88)].
Similar to the one-time costs incurred by Exchanges on the Federal platform, we estimate that implementing this policy will require one-time costs for each State Exchange of 7,000 hours. Of these 7,000 hours, we estimate it would take a database and network administrator and architect 1,750 hours at $103.34 per hour and a computer programmer 5,250 hours at $94.88 per hour to make the changes. State Exchanges would therefore incur a one-time burden of $14,937,230 [(1,750 hours × $103.34) + (5,250 hours × $94.88)] × 22 State Exchanges) to implement these technical changes.
We anticipate that this finalized policy will not result in ongoing burden changes for Exchanges and individuals related to the creation of a new DMI type for “eligible noncitizens” because these individuals would already be required to submit documentation to verify their eligibility to enroll in a QHP.
The total estimated annual burden for these information collection requirements is $15,810,185, representing 163,000 hours of burden.
We sought comment on these assumptions.
We did not receive any comments in response to the proposed burden estimates for this policy. For the reasons outlined previously and in the proposed rule, we are finalizing these estimates as proposed.
We estimate that implementing this finalized policy will require one-time costs for Exchanges to make technical updates to their eligibility systems related to both APTC and the BHP. We estimate that it would have taken the Exchanges on the Federal platform 2,500 hours and each State Exchange 2,000 hours in 2025 to make these technical updates. Of those 2,500 hours for Exchanges on the Federal platform, we estimate it would take a database and network administrator and architect
We anticipate that this finalized policy will result in ongoing burden reduction for Exchanges on the Federal platform related to no longer generating Medicaid Lawful Presence (MLP) Data Matching Issues (DMIs) and for all Exchanges related to no longer generating annual income (AI) DMIs for those who attest to income under 100 percent of the FPL. We noted in the proposed rule that these DMIs are generated when an individual attests that they are a lawfully present noncitizen and have an attested household income under 100 percent of the FPL, but the Exchange is not able to verify promptly whether their immigration status disqualifies them from full Medicaid coverage or verify their attested annual household income with trusted data sources (91 FR 6430). We also stated that currently, Exchanges must require individuals to submit documentation to verify their attested application information when trusted data sources cannot verify.
These inconsistencies are not generated by State Exchanges, so we do not estimate any change in burden to State Exchanges. Based on historical data from the FFE, we estimate a reduction of approximately 275,000 inconsistencies
Based on historical data from the FFE, we estimate that approximately 77,000 inconsistencies
The total estimated annual reduction in burden for these information collection requirements, beginning in 2026, is $24,126,144 ($16,341,600 + $7,784,544), representing 487,200 (330,000 + 157,200) hours of burden across all affected entities.
We sought comment on these proposed burden estimates and assumptions.
We did not receive any comments in response to the proposed burden estimates for this policy. For the reasons outlined previously and in the proposed rule, we are finalizing these estimates as proposed.
We are finalizing our proposal to amend paragraph § 155.305(f)(4) so that in PY 2028 and beyond, all Exchanges may not determine a tax filer or their enrollee eligible for APTC if: (1) HHS notifies the Exchange that APTC were paid on behalf of the tax filer, or their spouse if the tax filer is a married couple, for one year for which tax data would be utilized for verification of household and family size, and (2) the tax filer did not comply with the requirement to file a Federal income tax return and reconcile APTC for that year (referred to as the “1-tax year FTR” process). We also are finalizing that at the option of the Exchange, an Exchange may choose to implement this policy earlier in PY 2027 if it has the resources and capability to adopt the 1-year FTR process or continue to follow the 2-year FTR process until PY 2028. Exchanges on the Federal platform intend to adopt the 1-year FTR process in PY 2027, as HHS has the resources possible to do so. As we noted in the proposed rule, section 71303(a)(6) of the WFTC legislation amended section 36B(c) of the Code such that term “coverage month” does not include, for any individual enrolled in a QHP through an Exchange, any month for which the Exchange does not meet the requirements of § 155.305(f)(4)(iii) as published in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074) for PY 2028 and beyond, where effectively Exchanges are required to find enrollees ineligible for APTC after they or their tax filer has failed to file and reconcile their APTC for 1-tax year (91 FR 6430). However, minimal changes to the language of the Exchange application questions for States served by
We sought comment on these proposed burden estimates and assumptions.
We did not receive any comments in response to the proposed burden estimates for this policy. For the reasons outlined in the proposed rule, we are finalizing these estimates as proposed.
We are finalizing our proposal to update § 155.320(c)(3)(iii)(A) to extend the requirement for applicants to submit documentation when their attested household income is within the APTC range, but data sources indicate income less than 100 percent of the FPL. As finalized in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074), Exchanges are required to generate income DMIs when a tax filer's attested annual household income would qualify the taxpayer as an applicable taxpayer according to 26 CFR 1.36B-2(b) and trusted data sources indicate that income is under 100 percent of the FPL only through PY 2026. In the proposed rule, we stated that we proposed to implement this policy as a new and permanent verification process within the Exchange, as detailed later (91 FR 6431).
We anticipate that extending this income verification requirement would result in approximately 1 hour of time spent by consumers to complete associated questions in the application or to submit supporting documentation for each year of operation. Based on historical data from the FFE, we estimate that approximately 340,000 inconsistencies would be generated at the household level for the Exchanges on the Federal platform annually starting in 2027. On the State Exchanges, we estimate this figure to be 208,000 inconsistencies annually starting in 2027. Therefore, adding these inconsistencies would increase burden on consumers by approximately 548,000 hours across all Exchanges. Using the estimate of the hourly value of time for changes in time use for unpaid activities calculated at $25.02 per hour in section IV.A. of this final rule, we estimate that the increase in cost for each consumer in 2027 would be approximately $25.02, and the cost increase for all consumers who would generate this income inconsistency in 2027 and onwards would be approximately $13,710,960 (548,000 hours × $25.02 cost of unpaid activities) per year.
Additionally, we estimate that adding this income verification requirement would result in an increase in burden on the Exchanges on the Federal platform. Once households have submitted the required verification documents, we estimate that it would take approximately 1 hour and 12 minutes (1.2 hours) for an eligibility support staff person (BLS occupation code 43-4061), at an hourly cost of $49.52,
In addition to these administrative costs, we anticipate system expenses occurring in 2026 to establish this policy ahead of the effective date in 2027. These costs are to support updating technical systems, including the eligibility system. In the 2025 Marketplace Integrity and Affordability final rule (90 FR 27185), we estimated that it would take the Exchanges on the Federal platform and each State Exchange 8,000 hours in 2026 to make these updates and sunset the policy. Of those 8,000 hours, we estimated that it would take a database and network administrator and architect 2,000 hours at $103.34 per hour and a computer programmer 6,000 hours at $94.88 per hour. Given this, we estimate that Exchanges on the Federal platform would incur a one-time burden in 2026 of $775,960 (2,000 × $103.34 + 6,000 × $94.88) to make these eligibility system updates. State Exchanges would incur a one-time burden of $16,295,160 ((2,000 × $103.34 + 6,000 × $94.88) × 21). Because we are now finalizing this as a new and permanent verification process within the Exchange, we anticipate that many State Exchanges and the Federal Platform would incur the totality of these expenses to implement this policy as finalized.
We sought comment on these proposed burden estimates and assumptions.
We summarize and respond to public comments received on the burden estimates proposed policy in section V.C.14. of this final rule. For reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed.
We are finalizing our proposal to remove § 155.320(c)(5), which will allow Exchanges to continue the income verification process when IRS is successfully contacted but IRS returns no data rather than accepting an applicant's annual household income attestation. We are implementing this policy as a new permanent verification procedure, and we are presenting these estimates as costs inherent to implementing the policy as finalized in this final rule.
In the proposed rule, we stated that based on internal historical DMI data, we estimate that approximately 1,722,000 inconsistencies will be generated annually at the household level for Exchanges on the Federal platform, and 1,056,000 will be generated at the household level for State Exchanges due to this final policy (91 FR 6431). Once households have submitted the required verification documents, we estimate that it will take approximately 1 hour and 12 minutes (1.2 hours) for an eligibility support staff person (BLS occupation code 43-4061), at an hourly cost of $49.52,
In addition to the increased administrative burden on Exchanges, this change will increase the number of consumers who are required to submit documentation to verify their income. We estimate that consumers will each
In addition to these administrative costs, we anticipate system expenses occurring in 2026 to establish this policy ahead of the effective date in 2027. We estimated that it will take Exchanges on the Federal platform and each State Exchange 9,000 hours in 2026 to implement this policy. Of those 9,000 hours, we estimated it will take a database and network administrator and architect 2,250 hours at $103.34 per hour and a computer programmer 6,750 hours at $94.88 per hour. Therefore, we estimated that Exchanges on the Federal platform will incur a one-time burden in 2026 of $872,955 (2,250 × $103.34 + 6,750 × $94.88) to make these eligibility system updates, and State Exchanges will incur a one-time burden total in 2026 of $18,332,055 ($872,955 × 21) associated with a total of 189,000 (9,000 × 21) burden hours. Because this finalized policy will be implemented as a new permanent verification procedure, we anticipate that the full costs described in this provision will be applied to the State Exchanges and Exchanges on the Federal platform prospectively.
We sought comment on these proposed burden estimates and assumptions.
We summarize and respond to public comments received on the burden estimates proposed policy in section V.C.15. of this final rule. For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed.
In this final rule, we are finalizing the provision allowing the Federal Exchange to conduct pre-enrollment verification for SEPs other than Loss of Minimum Essential Coverage and adding the requirement that Exchanges on the Federal Platform conduct pre-enrollment verification for at least 75 percent of new enrollments.
In the proposed rule, we stated that we anticipate that maintaining this expansion of pre-enrollment verification for SEPs would result in approximately 1 hour of time spent by consumers to complete associated questions in the application or submit supporting documentation (91 FR 6432). Based on historical data from the FFE, we estimate that approximately 293,073 new SEP verification issues would continue to be generated at the household level for Exchanges on the Federal platform. Therefore, maintaining these inconsistencies would continue to increase burden on consumers by approximately 293,073 hours. Using the estimate of the hourly value of time for changes in time use for unpaid activities calculated at $25.02 per hour in section IV.A, we estimate that the cost increase for all consumers who generate this income inconsistency would be approximately $7,332,686 annually starting in 2027.
Additionally, we estimate that maintaining expanded pre-enrollment verification for SEPs would result in an increase in burden on Exchanges using the Federal platform. Based on historical FFE data, we anticipate that approximately 293,073 inconsistencies would be generated at the household level for Exchanges on the Federal platform. Once households have submitted the required verification documents, we estimate that it would take approximately 12 minutes (0.2 hours) for an eligibility support staff person (BLS occupation code 43-4061), at an hourly cost of $49.52,
We sought comment on these proposed burden estimates and assumptions.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these burden estimates for this policy as proposed. We summarize and respond to public comments received on the proposed estimates below.
Under this finalized policy, individuals who are ineligible for APTC or CSRs due to projected household income may apply for a hardship exemption to qualify for catastrophic coverage. While the FFE automatically grants these exemptions through the application system when consumers apply for catastrophic coverage, some consumers may submit paper applications for hardship exemptions.
In the proposed rule, we stated that the burden associated with this requirement includes the time for consumers to complete and submit paper hardship exemption applications, and the time for Exchanges to review and process these applications.
This information collection is currently approved under OMB control number 0938-1191 (CMS-10440), which covers hardship exemption applications and related documentation.
Based on current FFE implementation, we estimate that it will continue to require consumers approximately 16 minutes to complete and submit a paper hardship exemption application.
The four State Exchanges that process their own exemptions—California,
Based on the FFE implementation data and accounting for the enrollment share of the four State Exchanges that process their own exemptions (estimated at approximately 10 percent of total Exchange enrollment), we estimate these four State Exchanges will collectively process approximately 1,072 applications annually under the expanded hardship exemption eligibility criteria. Using the per-application manual processing cost of $15.75, we estimate the total annual cost burden for these four State Exchanges in total to be approximately $16,884 (1,072 applications × $15.75 per application). Individual State burden would depend on each State Exchange's enrollment volume and the proportion of consumers who fall into the expanded hardship exemption category. States with larger enrollment volumes and higher proportions of consumers with income below 100 percent FPL or above 250 percent FPL may experience higher application volumes than States with smaller enrollment or different demographic characteristics.
We note that the burden estimates presented previously may not reflect the actual burden on both consumers and Exchanges. The FFE experience demonstrates that automated exemption processing significantly reduces the need for manual paper application review. Exchanges may implement similar automated systems that grant hardship exemptions automatically when consumers ineligible for APTC or CSRs due to income apply for catastrophic coverage, thereby eliminating the need for separate exemption applications in most cases. Additionally, State Exchanges currently processing their own exemptions may choose to delegate exemption processing to HHS, which would eliminate the direct administrative burden on the State while ensuring consumers have access to the expanded hardship exemption eligibility. This delegation option is available under existing regulations and would result in zero additional burden to the delegating States.
We sought comment on these assumptions.
We did not receive any comments in response to the proposed burden estimates for this policy. For the reasons outlined in the proposed rule, we are finalizing these estimates as proposed.
In the proposed rule, we stated that the burden associated with QHP issuers and States in State Exchanges and SBE-FPs in implementing changes for PY 2026 to meet time and distance standards at § 155.1050 is covered by the currently approved information collection (OMB Control Number: 0938-1341 (CMS-10592)/Expiration date: April 30, 2027) (91 FR 6433). We sought comment on these proposed burden estimates in the context of the changes at § 155.1050(a)(2) that we proposed in the proposed rule and are now finalizing in this final rule, discussed directly below.
We are finalizing our proposal to amend § 155.1050(a)(2) to eliminate, for plan years beginning on or after January 1, 2027, the requirements under § 155.1050(a)(2)(i) and (ii) for State Exchanges and SBE-FPs to establish and impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs under § 156.230; instead, we will require that State Exchanges and SBE-FPs ensure that each QHP provides sufficient access to providers in a manner that meets applicable standards specified in § 156.230(a)(1)(ii) and (a)(1)(iii) for network plans, or, for plan years beginning on or after January 1, 2027, § 156.236(a) for non-network plans if such plans are allowed to be offered through the Exchange, as applicable. Many State Exchanges and SBE-FPs demonstrated to HHS that they have robust network adequacy standards and reviews in place beyond the requirements specified in § 156.230(a)(1)(ii) and (a)(1)(iii) for network plans, or § 156.236(a) for non-network plans. This approach recognizes that States are often best positioned to evaluate local provider networks and market conditions.
We estimate there would be minimal increase in burden to issuers associated with the modification of this policy as it was in effect for only one plan year, and prior to PY 2026, each State Exchange and SBE-FP was evaluated by HHS to understand their current state of network adequacy reviews, with all States being deemed as either meeting the requirements described at § 155.1050(a)(2)(i) or were determined to have a network adequacy review in place that met the requirement for the exception described at § 155.1050(a)(2)(ii).
We previously estimated that the total annual burden associated with State Exchanges and SBE-FPs in establishing and conducting network adequacy reviews to be up to 900 hours, which we anticipate would still apply, as we do not anticipate State Exchanges or SBE-FPs would need to make changes to their systems or policies to support the restoration of flexibilities to conduct network adequacy. Assuming the compliance officer average hourly rate of $75.40,
We sought comment on these proposed burden estimates and assumptions.
We did not receive any comments in response to the proposed burden estimates for this policy. For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed.
We are finalizing our proposal to amend § 155.1200(d) to reduce duplication between the proposed SEIPM program described in proposed subpart Q and the annual independent external programmatic audit requirements and standards described at § 155.1200(c) and (d). We are adding § 155.1200(e) to permit a State Exchange to satisfy certain annual independent external programmatic audit requirements, as described at § 155.1200(d), by completing the required annual SEIPM program process finalized in this rule. As a result, we estimate that there would be a general burden reduction for State Exchanges related to the programmatic audit requirement under § 155.1200(c). In
In the proposed rule, we stated that based on industry estimates of the average cost of contracting an auditor to perform an independent external programmatic audit, we project that the reduced audit scope would lower annual costs by approximately $45,000 for each State Exchange (91 FR 6433). This is based on an estimated average annual programmatic cost of $150,000. We anticipate the total cost annual reduction across 22 State Exchanges would be approximately $990,000 and that these savings could begin as early as 2027, coinciding with the submission of independent external audits for the PY 2026 SMART. However, we also noted that this change would also introduce a new burden associated with completing the SEIPM process, as discussed in the section below.
We sought comment on these proposed burden estimates and assumptions and specifically sought feedback from State Exchanges regarding the annual cost of the programmatic audit process.
We did not receive any comments in response to the proposed burden estimates for this policy. For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed.
As described in the preamble to § 155.1600, SEIPM is being finalized as proposed to replace the previous IPPTA program with requirements related to mandatory participation in SEIPM. SEIPM is designed as a process for HHS to review payments of APTC that were determined by State Exchanges to produce an estimate of improper payments.
In the preamble to § 155.1615(a)(1), we are finalizing our proposal that State Exchanges would provide to HHS: the State Exchange's Program Information which consists of policy, operational and technical documentation concerning business rules and calculations, entity relationships, data dictionaries, operating procedures, and system technology. This information is currently retained by State Exchanges in a digital format and can be electronically transmitted to HHS. We estimate that the burden associated with the collection and transfer of this information to HHS would be no more than 40 hours.
In the preamble to § 155.1615(a)(2), we are finalizing our proposal that State Exchanges would provide HHS with the universe of tax household information respective to the plan year being reviewed, that being a listing of the population of tax households that were enrolled in a QHP, where payments of APTC were made. The listing must include an identifier for each tax household, an identifier for each QHP policy within that tax household, the tax household size, the total payment amounts for each sampled unit for the benefit year, and information about the existence of an eligibility verification inconsistency associated with each sampled unit. The burden associated with the finalized collection of information includes the time it would take each State Exchange to meet with HHS to review the submitted information. We estimate that the burden associated with this data collection and transfer would be no more than 40 hours.
In the preamble to § 155.1615(a)(3), we are finalizing our proposal that State Exchanges would provide HHS with review unit data, that being the specific information that is required to review each of the sampled QHP tax household, which includes the following information at the tax household level:
• Information pertaining to the calculation of the APTC benefits paid. This includes monthly enrollment premium amounts, monthly APTC payment amounts, monthly Second Lowest Cost Silver Plan Premium amounts, and monthly essential health benefit amounts.
• Information provided by policy issuers relevant to enrollment reconciliation. This includes dates and amounts of effectuation payments, APTC and premium payment information, and policy start and end dates.
• Information relevant to the determination of eligibility for an SEP (where applicable), this includes consumer attestations and representations, copies of documentary evidence submitted by applicants, electronic verification information, and timing information.
• Information about timing of certification and coverage area of the associated QHP. This includes the coverage area of the QHP, timing of QHP certification or approval, and timing of QHP decertification or suppression.
• For each person on the policy who is included in the APTC payment calculation:
• Attestation and demographic information relevant to initial QHP. This includes the demographic information and consumer attestations and representations.
• Information relevant to electronic eligibility verifications and payment determinations. These include the electronic source consulted, the timing of the verification, and the results of the verification.
• Information relevant to QHP and APTC manual eligibility verifications and the resolution of electronic verification inconsistencies. This includes copies of documentary evidence submitted by applicants, the timing of submission, the timing of adjudication, and information about good faith extensions.
HHS would specify the manner in which the data is collected. HHS anticipates utilizing a standardized data request form with specific required fields for the collection of this information. The final collection instrument and methodology will be specified in subsequent guidance and would be designed to minimize burden while ensuring data quality and consistency across State Exchanges. HHS will provide State Exchanges with detailed specifications for data formatting, submission procedures, and technical requirements prior to implementation. We estimate that the burden associated with this data collection and transfer would be no more than 8 hours per sample. We anticipate each State Exchange would need to provide between 50 to 250 samples proportionate to the total amount of APTC payments processed by the State Exchange. At the aggregate level, a total sample size of approximately 2,000 tax households would be used to support improper payment measurement across all State Exchanges. In future periods, the total sample size may be adjusted based on factors such as observed error rates, statistical precision requirements, State Exchange participation levels, and available program resources, while ensuring compliance with OMB statistical sampling guidance for improper payment measurement.
The burden associated with completion and return of the required information would be the time it would take each State Exchange to meet with HHS to review the information being requested, analyze and design any database queries needed to produce the information, organize the information into a document or documents for the
We estimate that for each State Exchange, the total costs would range between $24,950 and $124,750 depending on the identified sample size. The calculation at the low end of the range was produced by multiplying 50 (the smallest number of samples that will be used in SEIPM) × $499 (the average cost per sampled record) = $24,950. The calculation at the high end of the range was produced by multiplying 250 (the largest number of samples that will be used in SEIPM) × $499 = $124,750.
The annual, aggregated burden for the total 22 State Exchanges to complete the SEIPM is estimated to be $1,097,800. This calculation was made by multiplying 2,200 (the total number of samples to be used in SEIPM) × $499 (the average cost per sample). This cost estimate encompasses the processes at the State Exchanges that includes but is not limited to the following: sampling procedures, data collection protocols, and analytical frameworks required to produce an annual improper payment estimate while maintaining statistical validity and regulatory compliance standards.
To compile our estimates, we utilized industry-standard burden estimation methodologies commonly employed for Federal data collection initiatives. We conducted a comprehensive task analysis to identify specific personnel roles and time requirements across all phases of the data collection process, including transition and SEIPM preparation, system setup and maintenance, materials preparation, tool and data preparation for review processes, pre-engagement activities, sampling procedures, review conduct, collaborative observations, and closeout activities. This systematic approach ensures our estimates reflect realistic operational requirements based on established Federal data collection practices.
Hourly wage rates vary across the occupational specialties necessary to perform the information collection and are as follows:
This establishes a mean hourly rate of $111.12 across all of the occupational specialties that would be needed for performing this collection.
While the initial burden estimate assumes 8 hours per sample as a baseline, HHS recognizes that State Exchanges would realize significant economies of scale when processing multiple samples within the same collection period. The initial sample requires the upfront costs in system setup, query development, staff training, and process establishment. However, subsequent samples within the same collection cycle will benefit from:
These efficiencies typically reduce the per-sample burden for subsequent samples after the initial setup. The 8-hour baseline represents the maximum expected burden per sample, with actual burden decreasing as State Exchanges leverage established processes and systems for additional samples within the same collection period, equating to an average hourly burden per sample of 4.49 hours.
The calculations in this paragraph demonstrate how the cost estimates were derived for the data collection process across State Exchanges. The mean hourly rate of $111.12 was calculated by averaging the five adjusted median occupational wage rates ($99.00 + $164.62 + $97.30 + $99.80 + $94.88 = $555.60 ÷ 5 = $111.12). While the baseline estimate assumes 8 hours per sample initially, economies of scale reduce the average burden to 4.49 hours per sample as State Exchanges develop efficient processes for subsequent samples. The cost per sample is calculated by multiplying the average burden hours by the mean hourly rate (4.49 hours × $111.12 = approximately $499 per sample). Finally, the aggregate cost estimate of $1,097,800 across all 22 exchanges represents the total expected cost when these efficiencies are realized across the entire sample collection process, which works out to an average of approximately $49,900 per State Exchange, calculated with the premise that each State Exchange would submit on average 100 samples. In summary, the total cost of $1,097,800 is derived from multiplying the estimated average cost per sample ($499) times the total samples (2200) to be drawn across all the State Exchanges.
The costs associated with the SEIPM program will begin in 2027, coinciding with the effective date of the regulation as specified in § 155.1605(a). These are annual recurring costs that State Exchanges will incur each year as part of the ongoing SEIPM requirements. The annual nature of these costs reflects the ongoing data submission processes that State Exchanges must perform to support HHS' annual improper payment measurement and reporting obligations under the Payment Integrity Information Act of 2019.
We will request to account for the associated information collection burden under OMB control number: 0938-NEW/CMS-10942.
Additionally, as described in the preamble to § 155.1535, we are finalizing that State Exchanges may be required to develop and implement corrective action plans (CAPs) following a completed SEIPM measurement designed to reduce improper payments as a result of eligibility determination errors, beginning in 2029. The burden associated with this requirement is the time and effort put forth by State Exchanges to develop and submit a CAP to HHS. We estimate that it would take each selected State Exchange up to 1,000 hours to develop a CAP. We estimate that the total annual burden associated with this requirement for up to 22 State Exchange respondents would be up to 22,000 hours. Assuming the management analyst average hourly rate of $97.30 per hour, we estimate that the cost of a corrective action plan per State Exchange could be up to $97,300, and for all 22 State Exchanges, up to $2,140,600. The burden related to this information collection will be submitted to OMB for approval after future rulemaking has been completed regarding the CAP process and requirements.
We sought comment on these proposed burden estimates and assumptions.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these burden estimates for this policy as proposed. We summarize and respond to public comments received on the proposed estimates below.
While some commenters stated that significant time and resources were required for IPPTA, we understand that there is variability across each state in terms of how much time and resources are required. The processes such as developing SQL scripts that were completed during IPPTA are intended to translate into the SEIPM process. The time and resources spent for developing those scripts and troubleshooting the output would not be experienced in SEIPM because the work will already have been completed. We clarify that we will allow flexibility in the data submission process to alleviate some of the administrative burden placed on the State Exchanges. We also intend to release sub-regulatory guidance to provide further details on SEIPM. For these reasons, HHS believes that the proposed estimations are sufficient for the State Exchanges to complete SEIPM.
We are finalizing our proposal to remove the following from our regulations effective beginning in PY 2027: the definition of “standardized options” at § 155.20; all requirements pertaining to standardized plan options at § 156.201 (the requirements for FFE and SBE-FP QHP issuers in the individual market to offer these plans at paragraphs (a) and (b) as well as the requirement for these plans to meaningfully differ from one another at paragraph (c)); the differential display of standardized plan options on
As stated in the proposed rule (91 FR 6435), under §§ 155.220(c)(3)(i)(H) and 156.265(b)(3)(iv), approved web-brokers and QHP issuers using a DE pathway to facilitate enrollment through an FFE or SBE-FP must differentially display standardized plan options in accordance with § 155.205(b)(1) in a manner consistent with how standardized plan options are displayed on
The current information collection is
We sought comment on the proposal to discontinue this information collection. We did not receive any comments in response to the proposal to discontinue this information collection. For the reasons outlined in the proposed and final rules, we are finalizing the discontinuation of this information collection as proposed.
We are finalizing our proposal to discontinue non-standardized plan option limits and exceptions at § 156.202. Because we are finalizing this policy as proposed, we are also finalizing our proposal to discontinue the corresponding information collection, which is Non-Standardized Plan Option Limit Exceptions (OMB Control Number: 0938-1461 (CMS-10878)/Expiration date: July 31, 2027), since issuers that seek to offer plans that are tailored to the treatment of chronic and high-cost conditions would be able to do so without submitting information that was formerly required under the exceptions process.
We sought comment on the proposal to discontinue this information collection. We did not receive any comments in response to the proposal to discontinue this information collection. For the reasons outlined in the proposed and final rules, we are finalizing this proposal as proposed.
We are finalizing our proposal at § 155.1050(d), for PY 2027 and beyond, to allow FFE States, including States that perform plan management, that elect to do so, to conduct provider access reviews for issuers' plans that use and do not use a provider network, provided that the State has demonstrated 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, as described at § 155.1050(d)(2) through (d)(4) as finalized in this rule. We will continue to conduct provider access reviews consistent with § 156.230 for QHP issuers that use a provider network and § 156.230 for QHP issuers that do not use a provider network in FFE States that do not elect to conduct such reviews, or in FFE States that do not demonstrate 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, as described at § 155.1050(d)(2) through (d)(4) as finalized in this rule. Under this finalized policy, we will continue to collect network adequacy data, including time and distance and appointment wait time data. We will continue collecting this data from all FFE issuers, either to use to conduct Federal network adequacy reviews in FFE States that do not elect to do so, or do not demonstrate they have sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program as described at § 155.1050(d)(2) through (d)(4), or with a view to make it available in a standardized format to States that are determined to have an Effective Provider Access Review Program, to assist them in their provider access analysis. We stated in the proposed rule (91 FR 6436) that we do not believe this proposal would introduce new burdens associated with data collection, as we would continue to utilize the same systems, processes, and data requirements currently in place. We believe the ICRs associated with this finalized policy are assessed and are encompassed by the revised information collections for QHP certification and network adequacy data collection (Continuation of Data Collection to Support QHP Certification and other Financial Management and Exchange Operations (OMB Control Number 0938-1187 (CMS-10433)/Expiration date: June 30, 2025) and Essential Community Provider-Network Adequacy (ECP/NA) Data Collection to Support QHP Certification (OMB Control Number. 0938-1415 (CMS-10803)/Expiration date: December 31, 2027)). Overall, we expect any change in burden cost to be negligible under this finalized policy. We do expect the total burden cost associated with the provider access review process to decrease for QHP issuers in States with an Effective Provider Access Review Program, as outside of initial data submission and validation, these issuers would not be subject to review processes conducted by HHS. However, burden costs saved by QHP issuers on the Federal level may be lost at the State review level, depending on how a State implements provider access review processes. It is unknown how States will implement provider access data collection and certification reviews under this final policy and the number of States that will elect to conduct these reviews, thus the total burden associated with undergoing this provider access certification review process on the State-level is uncertain.
We sought comment on these proposed burden estimates and assumptions.
We did not receive any comments in response to the proposed burden estimates for this policy. For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed.
In this final rule, we are not finalizing our proposal to reduce the minimum percentage requirements described under § 156.235(a)(2)(i) and (b)(2)(i) from 35 to 20 percent for the overall, FQHC, and family planning ECP thresholds, and will maintain the minimum percentage at 35 percent for each of the three aforementioned thresholds. We are finalizing our proposal to amend the narrative justification requirement language at § 156.235(a)(3) and 156.235(b)(3) to reflect current operations and data submission requirements as part of ECP certification reviews, as narrative justifications are no longer required for issuers not meeting the ECP standard because they input contract statuses directly into the ECP User Interface in the MPMS. Additionally, we are finalizing our proposal, with modification, to allow FFE States flexibility to elect to conduct ECP certification reviews. Specifically, as discussed in the preamble of this final rule, we are finalizing our proposal to allow FFE States flexibility to elect to conduct ECP certification reviews for network plans effective beginning PY 2027; however, we are modifying our proposal such that we will allow FFE States to conduct ECP certification reviews for non-network plans effective beginning PY 2028 under § 155.1051 due to the delayed implementation of the provisions allowing certification of non-network plans as QHPs. As noted in the proposed rule, the ICRs associated with QHP certification and ECP Data Collection to Support QHP Certification have already been assessed and are encompassed by the currently approved information collections (
We note that the type of ECP data collected from issuers will remain the same; issuers will still be required to designate contracted ECPs included within their provider networks for each of their service areas to meet the ECP standard under § 156.235. Thus, we expect issuer burden to remain at least the same by maintaining existing ECP threshold requirements, or lower due to recent system enhancements within the ECP UI in MPMS that aim to minimize issuer burden. For example, MPMS system enhancements within the ECP UI include optimized filter options that display applicable ECPs relevant to meeting specific ECP requirements (including threshold requirements) if selected as contract executed or contract offered by issuers; prior year import functionality that enable issuers to import ECP data from their previous year's QHP application, including contracts executed with ECPs, which reduces time needed to re-enter details that are up to date; and an ECP calculation workspace that provides direct feedback on how issuers scored on each ECP requirement within each network and service area (for example, a met versus unmet status), and how many additional ECPs need to be included within their application to satisfy ECP requirements. However, issuers may not experience reductions in administrative costs due to the need to maintain existing contracts, including by re-negotiating contract renewals and/or pursuing additional contracts to continue to meet existing ECP requirements.
Based on an analysis of PY 2026 FFE plan data, the average threshold percentage for all FFE QHP issuers, including issuers in States performing plan management, was 71 percent for the overall ECP threshold requirement, 85 percent for the family planning provider threshold requirement, and 79 percent for the FQHC threshold requirement. Thus, many issuers continue to exceed current threshold requirements by more than 30 percent, so even if the threshold were reduced to 20 percent, the reduction may not have influenced issuer contracting behavior and associated administrative cost savings. Therefore, in this final rule, we are not finalizing our proposal to reduce the minimum percentage requirements, which will maintain the minimum percentage at 35 percent for the overall, FQHC, and family planning ECP thresholds.
Furthermore, according to an analysis of PY 2025 FFE plan data, 14 medical QHPs (including one dual QHP) and 8 additional SADPs would have been required to submit narrative justifications for not meeting the ECP standard under § 156.235 if these data requirement collections were still in place. In the justification Excel format used prior to PY 2025, the 22 issuers referenced previously would have spent on average an estimated minimum of at least 2 minutes per ECP inputting provider contact information and the status of negotiations. The modernizations to the ECP data collection process in the ECP UI implemented beginning for PY 2025 have contributed to burden reductions among these issuers, since the time spent reporting provider data will be reduced, with issuers easily importing their prior year's ECP data into their current year's application or selecting ECPs with pre-populated contact information from the list embedded in MPMS. Additionally, in lieu of providing information on particular ECPs and writing responses to questions pertaining to monitoring and mitigating measures for ECP network gaps in the Excel justification format, these issuers now designate the status of negotiations with particular ECPs by selecting from a drop-down list in MPMS, which averages an estimated minimum of at least 5 seconds per ECP. As a whole, these efficiencies to the justification process through the ECP UI MPMS modernizations have reduced issuer burden as part of ECP certification reviews through reductions in the amount of time issuers spend submitting ECP data because the data is mostly prepopulated within MPMS, there are drop-down options to quickly append the status of contract negotiations, and MPMS clearly identifies needed corrections and required fields for the issuer to complete a satisfactory justification to support their QHP certification. Therefore, we are finalizing our proposal to change the narrative justification regulation text at § 156.235(a)(3) and (b)(3) to be consistent with these system changes, current HHS operational processes, and existing issuer ECP data submission requirements as part of ECP certification reviews.
In addition, we are finalizing our proposal, with a minor modification, to allow FFE States, including States performing plan management, to elect to conduct their own ECP certification reviews of issuers plans' with or without a provider network provided the State demonstrates it has sufficient authority and the technical capacity to conduct these reviews by meeting the applicable criteria, as determined by HHS, to be considered to have an Effective ECP Review Program under § 155.1051. While we are finalizing, beginning PY 2027, the proposal for FFE States to conduct their own ECP certification reviews of issuers' plans with a provider network provided the State demonstrates it has sufficient authority and the technical capacity to conduct these reviews, we are modifying our proposal to delay application of this policy to ECP certification reviews of issuers' non-network plans until PY 2028 due to the delayed implementation of the provisions allowing QHP certification of non-network plans. An FFE State will need to first express its interest to HHS and submit an attestation, and it will be granted an Effective ECP Review Program designation after HHS determines it meets all applicable requirements described for this program under § 155.1051. An FFE must also demonstrate sufficient authority and technical capacity to review non-network plans seeking QHP certification beginning PY 2028, if the State deems to allow such plans to operate in the State. If we determine that an FFE State does not have an Effective ECP Review Program or an FFE State does not elect to conduct such reviews, then we will continue to perform ECP certification reviews consistent with § 156.235 for network plans and § 156.236 for non-network plans (effective PY 2028). We are revising the information collection currently approved under OMB Control Number 0938-1415 (CMS-10803) (Essential Community Provider-Network Adequacy (ECP/NA) Data Collection to Support QHP Certification to reflect new requirements finalized under § 155.1051 for the Effective ECP Review Program. Since we will perform ECP certification reviews for issuers in FFE States without an Effective ECP Review Program consistent with our current operations, processes, and data submission requirements as part of QHP certification, we do not believe this finalized policy will introduce any new burdens associated with data collection. In addition, for QHP issuers in Effective ECP Review Program States, we do expect the total annual hours and annual burden cost associated with the ECP certification review process to slightly decrease on the Federal level. While QHP issuers in FFE States with an Effective ECP Review Program will still need to submit ECP data to HHS, issuers will not be required to undergo the extensive ECP review process to address corrections identified by HHS by resubmitting data, if they instead go through this process in FFE States with an Effective ECP Review Program. However, burden costs saved by QHP
We sought comment on these proposed burden estimates and assumptions, but we did not receive any comments in response to these proposed burden estimates related to ECP standards for network plans (§ 156.235) and the implementation of the proposed Effective ECP Review Program (§ 155.1051).
In this final rule, we are finalizing a number of revisions to Part 155 and Part 156 to allow plans that do not use a network (non-network plans) to receive QHP certification beginning with PY 2028 by demonstrating that they ensure a sufficient choice of providers in a manner consistent with section 1311(c)(1)(B) and (C) of the Affordable Care Act. We are finalizing our proposal to add new section § 156.236, that contains the provider access sufficiency standards (including ECP access) specific to non-network plans, and to revise §§ 156.230 and 156.235 to make clear that those sections address the provider access sufficiency standards (including ECP access) for network plans. Additionally, we clarify that non-network plans would be subject to and must be able to meet all of the general certification criteria at § 155.1000(c), which would allow Exchanges the ability to certify non-network plans as QHPs. Furthermore, we are finalizing our proposal effective beginning in PY 2028 to allow FFE States, including States performing plan management, to conduct provider access and/or ECP certification reviews provided the State elects to conduct these reviews and demonstrates it has sufficient authority and the technical capacity to conduct these reviews by meeting the applicable criteria, as determined by HHS, for each review program it wishes to administer; these review programs include the Effective Provider Access Review Program for provider access certification reviews under § 155.1050(d) and/or the Effective ECP Review Program for ECP certification reviews under § 155.1051. Accordingly, FFE States that elect to conduct provider access certification reviews, and are determined by HHS to have sufficient authority and the technical capacity to conduct these reviews by satisfying applicable criteria to be considered to have an Effective Provider Access Review Program under § 155.1050(d)(2) through (d)(4) will be permitted to perform such reviews of non-network plans, effective for non-network plans seeking QHP certification beginning PY 2028. Similarly, FFE States that elect to conduct ECP certification reviews, and are determined by HHS to have sufficient authority and the technical capacity to conduct these reviews by meeting applicable criteria to be considered to have an Effective ECP Review Program under § 155.1051 will be permitted to perform such reviews of non-network plans seeking QHP certification beginning PY 2028. The revision of the information collection currently approved under OMB Control Number 0938-1415 (CMS-10803) (Essential Community Provider-Network Adequacy (ECP/NA) Data Collection to Support QHP Certification) to reflect the finalized requirements under § 156.236 for non-network plans will be revised separately at a later date for OMB review and approval through the PRA renewal package process.
We believe that most of the current provider access data collection and submission requirements that apply to network plans would also apply to provider access reviews for non-network plans. Relevant to provider access reviews, under § 156.236(b)(1), non-network plans will be required to report their assessed percentage of providers in a service area that accept the plan's benefit amount as payment in full.
Additionally, to comply with § 156.236(b)(4) through (9), non-network plans will be required to submit supporting documentation and explain how they meet these regulatory requirements. Non-network plans will be required: to describe the processes and/or methodologies in place to conduct continuous outreach to available providers in a particular service area to determine whether they would accept the plan's benefit amount as payment in full; to identify how they make benefit amounts publicly available and accessible; to explain how benefit amounts are determined; to detail how they provide consumer-friendly and public information about potential balance billing scenarios and expected out-of-pocket costs; to validate that they offer an exceptions process for enrollees who cannot find providers (including ECPs) willing to accept the benefit amount as payment in full; and summarize how they provide adequate customer service or online provider directory assistance resources to assist plan enrollees and potential enrollees in finding providers (including ECPs) in their area who will accept the plan's benefit amount as payment in full. It is uncertain approximately how many non-network plans will apply for QHP certification beginning PY 2028 to reasonably estimate the total annual burden cost and hours for completing these requirements. However, we expect the time for responding to questions to assess compliance with § 156.236(b)(4) through (9) and submitting supporting documentation for a single non-network plan will range between 20 to 40 minutes for each of the 6 attestation questions, if assuming a 500-word limit, likely requiring a maximum 2 to 4 hours total to complete.
Furthermore, we believe that many of the current ECP data collection and submission requirements that already apply to network plans would also apply to non-network plans. First, non-network plans applying for QHP certification would similarly use MPMS, which has extensively streamlined data collection and submission, reducing burden among issuers during QHP certification. The MPMS ECP UI only displays qualified and eligible ECPs in the issuer's State, reducing the burden of filtering through the entire ECP List for applicable facilities. Instead of spending time and effort inputting individual ECP data (such as facility name, facility address, ECP reference number, NPI, etc.) for each applicable facility in each of the plan's applicable network and/or service area, QHP issuers, including SADPs, are able to use MPMS to select prepopulated ECPs from a list of available and eligible ECPs within the user interface. MPMS is also updated regularly during QHP certification to remove ECPs that have closed or are no longer eligible such that issuers do not spend time entering in ECP data that is no longer valid or applicable to their QHP application.
Non-network plans must submit ECP data in MPMS to demonstrate they meet ECP related requirements at § 156.236(b)(1) through (3) such as: whether the non-network plan meets at least a minimum percentage, as specified by HHS, of available ECPs that accept the plan's benefit amount as payment in full in each plan's service area collectively across all ECP categories defined under § 156.235(a)(2)(ii)(B), and at least a minimum percentage of available ECPs
In summary, we will be revising the information collection currently approved under OMB Control Number 0938-1415 (CMS-10803) (Essential Community Provider-Network Adequacy (ECP/NA) Data Collection to Support QHP Certification) to reflect finalized requirements under § 156.236 for non-network plans at a later time through the OMB review and approval process for PRA renewal packages.
We sought comment on these proposed burden estimates and assumptions. However, we did not receive any direct comments in response to these proposed burden estimates for this policy, thus we are finalizing these estimates. As discussed in III.E.12. of this final rule, we are delaying the implementation of this finalized policy to PY 2028.
There is no information collection associated with this policy and no changes were proposed to the QIS data collection requirements applicable to QHP issuers. QIS data collection from QHP issuers to the Exchange has been approved under OMB Control Number 0938-1286.
We have submitted a copy of this final rule to OMB for its review of the rule's information collection and recordkeeping requirements. These requirements are not effective until they have been approved by the OMB.
To obtain copies of the supporting statement and any related forms for the finalized collections discussed previously, please visit CMS' website at
This final rule includes payment parameters and provisions related to the HHS-operated risk adjustment and HHS-RADV programs, as well as 2027 benefit year user fee rates for issuers that participate in the HHS-operated risk adjustment program and the 2027 benefit year user fee rates for issuers offering QHPs through FFEs and SBE-FPs. This final rule also includes finalized revisions to the defrayal policy; removal of the requirement for a State to operate a SBE-FP before operation of a State Exchange; expanded
We have examined the impacts of this final rule as required by Executive Order 12866, “Regulatory Planning and Review”; Executive Order 13132, “Federalism”; Executive Order 13563, “Improving Regulation and Regulatory Review”; Executive Order 14192, “Unleashing Prosperity Through Deregulation”; the Regulatory Flexibility Act (RFA) (Pub. L. 96-354); section 1102(b) of the Social Security Act; and section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4); and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select those regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as any regulatory action that is likely to result in a rule that may: (1) have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or Tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impacts of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, or the President's priorities.
A regulatory impact analysis (RIA) was prepared for this final rule in keeping with Executive Order 12866. Based on our estimates, the Office of Management and Budget's (OMB) Office of Information and Regulatory Affairs (OIRA) has determined that this rulemaking is “significant” per section 3(f)(1). Under Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act), OIRA has also determined that this is a major rule as defined by 5 U.S.C. 804(2).
We have prepared an RIA that, to the best of our ability, presents the costs and benefits of the rulemaking.
As required by OMB Circular A-4 (available at
This final rule implements standards for programs that will have numerous effects, including providing consumers with access to more affordable health insurance coverage, reducing the impact of adverse selection, and stabilizing premiums in the individual and small group health insurance markets and in Exchanges. We are unable to quantify all the benefits and costs of this final rule. The effects in Table 22 reflect qualitative assessment of impacts and estimated direct monetary costs and transfers resulting from the provisions of this final rule for Exchanges, health insurance issuers and consumers. The annual monetized transfers described in Table 23 includes changes to costs associated with the risk adjustment user fee paid to HHS by issuers.
In the 2026 Payment Notice, we finalized excluding enrollees with HCCs from IVA sampling beginning with benefit year 2025 HHS-RADV. As a consequence of this change to the IVA sampling methodology, we are now finalizing our proposal to add an additional scaling factor
In simulating the impact of the proposed additional scaling factor, we found that HHS-RADV adjustments to risk adjustment transfers decreased in magnitude by 11.7 percent in the individual market (going from $148 million to $139 million) and by 13.8 percent in the small group market (from $81 million to $69.8 million). Table 24 shows only the impact on positive HHS-RADV adjustments. Because HHS-operated risk adjustment, and HHS-RADV adjustments, are budget neutral, we anticipate the same impact on negative risk adjustment transfers (or risk adjustment charges), in that both will decrease in magnitude. When examining the impact of the additional finalized scaling factor on HHS-RADV adjustments over premium, we anticipate only a 0.01 percent change in positive HHS-RADV adjustments in both markets between results with no additional factor and results with the additional scaling factor. This corresponds with a percentage point (PP) change of − 0.02. This helps to contextualize the change in the magnitude of HHS-RADV adjustments. This finalized policy will more precisely assess the proportion of an issuer's population's risk that arises as a result of enrollees with HCCs.
We solicited comments on the estimated impacts of this proposal.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in this final rule, we are finalizing these estimates as proposed.
For the 2027 benefit year, HHS will operate risk adjustment in every State and the District of Columbia. As described in the 2014 Payment Notice (78 FR 15416 through 15417), HHS' operation of risk adjustment under section 1343 of the Affordable Care Act on behalf of States is funded through a risk adjustment user fee. For the 2027 benefit year, we are finalizing our proposal to use the same methodology to estimate our administrative expenses to operate the HHS risk adjustment program as was used in the 2026 Payment Notice. As discussed previously in this final rule, risk adjustment user fee costs for the 2027 benefit year are expected to be similar to the prior 2026 benefit year budget estimates.
However, expected enrollment has deviated from the proposed rule to the final rule. Specifically, we have more recently available interim risk adjustment data for benefit year 2025, resulting in an increase to some of our enrollment estimates. Therefore, we anticipate that our revised enrollment projections will somewhat impact expected HHS risk adjustment user fee collections. For these reasons, we are finalizing a risk adjustment user fee rate of $0.18 PMPM for the 2027 benefit year, which is lower than the $0.20 PMPM for the 2026 benefit year. We expect the finalized HHS risk adjustment user fee for the 2027 benefit year will decrease the amount transferred from issuers of risk adjustment covered plans to the Federal Government by approximately $4 million.
We sought comment on these impact estimates and assumptions.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed and final rules, we are finalizing these estimates.
This rule finalizes our proposal to collect information on adjustments to the index rate as part of the rate filing justification to account for unreimbursed CSRs. As detailed in section III.C of this preamble, issuers will be required to report on the URRT actual CSR amounts paid on behalf of eligible enrollees and additional revenue collected from the previously applied CSR load (using the most recent annual data that is available prior to the applicable filing year, generally two years prior, using the standard methodology set forth in § 156.430(c)(2)), projected CSR amounts expected to be paid on behalf of enrollees in the upcoming plan year and the additional revenue expected to be collected from the applied CSR load factor for the upcoming plan year, and the CSR load factor for the upcoming plan year. This rule also finalizes our proposal to require issuers to provide an explanation in the Actuarial Memorandum of the methodology used to determine the load factor for the upcoming plan year and an explanation of how additional revenue expected to be collected from the applied CSR load factor compares to the amount of CSRs expected to be paid on behalf of enrollees for the same period.
The finalized provisions will primarily affect health insurance issuers offering qualified health plans in the individual market, Federal and State regulators in their review capacity, and indirectly, Marketplace enrollees who receive cost-sharing reductions. The enhanced CSR reporting will enable issuers to more accurately determine their CSR payment amounts and improve future projections for rate setting. This increase in accuracy and transparency may result in more appropriate premium levels if current CSR load factors are determined to be inaccurate or unreasonable, enabling issuers to better calibrate their load factors to adequately cover actual CSR costs, potentially leading to more stable and accurate premium pricing over time.
Issuers will incur a one-time cost, in 2026, of $418,790,376 to implement the standard methodology and generate the new URRT entries, followed by annual ongoing costs, beginning in 2027, of $209,395,188 to update their systems and recalculate the URRT values. Additionally, issuers will incur annual ongoing costs, beginning in 2026, of $157,222 to enter the finalized values in the URRT and $628,888 to provide an explanation in the Actuarial Memorandum of how the CSR load factor was determined. Costs might vary with issuer scale, data systems, and product complexity. These costs are expected to add approximately $2.00 PMPM or 0.25 percent of premium in administrative expenses for the 2027 plan year with that amount decreasing to approximately $1.00 PMPM or 0.13 percent of premium in later years. Additionally, the Federal Government will incur annual ongoing costs, beginning in 2026 (for PY 2027 rate filings), of $2,414,256 to review the additional information submitted. These costs are discussed in detail in the Collection of Information section IV.B of this final rule.
Enrollees can potentially experience changes in out-of-pocket costs as more accurate CSR reporting may lead issuers to adjust their load factors and premium pricing; the direction of these changes will depend on whether the current CSR load factors overestimate or underestimate actual CSR costs. If issuers have been overestimating actual CSR costs, they may decrease load factors and premiums, which could result in lower out-of-pocket costs for
Changes in CSR load calculations could result in corresponding adjustments to PTCs, as more accurate CSR load factors may increase or decrease silver plan premiums. If CSR loads decrease, silver plan premiums should decrease with corresponding Federal PTC outlays decreasing and offsetting changes in consumer net premiums. To the extent that improved estimates change plan pricing, there may also be distributional enrollment shifts among enrollees across metal levels on-Exchange and in silver plans offered off-Exchange.
We sought comment on these impacts and assumptions.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these impact estimates for this policy as proposed. We summarize and respond to public comments received on the proposed estimates later.
We are finalizing our proposal to remove § 155.105(b)(4) to rescind a requirement made in the 2025 Payment Notice,
We sought comments on the practical utility of this data collection from potential users of this CSR amount data (for example, State regulators).
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed rule, we are finalizing these estimates as proposed.
We are finalizing our proposal to amend § 155.106(a)(2) to rescind a requirement made in the 2025 Payment Notice
We sought comment on these impacts and assumptions.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed rule, we are finalizing these estimates as proposed.
We are not addressing in this final rule our proposal to amend § 155.205(b) to specify that a State Exchange is not limited to operating a centralized eligibility and enrollment consumer interface on the State Exchange's website as the only model for supporting consumer eligibility application submission and QHP enrollment functionality. We stated in the proposed rule that we expected minimal, if any, financial impact to current State Exchanges and States in the process of establishing their own State Exchange.
For the reasons outlined earlier in section III.D.4. of this final rule, we will address this policy and related comments in the 2028 Payment Notice or another appropriate rulemaking.
We are not finalizing our proposal to add § 155.221(k) to establish a new State Exchange enhanced direct enrollment (SBE-EDE) option by which State Exchanges can leverage direct enrollment technology to transition primarily to private sector-focused enrollment pathways operated by QHP issuers, web-brokers, and agents and brokers, instead of or in addition to a centralized eligibility and enrollment website operated by an Exchange. In the proposed rule, we stated that State Exchanges can elect, subject to HHS approval, to implement the SBE-EDE option and that the impact of the new SBE-EDE option would depend on the number of States that take advantage of the new option. We also stated in the proposed rule that current State Exchanges that elect to implement the SBE-EDE option would be responsible for meeting certain requirements for approval, in particular revising their Exchange Blueprint under new § 155.221(k) to describe precisely how the State proposes to implement the SBE-EDE option. We stated that we believe that any costs of revising the Exchange Blueprint would be nominal,
We sought comment on the proposed impacts and assumptions, and did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the final rule, we are not finalizing these estimates as HHS is not finalizing this policy.
We are finalizing our proposal to amend § 155.170(a) to provide that any State-required benefits will be considered “in addition to EHB” (and thus not EHB) if they are: required by a State action taking place after December 31, 2011; applicable to the small group and/or individual markets; specific to required care, treatment, or services; and not required by State action for purposes of compliance with Federal requirements. Under this finalized policy, such State-required benefits will be considered in addition to EHB regardless of whether the mandated benefits are embedded in the State's EHB-benchmark plan. We are finalizing this policy with a modification that it will be effective beginning with PY 2028 instead of PY 2027. We also are finalizing revisions to § 156.115(a) to align with this policy and to have State and issuer responsibilities for State-required benefits appear in a more logical reading order in the CFR.
We believe that this revision will have a mixed effect on the cost to States and the Federal Government. We stated in the proposed rule that a small number of States and issuers have taken significant action based on current § 155.170, including some States having sought or seeking EHB-benchmark plan changes under § 156.111 to add certain State-required benefits as EHB with the understanding that the cost of these additions would not require defrayal by the State (91 FR 6447). We stated that, in such States, this proposal may frustrate such efforts should it become effective in PY 2027, as any State-required benefit that fulfills the four proposed conjunctive elements at § 155.170(a)(1)(i) through (iv) would require defrayal, regardless of whether the benefit is included in the State's EHB-benchmark plan. We note that this defrayal policy is being finalized in this rule at § 155.170(a)(2)(i) through (iv) for plan years on or after PY 2028.
In States that ceased defraying the cost of State-required benefits included in their EHB-benchmark plans beginning in PY 2025 under the previous regulation but will be required to defray the cost of State-required benefits beginning in PY 2028 under the provision finalized in this final rule, the percentage of premium attributable to coverage of EHB for purpose of calculating APTC may decrease. Under this finalized policy, in a State that enacts a mandate for a benefit that is currently covered in its EHB-benchmark plan, there will be a decrease to Federal Government expense as the benefit will no longer be permitted to be included in the percentage of premium attributable to coverage of EHB for purpose of calculating APTC. States should evaluate the overlap between mandates and benefits covered in the State's EHB benchmark-plans for benefits for which they will be required to defray the cost under this finalized policy. Specifically, a State that wants to avoid defrayal obligations for the cost of State-required benefits that are already in the State's EHB-benchmark will be able to do so by repealing the applicable State requirement as being applicable to QHPs. While we expect that there should not be any measurable operational implications or infrastructure changes needed for States to implement this provision, we sought comments from States on any administrative costs that would be incurred as a result of implementing this provision. We likewise recognize that States that opt to retain benefit-mandates that carry defrayal obligations will incur defrayal costs. The scale of these costs will depend on the cost attributable to the State-required benefit. We sought comments from States on such estimates where applicable. Issuers may have to make modifications to their plan designs and plan filings to reflect any possible changes in designation of benefits as EHB because of this finalized policy, in the regular course of updating those annual materials. Given variation in State legislative calendars and session timing, and the need for issuers to update their plan filings and rates to account for benefits that will be defrayed by the State, we solicited comment on finalizing an effective date for PY 2028 instead of PY 2027.
We sought comment on these impact estimates and assumptions.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these impact estimates for this policy, but with the modification to the final policy to delay the effective date to PY 2028. We summarize and respond to public comments received on the proposed estimates later.
Some commenters stated concern that because the proposal could effectively apply new defrayal obligations to past State actions taken under prior regulatory frameworks, States will be forced to make difficult financial decisions that place certain benefits at risk.
We also understand that a small number of States and issuers have taken significant action based on current § 155.170 requirements, including that some States have sought or are seeking EHB-benchmark plan changes under § 156.111 to add certain State-required benefits as EHB based on the understanding that such EHB additions would be effective indefinitely absent any further EHB-benchmark plan changes under § 156.111 and that the cost of these additions would not require defrayal by the State. As finalized, any State-required benefit that fulfills the four conjunctive elements at § 155.170(a)(2)(i) through (iv) would require defrayal, regardless of whether the benefit is included in the State's EHB-benchmark plan.
We believe finalizing a delayed effective date of PY 2028 provides sufficient time for States to make these determinations and take any necessary action.
As discussed in the preamble of this final rule, we are finalizing amendments to §§ 155.220(j)(2)(ii)(A) and (j)(2)(iii)(A) to require agents, brokers, and web-brokers to use the HHS-approved and -created consumer consent form to meet the eligibility application review requirements and consent documentation requirements. We are finalizing this policy with a modification that it will be effective beginning with PY 2028 instead of PY 2027. Accordingly, we are also finalizing the redesignation of current § 155.220(j)(2)(ii)(A)(2) as § 155.220(j)(2)(ii)(A)(3) and current § 155.220(j)(2)(iii)(C) as § 155.220(j)(2)(iii)(D). We are also finalizing corresponding changes to §§ 155.220(j)(2)(ii)(A) and (j)(2)(iii)(A) to state that current documentation policies for eligibility application and review and consent are effective until PY 2028. Our finalized policy will eliminate the current broad allowances for meeting these requirements. The language in the regulation will also be changed to clarify what types of actions constitute “taking an action” to meet the regulatory requirements. The goal of this policy is to reduce confusion among agents, brokers, and web-brokers on what constitutes compliant eligibility application review documentation and what constitutes compliant consumer consent by ensuring objective standards, which protects consumers ultimately. These provisions also greatly improve HHS' investigative abilities into agent, broker, and web-broker eligibility application review and consumer consent review by creating a clear and objective standard for all applications clearly outlining what HHS deems complaint.
Given this finalized policy will require the usage of the HHS-approved and -created consumer consent form, agents, brokers, and web-brokers who had previously relied exclusively on text messaging, or other non-HHS-approved and -created consumer consent form methods will be particularly impacted by this change. Importantly, the HHS-approved and -created consumer consent form guarantees and ensures all regulatory requirements are in the documentation provided to the consumer, as well as making documentation review of potentially noncompliant agents, brokers, and web-brokers more streamlined and efficient. The HHS-approved and -created consumer consent form
As estimated in section IV.C of this final rule, the estimated annual cost of requiring agents, brokers, and web-brokers to use the HHS-approved and -created consumer consent form to meet the eligibility application review requirements and the consumer consent documentation requirements is $96,694,640, beginning in PY 2028.
We sought comment on these impact estimates and assumptions.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed and this final rule, we are finalizing these estimates with the modification to implement the policy effective PY 2028.
As discussed in the preamble of this final rule, the finalized regulatory amendments will create a new standards of conduct section in § 155.220(j) describing marketing requirements. These requirements will list certain prohibited practices, provide HHS audit authority, and put agents, brokers, and web-brokers on notice that they are responsible for marketing created by their downstream entities. This finalized policy will allow HHS to increase its efforts to engage in compliance actions for misleading marketing by providing agents, brokers, and web-brokers notice of the types of activities that are prohibited, allowing HHS to review marketing materials for compliance, and ensure agents, brokers, and web-brokers are not able to push responsibility to third-parties. Creating a
The finalized provisions will provide instructive language agents, brokers, and web-brokers may utilize when creating Exchange marketing materials. This will help ensure agents, brokers, and web-brokers are creating compliant marketing from the beginning and will not be subject to enforcement actions.
As estimated in section IV.D, the estimated total cost for the burden of responding to HHS regarding misleading marketing will be $1,392.96, beginning in 2027.
We sought comment on these impact estimates and assumptions.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed rule, we are finalizing these estimates as proposed.
As outlined in the preamble of this final rule, we are finalizing our proposal to remove the vendor program requirements established at § 155.222, that allow for certain training and information verification functions to be provided by HHS-approved vendors. Removing these requirements will permit HHS to discontinue the vendor program.
Considering the lack of utilization of this program by agents and brokers, as well as dwindling interest on the part of potential vendors, as outlined in the preamble, we do not anticipate potential vendors, nor agents and brokers, to be substantially impacted by these proposals. Agents and brokers will continue to have the ability to complete the annual training and information verification requirements through the MLMS at no cost.
This finalized policy will additionally save the government approximately $300,000 each plan year beginning in 2027 by removing the contractual costs required to facilitate the program.
We sought comment on these impact estimates and assumptions.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed rule, we are finalizing these estimates as proposed.
We estimate that there are currently 1,227,000 individuals receiving APTC through Exchanges who are lawfully present noncitizens, but who are not “eligible noncitizens,” and will therefore become ineligible for APTC and income-based CSRs beginning in PY 2027 under section 71301 of the WFTC legislation. This estimate is based on evaluating internal FFE data regarding “eligible noncitizen” enrollees and extrapolating that data to estimate the size of the impacted population in State Exchanges. Based on average monthly APTC expenditures of $656.89 per person, we project that this population becoming ineligible for APTC will reduce annual APTC expenditures by $9,672,048,360 (1,227,000 enrollees × $656.89 average APTC × 12 months), beginning in 2027.
We also anticipate that this change will result in costs to State Exchanges and the Federal Government to update eligibility systems in accordance with this finalized policy. As discussed further in section IV.F of this final rule, in aggregate we estimate $15,810,185 in PY 2026 in estimated one-time costs for implementation ($193,990 Federal government + $678,965 Exchanges on the Federal platform + $14,937,230 State Exchanges). For the three States and DC currently approved to operate a BHP beginning in 2027, we estimate the annual ongoing cost to be $39,133.60.
As some noncitizens will no longer be eligible for PTCs under this new provision, there are also individuals for whom the Federal Government will not make a payment if enrolled in a BHP. In Table 25, we provide our projections of BHP enrollment and spending prior to the impacts of the WFTC legislation. We have updated these projections to include New York's BHP, which is scheduled to restart effective July 1, 2026.
In 2025, we estimate there were about 138,100 BHP enrollees in 2 States based on the quarterly enrollment estimates that States submit to CMS. With DC starting a BHP in 2026 and New York restarting its BHP July 1, 2026, we project that enrollment would have increased by 479 percent in 2026 and by 83 percent in 2027, prior to any of the changes made by legislation and described in this final rule. We project enrollment will decrease in 2028 by 7.7 percent to 1,348,200 due to other legislative changes, and increase by 0.4 percent to 1,353,100 in 2029 and remain at that level through 2030.
We also estimate that the current Federal BHP payment in 2025 is about $644 per member per month, based on payments the Federal Government has made to the 2 BHP States last year. We project that these will increase by 25 percent in 2026 and to decrease 0.5 percent in 2027, with an average monthly payment of $803 in 2027 prior to changes made by legislation. These trends are heavily influenced by the restart of New York's BHP, which accounts for the majority of BHP enrollees and spending, and has a relatively higher average BHP payment per person. We project payments will increase at an average rate of about 5.2 percent after 2027.
We estimate that this provision will affect about 1.6 percent of BHP enrollees
We sought comments on these impact estimates and assumptions.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these impact estimates for this policy with the modifications made previously. We summarize and respond to public comments received on the proposed estimates later.
As described in the Collection of Information Requirements in section IV.G of this final rule, we estimate that implementing this finalized policy will require one-time costs for Exchanges to make technical updates to their eligibility systems totaling $4,316,278 ($242,488 for Exchanges on the Federal platform + $4,073,790 for State Exchanges) in PY 2025. We also estimate that this finalized policy will result in a reduction of the amount of DMIs with a total estimated annual reduction in burden for these information collection requirements of $24,126,144 ($16,341,600 for removal of MLP DMIs for Exchanges on the Federal platform + $4,575,648 for removal of AI DMIs for Exchanges on the Federal platform + $3,208,896 for removal of AI DMIs for State Exchanges), beginning in 2026.
As of the end of the Open Enrollment period for 2025, there were 237,125 enrollees who were part of the population of consumers with an annual household income of less than 100 percent of the FPL, who were also ineligible for Medicaid due to their immigration status and were enrolled in Marketplace coverage with APTC on the FFE. We estimate the average monthly value of that APTC was $656.89. Through this finalized policy and subsequent elimination of APTC across all exchanges, we estimate $1,869,180,495 (237,125 enrollees × $656.89 average APTC × 12 months) in APTC savings per year, beginning in PY 2026. We estimated the impact of section 71302, which no longer allows PTC during periods of Medicaid ineligibility on BHP enrollment and spending. Prior to the enactment of the WFTC legislation, some noncitizens would have been eligible for Medicaid on the basis of income and other criteria except for the 5-year waiting period for lawful permanent residents (LPRs) to be allowed to enroll in Medicaid. For those individuals, they would have instead been eligible for PTC through enrolling in a QHP on the health insurance exchanges assuming they met all other criteria. Similarly, those individuals would have been included in Federal BHP calculations in States that had elected to operate a BHP. Generally, these are individuals with household incomes up to 100 percent of the FPL.
Under section 71302 of the WFTC legislation, these individuals will no longer be eligible for PTC, and therefore the Federal Government will not make a payment for these individuals if enrolled in a BHP. We reviewed current BHP enrollment data based on the quarterly enrollment estimates, and we estimate that in 2026 about 223,000 BHP enrollees will no longer be eligible for PTC under this section, and thus there will not be BHP payments made for these enrollees. These projections have been updated since the proposed rule to include New York's BHP, which is scheduled to restart on July 1, 2026. From 2027 through 2030, we estimate the number of affected individuals will be between 400,000 and 440,000 annually. We project Federal spending will be lower by $2,522 million in 2026 (real 2026 dollars), and between $4,300 million and $4,700 million lower annually between 2027 and 2030. The annual estimates are shown in Table 27.
We sought comment on these impact estimates and assumptions.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these impact estimates for this policy with the modifications made previously. We summarize and respond to public comments received on the proposed estimates later.
We are finalizing our proposal to amend paragraph § 155.305(f)(4) so that in PY 2028 and beyond, all Exchanges may not determine a tax filer or their enrollee eligible for APTC if: (1) HHS notifies the Exchange that APTC were paid on behalf of the tax filer, or their spouse if the tax filer is a married couple, for one year for which tax data would be utilized for verification of household and family size, and (2) the tax filer did not comply with the requirement to file a Federal income tax return and reconcile APTC for that year (referred to as the “1-tax year FTR” process). We also are finalizing that, at the option of the Exchange, an Exchange may choose to implement this policy earlier in PY 2027 if they have the resources and capability to adopt the 1-year FTR process or continue to follow the 2-year FTR process until PY 2028. Exchanges on the Federal platform intend to adopt the 1-year FTR process in PY 2027, as HHS has the resources possible to do so. To conform with this finalized policy, we further are finalizing our proposal to amend the notice requirement at § 155.305(f)(4)(iii), which is where the notice requirements have been reorganized. Our changes are aimed at addressing the notice messaging for tax filers who are at risk for losing APTC under a 1-year FTR policy, either for the Exchanges that adopt this option in PY 2027, and for all Exchanges in PY 2028. Exchanges operating under a 1-year FTR policy should use the more urgent language currently contained in the second-year notice of the 2-year FTR policy notices to accurately convey to tax filers or their enrollees that they are at imminent risk of losing APTC if they do not file and reconcile.
This provision will align with the WFTC legislation starting in PY 2028, but we additionally are finalizing that Exchanges can choose to implement this as early as PY 2027.
In light of the finalized policy changes for FY 2027 and beyond, we estimate that it will take the Federal Government and each State Exchange, if they choose to implement the 1-year FTR policy for PY 2027, instead of PY 2028 as required by the WFTC legislation, approximately 10,000 hours in 2026 to develop and code changes to the eligibility systems to evaluate and verify FTR status under the revised FTR process, such that enrollees are found to be FTR after 1 tax year of failing to file and reconcile their APTC. Of those approximately 10,000 hours, we estimate it will take a database and network administrator and architect 2,500 hours at $103.34 per hour and a computer programmer 7,500 hours at $94.88 per hour based on our prior experience with system changes. In aggregate for the State Exchanges, we estimate a one-time burden in 2026 of 200,000 hours (20 State Exchanges × 10,000 hours) at a cost of $19,399,000 (20 States × [(50,000 hours × $103.34 per hour) + (150,000 hours × $94.88 per hour)]) for completing the necessary updates to State Exchange eligibility systems in 2026, if State Exchanges implement the 1-year FTR process for PY 2027. If Exchanges choose to implement the 1-year FTR process for PY 2028, these estimated costs will be delayed by one year to 2027. For the Federal Government, we estimate a one-time burden in 2026 of 10,000 hours at a cost of $969,950 ((2,500 hours × $103.34 per hour) + (7,500 hours × $94.88 per hour)). In total, the burden associated with all system updates to revert back to the 1-year policy will be 210,000 hours at a cost of $20,368,950.
We also estimate that by switching to the 1-year policy from the current 2-year policy in PY 2028 or at the Exchange's option in PY 2027, the Federal Government will save APTC from the population of 1-year FTR consumers who would otherwise have retained APTC eligibility for an additional coverage year under the 2-year FTR policy. We estimate that total enrollment for the Exchanges will decrease by approximately 725,000 to 1,800,000 individuals in PY 2026 as compared to PY 2025 due to the expiration of the enhanced APTC subsidies, the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074), and the WFTC legislation. The resulting reduction in Exchange enrollment from these law and policy changes, will also affect the total amount of expected households in FTR status. For PY 2025, the total FTR 1-year population dropped from almost 1.5 million households prior to Open Enrollment to less than 400,000 households during FTR Recheck. The total FTR 2-year population dropped from approximately 350,000 households prior to Open Enrollment, to approximately 300,000 households at FTR Recheck, and then after the final
For the purposes of this RIA, we assume the scenario that Exchanges will comply with the policy in PY 2028 to align with the WFTC legislation. We sought comment on these impact estimates and assumptions.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed rule, we are finalizing these estimates as proposed.
In this final rule, we are amending § 155.320(c)(3)(iii)(A) to indefinitely extend the requirement for applicants to submit documentation when they attest to income that would qualify the taxpayer as an applicable taxpayer per 26 CFR 1.36B-2(b), but trusted data sources show income below 100 percent of the FPL starting in 2027.
As discussed further in section IV.I of this final rule, we estimate an approximate annual increase in burden costs of $20.2 million for Exchanges using the Federal platform and $12.4 million for State Exchanges starting in 2027 to receive, review, and verify submitted verification documents as well as conduct outreach and determine DMI outcomes for applicants below 100 percent of the FPL. The implementation of this finalized policy will result in a one-time cost of $775,960 to Exchanges on the Federal platform and approximately $16.3 million total State Exchanges in 2026 to update the eligibility systems and perform other technical updates to implement the additional verification of an applicant's annual household income attestation when tax data is returned that is under 100 percent of the FPL while the household's annual income attestation is at or above 100 percent of the FPL. Finally, we estimate an increase in burden of approximately $13.7 million across all Exchanges in 2027 and annually onwards for consumers to submit documentation to fulfill income verification requirements. We recognize the burden the continuation of policy may place on State Exchanges, and we sought comment from these and other impacted interested parties to inform this decision.
While there would be additional annualized budget impacts of this policy on State Exchanges and the Federal Platform, there may be some savings associated with an anticipated reduction in APTC for consumers. Based on our analysis of enrollment data from DMI generation numbers from when this DMI was previously in place, we estimate creating DMIs that require additional verification will reduce the number of people who receive APTC annually by 50,000 for Exchanges on the Federal platform. We estimate the annual reduction of people who receive APTC in the State Exchanges to be 31,000. Using an estimated average four months reduced APTC and an average monthly APTC rate of $656.89 per person, we estimate total APTC expenditures will be reduced by approximately $213 million per year starting in 2027 for the period in which we maintain this policy (50,000 × $656.89 × 4 + 31,000 × $656.89 × 4).
We sought comment on these impact estimates and assumptions. For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed. We summarize and respond to public comments received on the burden estimates of the proposed policy to perform further income verification processes when the IRS returns income that is below 100 percent FPL but an applicant's attested projected annual household income would consider them an applicable taxpayer according to 26 CFR 1.36B-2(b) for the plan year for which coverage is requested, and is more than a reasonable threshold above the annual household income, below.
In this final rule, we are finalizing our proposal to remove § 155.320(c)(5), which will allow Exchanges to continue the income verification process when IRS is successfully contacted but IRS returns no data rather than accepting an
As further discussed in section IV.J of the final rule, we estimate an increase in annual burden costs of approximately $102.3 million for Exchanges on the Federal platform and approximately $62.8 million total for State Exchanges starting in 2027 to receive, review, and verify submitted verification documents as well as conduct outreach and determine DMI outcomes for applicants whose tax return data is unavailable. The implementation of this finalized policy will result in a one-time cost of $872,955 to Exchanges on the Federal platform and approximately $18.3 million total State Exchanges in 2026 to update the eligibility systems and perform other technical updates to implement the additional verification of an applicant's annual household income attestation when tax data is unavailable. As also further discussed in section IV.J of this final rule, we also estimate an increase in annual burden of $69,480,540 for consumers in 2027 and beyond to submit documentation to fulfill income verification requirements associated with this finalized provision.
Based on our analysis of enrollment data from DMI generation numbers from when this DMI was previously in place, as well as historical enrollment data, we estimate creating DMIs that require additional verification will result in a decrease in APTC, potentially to zero, for 252,000 enrollees for Exchanges on the Federal platform and 155,000 enrollees on State Exchanges each year. Using an estimated average 4 months reduced APTC, as estimated based on internal 2016-2020 APTC data, with an average monthly APTC rate of $656.89 per person, we anticipate that this change could result in an annual reduction of $1,069 million (252,000 × $656.89 × 4 + 155,000 × $656.89 × 4) in APTC expenditures starting in 2027. We accepted comments on whether this number may be slightly less because of potential decreased enrollment if the enhanced PTC are no longer in effect.
We sought comment on these impact estimates and assumptions.
For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed. We summarize and respond to public comments received on the burden estimates proposed policy later.
We are finalizing modifications to § 155.400(g) to remove paragraphs (2) and (3), which establish an option for issuers to implement a fixed-dollar and/or gross percentage-based premium payment threshold (if the issuer has not also adopted a net percentage-based premium threshold) beginning in the 2027 coverage year. Permanently removing the options for issuers to implement either a fixed-dollar and/or gross percentage will continue to help strengthen program integrity by ensuring that enrollees cannot remain enrolled in coverage for extended periods of time without paying any premium, increasing the likelihood that consumers who were improperly enrolled become aware of their enrollment.
We do not anticipate that there will be any costs for issuers going forward since issuers were not able to implement these thresholds in PY 2026 per the 2025 Marketplace Integrity and Affordability final rule (90 FR 27133), and we are extending this policy permanently in this final rule.
While we did not initially provide these estimates in the proposed rule, we did not receive any response to the proposed impact estimates for this policy when they were previously proposed in the 2025 Marketplace Integrity and Affordability rule (90 FR 27202). For the reasons outlined in this final rule, we are finalizing these estimates.
We are finalizing our proposal to no longer “sunset” the prohibition on Exchanges offering the 150 percent FPL SEP, in alignment with section 71304 of the WFTC legislation. As explained in preamble in section III.D.15 of this final rule, section 71304 of the WFTC legislation prohibits APTC for plans enrolled in through the 150 percent FPL SEP, and therefore eliminates the SEP's ability to facilitate access to affordable coverage. We are therefore finalizing our proposal to no longer permit Exchanges to offer the 150 percent FPL SEP.
In the proposed rule, we stated that absent the WFTC legislation, and assuming that the prohibition on Exchanges offering the 150 percent FPL SEP had “sunset” on December 31, 2026, we assume that all Exchanges would have elected to begin offering the 150 percent FPL SEP again in PY 2027 (91 FR 6451). We stated that this assumption is based on past experience with the overwhelming majority of Exchanges choosing to offer this SEP. If all Exchanges offered the 150 percent FPL SEP beginning in PY 2027, we assumed that this would result in increased adverse selection, which will result in increases to premiums and APTC expenditures. As a result, we estimated that the proposed policy would reduce premiums by 3 to 4 percent, as a result of improvements to the risk pool as the removal of the SEP would limit consumers' ability to wait until they need services to enroll in coverage. We estimated that the reduced premiums would have resulted in an overall decrease in APTC expenditures of $3.4 to $4.5 billion per year, beginning in PY 2027. For the purposes of the RIA in the proposed rule, we used $3.8 billion as the estimated annual decrease in APTC expenditures, beginning in PY 2027.
We sought comment on these impact estimates and assumptions.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these impact estimates with the following modifications. We have reduced the estimated premium impact of this policy to 2 to 3 percent resulting in a decrease in APTC expenditures of $2.5 to $3.6 billion per year. For the purposes of the RIA, we used $3.1 billion as the estimated annual decrease
In this final rule, we are finalizing the provision to allow Exchanges on the Federal Platform to continue to conduct pre-enrollment verification for SEPs other than Loss of Minimum Essential coverage and add the requirement that Exchanges on the Federal Platform conduct pre-enrollment verification for at least 75 percent of new enrollments.
We anticipate that revisions to § 155.420 will have a positive impact on program integrity by verifying eligibility for SEPs. Increasing program integrity through continuing this policy will reduce improper subsidy payments and could contribute to keeping premiums low and therefore, further protecting taxpayer dollars. This policy may deter enrollments among younger people at higher rates, which could worsen the risk pool and increase premiums. However, we expect any such deterrence will impact a very small number of young people and, therefore, have only a minimal impact on the risk pool and premiums. We estimate that the net effect of pre-enrollment verification will reduce premiums by approximately 0.5-0.8 percent and will maintain the reduction in APTC spending of approximately $105.4 million, beginning in PY 2027.
We anticipate this policy will moderately increase the regulatory burden on Exchanges using the Federal platform. Based on past experience, we estimate that maintaining the expansion in pre-enrollment verification to most individuals seeking to enroll in coverage through all applicable SEPs offered through Exchanges on the Federal platform will result in an additional 293,073 individuals having their enrollment delayed or “pended” annually until eligibility verification is completed, although for the vast majority of individuals the delays would be less than 1-3 days. As mentioned in section IV.K of this final rule, we anticipate that maintaining the expansion of SEP verification will result in increased inconsistencies, with an associated cost increase for consumers of approximately $7,332,686 beginning in 2027. There will also be an increase in ongoing costs for Exchanges on the Federal platform due to an increase in the number of SEP enrollments for which they must conduct verification. We estimate that the total increase in ongoing processing costs to maintain compliance with this requirement for the FFE will be approximately $11.7 million annually (293,073 additional SVI × $40 cost per SVI). Furthermore, as mentioned in section IV.K, we anticipate that expanding verification will result in an increase in annual burden of labor costs on Exchanges on the Federal platform at a cost of $2,902,615 annually.
We sought comment on these impact estimates and assumptions.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these burden estimates for this policy as proposed. We summarize and respond to public comments received on the proposed estimates later.
This final rule amends § 155.605(d)(1) to codify and expand hardship exemption eligibility to individuals who are ineligible for APTC or CSRs due to projected household income (below 100 percent or above 250 percent of the FPL). This expansion will allow these individuals to qualify for catastrophic coverage under section 1302(e) of the Affordable Care Act.
Most State Exchanges currently delegate hardship exemption processing to HHS. However, four State Exchanges—California, Connecticut, Maryland, and the District of Columbia—currently process their own exemptions. Following HHS guidance published on September 4, 2025, this policy expansion has been implemented for consumers in all States that currently delegate exemption processing to HHS. This final rule will extend the same hardship exemption eligibility to consumers in the four State Exchanges that currently process their own exemptions, ensuring that consumers in all States have access to affordable coverage.
We assume the four State Exchanges that process their own exemptions will experience an administrative burden associated with processing hardship exemption applications under the expanded eligibility criteria. Based on previous experience, we estimate that Exchange staff will require approximately 19 minutes (0.32 hours) to review and process each hardship exemption application. Using the median hourly wage of $24.76 for Eligibility Interviewers, Government Programs (occupation code 43-4061), and adjusting for fringe benefits and overhead, we calculate an adjusted hourly wage of $49.52. Based on these figures, we estimate the cost per application to be $15.75, calculated as follows: (19 minutes ÷ 60 minutes) × $49.52/hour = $15.75 per application.
Based on our analysis of operational FFE data regarding existing hardship exemption requirements and the new requirement finalized in this rule, we estimate these four State Exchanges will collectively process approximately 1,072 applications annually under the expanded hardship exemption eligibility criteria when considering their combined share of approximately 10 percent of total Exchange enrollment.
Using the per-application manual processing cost of $15.75, we estimate the total annual cost burden for these four State Exchanges in total to be approximately $16,884 (1,072 applications × $15.75 per application). Individual State burden will vary depending on each State Exchange's enrollment volume and the proportion of consumers who fall into the expanded hardship exemption category. States with larger enrollment volumes and higher proportions of consumers with income below 100 percent FPL or above 250 percent FPL may experience higher application volumes than States with smaller enrollment or different demographic characteristics.
We note that the actual burden may be lower over time than estimated if State Exchanges implement automated exemption processing similar to the FFE's system. The FFE experience demonstrates that automated processing significantly reduces the need for manual paper application review, as the system automatically grants hardship exemptions for consumers ineligible for APTC due to income when they apply for catastrophic coverage. State Exchanges that adopt similar automated systems will experience reduced administrative burden while ensuring consumers have seamless access to hardship exemptions and catastrophic coverage.
To estimate the cost of developing an automated exemption processing system, we analyzed personnel and time requirements across three major phases: system development, testing and quality assurance, implementation and training. The hour estimates presented later are illustrative examples intended to demonstrate the general magnitude of costs that might be associated with automated system development.
We estimate that Computer Systems Analysts will need approximately 400 hours at an adjusted hourly wage of $99.80, resulting in a cost of $39,920. Computer Programmers will require the most substantial time investment, with an estimated 600 hours at an adjusted rate of $94.88 per hour, totaling $56,928. Database and Network Administrators will need approximately 200 hours at $103.34 per hour to configure the necessary data infrastructure and system architecture, costing $20,668. A Project Manager will oversee the development effort for approximately 160 hours at $96.88 per hour, adding $15,501 to the total. The combined system development cost will be approximately $133,017, requiring 1,360 total staff hours.
Following initial development, the system will require comprehensive testing to ensure accuracy, compliance with Federal regulations, and proper integration with existing Exchange systems. Computer Systems Analysts will conduct approximately 120 hours of testing at $99.80 per hour, costing $11,976. Compliance Officers will review the system for regulatory compliance for approximately 80 hours at $75.40 per hour, adding $6,032. The total testing and quality assurance cost will be approximately $18,008, requiring 200 staff hours.
The final phase will involve deploying the automated system and training staff on any residual manual processes or system monitoring requirements. Management Analysts will coordinate the implementation for approximately 80 hours at $97.30 per hour, costing $7,784. Eligibility Interviewers will require approximately 40 hours of training at $49.52 per hour to understand the new automated processes and handle any exceptions, totaling $1,981. The implementation and training phase will cost approximately $9,765, requiring 120 staff hours.
Combining all three phases, the total estimated one-time cost in PY 2026 to develop an automated exemption processing system will be approximately $160,790, so in total $643,160 for four State Exchanges. This estimate represents 1,680 total staff hours across multiple occupational categories and assumes a standard development timeline and complexity level.
We recognize that this cost estimate could vary significantly depending on several factors. States with more modern and flexible existing system infrastructure may experience lower development costs due to easier integration. Conversely, States with legacy systems may face higher costs. State-specific requirements, customizations, or additional compliance considerations could also increase costs.
We sought comment on these burden estimates, including the estimated number of applications, time required for consumers to complete applications, and time required for Exchanges to process applications. We also sought comment on opportunities to further reduce burden through automation or other streamlined processes.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in this final rule, we are finalizing these estimates as proposed.
We are finalizing our proposal to amend § 155.1050(a)(2) to eliminate the requirements under § 155.1050(a)(2)(i) and (ii) for State Exchanges and SBE-FPs to establish and impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs under § 156.230; instead, we will require that State Exchanges and SBE-FPs ensure that each QHP provides sufficient access to providers in a manner that meets applicable standards specified in § 156.230(a)(1)(ii) and (a)(1)(iii) for network plans, or, for plan years beginning on or after January 1, 2027, § 156.236(a) for non-network plans if
We anticipate this finalized policy will maintain the regulatory burden on the 22 State Exchanges and 1 SBE-FP we expect for PY 2027, providing them with more flexibility to regulate and review for network adequacy in a manner that best protects their respective consumers. We estimate this impact to be $1,560,780 beginning in PY 2027, as outlined in section IV.M of this final rule. We anticipate this provision might increase the administrative burden on issuers that operate in multiple States as they navigate varying regulatory frameworks and standards. The impact to consumers is not known at this time but there is a risk of potential decreased access to care for consumers if those State standards and their reviews are less consumer protective than the Federal network adequacy review framework.
We sought comment on these impact estimates and assumptions.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed rule, we are finalizing these estimates as proposed.
We are finalizing our proposal to amend § 155.1200(d) to reduce duplication between the SEIPM program described in subpart Q and the annual independent external programmatic audit requirements and standards described at § 155.1200(c) and (d). We are finalizing our proposal to add § 155.1200(e) to permit a State Exchange to satisfy certain annual independent external programmatic audit requirements, as described at § 155.1200(d), by completing the proposed required annual SEIPM program process. As a result, we estimate that there will be a general burden reduction for State Exchanges related to the programmatic audit requirement under § 155.1200(c). In particular, the current 22 State Exchanges that operate their own eligibility and enrollment platforms will incur lower costs for contracts with independent external auditors, since many requirements under subparts D and E will be addressed through completion of the SEIPM process for the applicable benefit year.
Based on industry estimates of the average cost of contracting an auditor to perform an independent external programmatic audit, HHS projects that the reduced audit scope would lower annual costs by approximately 30 percent or $45,000 for each State Exchange. This is based on an estimated average annual programmatic audit cost of approximately $150,000 for a medium-size State Exchange. We anticipate the total cost annual reduction across 22 State Exchanges will be approximately $990,000 and expect that these savings could begin as early as 2027, coinciding with the submission of independent external audits for the PY 2026 SMART. However, this change would also introduce a new burden associated with completing the SEIPM and the related CAP process, as discussed in the section later. For an estimate of the burden created under SEIPM, please refer to section V.C.22.
We requested comment on the reduction in burden and specifically sought feedback from State Exchanges regarding the annual cost of the programmatic audit process.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed.
This policy will allow HHS to implement the Payment Integrity Information Act of 2019 (PIIA) requirements for State Exchanges. As described in the preamble earlier in this final rule, the PIIA requires that agencies measure the improper payments rate for programs susceptible to significant improper payments. HHS already undertakes annual measurements for Medicare, Medicaid, FFEs, and SBE-FPs. This final rule lays the groundwork to complete the Exchanges' measurement program by including State Exchanges and to enable HHS to estimate a comprehensive APTC improper payment rate as mandated by statute.
This policy will allow HHS to measure improper payments that are resultant from State Exchange operations related to the determination of eligibility and payment amounts for APTC and will require State Exchanges to provide Corrective Action Plans responsive to the findings of the measurement. Even slight decreases in this rate will accrue large taxpayer savings. To delineate the range of estimated burden across the State Exchanges, cost estimates were created at the State Exchange level using an average cost per sample of $499. State Exchanges with proportionally smaller amounts of APTC are planned to produce a sample size of 50 while the largest States are planned to produce a sample size of 250. Using these numbers multiplied by the average cost estimate per sample of $499, the SEIPM will incur a range of approximately $24,950.00-$124,750.00 in costs per respondent. As stated in the Information Collection in IV.O, the total costs for the State Exchanges to produce the information and to undergo the review process is estimated to be $1,097,800. Additionally, State Exchanges will incur a cost to develop and submit a corrective action plan (CAP) to HHS following an SEIPM cycle beginning in 2029. We estimate that it will take each State Exchange up to 1,000 hours or $97,300 to develop a CAP. We estimate that the total annual burden associated with this requirement for up to 22 State Exchange respondents will be up to 22,000 hours and $2,140,600. The burden related to this information collection will be submitted to OMB for approval after future rulemaking has been completed regarding the CAP process and requirements.
Additionally, we estimate that six Full Time Equivalents (FTEs) will be necessary to complete the activities associated with SEIPM and SEIPM contract management. This estimate is based upon our experience with staffing the Improper Payment Pre-Testing and Assessment (IPPTA) which has been operationalized in a similar manner and format as will be the SEIPM. The estimated annual cost per Full-Time Equivalent (FTE) is $376,075. This figure was derived by identifying the maximum salary for a Federal employee on the general pay table in the Baltimore area, which was $183,500 in 2023. To ensure conservative budgeting and sufficient funding, this salary was used as the base. The base salary was then multiplied by a factor of two to account for employee fringe benefits and overhead costs. Consequently, the total annual estimate per FTE is $376,075, leading to an aggregate annual cost of $2,256,450 for all FTEs.
Finally, we anticipate total estimated annual contracting costs of $19.5 million incurred by HHS. These costs include but are not limited to: collecting the information from the State Exchanges, building and completing automated review systems, creating the statistical methodology and identifying the sample, appeal adjudication, estimating the improper payment rate, generating required reports, and IT support and infrastructure costs.
In summary, we expect total annual costs incurred across the State Exchanges to being $3.2 million, total HHS contracting costs to being $19.5 million, and total HHS staffing costs to being $2.3 million for a total cost of $24.8 million annually.
We believe that the potential benefits of this regulatory action justify the present costs. We sought comment on these impact estimates and assumptions.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these impact estimates for this policy as proposed. We summarize and respond to public comments received on the proposed estimates later.
We conducted a comprehensive analysis to identify specific personnel roles and time requirements across all phases of the data collection process. We used the GSA labor category table to estimate burden on key occupational roles that we considered crucial in SEIPM while also using some of the early survey data provided by State Exchanges in Group A. While we received some burden data from a couple of commenters, we did not receive information across all State Exchanges. We noted that some States during IPPTA were able to provide the required information with minimal challenges.
While some commenters stated that significant time and resources were required for IPPTA, we understand that there is variability across each State in terms of how much time and resources are required. The processes such as developing SQL scripts that were completed during IPPTA are intended to translate into the SEIPM process. The time and resources spent for developing those scripts and troubleshooting the output would not be experienced in SEIPM because the work will already have been completed. We also clarify that we will allow flexibility in the data submission process to alleviate some of the administrative burden placed on the State Exchanges. We also intend to release sub-regulatory guidance to provide further details on SEIPM. For these reasons, HHS believes that the proposed estimations are sufficient for the State Exchanges to complete SEIPM. Accordingly, we are finalizing § 155.1600 as proposed.
We are finalizing an FFE user fee rate of 1.9 percent of premiums for the 2027 benefit year, which is less than the 2.5 percent FFE user fee rate finalized for the 2026 benefit year. We are also finalizing an SBE-FP user fee rate of 1.5 percent of premiums for the 2027 benefit year, which is less than the 2.0 percent SBE-FP user fee rate we finalized for the 2026 benefit year.
Because we are decreasing the FFE and SBE-FP user fee rates for the 2027 benefit year from the current 2026 benefit year rates, we are estimating that this reduction in FFE and SBE-FP user fee rates will reduce transfers from issuers to the Federal Government by approximately $130 million for benefit year 2027 compared to the prior benefit year. We expect that available user fee collections will be sufficient to fund Exchange operations through 2027 at the finalized 2027 benefit year user fee rates.
We sought comment on these impact estimates and assumptions.
We did not receive any comments in response to the proposed impact estimates for this policy.
For the reasons outlined in the proposed rule and this final rule, we are finalizing these estimates as described in this section.
We are finalizing our proposal to revise § 156.115(d) to prohibit issuers from including routine non-pediatric dental services as an EHB. We do not anticipate any immediate costs to the Federal Government, States, issuers, or enrollees because of this finalized policy. This finalized policy will once again prohibit issuers from covering routine non-pediatric dental services as an EHB, which avoids the potential imposition of premium increases associated with these services. However, we do not expect that the removal of routine non-pediatric dental services as an EHB will have a significant impact on premium reduction, as all benefits a State adds to their EHB-benchmark plan are subject to the typicality standard at § 156.111(b)(2)(ii), which limits how generous the updated plan would be. For example, if a State added routine non-pediatric dental services as an EHB under the existing policy, as we explained in the 2025 Payment Notice final rule (89 FR 26348), they may have needed to consider removing and/or adjusting other benefits to make room for the non-pediatric dental services to ensure the scope of benefits falls within the typicality range.
Additionally, this finalized change only has a premium impact to the extent States already updated their EHB-benchmark plans to include routine non-pediatric dental services under the policy finalized in the 2025 Payment Notice that allows States to add routine non-pediatric dental services as an EHB beginning with PY 2027. Since no State has taken this action, this finalized policy has no premium impact. Finalized as proposed, this policy to prohibit coverage of routine non-pediatric dental services as an EHB will be effective upon the effective date of this final rule, preventing any future premium impact from the former policy.
Consistent with our note in the 2025 Payment Notice final rule (89 FR 26409), which acknowledged that removing the prohibition on routine non-pediatric dental services as an EHB may increase costs for issuers who may need to expand their networks to cover these services, this policy may avoid cost increases for issuers that would have needed to expand their networks
While this finalized policy may limit potential premium increases for enrollees and cost increases for issuers related to network expansion, we acknowledge that this policy may impact long-term health outcomes and associated medical costs. As we explained in the proposed 2025 Payment Notice (88 FR 82597-98), oral health and overall health are inextricably linked; untreated oral health conditions can increase risk for and complicate the management of chronic conditions.
We solicited comment on the impact of our proposal to revise § 156.115(d) to prohibit issuers from including routine non-pediatric dental services as an EHB and whether other impacts should be considered.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these impact estimates for this policy as proposed. We summarize and respond to public comments received on the proposed estimates below.
Under current regulations, catastrophic plans, like all QHPs offered through the Exchanges, have annual contract periods that require re-enrollment each year during the open enrollment period. The finalized regulation will provide consumers who are eligible for catastrophic coverage with the potential of more predictable multi-year coverage arrangements, with a term of multiple consecutive plan years not to exceed 10 years, compared to annual re-enrollment, though premiums may be adjusted during the contract term in accordance with applicable requirements. As finalized, other than the fact that a multi-year catastrophic plan could have a term of up to 10 consecutive plan years for individuals who qualify for such plans upon enrollment, and coverage could be provided before the deductible is met for certain VBID benefits to be specified in future guidance, there would be no material differences between the regulatory requirements for such plans and 1-year catastrophic plans. This may potentially reduce premium volatility and administrative burden while maintaining the EHB and consumer protections required under the Affordable Care Act. This finalized policy aims to enhance market stability for a segment of consumers who may benefit from longer-term coverage arrangements. The finalized regulation will be effective for plan years and policy years beginning on or after January 1, 2027.
We sought comments on issuer participation, State and State Exchange operational impacts, and market segmentation effects.
The finalized regulation is anticipated to deliver benefits for eligible consumers and participating issuers. Consumers who enroll in multi-year catastrophic plans may benefit from more predictable multi-year coverage, with a term of multiple consecutive plan years not to exceed 10 years, reduced need to navigate annual open
Issuers may incur costs related to developing multi-year catastrophic plans, such as developing new pricing models. States and the Federal Government will face costs associated with reviewing and approving multi-year catastrophic plan filings. We sought comments on costs and data that could be used to quantify these impacts.
The availability of multi-year catastrophic plans may result in transfer effects impacting consumers, issuers, States, and the Federal Government, with the magnitude dependent on uptake rates. We sought comments on transfer effects, premium impacts, Federal PTC expenditures, and data that could be used to quantify these impacts.
Given that this will be a new option for consumers, there is uncertainty regarding consumer demand for multi-year catastrophic plans. There is also uncertainty regarding how premiums will be structured for multi-year catastrophic plans, including the methodology and frequency of adjustments (such as annual adjustments tied to inflation or other factors) permitted under applicable requirements. Additionally, there is uncertainty about how consumers enrolled in multi-year catastrophic plans will respond if their health status changes and what implications this may have for consumers. We sought comment on these uncertainties and requested data that could help quantify the potential impacts of multi-year catastrophic plans on enrollment patterns, premium levels, and Federal expenditures.
As discussed in section III.E.6. of this final rule, after consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy with the following modifications. We are finalizing § 156.155(a)(6) with minor revisions to refer to “plan years” instead of “years” for greater clarity and precision. We are also finalizing § 156.155(a)(6) to state that multi-year catastrophic plans may utilize value-based insurance designs to provide benefits before reaching the deductible, under guidelines issued by the Departments. We are also finalizing a conforming amendment at § 156.155(a)(3), providing that catastrophic plans provide no benefits before the annual limitation on cost sharing is reached, except as provided in paragraph (a)(6). We are not finalizing the proposed conforming amendments to § 156.155(a)(1), as multi-year catastrophic plans, like other catastrophic plans, must meet all applicable requirements for health insurance coverage in the individual market. We are not finalizing the proposed addition of § 156.130(c) which provided that in the case of a multi-year catastrophic plan, the annual limitation on cost sharing for the initial plan year of the contract may apply on an annual basis, or on average over the life of the contract. We summarize and respond to public comments received on the proposed impact estimates for this policy later.
To address an issue that has arisen in the implementation of section 1302(c) through (e) of the Affordable Care Act, we are finalizing our proposal adding new § 156.136 to change the permissible cost-sharing parameters for bronze plans and revisions to § 156.155(a)(3) for updated requirements for catastrophic plans with modifications.
We are finalizing changes to the cost-sharing requirements at § 156.155(a)(3) for catastrophic plans in the individual market to address an irreconcilable conflict between section 1302(c) through (e) of the Affordable Care Act. Specifically, we are finalizing our proposal to permit some individual market bronze plans to exceed the maximum annual limitation on cost sharing beginning in PY 2027, but we are modifying to require these bronze plans not to exceed 130 percent of the standard annual limitation on cost sharing, rounded down to the next lowest multiple of 50 dollars, and to achieve an AV within the standard bronze
We sought comment on these impact estimates and assumptions.
After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing these impact estimates for this policy with the following modifications: to require that the higher MOOP limit which is permitted for some bronze plans not exceed the calculation of 130 percent of the annual limitation on cost sharing; to make a correction to the calculation of 130 percent of the annual limitation; and to delay the implementation of the requirement to calculate the catastrophic annual limitation on cost sharing as 130 percent of the standard annual limitation cost sharing until PY 2028. We summarize and respond to public comments received on the proposed estimates later.
We are finalizing our proposal to discontinue the full suite of standardized plan option policies effective beginning in PY 2027. Specifically, we are finalizing our proposal to remove the following from our regulations: the definition of “standardized options” at § 155.20; all requirements pertaining to standardized plan options at § 156.201 (the requirements for FFE and SBE-FP QHP issuers in the individual market to offer these plans at paragraphs (a) and (b) as well as the requirement for these plans to meaningfully differ from one another at paragraph (c)); the authority to differentially display standardized plan options on
However, we recognize that some issuers and consumers may still find certain features of these plan designs valuable. This is why we did not propose to require issuers to discontinue their existing standardized plan option offerings altogether. Instead, under this finalized approach, issuers will be permitted to choose whether to discontinue these offerings altogether or to continue offering them with either the same or modified cost sharing, while we simultaneously discontinue the differential display of these plans on
Under this finalized approach, if issuers wished to discontinue their standardized plan option offerings altogether, they will be permitted to do so, and enrollees in these plans will be crosswalked to a different plan in accordance with the crosswalk hierarchy at § 155.335(j). Additionally, if issuers wished to continue offering these standardized plan options with the same cost sharing, they will also be permitted to do so, and enrollees in these plans will continue to be auto-reenrolled in these plans from one plan year to the next. However, these plans will no longer be visually distinguished as standardized plan options on
In most scenarios where an issuer modifies the cost sharing structure of one of its standardized plan option offerings, the newly modified plan that was formerly the standardized plan option will be considered a new plan and will therefore require a new plan ID. In this scenario, enrollees will be crosswalked from the discontinued plan to another plan in accordance with the crosswalk hierarchy at § 155.335(j). These enrollees could be crosswalked into the newly modified plan that was formerly the standardized plan option, or an entirely different plan altogether, depending on the unique circumstances in each county.
However, under the definition of “plan” at § 144.103, a State may permit issuers to make greater changes to a plan's cost sharing while still permitting that plan to be considered the same plan—thus maintaining the same plan ID. Furthermore, under § 147.106(e)(3)(iv), as long as the variation in cost sharing is solely related to changes in cost and utilization of medical care, or to maintain the same metal tier level (and other applicable requirements under § 147.106(e) are met), the modifications could be considered uniform (thus, a viable exception to guaranteed renewability).
In the scenario where an issuer modifies what was formerly a standardized plan option's cost sharing structure while maintaining the same plan ID, enrollees in the plan will be auto-reenrolled from one plan year to the next. In either case, whether the modification of a former standardized plan option's cost sharing results in that plan being considered the same or a different plan, enrollees will be crosswalked in accordance with the crosswalk hierarchy at § 155.335(j), and that plan will no longer be differentially displayed as a standardized plan option on
Adopting this approach will effectively remove the standardization component of this suite of policies while simultaneously minimizing the risk of disruption for consumers enrolled in and issuers of these plans. This approach will also ensure that issuers of these plans that wish to continue offering them will be able to do so at their discretion. If issuers did choose to continue offering these plans, either with the same or modified cost sharing structures, they will be able to continue utilizing existing benefit packages, provider networks, drug lists, and formularies, including those paired with standardized plan options for PY 2026. This will further minimize burden for these issuers.
In addition, we have assumed the responsibility for differentially displaying standardized plan options on
However, we acknowledge that the discontinuation of the differential display requirements for the DE pathways at §§ 155.220(c)(3)(i)(H) and 156.265(b)(3)(iv) will impose a degree of burden on approved web-broker and QHP issuer enrollment partners using a direct enrollment pathway to facilitate consumer enrollment through an FFE or SBE-FP, since these entities will be required to modify their own platforms in some manner. However, we anticipate that the burden of making these modifications will be minimal, as decommissioning existing functionalities (such as the differential display of standardized plan options, which will include the full suite of differential display features discussed in greater detail in the preamble to § 156.201 of this final rule) and reverting to the previous state of display will entail significantly lower burden than introducing novel features and functionalities.
Further, since differential display of standardized plan options on
We refer readers to the preamble section for the finalized policy to discontinue standardized plan options (§§ 155.20, 155.205(b)(1), 155.220(c)(3)(i)(H), 156.201, and 156.265(b)(3)(iv)) for a detailed discussion of relevant literature we considered in our approach to this finalized policy.
We sought comment on these impact estimates and assumptions. We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed.
We are finalizing our proposal to discontinue non-standardized plan option limits and exceptions at § 156.202. However, we recognize that some issuers and consumers may still find certain features of the chronic and high-cost condition plans that were originally offered through the non-standardized plan option limit exceptions process valuable. This is why we did not propose to require issuers to discontinue these chronic and high-cost condition plans. Instead, under this finalized policy, issuers will be permitted to choose whether to discontinue the chronic and high-cost condition plans originally offered through the non-standardized plan option limit exceptions process altogether or continue offering them with either the same or modified cost sharing. Issuers will similarly be permitted to continue offering other non-standardized plan options not associated with the non-standardized plan option limit exceptions process.
Under this finalized approach, if issuers wish to discontinue the chronic and high-cost condition plans originally offered through the exceptions process (or other non-standardized plan options not associated with the non-standardized plan option limit exceptions process) altogether, they will be permitted to do so, and enrollees in these plans will be crosswalked to a different plan in accordance with the crosswalk hierarchy at § 155.335(j). Additionally, if issuers wish to continue offering the chronic and high-cost condition plans originally offered through the exceptions process (or other non-standardized plan options not associated with the non-standardized plan option limit exceptions process) with the same cost sharing structures, they will also be permitted to do so, and enrollees in these plans will continue to be auto-reenrolled in these plans from one plan year to the next. Finally, if issuers wish to continue offering the chronic and high-cost condition plans originally offered through the exceptions process (or other non-
In most scenarios where an issuer modifies the cost sharing structure of one of its chronic and high-cost condition plans originally offered through the exceptions process (or other non-standardized plan options not associated with the non-standardized plan option limit exceptions process), the newly modified plan that was formerly the exceptions process plan (or other non-standardized plan options not associated with the non-standardized plan option limit exceptions process) will be considered a new plan and would therefore require a new plan ID. In this scenario, enrollees will be crosswalked from the discontinued plan to another plan in accordance with the crosswalk hierarchy at § 155.335(j). These enrollees could be crosswalked into the newly modified plan that was formerly the exceptions process plan, or an entirely different plan altogether, depending on the unique circumstances in each county.
However, under the definition of “plan” at § 144.103, a State may permit issuers to make greater changes to a plan's cost sharing while still permitting that plan to be considered the same plan—thus maintaining the same plan ID. Furthermore, under § 147.106(e)(3)(iv), as long as the variation in cost sharing is solely related to changes in cost and utilization of medical care, or to maintain the same metal tier level (and other applicable requirements under 45 CFR 147.106(e) are met), the modifications could be considered uniform (thus, a viable exception to guaranteed renewability).
In the scenario where an issuer modifies what was formerly an exceptions process plan's (or other non-standardized plan options not associated with the non-standardized plan option limit exceptions process) cost sharing structure while maintaining the same plan ID, those enrolled in the plan will be auto-reenrolled from one plan year to the next. In either case, whether the modification of a former exceptions process plan's cost sharing results in that plan being considered the same or a different plan, enrollees will be crosswalked in accordance with the crosswalk hierarchy at § 155.335(j).
Ultimately, adopting this approach will substantially reduce regulatory complexity and the burden associated with the non-standardized plan option limit and the corresponding exceptions process while simultaneously minimizing the risk of disruption to consumers enrolled in and issuers of the chronic and high-cost condition plans originally offered through the exceptions process (or other non-standardized plan options not associated with the non-standardized plan option limit exceptions process). If issuers did choose to continue offering these plans, either with the same or modified cost sharing structures, they will be able to continue utilizing existing benefit packages, provider networks, drug lists, and formularies, including those paired with what were formerly the exceptions process plans for PY 2026. This will further minimize burden for these issuers.
We refer readers to the preamble section for the finalized policy to discontinue standardized plan options (§§ 155.20, 155.205(b)(1), 155.220(c)(3)(i)(H), 156.201, and 156.265(b)(3)(iv)) for a detailed discussion of relevant literature we considered in our approach to the finalized policy to discontinue non-standardized plan option limits and exceptions.
We sought comment on these impact estimates and assumptions. We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed.
We are finalizing our proposal at § 155.1050(d) to allow FFE States, including States that perform plan management, that elect to do so, to conduct provider access reviews for issuers' plans that use and do not use a provider network, provided that the State demonstrates it 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 as described at § 155.1050(d)(2) through (d)(4). This policy will apply effective beginning in PY 2027 for provider access certification reviews for issuers' plans that use a provider network and effective PY 2028 for provider access certification reviews for issuers' plans that do not use a provider network. HHS will continue to conduct network adequacy reviews consistent with § 156.230 for QHP issuers that use a provider network and, for plan years beginning on or after January 1, 2028, provider access reviews for QHP issuers that do not use a provider network in FFE States that do not elect to conduct such reviews, or in FFE States that do not demonstrate they have 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, as described at § 155.1050(d)(2) through (d)(4). Under this finalized policy, we will continue to collect network adequacy data, including time and distance and appointment wait time data. We will continue collecting this data from all FFE issuers, either to use to conduct Federal network adequacy reviews in FFE States that do not elect to do so or do not demonstrate they have sufficient authority and the technical capacity to conduct these reviews by satisfying the criteria to be considered to have an Effective Provider Access Review Program as described at § 155.1050(d)(2) through (d)(4), or with a view to make it available in a standardized format to States that are determined to have an Effective Provider Access Review Program, to assist them in their network adequacy analysis.
The preceding years of conducting reviews of QHP issuer provider network adequacy, including analyzing issuer submitted data and discussions with States, issuers, and other various interested parties around diverse market conditions, have demonstrated that a one-size-fits-all approach to provider network adequacy review is not satisfactory. For example, issuers have highlighted to us persistent challenges in locating and contracting with enough providers of various specialties (for example, allergy and immunology, behavioral health, gastroenterology) in remote or difficult to access areas of a State. States have brought to our attention various geographic constraints that impact QHP issuer's ability to satisfy time and distance requirements and have made arguments to assess based on time or distance individually rather than being required to meet a time and distance standard that may be insurmountable due to a topographical constraint such as a body of water or navigating roads in mountainous terrain. Partnerships with States performing plan management, that have elected to conduct their own network adequacy reviews, have highlighted for us how States may innovate in their approach to conducting network adequacy reviews in ways that are sensitive to conditions and capacity in the State. These are among the factors
We do not anticipate any additional costs to the Federal Government as part of this finalized policy. While HHS still intends to collect data from QHP issuers in States with Effective Provider Access Review Programs, there is the potential for cost savings at the Federal level related to provider access reviews during QHP certification if HHS shifts these responsibilities to States that elect to conduct their own reviews. However, this may increase costs in States if they do not already possess capability and resources necessary to conduct sufficient provider access reviews, as well as ensure compliance and appropriate consumer protections. For QHP issuers, this finalized policy may have reduced administrative costs and efficiency gains. While HHS will still collect network adequacy data from issuers in these States, issuers will not have to undergo network adequacy certification reviews at the Federal level which often requires additional reporting to HHS to address corrections in network adequacy required to meet Federal standards. Additionally, many QHP issuers already have State specific network adequacy requirements with which they must comply to operate plans in the State. Thus, redirecting network adequacy review activities to States, that issuers already need to report to, could streamline the efficiency of the QHP certification process and reduce burden for issuers. However, requiring issuers to submit network adequacy data on both the State and Federal levels could potentially duplicate efforts and increase costs for issuers, though the extent of any administrative burden is uncertain as States may have different data collection and submission requirements, and it is not yet known how FFE States would implement or may change network adequacy data collection as part of an Effective Provider Access Review Program and if existing data collection processes already exist or need to be modified to support requirements under finalized § 155.1050(d).
Regarding Federalism implications of this finalized policy, the Affordable Care Act does not require States to establish and enforce network adequacy certification criteria and review programs for QHP issuers; if a State elects not to establish any of these programs or is not approved to do so, HHS must establish and operate the programs in that State. As part of this finalized policy, we will not require that States elect to conduct provider access certification reviews as part of an Effective Provider Access Review Program. Rather, we are finalizing our proposal to allow States flexibility to conduct provider access certification reviews, should they choose, provided they have sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria in § 155.1050(d)(2) through (d)(4).
We sought comment on these impact estimates and assumptions.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed.
In this final rule, we are not finalizing our proposal to reduce the minimum percentage requirements described under § 156.235(a)(2)(i) and (b)(2)(i) from 35 to 20 percent for the overall, FQHC, and family planning ECP thresholds, and will maintain the minimum percentage at 35 percent for each of the three aforementioned thresholds. We are finalizing our proposal to amend the narrative justification requirement language at § 156.235(a)(3) and 156.235(b)(3) to reflect current operations and data submission requirements as part of ECP certification reviews, as narrative justifications are no longer required for issuers not meeting the ECP standard as they input contract statuses directly into the ECP User Interface in the MPMS. Additionally, we are finalizing our proposal with modifications to allow FFE States flexibility to elect to conduct ECP certification reviews. Specifically, as discussed earlier in this final rule, we are finalizing our proposal to allow FFE States flexibility to elect to conduct ECP certification reviews for network plans effective beginning PY 2027; however, we are modifying our proposal that will allow FFE States to conduct ECP certification reviews for non-network plans effective beginning PY 2028 under § 155.1051 due to the delayed implementation of the provisions of allowing certification of non-network plans as QHPs.
ECP requirements under the General Standard at § 156.235(a)(2)(i) specify that a plan applying for QHP certification to be offered through a FFE must demonstrate in its QHP application that the issuer's provider network includes as participating providers at least a minimum percentage, as specified by HHS, of available ECPs in each plan's service area collectively across all ECP categories defined under § 156.235(a)(2)(ii)(B), and at least a minimum percentage of available ECPs in each plan's service area within certain individual ECP categories, as specified by HHS. Alternate Standard issuers must demonstrate similar minimum percentage requirements as described at § 156.235(b)(2)(i). For PY 2014, we set this minimum percentage at 20 percent and increased the minimum percentage to 30 percent for PY 2015. For QHP certification for PY 2018 and through the end of PY 2022, we returned to the percentage used in PY 2014, and to again consider the
We do not anticipate any major new impacts associated with maintaining the minimum ECP threshold percentage at 35 percent described under §§ 156.235(a)(2)(i) and (b)(2)(i), compared to previous plan years. Retaining existing requirements for network size may stabilize costs for consumers as issuers may have responded to reduced minimum percentage requirements by contracting with fewer ECPs, which could have increased out-of-pocket costs for consumers whose preferred ECPs transition out-of-network. Retaining the existing minimum percentage requirement will minimize additional costs from increased travel time and wait time for appointments or reductions in continuity of care for patients whose providers have been removed from their insurance networks. Issuers who maintain existing contracting levels to meet the 35-percent minimum percentage requirement will likely maintain any current costs.
We are finalizing our proposal to modify the narrative justification requirement under §§ 156.235(a)(3) and 156.235(b) to make the language more consistent with current operations and data submission requirements for ECP certification reviews. As part of the narrative justification requirements, an issuer applying for QHP certification that is not meeting the ECP standard under § 156.235 had to include as part of its QHP application a written open-ended narrative describing how the issuer's provider network as currently designed would provide an adequate level of service for individuals residing in low-income zip codes or Health Professional Shortage Areas within the plan's service area, and how the issuer would strengthen the plan's provider network in future years. We have instituted multiple refinements and modernizations to the justification process over time, and recently in PY 2025, leveraged information technology to embed justification related information (for example, contract statuses) into the new ECP User Interface (UI) in the MPMS. In alignment with this modernization that now allows issuers to easily select and report the contract status of ECPs included within their networks or who are being recruited into their networks, we are finalizing our proposal to modify §§ 156.235(a)(3) and 156.235(b) to instead designate that a network plan applying for QHP certification to be offered through a FFE must include as part of its QHP application the status of contract offers to qualified ECPs available in the network plan's service area. A network plan will not need to report on the status of contract offers for all available ECPs in the network plan's service area but should at least report on the status of contract offers for all ECPs which the issuer has either included in its network plan or offered a contract to be included in its network plan within each service area.
We believe these changes to the narrative justification requirements at §§ 156.235(a)(3) and 156.235(b) will not have meaningful impacts to issuers since these amendments reflect current ECP data submission requirements that have been in place since PY 2025. Issuers will continue to upload ECP data into MPMS and complete required fields within the ECP UI, including selecting or importing ECPs included within their networks and designating the status of their contract offers. Although this finalized language does not modify current requirements as part of ECP certification reviews, it will reflect modernizations to the ECP data collection process that have introduced significant program efficiencies that have improved data quality, and effectively reduced the time, resources, and administrative costs required by issuers to submit supporting justification documentation for meeting the ECP standard under § 156.235.
Furthermore, we are finalizing our proposal with minor modifications to allow FFE States, including States performing plan management, to elect to perform their own State reviews of issuer-submitted ECP data provided the State demonstrates sufficient legal authority and the technical capacity to conduct these reviews by meeting the applicable criteria, as determined by HHS, to be considered to have an Effective ECP Review Program under § 155.1051. We are finalizing this policy for FFE States to conduct their own ECP certification reviews of issuers' plans with a provider network effective beginning in PY 2027, and we are modifying our proposal to be effective PY 2028 for ECP certification reviews for issuers' plans that do not use a provider network. We are finalizing that FFE States must ensure that a QHP with a provider network includes in its provider network a sufficient number and geographic distribution of ECPs, where available, to ensure reasonable and timely access to a broad range of such providers for low-income individuals or individuals residing in Health Professional Shortage Areas within the QHP's service area, in accordance with the Exchange's network adequacy standards. In addition, we are finalizing our proposal that FFE States must also ensure that a non-network plan applying for certification as a QHP to be offered through an FFE demonstrates that it provides reasonable and timely access to ECPs that accept the plan's benefit amount as payment in full to ensure that services will be accessible without
We anticipate several potential impacts associated with these finalized changes to implement the Effective ECP Review Program provisions at § 155.1051. First, while we believe that predominately collecting and reviewing ECP data on the Federal level as part of QHP certification for issuers across the FFE has helped ensure that issuers include a sufficient number and geographic distribution of ECPs within their networks, we believe providing FFE States more flexibility and authority to conduct their own ECP certification reviews may deliver quality improvements to the review process. We acknowledge that States possess unique knowledge on local and contextual factors, such as on market conditions, geographic constraints, and areas in the State with limited economic resources, provider shortages, workforce issues, and population demographics. FFE States may incorporate these various factors to tailor their ECP certification reviews and apply ECP certification results to more directly address State-specific challenges for consumers as it pertains to ECP access, which is more difficult to accomplish at the Federal level with a one-size-fits all approach for all States. In addition, continuing to leverage Federal infrastructure to collect ECP data from issuers in FFE States with an Effective ECP Review Program will create opportunities for a State-Federal partnership where HHS could provide data in a standardized format to States to inform their ECP certification reviews and provide support to FFE States that require additional assistance.
Additionally, we presume there are several cost-related implications of this finalized policy. We do not anticipate any additional costs to the Federal Government as part of this finalized policy. While HHS still intends to collect data from QHP issuers in FFE States with Effective ECP Review Programs, there is still the potential for cost savings at the Federal level as it pertains to reviewing such ECP data during QHP certification and taking enforcement actions against QHP issuers after QHP certification as part of compliance if HHS shifts these responsibilities to FFE States that elect to conduct their own reviews of issuers as part of the Effective ECP Review Program. Though, in turn, this may increase costs among FFE States if they do not already possess the capability and resources to conduct complex, data-intensive ECP certification reviews and enforcement actions against issuers that neglect to meet ECP requirements. For QHP issuers, this finalized policy may have reduced administrative costs and efficiency gains. While HHS will still collect ECP data from issuers in these FFE States, issuers will not have to undergo intensive ECP certification reviews at the Federal level which often requires coordination with HHS to address corrections in ECP data until ECP requirements are met. Also, many QHP issuers already need to coordinate with FFE States to meet various requirements to operate plans in the State. Thus, redirecting ECP review activities to FFE States that issuers already need to coordinate with could further streamline the efficiency of the QHP certification process. However, requiring issuers to submit ECP data on both the State and Federal levels could potentially duplicate both effort and costs among issuers, but the extent of this administrative burden is uncertain as States likely have different data collection and submission requirements, and it is not yet known how FFE States will implement ECP data collection as part of the Effective ECP Review Program and if existing data collection processes already exist or need to be developed to support requirements under § 155.1051.
Lastly, as it pertains to Federalism implications of this proposal, the Affordable Care Act does not require FFE States to establish and enforce ECP certification criteria and review programs for QHP issuers; if an FFE State elects not to establish any of these programs or is not approved to do so, HHS must establish and operate the programs in that State. As part of this finalized policy, we will not require that FFE States elect to conduct ECP certification reviews as part of the Effective ECP Review Program. Rather, we are finalizing additional flexibilities to allow FFE States with the desire to conduct ECP certification reviews to have an opportunity to do so, provided they have sufficient authority and the technical capacity to conduct these reviews by meeting the applicable criteria in § 155.1051. Thus, FFE States that elect to perform their ECP certification reviews and undergo HHS' determination process for assessing if an FFE State has an Effective ECP Review Program will be willingly assuming this responsibility.
We sought comment on these impacts and assumptions.
We did not receive any comments in response to the proposed impact estimates for these policies as part of the regulatory impact analyses. However, several commenters raised general concerns on the potential cost impacts to consumers, ECPs, and issuers if the minimum percentage requirement is reduced to 20 percent. Please see our response to this discussion in section III.E.11.a. of this final rule. For the reasons outlined in the final rule, we are finalizing these estimates with modifications to reflect the impacts associated with not finalizing the proposed minimum percentage reduction. These modifications include no projected impacts due to retaining the minimum percentage at 35 percent on consumer's access to continuous care and out-of-pocket costs, and administrative costs to issuers.
We are finalizing a number of revisions to part 155 and part 156 to allow plans that do not use a network (non-network plans) to obtain QHP certification by demonstrating sufficient access to a broad range of providers in a manner consistent with sections 1311(c)(1)(B) and (C) of the Affordable Care Act. Non-network plans will be permitted to obtain QHP certification effective PY 2028, if satisfying all
Non-network plans may typically attract healthier enrollees who are generally more willing and able to engage in a sufficient number of price negotiations with providers to benefit from the value a non-network plan can provide. Conversely, individuals requiring frequent care may prefer enrolling in network plans to avoid the need to conduct price negotiations for a greater volume of needed care. This, in turn, naturally leads to favorable risk selection in non-network plans. Consequently, under this finalized policy, non-network plans should anticipate and budget for risk adjustment transfers in their premium calculations, at least to the extent that the issuers of such plans do not already have sufficient reserves at hand to be able to pay an expected high risk adjustment transfer amount.
This dynamic also means that non-network plans may tend to have lower premiums than network plans, so we expect that they would tend to be among the least expensive plans in a particular area. This could affect premium tax credits to the extent that non-network plans are the lowest and/or second-lowest cost silver plan in that area.
We sought comment on these impact estimates and assumptions.
While commenters did not specifically comment on the proposed estimates within this section, commenters shared concerns consistent with this discussion regarding consumer out-of-pocket costs and balance billing risks, financial impacts on providers unable to negotiate benefit amounts with non-network plans, the likelihood for non-network plans to lower health care costs, non-network plans potentially affecting the benchmark for advanced premium tax credits, and the possibility for non-network plans to alter risk pools by attracting healthier enrollees. Please refer to our responses to these concerns in III.E.12. of this final rule. For the reasons outlined in the proposed and final rule, we are finalizing these estimates.
We are finalizing our proposal to modify § 156.480 to clarify HHS' authority to audit or conduct a compliance review to assess issuers' compliance with requirements related to the APTC, CSR, and user fee programs. Specifically, we are clarifying that under § 156.480(c), HHS or its designee may audit or conduct a compliance review to assess compliance with all requirements related to the APTC, CSR, and user fee programs applicable to issuers offering a QHP in an Exchange. For consistency, we are also finalizing our proposal to make conforming changes to § 156.480(c)(6) to provide that in instances where HHS enforces compliance with any requirements related to the APTC, CSR, and user fee programs for QHP issuers participating in State Exchanges or SBE-FPs, HHS may do so in accordance with § 156.805. We are further clarifying that the compliance review authority in § 156.480(c) allows for compliance reviews on an as needed or annual basis.
We estimate that the audits that we will conduct under this authority will not impose additional costs beyond what is already accounted for in the audit review process (86 FR 24140, 24281). We estimate that we will conduct compliance reviews under this authority to address systemic issues for approximately 150 issuers each year. We estimate that it will take a business operations specialist 10 hours (at a rate of $78.14 per hour) to compile and submit data and other information necessary for a compliance review. We estimate it will take a compliance officer (at a rate of $75.40 per hour) 4 hours to review and sign off on the submission. The cost per issuer to develop and submit the compliance information will be approximately $1,083.
The total annual cost to issuers undergoing compliance reviews will be approximately $162,450 ($1,083 × 150 issuers) beginning in 2026. However, conducting compliance reviews on an as needed or annual basis if determined appropriate by HHS to assess issuer compliance with requirements related to the APTC, CSR, and user fee programs may reduce the amount of APTC overpayments and result in HHS recouping those overpayments. Further, this additional information could assist issuers in correcting their data for APTC payments not received in advance of the 3-year window, after which HHS only recoups overpayments.
We sought comment on the proposed impact estimates and assumptions.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed and final rules, we are finalizing these estimates with modifications to update for the current adjusted hourly wage rates used in burden estimates provided in Table 14 of part IV.A.
We are finalizing our proposal to amend § 156.805 to reiterate what HHS considers when imposing CMPs as enforcement remedies against QHP issuers in Exchanges. Specifically, we are amending § 156.805(b) to provide that HHS, in determining the amount of CMPs, will identify the lawful purpose or purposes of the CMP.
We are also finalizing our proposal to clarify the authority HHS has to impose CMPs against issuers in State Exchanges and SBE-FPs for identified violations. Specifically, we are amending § 156.805(f) to clarify that, when HHS' authority to enforce requirements in State Exchanges and SBE-FPs is triggered, HHS may impose CMPs against issuers in State Exchanges and SBE-FPs for violations of requirements described in § 156.805(a) that are applicable to issuers offering a QHP in a State Exchange or SBE-FP.
We do not believe that the finalized amendments will impose substantial additional costs to HHS beyond the costs that are already accounted for as part of the existing bases and process for imposing CMPs in the FFE, State Exchanges, and SBE-FPs. This is an existing policy that already applies broadly to those issuers participating on the Exchange, and since this amendment does not independently add
On balance, we anticipate that this finalized policy will streamline our compliance and enforcement processes and limit the administrative burden for evaluating Exchange standards and requirements applicable to issuers offering QHPs participating in Exchanges.
We sought comment on these impact estimates and assumptions.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed.
We are finalizing our proposal to amend to § 156.903 to provide that an ALJ presiding over an appeal of a sanction imposed in accordance with § 156.805 may issue subpoenas, upon his or her own motion or at the request of a party, if they are reasonably necessary for the full presentation of a case and to add procedures governing the process for issuing subpoenas. We are also finalizing our proposal to amend § 156.935 to ensure that the discovery provisions set forth therein do not apply to appeals of proposed CMPs to be assessed under § 156.805 that result from violations identified in audits under § 156.480(c).
We do not believe that the finalized amendments will impose additional costs to HHS beyond what is currently accounted for in appeals to the DAB. The DAB's procedures include subpoena procedures which follow the procedures established by a program's regulations. We also do not believe the finalized amendments to exclude appeals of CMPs to be assessed under § 156.805 that result from violations identified in audits under § 156.480(c) from discovery will impose additional costs on HHS or issuers, as both parties would be able to provide and obtain information during the audit and informal refutation process and obtain publicly available information that would help to develop a record for appeal.
We sought comment on these impact estimates and assumptions.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed.
As discussed in section IV.U of this final rule, there is no information collection associated with this finalized policy and no changes were proposed to the QIS data collection requirements applicable to QHP issuers.
We sought comment on this impact estimate and assumption.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed.
We are finalizing our proposal to amend the payment and collections processes set forth at § 156.1215(b) to provide that any CMPs assessed against health insurance issuers for violations of any applicable Exchange standards and requirements or PHS Act requirements applicable health insurance issuers, will be subject to netting as part of HHS' integrated monthly payment and collections cycle. We also finalize our proposal to amend § 156.1215(c) to provide that any amount owed to the Federal Government by an issuer and its affiliates for unpaid CMP amounts, after HHS nets amounts owed by the Federal Government under these program affiliates, will be the basis for calculating the determination of the debt.
We do not believe that the finalized amendments will impose additional costs to HHS beyond costs that are already accounted for as part of the existing payment and collections process. The existing payment and collection process uses netting as one means to collect debts from health insurance issuers. The finalized amendments provide that HHS will use the existing process to collect unpaid amounts for CMPs assessed against issuers and their affiliates operating under the same tax identification number that are already subject to netting. This finalized policy also reduces the number of payments and charges flowing back and forth between HHS and issuers, allowing for more efficient collections.
Therefore, we anticipate this finalized policy will streamline the payments and collections processes and limit the administrative burden for operating our programs.
We sought comment on these impact estimates and assumptions.
We did not receive any comments in response to the proposed impact estimates for this policy. For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed.
As discussed in the 2027 Payment Notice proposed rule, due to the uncertainty involved with accurately quantifying the number of entities that would review the rule, we assumed that the mid-point between the total number of unique commenters on the 2026 Payment Notice proposed rule (269) and the number of page views on the
We sought comment on these estimates and assumptions.
We did not receive any comments in response to the proposed estimates for this policy. For the reasons outlined in the proposed and final rules, we are finalizing these estimates with the following modifications. The mid-point between the actual number of comments received for the 2027 Payment Notice proposed rule (2,861) and the number of page views on the
In the regulatory impact analysis of this final rule, we include impact analyses and estimates for each finalized policy separately, as we intend for each provision to be severable from the rest. Please see section III.I. of this final rule for a more detailed discussion on the severability of the provisions of this rule. However, we anticipate that the provisions of this final rule, while severable, may work in concert with each other and affect many of the same individuals seeking coverage through the individual health insurance market. Therefore, the overall impact of this final rule will likely be less than the simple accumulation of the individual provisions' impact analyses. To the best of our ability, we provide overall impact estimates of these provisions for enrollment, premiums, and APTC, that minimize the overlap of individuals affected.
The baseline starts with internal CMS data of enrollment by month, premiums, and APTCs, we summarize the data using average monthly amounts. These monthly averages are projected throughout the year using historical monthly patterns during a similar environment. For future years, the enrollment is trended by the projected growth in the under age 65 population, however, there is a decrease in 2028 enrollment due to the expected impact of the WFTC legislation which is expected to reduce the level of improper enrollments through additional eligibility verification standards. Spending amounts are trended using projected growth in NHEA less Medicare. While effectuated enrollment numbers are unavailable at this time, we have increased the 2026 average baseline enrollment by 1.151 million to 18.861 million compared to the 17.71 million baseline used in the proposed rule based on enrollee activity we have seen so far in 2026. Moreover, our 2027 baseline enrollment is 18.881 million compared to the 17.729 million in the proposed rule. We have also reduced the impact of the under 150 percent FPL SEP that was included in the proposed rule.
Based on the analysis presented thus far in this section, we expect average enrollment for 2027 to decrease between 1.2 and 2 million enrollees compared to baseline estimates. We expect average premium PMPMs to range from 1.2 percent to 1.8 percent lower compared to the baseline scenario before normal premium trends. Many enrollees will discontinue coverage when stronger eligibility verifications identify they are no longer eligible for subsidies, and we believe it is likely that healthier enrollees are more likely to discontinue coverage. The expected worsening of morbidity in the market is offset by protecting against adverse selection with pre-enrollment SEP verification, removal of the SEP for those under 150 percent FPL, and a reduction in exchange user fee charges.
We have estimated a 1.7 percent increase in premiums in the scenario where 1.2 million enrollees leave the market and a 2.4 percent premium increase if 2 million enrollees leave. These premium impact estimates assume the 1.2 million leaving enrollees have average claims expenses that are 75 percent of the average risk pool and the 2 million leaving enrollees have average claims expenses that are 80 percent of the average risk pool. If the average claims PMPM is 86 percent of the premium PMPM (0.86 × $764.28 = $657.28), we estimate the 1.2 million exiting enrollees have claims costs of $492.96 PMPM (0.75 × 657.28 = 492.96), and the remaining 17.681 million enrollees have an average claims cost of $668.44 (1.2/18.881 × 492.96 + 17.681/18.881 × 668.44 = 657.28). Comparing the new claims PMPM of $668.44 to the prior claims PMPM of $657.28 shows a 1.7 percent increase in average claims (668.44/657.28−1 = 0.017). Similarly, if 2 million enrollees leave the market, they are likely to be closer to the average claims cost of the market, so we estimate this population averages 80 percent of the average risk pool cost or $525.83 PMPM (0.80 × 657.28 = 525.83). If 2 million enrollees with average claims cost of $525.83 leave the risk pool, the remaining 16.881 million enrollees would have an average claims cost of $672.86 (2/18.881 × 525.83 + 16.881/18.881 × 672.86 = 657.28), which is 2.4 percent higher than the baseline claims PMPM. Assumptions regarding the relative health of the population leaving the market compared to the health of the average population were further informed considering various economic studies. Consistent with Tebaldi's (2023) research
These increases are offset by pre-enrollment SEP verification to improve the health of the risk pool from adverse selection by removing opportunities for unauthorized enrollment and plan switches. With loss of enhanced subsidies and an increase in the member shared responsibility payment, an enrollment option always being available encourages healthier individuals to forgo coverage and wait until they are sick to enroll in an
The FFE user fee is being reduced to 1.9 percent of monthly premiums, and the SBE-FP user fee rate is being reduced to 1.5 percent, so we reduce the premium estimate by 0.4 percent beginning in 2027. The 0.4 percent premium reduction was calculated using total premiums by State to weight the user fee reduction across all States to obtain an overall market premium impact for this change. Overall, after accounting for the market morbidity impact along with policies aimed at mitigating adverse selection, premiums are expected to be 1.2 percent lower in the 1.2 million enrollment scenario and 2.4 percent lower in the 2 million enrollment scenario in 2027 compared to the baseline scenario before normal premium trends.
For the 1.2 million enrollment scenario, premium trend is estimated to increase by 4.5 percent for 2027 and 4 percent the following years. Premium trend is estimated to increase by 6 percent for 2027 and 4.5 percent in the following years for the 2 million enrollment scenario. Starting with a 2026 premium PMPM of $736.36 and applying the adjustments mentioned previously, we arrive at estimated premium PMPMs of $760.66 in the 1.2 million enrollment scenario and $767.28 in the 2 million enrollment scenario [736.36 × (1 + 0.045 + 0.017-0.02-0.005-0.004) = 760.66 and 736.36 × (1 + 0.06 + 0.024-0.03-0.008-0.004) = 767.28]. We assume APTC PMPMs will be approximately 88.5 percent of premium PMPMs, leading to projected 2027 APTC PMPMs of $673.18 for the 1.2 million enrollment scenario and $679.05 for the 2 million enrollment scenario (760.66 × 0.885 = 673.18 and 767.28 × 0.885 = 679.05).
Future enrollment is expected to shrink by 2.3 percent for 2028 as these policies continue to take full effect. We estimate modest enrollment increases of 0.3 percent for 2029 and 0.03 percent for 2030.
While not specifically accounted for in these estimates, we further expect a decrease in average premiums and APTC payments resulting from better estimates of the CSR load factor. By providing guidance that the CSR load factor must be set to only collect expected unpaid CSR amounts and not inappropriately inflate Federal expenditures, the likely result will be reduced benchmark plan premiums in several states which will also cause a shift in metal tier enrollment distribution. These additional premium decreases will potentially lead to net reduction in premium under this final rule.
This final rule finalizes updates to policies that were previously finalized with an earlier effective date in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074), including § 155.305(f)(4) Failure to File and Reconcile (FTR), § 155.320(c)(3)(iii) Income Verification when Data Sources Indicate Income Less than 100 Percent of the FPL, § 155.320(c)(5) Income Verification When Tax Data is Unavailable, and § 155.420(g) Pre-Enrollment Special Enrollment Period Verification. Although these policies were initially finalized in the 2025
While we cannot postulate on active judicial proceedings, we have considered the regulatory impact if this stay was lifted and these provisions from the 2025 Marketplace Integrity and Affordability final rule became effective. If the stay is lifted in PY 2026, these provisions may become effective in PY 2026, but there still may be an operational delay in effectuating the policies. If the provisions become effective in PY 2026, the regulatory impacts that were estimated in the 2025 Marketplace Integrity and Affordability final rule would be in effect for PY 2026. From PY 2027, the ongoing regulatory impacts that are estimated in this final rule would be in effect. Any costs to sunset the provisions that were estimated in the 2025 Marketplace Integrity and Affordability final rule would be nullified if this final rule is finalized as proposed because the policies would continue beyond PY 2026. We do not anticipate additional impacts beyond what has been estimated in the 2025 Marketplace Integrity and Affordability final rule and this final rule. If the court stay is lifted after PY 2026 and this rule is finalized as proposed, we do not anticipate additional regulatory impacts from the court decision, as the policies in this final rule will be in effect, and we have estimated the regulatory impacts under the relevant provisions in this final rule.
Due to the uncertainties mentioned previously, we are unable to further quantify the impact regarding the active court proceedings. We sought comment on these estimates and assumptions.
We did not receive any comments in response to these proposed impact estimates. For the reasons outlined in the proposed and final rules, we are finalizing these estimates as proposed.
CMS created a Frequently Asked Questions (FAQ) document to help address the issue of what is considered “taking an action” as it relates to regulatory requirements for creating documentation related to eligibility application review and consumer consent, as per § 155.220(j)(2)(ii)(A) and (j)(3)(iii)(A), respectively. However, adding this language solely to sub-regulatory guidance, such as an FAQ, would not provide HHS with the necessary enforcement authority when we are reviewing documentation submitted by agents/brokers related to documenting consumer eligibility application requirements and consent documentation. Therefore, it was determined that updating the regulations in § 155.220 was necessary.
When developing the finalized proposal to expand the marketing regulations to improve our enforcement authority related to misleading marketing, we considered creating an FAQ document to notify agents, brokers, and web-brokers of certain prohibited behaviors related to marketing practices. However, adding this language solely to sub-regulatory guidance, such as an FAQ document, would not provide HHS with the necessary enforcement authority when we discover misleading marketing. Therefore, it was determined that updating the regulations in § 155.220 was necessary.
In developing the SEIPM policies contained in this final rule (§ 155.1600), we considered the lessons learned while implementing IPPTA. During IPPTA, HHS engaged with 19 State Exchanges to test measurement processes. We considered several data collection options and chose the primary option as that which provides the greatest amount of reliability and flexibility in providing the data that supports the payment decisions and calculations of APTC made by State Exchanges.
In regard to the finalized SEIPM, HHS considered several alternative approaches. For the implementation timeline, HHS considered alternative implementation timelines for SEIPM beyond the finalized January 1, 2027 effective date. Alternatives for extending the implementation timeline to 2028 or 2029 were considered as they would have provided HHS the window to evaluate all of the results from IPPTA as well as afford State Exchanges with additional preparation time. Delaying the implementation beyond 2027 would delay HHS' ability to meet PIIA requirements for comprehensive improper payment measurement across all APTC programs. The January 2027 effective date balances the need for adequate State Exchange preparation time with Federal statutory obligations, particularly given the foundational framework established through the IPPTA with the large bulk of operational processes associated with collecting information from the State Exchanges being completed. IPPTA will continue through the end of 2026 and we will continue to assess lessons learned for incorporation into the SEIPM implementation.
For the data collection requirements, HHS evaluated alternate approaches that would have required more limited data submissions from State Exchanges. One alternative considered was limiting data collection to only basic enrollment and payment information, which would have reduced State Exchange burden but would not have provided sufficient detail to conduct comprehensive improper payment reviews that meet PIIA standards. For sampling methodology, HHS considered alternative approaches to the proposed stratified random sampling methodology. One alternative considered was using a simple random sampling approach without stratification, which would have been easier to implement but would have been less efficient in detecting errors and would have required larger sample sizes to achieve the same level of statistical precision. HHS also considered implementing a static sample size approach that would have applied the same sample size across all State Exchanges regardless of their APTC volume or operational characteristics. While this approach would have simplified program administration and ensured consistent measurement effort across all participating Exchanges, it would have resulted in imprecise estimates for smaller State Exchanges and inefficient resource allocation for larger Exchanges, failing to optimize statistical precision relative to program risk and Federal investment. HHS also evaluated implementing more prescriptive enforcement mechanisms with automatic penalties for noncompliance but determined that the proposed graduated enforcement approach with due process protections and opportunities for corrective action better supports the collaborative relationship necessary for successful program implementation while maintaining appropriate accountability for State Exchange compliance with Federal oversight requirements.
Finally, in considering the SEIPM, we evaluated the option of publishing individual rates for each SBE, rather than an aggregate rate for all State Exchanges. Achieving an appropriate level of precision (that is, a margin of error less than +/−5 percent) for such an approach, however, would require doubling the sample sizes used which would incur an additional $25 million Federal and $1.5 million State cost annually. Therefore, we did not adopt this approach.
In considering modifications to the programmatic audit requirements under § 155.1200(c), HHS evaluated several alternatives. These included maintaining the existing audit requirement for State Exchanges that
In developing this finalized policy to require issuers that make plan-level adjustments to account for unreimbursed CSRs to submit specified CSR data elements in the URRT and Actuarial Memorandum, HHS considered several alternative approaches. One alternative considered was to maintain the current policy as outlined in the 2025 Rate Filing Guidance, which would have continued to rely on reporting of CSR-related information in the Actuarial Memorandum without adding explicit URRT fields. However, this approach would not have achieved the policy goal of ensuring consistency and comparability across issuers and States in the reporting of CSR load methodologies and amounts. HHS also considered permitting issuers to use alternative or simplified methodologies for estimating CSR amounts paid on behalf of enrollees, leveraging existing internal calculations that may vary by issuer. While this approach could have reduced issuer burden, it would have resulted in inconsistent data and limited the ability of State and Federal regulators to assess whether CSR load adjustments are actuarially justified. Finally, HHS considered not requiring submission of CSR data at all, leaving such determinations entirely to State review processes. However, this would not have provided HHS and State regulators with standardized, plan-level information needed to ensure transparency and regulatory oversight of CSR loading practices. The finalized approach—requiring consistent data reporting through the URRT and Actuarial Memorandum using the standard methodology under § 156.430(c)(2)—balances the need for improved data comparability and regulatory oversight with the goal of minimizing additional issuer burden by leveraging existing data and familiar calculation methodologies.
We considered maintaining the vendor program, which would allow the opportunity for approved third-party vendors to facilitate agent and broker annual registration and training in addition to having the training and registration process available through the CMS Marketplace Learning Management System (MLMS), but determined the benefits of terminating the vendor program outweighs the costs of maintaining the existing policy with both programs. As such, we did not consider other regulatory alternatives, as removing § 155.222, which would allow HHS to sunset the vendor program, would maintain agent and broker accessibility to training and registration while reducing costs.
We provided examples of alternatives that we considered but did not implement when confronting the incongruence between section 1302(c) through (e) of the PPACA, such as trending the AV Calculator to account for changes in the standard population. However, we believe such a change would make the AV Calculator likely contrary to of the Affordable Care Act and generally accepted actuarial standards. Therefore, we do believe that a real conflict exists, and that the best way to solve the conflict is to give issuers the flexibility, at their option, to offer bronze plans exceeding the standard annual limitation on cost sharing as long as they offer a bronze plan that meets the standard annual limitation on cost sharing per § 156.136, and further differentiate catastrophic plans through a higher required annual limitation on cost sharing per § 156.155(3)(a)(ii).
We considered a range of regulatory alternatives for the finalized policy to discontinue the full suite of standardized plan options policies effective beginning in PY 2027. Under the finalized provision, we will remove the following from our regulations: the definition of “standardized option” at § 155.20; all requirements pertaining to standardized plan options at § 156.201 (the requirements for FFE and SBE-FP QHP issuers in the individual market to offer these plans at paragraphs (a) and (b) as well as the requirement for these plans to meaningfully differ from one another at paragraph (c)); the differential display of standardized plan options on
We considered several regulatory alternatives that could potentially allow us to achieve the same goals of simplifying the plan selection process and reducing burden without discontinuing this suite of policies in its entirety. In particular, we considered continuing to require issuers to offer standardized plan options but only at particular metal levels, such as the bronze and silver metal levels (instead of at every metal level at which they offer non-standardized plan options). We also considered requiring issuers to offer standardized plan options only in certain service areas in which they offer a certain number of non-standardized plan options. We also considered transitioning from requiring issuers to offer these standardized plan options to once more allowing issuers to voluntarily offer them—as was the approach with the previous iteration of the policy—while we continue to maintain the differential display of these plans on
However, based on our experience administering this suite of policies from PY 2023 through PY 2026, we have determined that this suite of policies has failed to meaningfully enhance the consumer experience, increase consumer understanding, and simplify the plan selection process—our originally articulated objectives. Furthermore, imposing these requirements has increased burden for both issuers and HHS (for example, by requiring issuers to create and submit certification applications for additional plans), impeded issuer innovation in plan design, unnecessarily constrained consumer choice, and caused significant market disruption. Additionally, based on our experience administering the previous iteration of this suite of policies from PY 2017 through 2019 (when standardized plan options were voluntary and when there was no non-standardized plan option limit), we do not believe it would be an effective approach to once more revert to making it voluntary for issuers to offer these plans. This is primarily because when there was no requirement for issuers to offer these plans, few issuers chose to offer them, and fewer consumers chose to enroll in them.
Furthermore, we do not believe HHS is positioned to impose a “one size fits all” approach standardized plan option designs for an environment as heterogenous as the FFEs (such as in terms of consumer demographics, health care needs, and preferences). We refer readers to the preamble section for the finalized policy to discontinue
We considered making the provisions requiring income verification when tax data is unavailable and income verification when trusted data sources indicate income less than 100 percent of the FPL optional for State Exchanges that demonstrate improper payment rates (that is, SEIPM) below the Federal rate (that is, FEIPM). Under the current finalized policy, we will impose these requirements on all Exchanges starting in PY 2027. We considered this regulatory alternative in light of the fact that some analysis
We considered taking no action regarding modifications to § 155.400(g), which would have allowed the FFE, SBE-FPs, and State Based Exchanges to allow issuers to adopt a fixed-dollar premium payment threshold and/or a gross premium-based percentage payment threshold. We also considered removing just the gross premium fixed-dollar threshold policy and allowing issuers the option to utilize the fixed-dollar premium threshold, since the gross premium percentage-based threshold could allow an enrollee with a larger gross premium to remain enrolled in coverage for a longer period of time and accumulate a higher amount of debt. However, given the continued numbers of improper enrollments and plan switches and other improper enrollment trends, both the fixed-dollar and gross-premium percentage-based thresholds present program integrity risks that may allow consumers (and Medicaid beneficiaries who are victims of dual improper enrollment into a QHP) to remain in coverage for a much longer or indefinite amount of time, after payment of the binder. Consumers who never wanted, or no longer need, QHP coverage could remain enrolled for longer than the 3-month grace period, accruing premium debt and potentially facing complications when they file their taxes. Issuers will still have the option to implement the existing net premium percentage-based policy to allow consumers who pay the majority of their premium to avoid being put into a grace period.
The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small entities. The RFA generally defines a “small entity” as (1) a proprietary firm meeting the size standards of the Small Business Administration (SBA), (2) a not-for-profit organization that is not dominant in its field, or (3) a small government jurisdiction with a population of less than 50,000. Individuals and States are not included in the definition of a “small entity.”
Title I of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) added a new title XXVII to the PHS Act to establish various reforms to the group and individual health insurance markets. These provisions of the PHS Act were later augmented by other laws, including the Affordable Care Act. Subtitles A and C of title I of the Affordable Care Act reorganized, amended, and added to the provisions of part A of title XXVII of the PHS Act relating to group health plans and health insurance issuers in the group and individual markets. The term “group health plan” includes both insured and self-insured group health plans. For summarized sections of the PHS Act and Affordable Care Act, please see section II.A. of this final rule.
These finalized provisions revise current regulations, and HHS does not anticipate any duplication, overlap, or conflict with other rules and regulations associated with these rules.
For the purposes of the RFA, we believe the following provisions could impact smaller agent, broker, and web broker firms.
We are finalizing amendments to §§ 155.220(j)(2)(ii)(A) and (j)(2)(iii)(A) to require agents, brokers, and web-brokers to use the HHS-approved and -created consumer consent form to meet the eligibility application review requirements and consent documentation requirements. Our finalized policy will eliminate the current broad allowances for meeting these requirements. The language in the regulation will also be changed to clarify what types of actions constitute “taking an action” to meet the regulatory requirements. The goal of this policy is to reduce confusion among agents, brokers, and web-brokers on what constitutes compliant eligibility application review documentation and what constitutes compliant consumer consent by ensuring objective standards, which protects consumers ultimately. These policies also greatly improve HHS' investigative abilities into agent, broker, and web-broker eligibility application review and consumer consent review by creating a clear and objective standard for all applications clearly outlining what HHS deems
The finalized regulatory amendments create a new standards of conduct section in § 155.220(j) describing marketing requirements. These requirements will list certain prohibited practices, provide HHS audit authority, and put agents, brokers, and web-brokers on notice that they are responsible for marketing created by their downstream entities. This finalized policy will allow HHS to increase its efforts to engage in compliance actions for misleading marketing by providing agents, brokers, and web-brokers notice of the types of activities that are prohibited, allowing HHS to review marketing materials for compliance, and ensure agents, brokers, and web-brokers are not able to push responsibility to third-parties. Creating a marketing standards of conduct section is necessary to protect consumers and maintain the integrity of the Exchanges. More information about this provision is available at section V.C.9. of this final rule.
For the purposes of the RFA, we believe the following provisions could impact smaller insurers.
The final rule will require issuers to report actual CSR amounts paid in the Market Experience section (2 years prior, using the standard methodology), projected CSR amounts in the current filing year in the Projections section, and CSR load factors in a new dedicated line item, among other proposed requirements. Issuers would also be required to provide an explanation of how these data points were used to determine the CSR load as part of the Actuarial Memorandum.
The finalized provisions will primarily affect health insurance issuers offering qualified health plans in the individual market, Federal and State regulators in their review capacity, and indirectly, Marketplace enrollees who receive cost-sharing reductions. The enhanced CSR reporting will enable issuers to more accurately determine their CSR payment amounts and improve future projections for rate setting. This could result in more appropriate premium levels if current CSR load factors are inaccurate or unreasonable, enabling issuers to better calibrate their load factors to adequately cover actual CSR costs, potentially leading to more stable and accurate premium pricing over time. More information is available at section V.C.3. of this final rule.
We are finalizing our proposal to modify § 156.480 to clarify HHS' authority to audit or conduct a compliance review to assess issuers' compliance with requirements related to the APTC, CSR, and user fee programs. Specifically, we are clarifying that under § 156.480(c), HHS or its designee may audit or conduct a compliance review to assess compliance with all requirements related to APTC, CSR, and user fee programs applicable to issuers offering a QHP in an Exchange. For consistency, we also are finalizing conforming changes to § 156.480(c)(6) to provide that in instances where HHS enforces compliance with any requirements related to APTC, CSR, and user fee programs for QHP issuers participating in State Exchanges or SBE-FPs, HHS may do so in accordance with § 156.805. We also are clarifying that the compliance review authority in § 156.480(c) allows for compliance reviews as needed or on an annual basis. More information about this provision is available at section V.C.32. of this final rule.
For purposes of the RFA, we believe that health insurance issuers and group health plans would be classified under the North American Industry Classification System (NAICS) code 524114 (Direct Health and Medical Insurance Carriers) or possibly be classified in 621491 (HMO Medical Centers). Based on latest available Statistics of U.S. Businesses (SUSB) data, 1,071 and 146 total firms fall under NAIC codes 524114 and 621491, respectively.
For purposes of the RFA, the Department consider agents, brokers, and web brokers classified under NAICS code 524210 (Insurance Agencies and Brokerages) that have annual receipts of $15 million or less to be small entities. According to the 2022 Statistics of U.S. Businesses data,
For the purposes of this RFA, the costs per agent, broker, and web broker summarized in sections V.C.8. and V.C.9. are expected to be representative of the average costs that would be incurred by small agents, brokers, and web brokers to comply with the provisions in this final rule. We outline
Regarding the costs related to requiring small agents, brokers, and web-brokers to use the HHS-approved and -created consumer consent form to meet the eligibility application review documentation requirements and the consumer consent documentation requirements, we estimate it would take approximately 10 minutes of time for an enrolling agent, broker or web-broker to meet eligibility application review documentation requirements and to obtain consumer, or their authorized representative, affirmation of their consent. Using the current adjusted hourly wage rate of $58.04
As stated in IV.D of this final rule, we do not anticipate many costs for the agents, brokers, or web-brokers we investigate for misleading marketing. We believe responding to HHS requests to provide confirmation they removed the ads and/or reviewed the marketing guidelines would not be overly time-consuming or burdensome. Our notifications to the agents, brokers, or web-brokers detail what response is required and provide hyperlinks to the noncompliant ad(s). We estimate it would take each agent, broker, or web-broker one hour to remove any noncompliant ad(s), and/or review the marketing guidelines, and respond to HHS via email. This estimate incorporates the potential of HHS asking these agents, brokers, and web-brokers to provide advertisements for HHS' review. Using the hourly wage rate for an insurance sales agent from Table 14 in section IV.A. of this final rule ($58.04), the cost of responding to HHS would be $58.04 per response. The total cost for small agents, brokers, and web-brokers would be contingent on the number of responses from these smaller firms, with the upper bound estimate being 24 responses estimated for all agents, brokers, and web brokers regardless of firm size. Please see sections IV.D. and V.C.9. of this final rule for more information.
For the purposes of this RFA, the costs per issuer summarized in sections V.C.3. and V.C.32 of this final rule are expected to be representative of the average costs that would be incurred by small issuers to comply with the provisions in this final rule. We outline those proposed assumptions and estimates later in this section.
As discussed in section III.C. of this final rule, this rule is finalizing our proposal to change the instructions for the URRT so that issuers will enter the actual amount of CSRs they paid for enrollees (2 years prior), the amount of CSRs they expect to provide to enrollees, and add a new field to gather the “load amount.” Issuers will incur ongoing burden to gather the three required values and enter them into the URRT in their appropriate places. The annual cost and burden per issuer to update and run the standard methodology calculations is $572,118 at 5,700 hours. The annual cost and burden per issuer to provide CSR related information in the URRT is $429.47 at 3.6 hours. The annual cost and burden per issuer to provide CSR calculation explanations in the Actuarial Memorandum is $1,718.27 at 14.2 hours. The total annual ongoing cost for 16 small issuers is $9,188,251.84 at 91,488 hours. We estimate that each issuer will incur an initial one-time cost of $1,114,236 at 11,400 burden hours in 2026 to develop and implement a claim-level re-adjudication process using the standard methodology set forth in § 156.430 to produce the required values, which totals $17,827,776 at 182,400 for 16 small issuers. Please see sections IV.B. and V.C.3. of this final rule for more information.
In regard to modifying § 156.480 to clarify HHS' authority to audit or conduct a compliance review to assess issuers' compliance with requirements related to the APTC, CSR, and user fee programs, we estimate that the audits that we conduct under this authority will not impose additional costs beyond what is already accounted for in the audit review process (86 FR 24140, 24281). We estimate that it will take a business operations specialist 10 hours (at a rate of $78.14 per hour) to compile and submit data and other information necessary for a compliance review. We estimate it will take a compliance officer (at a rate of $75.40 per hour) 4 hours to review and sign off on the submission. The cost per issuer to develop and submit the compliance information would be approximately $1,083. The total cost for small issuers is contingent on the number of small issuers selected for a compliance review each year (out of the 150 estimated regardless of firm size in section V.C.32. of this final rule). Please see section V.C.32. of this final rule for more information.
We anticipate small issuers could be impacted by other provisions in this final rule. However, we are unable to quantify the impact of these changes on small issuers due to uncertainty regarding their market share, market participation, membership in larger holding groups, enrollment and risk mix, and APTC receipts. However, we anticipate that there would not be a significant change in revenue for issuers as a reduction in APTC payments would mean consumers would be responsible for the balance of the premium not covered by APTC. Yet, we also acknowledge that due to the reductions in enrollment anticipated to result from the policies in this final rule, including the potential reduction in APTC to consumers resulting in increased premiums and choosing not to maintain coverage due to affordability constraints, issuers may experience a reduction in premium revenue. However, we anticipate this could be balanced by a reduction in claims experience, and we are unable to quantify this impact on small issuers due to uncertainty.
The data and conclusions presented in this section, along with the rest of the RIA, amount to our final regulatory flexibility analysis under the RFA.
We sought comment on the estimates and assumptions.
For the reasons outlined in the proposed and final regulatory flexibility analyses, we are finalizing the previous estimates.
As discussed in section V.C.37. of this final rule, we anticipate that entities such as issuers, including small issuers and agents/brokers, would face regulatory review costs as a result of needing to familiarize themselves with this final rule. The cost per entity to review this final rule is estimated to be $741.77. The total cost for 16 small issuers to review this rule is estimated to be $11,868.32. We anticipate that agents, brokers, and web brokers would also incur costs to review this final rule, however, we do not have reliable data on the number of agents, brokers, and web brokers that would review this rule and therefore do not estimate the total burden for these entities. We sought comment on the number of agents, brokers, and web brokers that may review this rule and the associated costs.
We did not receive any comments in response to our proposed regulatory review costs. Therefore, we are finalizing these estimates.
For regulatory alternatives considered regarding the provisions in this final rule, please see section V.D. of this final rule.
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area and has fewer than 100 beds. While this final rule is not subject to section 1102 of the Act, we have determined that this rule would not affect small rural hospitals. Therefore, we anticipate this final rule would not have a significant impact on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2026, that threshold is approximately $193 million. Although we have not been able to quantify all costs, we expect that this final rule would not impose a mandate that would result in the expenditure by State, local, and Tribal Governments, in the aggregate, or by the private sector, of more than $193 million in any 1 year.
Executive Order 13132 establishes certain requirements that an agency must meet when it issues a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications.
In compliance with the requirement of E.O. 13132 that agencies examine closely any policies that may have Federalism implications or limit the policy making discretion of the States, we have engaged in efforts to consult with and work cooperatively with affected States, including participating in conference calls with and attending conferences of the NAIC, and consulting with State insurance officials on an individual basis.
While developing the proposed rule and this final rule, we attempted to balance the States' interests in regulating health insurance issuers with the need to ensure market stability. By doing so, we complied with the requirements of E.O. 13132.
Because States have flexibility in designing their Exchange and Exchange-related programs, State decisions would ultimately influence both administrative expenses and overall premiums. States are not required to establish an Exchange or risk adjustment program. For States that elected previously to operate an Exchange, those States had the opportunity to use funds under Exchange Planning and Establishment Grants to fund the development of data. Accordingly, some of the initial cost of creating programs was funded by Exchange Planning and Establishment Grants. After establishment, Exchanges must be financially self-sustaining, with revenue sources at the discretion of the State. Current State Exchanges charge user fees to issuers.
In our view, while this final rule will not impose substantial direct requirement costs on State and local governments, this regulation has Federalism implications due to potential direct effects on the distribution of power and responsibilities among the State and Federal Governments relating to determining standards relating to health insurance coverage that is offered in the individual and small group markets.
We have examined the federalism implications involved in finalizing our proposal to revise § 155.170(a) to provide that any State-required benefits would be considered “in addition to EHB” (and thus not an EHB) if they are: required by a State action taking place after December 31, 2011; applicable to the small group and/or individual markets; specific to required care, treatment, or services; and not required by State action for purposes of compliance with Federal requirements. While developing this finalized policy, we considered our longstanding engagement with States regarding their benefit mandates and the operation and impact of the statutory defrayal requirement, including discussions with State insurance officials over time about how State mandates affect affordability and Federal and State financial impacts. In developing this finalized policy, we sought to balance States' interests in regulating health insurance issuers with the need to promote market stability and affordability, and we believe this approach appropriately respects State authority while advancing the objectives of the Affordable Care Act. As finalized, we expect that there would be increased costs to any States that would have to defray the cost of benefits that would be considered “in addition to EHB.”
In addition, we believe this final rule does have Federalism implications due to system and operation costs associated with requiring the four State Exchanges that process their own hardship exemptions to process the additional hardship exemptions expected due to the amendment to § 155.605(d)(1) in this final rule. However, the Federalism implications are mitigated as this final rule would not preempt State law, as it provides States with flexibility to either process hardship exemptions themselves or delegate this function to HHS under existing regulatory provisions at § 155.605(d), thereby avoiding any Federalism implications that would trigger the requirements of Executive Order 13132.
Additionally, in this final rule, HHS finalizes new State flexibilities for provider access reviews and/or ECP certification reviews, which have
Additionally, we believe this final rule also has Federalism implications for both policies related to income verification in cases where a consumer attests to an income at or above 100 percent of the FPL but the IRS returns data below 100 percent of the FPL as well as in cases where the IRS returns no income data for a household. Specifically, States will incur one-time implementation costs as well as annual operating costs for the policies, and, in the case of the below 100 percent FPL policy, requiring State Exchanges to set continue the income verification when IRS returns data below 100 percent of the FPL but households attest to income at or above 100 percent of the FPL. However, this is mitigated by no longer requiring Exchanges to accept attestations in cases where the IRS returns no income for a household. Additionally, the Federalism implications are mitigated by the benefits to ensuring Marketplace stability, particularly through addressing continued potential fraud.
We also believe this final rule has Federalism implications for the amendment of the failure to file and reconcile policy at § 155.305(f)(4) in this final rule. Specifically, States will incur one-time implementation costs as well as annual operating costs for their failure to file and reconcile policies. Federalism implications are mitigated by the benefits to the Marketplace by removing unauthorized enrollments and lessening the potential for consumers to generate potentially large tax liabilities.
In addition, we believe this final rule's provisions related to cost sharing for catastrophic plans at § 156.155(3)(a)(ii) and for some bronze plans at § 156.136 present implications for State authority and impact, but do not rise to the definition set in Executive Order 13132 because Section 1302(c)(1) of the Affordable Care Act establishes the annual limitation on cost sharing that applies to health plans offered in the individual and small group markets, and we are only reiterating that States may not set a different annual limitation on cost sharing than the limitation established under section 1302(c)(1) of the Affordable Care Act, nor may States set a different limit under existing statute. States may decline to certify plans designed with the flexibility we are finalizing to allow higher annual limitation on cost sharing than previously permitted. The optionality of the sale of these plans further shows that this this rule does not impose substantial direct compliance costs on State and local governments beyond those already required by the existing statutory framework, nor does it set a standard that would preempt State law. Rather, this rule provides additional flexibility within the boundaries Congress established, and it does not alter the fundamental statutory relationship between Federal and State authority for the annual limitation on cost sharing.
Executive Order 14192, entitled “Unleashing Prosperity Through Deregulation” was issued on January 31, 2025, and requires that “any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least 10 prior regulations.” This rule is exempt from otherwise-applicable requirements under E.O. 14192, per footnote 1 of OMB's Accounting Methods.
This final regulation is subject to the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801
Mehmet Oz, Administrator of the Centers for Medicare & Medicaid Services, approved this document on May 11, 2026.
Administrative practice and procedure, Health care, Health insurance, Intergovernmental relations, Penalties, Reporting and recordkeeping requirements.
Administrative practice and procedure, Health care, Health insurance, Penalties, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Brokers, Conflict of interests, Consumer protection, Eligibility criteria, Exemptions, Grants administration, Grant programs-health, Health care, Health insurance, Health maintenance organizations (HMO), Health records, Hospitals, Indians, Individuals with disabilities, Intergovernmental relations, Loan programs-health, Medicaid, Organization and functions (Government agencies), Public assistance programs, Reporting and recordkeeping requirements, Technical assistance, Women and youth.
Administrative practice and procedure, Advertising, Advisory committees, Brokers, Conflict of interests, Consumer protection, Grant programs-health, Grants administration, Health care, Health insurance, Health maintenance organization (HMO), Health records, Hospitals, Indians, Individuals with disabilities, Loan programs-health, Medicaid, Organization and functions (Government agencies), Public assistance programs, Reporting and recordkeeping requirements, State and local governments, Sunshine Act, Technical assistance, Women, and Youth.
For the reasons set forth in the preamble, the Department of Health and Human Services and the Centers for Medicare & Medicaid Services amends 42 CFR part 600 and 45 CFR subtitle A, subchapter B, as set forth below:
Section 1331 of the Patient Protection and Affordable Care Act of 2010 (Pub. L. 111-148, 124 Stat. 119), as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111—152, 124 Stat. 1029).
42 U.S.C. 300gg through 300gg-63, 300gg-91, and 300gg-92, as amended.
In determining the amount of any civil money penalty, CMS will identify the lawful purpose or purposes of the penalty, and take into account the following factors as appropriate to the circumstances of the case:
42 U.S.C. 18021-18024, 18031-18033, 18041-18042, 18051, 18054, 18071, and 18081-18083.
The addition reads as follows:
(a) * * *
(2) Submit an Exchange Blueprint application for HHS approval at least 15 months prior to the date on which the Exchange proposes to begin open enrollment as a State Exchange.
(i)
(ii)
(a)
(2) For plan years beginning on or after January 1, 2028, a State may require a QHP to cover benefits in addition to the essential health benefits, which are any State-required benefits that are:
(i) Required by a State action taking place after December 31, 2011;
(ii) Applicable to the small group and/or individual markets;
(iii) Specific to required care, treatment, or services; and
(iv) Not required by State action for purposes of compliance with Federal requirements.
(3) A State must make payments in accordance with paragraph (b) of this section to defray the cost of any State-required benefits in addition to the EHB.
(b) * * *
(1) Provides standardized comparative information on each available QHP and at a minimum includes:
The revisions and additions read as follows:
(j) * * *
(2) * * *
(i) Provide consumers with correct information, without omission of material fact, regarding the Federally-facilitated Exchanges, QHPs offered through the Federally-facilitated Exchanges, and insurance affordability programs, and refrain from conduct that is misleading (including by having a direct enrollment website that HHS determines could mislead a consumer into believing they are visiting
(ii) * * *
(A) Documenting that eligibility application information has been reviewed by and confirmed to be accurate by the consumer or the consumer's authorized representative must require the consumer or their authorized representative to take an action that produces a record that can be maintained by the individual or entity described in paragraph (j)(1) of this section and produced to confirm the consumer or their authorized representative has reviewed and confirmed the accuracy of the eligibility application information. For enrollments for plan years ending prior to January 1, 2028, non-exhaustive examples of acceptable documentation include obtaining the signature of the consumer or their authorized representative (electronically or otherwise), verbal confirmation by the consumer or their authorized representative that is captured in an audio recording, a written response (electronic or otherwise) from the consumer or their authorized representative to a communication sent by the agent, broker, or web-broker, or other similar means or methods specified by HHS in guidance.
(
(iii) * * *
(A) Obtaining and documenting the receipt of consent must require the consumer, or the consumer's authorized representative designated in compliance with § 155.227, to take an action that produces a record that can be maintained and produced by an individual or entity described in paragraph (j)(1) of this section to confirm the consumer's or their authorized representative's consent has been provided. For enrollments for plan years ending prior to January 1, 2028, non-exhaustive examples of acceptable documentation of consent include obtaining the signature of the consumer or their authorized representative (electronically or otherwise), verbal confirmation by the consumer or their authorized representative that is captured in an audio recording, a response from the consumer or their authorized representative to an electronic or other communication sent by the agent, broker, or web-broker, or other similar means or methods specified by HHS in guidance.
(C) For enrollments for plan years beginning on or after January 1, 2028, including enrollments under § 155.335(j), all documentation required under paragraph (j)(2)(iii)(A) of this section must be collected by having the consumer or the consumer's authorized representative take an action to execute an HHS-approved and -created consumer consent form. The action the consumer or the consumer's authorized representative took to provide consent must be clear to HHS. This may include hand-written or electronic written signature or initials on the HHS-approved and -created consumer consent form, an email from the consumer or the consumer's representative, or a recorded verbal conversation. A signature that is simply typed on the documentation or a filled-in check box does not properly indicate consent was provided by the consumer or the consumer's authorized representative.
(3)
(i) Comply with the standards of conduct under paragraph (j)(2) of this section; and
(ii) Provide consumers with correct information, without omission of material fact, regarding the Federally-facilitated Exchanges, QHPs offered through the Federally-facilitated Exchanges, and insurance affordability programs, and refrain from marketing that is misleading, materially inaccurate, coercive, or discriminates based on race, color, national origin, disability, age, or sex.
(iii) Examples of prohibited misleading marketing practices agents, brokers, and web-brokers may not include in their marketing of FFE plans include, but are not limited to:
(A) Providing cash, monetary rebates, gift cards, travel vouchers, or cash equivalents as an inducement for enrollment or otherwise.
(B) Offering gifts to consumers, unless the gifts are of nominal value, are offered to similarly situated consumers without regard to whether or not the consumers enroll, and are not in the form of cash or cash equivalents.
(C) Falsely asserting or suggesting that consumers will always qualify for zero-dollar insurance/zero-dollar premiums.
(D) Falsely using identical or facsimiles of government or other official logos and notations.
(E) Miscommunicating enrollment timelines and deadlines.
(F) Misconstruing legislation, regulations, or Executive Orders, including listing fake or incorrect references or citations.
(G) Utilizing the image or likeness and/or utilize a quote from a notable figure, such as a celebrity or politician, in an advertisement claiming that figure has endorsed you or your agency when that endorsement is not truthful.
(iv) An individual or entity described in paragraph (j)(1) of this section must produce any marketing material upon request, within the specified timeframe HHS mandates, in response to monitoring, audit, and enforcement
(v) An individual or entity described in paragraph (j)(1) of this section is responsible to ensure that all marketing-related materials created, written, released, or otherwise produced by the individual or entity or on their behalf adhere to the requirements of paragraphs (j)(3)(ii) and(iii) of this section, and to make all such marketing-related materials available upon request in accordance with paragraph (j)(3)(iv) of this section.
The revisions and addition read as follows:
(f) * * *
(1) * * *
(ii) One or more applicants who is expected to be a member of the tax filer's family within the meaning of 26 CFR 1.36B-1(d) for the benefit year—
(C) He or she is a U.S. citizen, U.S. national, or an eligible noncitizen as defined in § 155.20.
(4)
(B) For plan year 2028 and beyond, an Exchange must implement a 1-tax year FTR policy described in paragraph (f)(4)(ii)(A) of this section.
(ii)
(A) A tax filer and their spouse, if the tax filer is married, is considered to have failed to file and reconcile for 1 tax year if HHS notifies the Exchange as part of the process described in § 155.320(c)(3) that APTC payments were made on behalf of either the tax filer or the tax filer's spouse, if the tax filer is a married couple, for the most recent year for which tax data would be utilized for verification of household income and family size in accordance with § 155.320(c)(1)(i), and the tax filer or the tax filer's spouse did not comply with the requirement to file an income tax return for that year as required by 26 U.S.C. 6011, 6012, and in 26 CFR chapter I, and reconcile APTC for that period.
(B) A tax filer and their spouse, if the tax filer is married, is considered to have failed to file and reconcile for 2 tax years if HHS notifies the Exchange as part of the process described in § 155.320(c)(3) that APTC payments were made on behalf of either the tax filer or the tax filer's spouse, if the tax filer is a married couple, for the 2 most recent consecutive tax years for which tax data would be utilized for verification of household income and family size in accordance with § 155.320(c)(1)(i), and the tax filer or the tax filer's spouse did not comply with the requirement to file an income tax return for those years as required by 26 U.S.C. 6011, 6012, and in 26 CFR chapter I, and reconcile APTC for that period.
(iii) Notice Requirements. For purposes of paragraph (f)(4)(ii) of this section, the following notice requirements apply.
(A) An Exchange that implements a 2-tax year FTR policy as described in paragraph (f)(4)(ii)(B) of this section must:
(
(
(
(
(
(
(B) An Exchange that implements 1-tax year FTR policy as described in paragraph (f)(4)(ii)(A) of this section must:
(1) Send a notification to the tax filer, consistent with the standards applicable to the protection of Federal Tax Information, that informs the tax filer that the Exchange has determined that the tax filer or the tax filer's spouse, if the tax filer is married, has failed to file and reconcile of the need to file and reconcile, and of the risk of being determined ineligible for APTC if they fail to file and reconcile immediately; or
(2) Send a notification to either the tax filer or their enrollee, that informs the tax filer or enrollee that they may be at risk of being determined ineligible for APTC in the future. These notices must educate tax filers or their enrollees on the requirement to file and reconcile, while not directly stating that the IRS indicates the tax filer or the tax filer's spouse, if the tax filer is married, has failed to file and reconcile.
The revisions and addition read as follows:
(c) * * *
(3) * * *
(iii) * * *
(A) Except as specified in paragraphs (c)(3)(iii)(B), (C), and (D) of this section, if an applicant's attestation to projected annual household income, as described in paragraph (c)(3)(ii)(B) of this section, would qualify the tax payer as an applicable taxpayer under 26 CFR 1.36B-2(b) for the plan year for which coverage is requested and is more than a reasonable threshold above the annual household income computed in accordance with paragraph (c)(3)(ii)(A) of this section, the data described in paragraph (c)(3)(ii)(A) of this section indicates that projected annual household income is under 100 percent of the FPL, and the Exchange has not verified the applicant's MAGI-based income through the process specified in paragraph (c)(2)(ii) of this section to be within the applicable Medicaid or CHIP MAGI-based income standard, the Exchange must proceed in accordance with § 155.315(f)(1) through (4). For the purposes of this paragraph, a reasonable threshold is established by the Exchange in guidance and approved by HHS, but must not be less than 10 percent, and can also include a threshold dollar amount.
(vi) * * *
(C) * * *
(2) If the data described in paragraph (c)(3)(vi)(A) of this section indicates that projected annual household income is under 100 percent of the FPL and the applicant's attestation to projected household income, as described in paragraph (c)(3)(ii)(B) of this section, would qualify the taxpayer as an applicable taxpayer according to 26 CFR 1.36B-2(b) for the plan year for which coverage is requested and is more than a reasonable threshold above the annual household income as computed using data sources described in paragraph (c)(3)(vi)(A) of this section, in which case the Exchange must follow the procedures specified in § 155.315(f)(1) through (4). The reasonable threshold used under this paragraph must be equal to the reasonable threshold established in accordance with paragraph (c)(3)(vi) of this section.
(vii)
(viii)
(ix) Verification of eligible noncitizen status. (A) Verification with the records of the Department of Homeland Security. For an applicant who has information or documentation of immigration status that can be verified through the Department of Homeland Security's Systematic Alien Verification for Entitlements (SAVE) program, and who attests to having an eligible noncitizen immigration status as defined at § 155.20, the Exchange must transmit information from the applicant or document to the Department of Homeland Security for verification.
(B) Inconsistencies and inability to verify information. For an applicant who attests to having an eligible noncitizen status as defined at § 155.20, and for whom the Exchange cannot verify such attestation through the Department of Homeland Security, the Exchange must follow the procedures specified in § 155.315(f)(1) through (4). The date on which the notice is received means 5 days after the date on the notice, unless the applicant demonstrates that he or she did not receive the notice within the 5 day period as described in § 155.315(b)(2).
(C) If, at the conclusion of the period specified in paragraph (c)(3)(ix)(B) of this section, the Exchange remains unable to verify the applicant's attestation, the Exchange must determine the applicant ineligible for advance payments of the premium tax credit and cost-sharing reductions, notify the applicant of such determination in accordance with the notice requirements specified in § 155.310(g), and discontinue any advance payments of the premium tax credit and cost-sharing reductions in accordance with the effective dates specified in § 155.330(f).
(g)
(1) Effectuate an enrollment based on payment of the binder payment under paragraph (e) of this section.
(2) Avoid triggering a grace period for non-payment of premium, as described by § 156.270(d) of this subchapter or a grace period governed by State rules.
(3) Avoid terminating the enrollment for non-payment of premium as, described by §§ 156.270(g) of this subchapter and 155.430(b)(2)(ii)(A) and (B).
The revisions read as follows:
(a) * * *
(4) * * *
(iii) For the other triggering events specified in paragraph (d) of this section, except for paragraphs (d)(2)(i), (d)(4), and (d)(6)(i) and (ii) of this section for becoming newly eligible or ineligible for CSRs, and paragraphs (d)(8), (9), (10), (12), and (14) of this section:
(d) * * *
(13) At the option of the Exchange, the qualified individual provides satisfactory documentary evidence to verify his or her eligibility for an insurance affordability program or enrollment in a QHP through the Exchange following termination of Exchange enrollment due to a failure to verify such status within the time period specified in § 155.315.
(g)
The addition reads as follows:
(d) * * *
(1) * * *
(iv) The applicant, or if the applicant is a tax dependent, the tax filer claiming the applicant as a dependent, has a projected household income that does not qualify them as an applicable taxpayer according to 26 CFR 1.36B-2(b) or does not qualify them for cost-sharing reductions according to 45 CFR 155.305(g)(1)(i)(C).
The revisions and addition read as follows:
(a) * * *
(1) A Federally-facilitated Exchange State without an Effective Provider Access Review Program (as defined in paragraph (d) of this section) must ensure that each QHP provides sufficient access to providers in a manner that meets the standards specified in § 156.230 for network plans, or, for plan years beginning on or after January 1, 2028, § 156.236 for non-network plans if such plans are allowed to be offered through the Exchange, as applicable. A State on the Federally-facilitated Exchanges with an Effective Provider Access Review Program (as defined in paragraph (d) of this section) must ensure that each QHP provides sufficient access to providers in a manner that meets the standards specified in § 156.230(a)(1) for network plans, or, for plan years beginning on or after January 1, 2028, § 156.236(a) for non-network plans if such plans are allowed to be offered through the Exchange, as applicable.
(2) State Exchanges and State-based Exchanges on the Federal Platform must ensure that each QHP provides sufficient access to providers in a manner that meets standards under § 156.230(a)(1)(ii) and (iii) for network plans, or, for plan years beginning on or after January 1, 2027, § 156.236(a) for non-network plans if such plans are allowed to be offered through the Exchange, as applicable.
(d)(1) FFE States may elect to conduct their own provider access certification reviews of issuers' plans, with or without a provider network, applying for certification as a QHP to be offered through a Federally-facilitated Exchange provided that the State has demonstrated sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program under paragraphs (d)(2) through (d)(4) of this section. This option applies to Federally-facilitated Exchange States, including States performing plan management. If States do not satisfy the criteria established under paragraphs (d)(2) through (d)(4) of this section, or do not elect to conduct such reviews, CMS will continue to conduct reviews of QHP issuer provider access in those States consistent with requirements listed under § 156.230 for network plans and under § 156.236 for non-network plans. Applicable requirements for non-network plans under this section are effective for plan years beginning on or after January 1, 2028.
(2) Federally-facilitated Exchange States with an Effective Provider Access Review Program must ensure that a QHP issuer that uses a network of providers ensures that the in-network providers, as available to all enrollees, include essential community providers (ECPs) in accordance with § 156.235, and maintains a network that is sufficient in number and types of providers, including providers that specialize in mental health and substance use disorder services, to ensure that all services will be accessible without unreasonable delay. The QHP issuer's provider network consisting of in-network providers, as available to all enrollees, must be consistent with the rules for network plans of section 2702(c) of the PHS Act.
(3) Federally-facilitated Exchange States with an Effective Provider Access Review Program must ensure that a QHP issuer that does not use a network of providers (a non-network plan) provides access to a sufficient choice 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 all services will be accessible without unreasonable delay.
(4) A Federally-facilitated Exchange State that elects to conduct provider access reviews has an Effective Provider Access Review Program if it meets the following requirements:
(i) The State has established provider access standards that are set forth in State statute or regulation, which are consistent with provider access standards as set forth in § 156.230(a)(1)(ii) and (iii), and reports to CMS whether the State has delegated authority to some entity other than the State Department of Insurance to perform any or all provider access review activities.
(ii) The State's provider access review process includes reporting systems for State required provider access metrics and documentation of methodology and the State provides descriptions of all data collection systems, resources, templates, and methodologies used by the State, or the State's delegated entity to collect and review provider access data; and the State receives from issuers data and documentation in connection with provider access standards that are sufficient to conduct the examination.
(iii) The State's provider access review process includes procedures to ensure full and ongoing compliance with State provider access standards and enforcement frameworks applicable to issuers that fail to meet provider access standards so that those issuers come into compliance with State provider access standards, including standardized processes to assess efforts the issuer is pursuing to come into compliance with State provider access standards and implementing any justification and exception processes for issuers that have not yet or cannot meet provider access requirements.
(iv) The State establishes and maintains clear procedures and timeline requirements for regular provider access reviews, including processes that ensure reviews occur prior to completion of each plan year's QHP certification cycle.
(v) The State has a process for monitoring and addressing consumer-related provider access complaints to ensure sufficient access to providers consistent with section 1311(c)(1)(B) of the Affordable Care Act and as set forth in State statute.
(vi) The State has a process to collect and review information described under § 156.236(b)(4) through (b)(9) from non-network plans, which non-network plans must submit to the FFE for a determination that it provides access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full.
(5) CMS will determine whether a State has an Effective Provider Access Review Program based on information available to CMS that demonstrates whether the program meets the criteria described under paragraphs (d)(2) through (d)(4) of this section.
(6) CMS may grant an exception to the requirements in paragraph (d) of this section if it determines that making such an exception is in the interests of qualified individuals in the State or States in which such Exchange operates.
(7) CMS will notify the FFE State electing to conduct provider access certification reviews of its decision in writing whether the State is determined to have an Effective Provider Access Review Program and can therefore conduct its own provider access certification reviews. CMS reserves the right to evaluate at any time whether, and to what extent, an FFE State's circumstances have changed such that it has begun to or has ceased to satisfy the criteria established by CMS under this section. Such evaluations may result in CMS assuming provider access review responsibilities or transitioning such responsibilities back to the State.
(a) FFE States may elect to conduct their own ECP certification reviews of issuers' plans with or without a provider network applying for certification as a QHP to be offered through a Federally-facilitated Exchange provided that the State demonstrates it has sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria to be considered to have an Effective Essential Community Provider Review Program under this section. This option applies to all FFE States, including States performing plan management. An FFE State must demonstrate it meets applicable criteria established under paragraphs (b) through (c) of this section for both network plans and non-network plans, and the sufficient authority and technical capacity to conduct reviews of such plans (as assessed by CMS under § 155.1051(e)), to be considered to have an Effective Essential Community Provider Review Program, if they decide to certify such plans. If FFE States do not satisfy the criteria established by CMS under paragraphs (b) through (e) of this section or do not elect to conduct such reviews, then CMS will continue to perform ECP certification reviews consistent with § 156.235 for network plans and § 156.236 for non-network plans. Applicable requirements for non-network plans under this section are effective for plan years beginning on or after January 1, 2028.
(b) FFE States with an Effective ECP Review Program must ensure that a QHP issuer with a provider network includes in their provider network a sufficient number and geographic distribution of ECPs, where available, to ensure reasonable and timely access to a broad range of such providers for low-income individuals or individuals residing in Health Professional Shortage Areas within the QHP's service area, in accordance with the Exchange's network adequacy standards. FFE States with an Effective ECP Review Program must also ensure that a non-network plan applying for certification to be offered as a QHP through a Federally-facilitated Exchange demonstrates that it provides reasonable and timely access to ECPs that accept the plan's benefit amount as payment in full to ensure that services will be accessible without unreasonable delay.
(c) FFE States with an Effective ECP Review Program must have established ECP requirements that are set forth in State statute or regulation. FFE States must demonstrate that these established ECP requirements ensure that plans meet all the following requirements that promote a sufficient number and geographic distribution of ECPs:
(1) The minimum percentage requirements under § 156.235(a)(2)(i) for network plans, and under § 156.236(b)(1) for non-network plans.
(2) The Indian health care provider requirement under § 156.235(a)(2)(ii)(A) for network plans and under § 156.236(b)(3) for non-network plans.
(3) The category per county requirements, including for each of the eight ECP category types under § 156.235(a)(2)(ii)(B) for network plans and under § 156.236(b)(2) for non-network plans.
(d) FFE States with an Effective ECP Review Program that have alternative ECP requirements compared to those described under paragraph (c)(1) through (3) of this section must demonstrate how their requirements would continue to promote a sufficient number and geographic distribution of ECPs to ensure reasonable and timely access to ECPs, and an adequate level of service for low-income enrollees or individuals residing in Health Professional Shortage Areas.
(e) CMS will consider all the following factors in its review to determine if an FFE State has an Effective ECP Review Program:
(1) The State's legal authority to review whether plans applying for QHP certification meet ECP requirements, including relevant State regulations and statutes.
(2) Evidence that the State's requirements are consistent with ECP requirements under paragraph (c)(1) through (3) of this section that promote a sufficient number and geographic distribution of ECPs, or the State provides a rationale to describe how its alternative requirements promote a sufficient number and geographic distribution of ECPs to ensure reasonable and timely access to ECPs.
(3) A description of the State's definition of an ECP, if different from the definition under § 156.235(c), including relevant categories and eligibility criteria that the State uses to determine whether a facility qualifies as an ECP.
(4) Whether the State utilizes the Federal ECP List or has a process it uses to identify qualified ECPs that may be included within a network plan's provider network.
(5) Whether the State utilizes the Federal ECP List or has a process it uses to identify qualified ECPs that may accept a non-network plan's benefit amount as payment in full.
(6) A description of data collection systems, resources, templates, or methodologies used by the State to collect and review ECP data.
(7) Whether the State generally collects information from QHP issuers regarding the status of contract offers for network plans or offers of benefit amounts as payment in full to an ECP for non-network plans.
(8) Whether the State has delegated authority to some other entity other than the State Department of Insurance to perform any or all ECP review activities.
(9) Whether the State has compliance reviews, follow-up procedures, and enforcement frameworks applicable to issuers that demonstrate inadequate networks of ECPs or inadequate access to ECPs that accept benefit amounts as payment in full, so that those issuers come into compliance with State ECP requirements, including standardized processes to assess efforts the issuer is pursuing to come into compliance with State ECP requirements and any justification and exception processes for
(10) Whether the State has a process for monitoring and addressing consumer-related complaints regarding access to ECPs to ensure sufficient access to ECPs consistent with section 1311(c)(1)(C) of the Affordable Care Act and set forth in State statute.
(11) Whether the State collects the information described under § 156.236(b)(4) through (b)(9) from issuers of non-network plans, which issuers of non-network plans must submit to the FFE for a determination that the plan provides reasonable and timely access to ECPs that accept the plan's benefit amount as payment in full.
(f) CMS will notify the FFE State electing to conduct ECP certification reviews of its decision in writing whether the State is determined to have an Effective ECP Review Program and can therefore conduct its own ECP certification reviews. CMS reserves the right to evaluate at any time whether, and to what extent, an FFE State's circumstances have changed such that it has begun to or has ceased to satisfy the criteria established by CMS under this section, and consequently no longer has an Effective ECP Review Program.
(d)
(e)
(a) This subpart sets forth the requirements of the State Exchange Improper Payment Measurement (SEIPM) program. SEIPM is an initiative through which HHS will measure improper payments of advance payment of the premium tax credit (APTC) that are administered by State Exchanges, as described in more detail in § 155.1610. HHS will use the SEIPM program results to produce an estimate of improper payments of APTC aggregated across State Exchanges.
(b) Unless otherwise specified by HHS, all State Exchanges must submit information on an annual basis that is necessary to support the SEIPM processes.
(c) HHS will publish in the Agency Financial Report an estimate of improper payments that is aggregated across all State Exchanges.
(a)
As used in this subpart—
(1) Eligibility for and enrollment in a Qualified Health Plan (QHP);
(2) Eligibility for APTC, and calculated amount of APTC;
(3) Redeterminations of eligibility during a plan year;
(4) Eligibility redeterminations for purposes of re-enrollment.
(1) Eligibility for and enrollment in a QHP;
(2) Eligibility for APTC, and calculated amount of APTC;
(3) Redeterminations of eligibility during a Plan Year;
(4) Annual eligibility redeterminations.
(a) HHS will issue an Annual Program Schedule to each State Exchange no later than January 5th of the Measurement Year. The Annual Program Schedule will specify the deadlines for all information submissions required under this section.
(b) On an annual basis, each State Exchange must submit or make available to HHS the following information:
(1)
(2)
(i) Exchange assigned policy identifier;
(ii) Tax household grouping identifier;
(iii) SSN inconsistency indicator;
(iv) Citizenship inconsistency indicator;
(v) Lawful presence inconsistency indicator;
(vi) Annual income inconsistency indicator;
(vii) Non-employer sponsored minimum essential coverage inconsistency indicator;
(viii) Employer sponsored minimum essential coverage inconsistency indicator;
(ix) Incarceration inconsistency indicator;
(x) Residency inconsistency indicator;
(xi) Number of tax household members; and
(xii) APTC amount paid over the duration of the benefit year.
(3)
(i) Information pertaining to the calculation of the APTC benefits paid that includes monthly enrollment premium amounts, monthly APTC payment amounts, monthly Second Lowest Cost Silver Plan Premium amounts, and the amount of each monthly premium that is attributable to essential health benefits.
(ii) Information relevant to enrollment that includes dates and amounts of effectuation payments, premium payment amount, and policy start and end dates.
(iii) Information relevant to the determination of eligibility for a special enrollment period (where applicable), which would include (where applicable) information collected by the State Exchange about consumer attestations and representations regarding special enrollment period eligibility criteria, copies of documentary evidence submitted by applicants, electronic verification information, and timing information.
(iv) Information about the timing of QHP certification or approval, the coverage area of the associated QHP, and the timing of any QHP decertification or suppression.
(v) To the extent applicable, for each person who is included in the APTC payment calculation:
(A) Information collected by the State Exchange about consumer attestations regarding QHP and APTC eligibility factors and demographic information relevant to initial QHP enrollment and eligibility.
(B) APTC eligibility and payment determinations which includes evidence of required data verifications, the electronic sources consulted, the timing of required verifications, and the results of the verification.
(C) Information relevant to QHP and APTC manual eligibility verifications and the resolution of electronic verification inconsistencies, which would include copies of documentary evidence submitted by QHP enrollees, the timing of submissions, the timing of adjudication, and information about good faith extensions.
(D) Information relevant to QHP and APTC eligibility redeterminations such as information about automatic annual redeterminations, the timing and results of periodic examinations of data sources, and policy or application changes initiated by the consumer and resultant electronic or manual eligibility verifications.
(vi) Any consumer submitted documents that were used to establish new or continued eligibility for enrollment in a QHP and APTC.
(a)
(1)
(2)
(i) Overall APTC expenditures associated with the State Exchange.
(ii) State-level precision goals for the current SEIPM cycle.
(iii) The improper payment rate from the State Exchange's previous SEIPM cycle.
(3)
(b)
(c)
(i) The total number of sampled tax households selected for the State Exchange.
(ii) A unique identifier for each sampled tax household.
(iii) Any specific instructions or requirements that HHS determines are needed to facilitate HHS' review of the sampled records.
(2)
(3)
(A) Technical issues prevent completion of the sampling process within the standard timeframe;
(B) Data quality issues require additional coordination with State Exchanges before sampling can be completed; or
(C) Other circumstances beyond HHS's control necessitate additional time to ensure accurate sampling methodology.
(ii) If HHS determines an extension is necessary, HHS will:
(A) Notify all affected State Exchanges in writing of the extension and the revised notification date;
(B) Provide the reason for the extension; and
(C) Confirm the impact, if any, on subsequent SEIPM cycle timelines.
(a)
(2)
(3)
(i) Enrolling or re-enrolling a consumer into a QHP for which APTC was paid.
(ii) Consumer eligibility for APTC being paid on the consumer's behalf.
(iii) Calculating the APTC amount that was paid on the consumer's behalf.
(iv) Taking required actions upon changes to a consumer's status that would affect their APTC-related eligibility or payment amount.
(4)
(b)
(1) Calculate the correct APTC amount based on the requirements of section 36B of the Internal Revenue Code and applicable implementing regulations.
(2) Determine an improper payment amount.
(3) Document the error and improper payment amount within a Sampled Unit Assessment Package and provide the Sampled Unit Assessment Package to the State Exchange.
(4) Extrapolate the identified improper payments from the sample to estimate the total improper payment amount for the State Exchange's entire universe of APTC payments, using statistically valid methodologies that comply with OMB guidance on improper payment estimation.
(c)
(1) The estimated aggregate improper payment rate for Federal and State Exchanges combined.
(2) The estimated aggregate improper payment rate for State Exchanges, and;
(3) HHS will provide to each State Exchange a report that documents the State-specific improper payment rate and error analysis.
(a)
(2) Upon receipt of a Difference Resolution request, HHS will do the following:
(i) Engage with the State Exchange in a collaborative process to examine the disputed findings and any additional documentation provided by the State Exchange.
(ii) Evaluate the disputed findings by applying the same protocol used in the original review while considering whether the State Exchange's position is supported by the existing or newly provided evidence.
(iii) Prepare the Difference Resolution Decision.
(3) The Difference Resolution Decision will be communicated to the State Exchange within 90 days of receipt of the written request for a Difference Resolution. The Difference Resolution Decision will include a summary of the analysis and rationale that informed the decision.
(b)
(i) The State Exchange may not submit new evidence; it may use evidence that was previously submitted during Difference Resolution.
(ii) The State Exchange may provide additional context regarding information that was submitted during Difference Resolution.
(2) Upon receipt of an appeal request, HHS will do the following:
(i) Assign the appeal request to one or more administrative appeal reviewers who were not involved in the original review;
(ii) Conduct a comprehensive review of the disputed findings using the administrative record established during the Difference Resolution process;
(iii) Independently evaluate the disputed findings by applying the same protocol used in the original review while considering whether the State Exchange's position is supported by the evidence; and
(iv) Prepare an appeal decision for the completed review based on a preponderance of the evidence.
(3) HHS will issue the appeal decision within 90 days of receipt of the written request for appeal. The appeal decision will include a summary of the analysis and rationale that informed the decision.
(c)
(1) A clear statement of the specific finding(s) being challenged.
(2) All factual and legal bases for filing the request.
(3) Evidence directly related to the finding(s), which may include:
(i) Clarifying information regarding data interpretation.
(ii) Legal citations supporting the State Exchange's position.
(d)
(i) HHS will adjust the affected improper payment rate calculations for the SEIPM cycle.
(ii) Updated aggregate rates will be reflected in current cycle reporting.
(2) For Difference Resolution Requests or administrative appeals resolved in favor of the State Exchange after completion of the SEIPM cycle:
(i) If Difference Resolution or administrative appeal decisions result in material changes to aggregate rates, HHS will publish amended aggregate improper payment rates in subsequent Agency Financial Reports or other appropriate public reporting mechanisms as well as notify affected State Exchanges of any amendments to previously published rates.
(ii) If HHS determines, at its discretion, that the Difference Resolution or administrative appeal decisions do not result in material changes to aggregate rates, no action will be taken to publish amended aggregated improper payment rates or notify affected State Exchanges.
(e)
(a)
(b)
(1) In developing a proposed CAP, the State Exchange must conduct an error analysis such as reviewing causes, characteristics, and frequency of errors that are associated with improper payments. The State Exchange must review the findings of the analysis to determine the causes of the errors included in the State Exchange improper payment rate, if any, and to identify the root causes of the resulting improper payments.
(i) If a State Exchange has a pending Difference Resolution request or administrative appeal and HHS requests a CAP, HHS may provide a new timeline for CAP submission after the Difference Resolution or Administrative Appeal Decision and calculation of the final improper payment rate.
(2) The State Exchange must determine the corrective actions to be implemented to correct causes of the errors included in the State Exchange improper payment rate and to prevent them from occurring again.
(3) The proposed CAP must include measurable milestones, accountability mechanisms, regular monitoring and validation of progress, documentation of implemented corrective actions, and regular status updates. The CAP must include all the following for each identified error:
(i) The specific corrective action.
(ii) Status of the corrective action.
(iii) Scheduled or actual implementation date of the corrective action.
(iv) Key personnel responsible for implementing each corrective action.
(v) A plan for monitoring the effectiveness of the corrective action.
(c)
(d)
(a) Any State Exchange in its first year of operation must participate in a 1-year SEIPM preparation phase prior to participating in SEIPM in the subsequent year.
(b) To satisfy the requirements of the SEIPM preparation phase, a State Exchange must:
(1) Complete the information submission requirements in § 155.1615(b)(1) and (3) using information from the most current Plan Year for a sample size not to exceed 10 unique tax households that address scenarios specified by HHS.
(2) Undergo the review procedures in § 155.1625(a) and (b).
(3) Participate in technical assistance activities provided by HHS, which may include:
(i) Training on SEIPM requirements and procedures;
(ii) System readiness assessments;
(iii) Data quality validation exercises; and
(iv) Process improvement recommendations.
(c) At the beginning of each calendar year, HHS will provide any State Exchange that meets the conditions in paragraph (a) of this section with a schedule that spans a 12-month period that specifies when the requirements of this section must be completed.
HHS will minimize potential duplicate requirements of the annual independent external programmatic audit described at § 155.1200(c) and (d) and SEIPM, such that, as determined by HHS, a State Exchange may be deemed to satisfy certain requirements of § 155.1200(c) and (d), particularly the review of compliance with subparts D and E, as identified in HHS sub-regulatory guidance, for a particular plan year by successfully completing the SEIPM process.
(a)
(b)
(1) Fails to submit required data or documentation within the timelines specified in the Annual Program Schedule.
(2) Submits data or documentation that is incomplete, inaccurate, or in a format that would reasonably prevent effective review.
(3) Fails to implement the CAP process as set out in § 155.1635(d).
(4) Demonstrates a pattern of more than five instances during a SEIPM cycle in which the State Exchange fails to respond within 30 calendar days, or provides a non-responsive answer, to HHS requests for clarification or additional information.
(c)
(1) Provide written notice to the State Exchange specifying the nature of the noncompliance and the potential consequences.
(2) Allow the State Exchange a reasonable opportunity, not less than 30 days, to cure the noncompliance or demonstrate that compliance has been achieved.
(d)
(1) Enhanced monitoring and reporting.
(2) Mandatory implementation of specific operational procedures or controls.
(3) On-site visits to State Exchange facilities to assess operational procedures, data systems, and compliance with program requirements.
(e)
42 U.S.C. 18021-18024, 18031-18032, 18041-18042, 18044, 18054, 18061, 18063, 18071, 18082, and 26 U.S.C. 36B.
The addition and revision read as follows:
(a) * * *
(2) Are required by a State action taking place on or before December 31, 2011.
(d) For plan years beginning before January 1, 2026, an issuer of a plan offering EHB may not include routine non-pediatric dental services, routine non-pediatric eye exam services, long-term/custodial nursing home care benefits, or non-medically necessary orthodontia as EHB. For plan years beginning on any day in calendar year 2026, an issuer of a plan offering EHB may not include routine non-pediatric dental services, routine non-pediatric eye exam services, long-term/custodial nursing home care benefits, non-medically necessary orthodontia, or specified sex-trait modification procedures (as defined at § 156.400) as EHB. For plan years beginning on or after January 1, 2027, an issuer of a plan offering EHB may not include routine non-pediatric dental services, routine non-pediatric eye exam services, long-term/custodial nursing home care benefits, non-medically necessary orthodontia, or specified sex-trait modification procedures (as defined at § 156.400) as EHB.
(a) * * *
(2) Except as permitted in § 156.136 and § 156.155(a)(3)(ii), for a plan year beginning in a calendar year after 2014, cost sharing may not exceed the following:
For plan years beginning on or after January 1, 2027, if an issuer offers a bronze plan (as defined at § 156.140(b)(1)) in the individual market that complies with the cost-sharing requirements at § 156.130 and the levels of coverage requirements at § 156.140, the issuer may also offer within the same service area bronze plans that exceed the maximum annual limitation on cost sharing at § 156.130 by amounts in increments of 50 dollars in order to achieve an AV within the standard bronze de minimis variation at § 156.140(c), calculated as described in § 156.135 of this subpart, but not to exceed an amount equal to 130 percent of the annual limitation on cost sharing under section 1302(c)(1) of the Affordable Care Act.
The revision and addition read as follows:
(a) * * *
(3)(i) For plan years beginning before January 1, 2028, provides coverage of the essential health benefits under section 1302(b) of the Affordable Care Act, except that the plan provides no benefits for any plan year (except as provided in paragraphs (a)(4), (b), and (c) of this section) until the annual limitation on cost sharing in section 1302(c)(1) of the Affordable Care Act is reached.
(ii) For plan years beginning on or after January 1, 2028, provides coverage of the essential health benefits under section 1302(b) of the Affordable Care Act, except that the plan provides no benefits for any plan year (except as provided in paragraphs (a)(4) and (6), (b), and (c) of this section) until an amount equal to 130 percent of the annual limitation on cost sharing in section 1302(c)(1) of the Affordable Care Act, rounded down to the next lowest multiple of 50 dollars, is reached.
(6) For plan years beginning on or after January 1, 2027, has a plan term of either 1 plan year, or of multiple consecutive plan years not to exceed 10 plan years. Such a plan with a plan term of at least 2 consecutive plan years may utilize value-based insurance designs to provide benefits before reaching the deductible, pursuant to guidelines issued by the Secretaries of Health and Human Services, Labor, and the Treasury under section 2713(c) of the Public Health Service Act.
(a) * * *
(1) A QHP that uses a network of providers must ensure that the provider network consisting of in-network providers, as available to all enrollees, meets the following standards:
(2) * * *
(i)
(ii)
(3) When CMS is conducting provider access reviews under paragraph (a)(2)(i)(A) and (B) of this section, the Federally-facilitated Exchange may grant an exception to the requirements in paragraphs (a)(2)(i)(A) and (B) of this section if the Exchange determines that
(4) A limited exception to the requirement described under paragraph (a)(1) of this section is available to stand-alone dental plans issuers that sell plans in areas where it is prohibitively difficult for the issuer to establish a network of dental providers; this exception is not available to medical QHP issuers. Under this exception, an area is considered “prohibitively difficult” for the stand-alone dental plan issuer to establish a network of dental providers based on attestations from State departments of insurance in States with at least 80 percent of counties classified as Counties with Extreme Access Considerations (CEAC) that at least one of the following factors exists in the area of concern: a significant shortage of dental providers, a significant number of dental providers unwilling to contract with Exchange issuers, or significant geographic limitations impacting consumer access to dental providers.
(a) * * *
(1) A QHP issuer that uses a provider network consisting of in-network providers must ensure that the provider network of each of its QHPs includes a sufficient number and geographic distribution of essential community providers (ECPs), where available, to ensure reasonable and timely access to a broad range of such providers for low-income individuals or individuals residing in Health Professional Shortage Areas within the QHP's service area, in accordance with the Exchange's network adequacy standards.
(2) A network plan applying for QHP certification to be offered through a Federally-facilitated Exchange has a sufficient number and geographic distribution of ECPs if it demonstrates in its QHP application that—
(i) The QHP issuer's provider network includes as participating providers at least a minimum percentage, as specified by HHS, of available ECPs in each network plan's service area collectively across all ECP categories defined under paragraph (a)(2)(ii)(B) of this section, and at least a minimum percentage of available ECPs in each network plan's service area within certain individual ECP categories, as specified by HHS. Multiple providers at a single location will count as a single ECP toward both the available ECPs in the network plan's service area and the issuer's satisfaction of the ECP participation standard. For network plans that use tiered networks, to count toward the issuer's satisfaction of the ECP standards, providers must be contracted within the network tier that results in the lowest cost-sharing obligation. For network plans with two network tiers (for example, participating providers and preferred providers), such as many preferred provider organizations (PPOs), where cost-sharing is lower for preferred providers, only preferred providers will be counted towards ECP standards; and
(ii) The issuer of the network plan offers contracts to—
(3) A network plan applying for QHP certification to be offered through a Federally-facilitated Exchange must include as part of its QHP application the status of contract offers to qualified ECPs available in the network plan's service area. A network plan does not need to report on the status of contract offers for all available ECPs in the network plan's service area, but must at least report on the status of contract offers for all ECPs which the issuer has either included in its network plan or offered a contract to be included in its network plan within each service area.
(5) A network plan that provides a majority of covered professional services through physicians employed by the issuer or through a single contracted medical group may instead comply with the alternate standard described in paragraph (b) of this section.
(b)
(2) A network plan described in paragraph (a)(5) of this section applying for QHP certification to be offered through a Federally-facilitated Exchange has a sufficient number and geographic distribution of employed or contracted providers if it demonstrates in its QHP application that—
(i) The number of its providers that are located in Health Professional Shortage Areas or five-digit zip codes in which 30 percent or more of the population falls below 200 percent of the Federal poverty level satisfies a minimum percentage, specified by HHS, of available ECPs in each network plan's service area collectively across all ECP categories defined under paragraph (a)(2)(ii)(B) of this section, and at least a minimum percentage of available ECPs in each network plan's service area within certain individual ECP categories, as specified by HHS. Multiple providers at a single location will count as a single ECP toward both the available ECPs in the network plan's service area and the issuer's satisfaction of the ECP participation standard. For network plans that use tiered networks, to count toward the issuer's satisfaction of the ECP standards, providers must be contracted within the network tier that results in the lowest cost-sharing obligation. For network plans with two network tiers (for example, participating providers and preferred providers), such as many PPOs, where cost sharing is lower for preferred providers, only preferred providers would be counted towards ECP standards; and
(ii) The issuer's integrated delivery system provides all of the categories of services provided by entities in each of the ECP categories in each county in the network plan's service area as outlined in the general ECP standard, or otherwise offers a contract to at least one ECP outside of the issuer's integrated delivery system per ECP category in each county in the network plan's service area that can provide those services to low-income, medically underserved individuals.
(3) A network plan applying for QHP certification to be offered through a Federally-facilitated Exchange must include as part of its QHP application the status of contract offers to qualified ECPs available in the network plan's service area. A network plan does not need to report on the status of contract offers for all available ECPs in the network plan's service area, but must at least report on the status of contract offers for all ECPs which the issuer has either included in its network plan or offered a contract to be included in its network plan within each service area.
(a) A QHP that does not use a network of providers (a non-network plan) must ensure access to a range of providers that accept the non-network plan's benefit amount as payment in full, including essential community providers (ECPs) and providers that specialize in mental health and substance use disorder services, to ensure that services will be accessible without unreasonable delay. A non-network plan does not provide access to a range of providers in this manner by simply providing some benefit amount for covered services rendered by any provider without providing the Exchange any other contextual information.
(b) For plan years beginning on or after January 1, 2028, a non-network plan applying for QHP certification to be offered as a QHP through a Federally-facilitated Exchange must submit the following information to the Federally-facilitated Exchange for a determination that it provides access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full, and reasonable and timely access to ECPs that accept the plan's benefit amount as payment in full:
(1) The non-network plan's assessed percentage of providers in each plan's service area that accepts the plan's benefit amount as payment in full; and for ECPs, whether the non-network plan meets at least a minimum percentage, as specified by HHS, of available ECPs that accept the plan's benefit amount as payment in full in each plan's service area collectively across all ECP categories defined under § 156.235(a)(2)(ii)(B), and at least a minimum percentage of available ECPs that accept the plan's benefit amount as payment in full in each plan's service area within certain individual ECP categories, as specified by HHS;
(2) For ECPs, whether the non-network plan offers the benefit amount as payment in full to at least one ECP in each of the eight (8) ECP categories per county in the plan's service area described in § 156.235(a)(2)(ii)(B);
(3) For ECPs, whether the non-network plan offers the benefit amount as payment in full to all available Indian health care providers in the plan's service area;
(4) The non-network plan's strategy for conducting continuous outreach to available providers (including ECPs) in a particular area to determine whether they would accept the plan's benefit amount as payment in full;
(5) The non-network plan's strategy for making benefit amounts publicly available, including to plan enrollees, potential enrollees, and providers (including ECPs), in an easily accessible and understandable format, and for regularly updating any changes to benefit amounts;
(6) The non-network plan's methodology for determining benefit amounts;
(7) The non-network plan's strategy for providing consumer-friendly and public information about potential balance billing scenarios and expected out-of-pocket costs, including historical data on actual out-of-pocket costs incurred by its enrollees while accessing providers (including ECPs) in the area, and information on navigating episodes of care with multiple benefit amounts (including for ancillary providers and services);
(8) The availability of an exceptions process under the non-network plan for enrollees who cannot find providers (including ECPs) willing to accept the benefit amount as payment in full; and
(9) The non-network plan's strategy for providing adequate customer service or online provider directory assistance resources to assist plan enrollees and potential enrollees in finding providers (including ECPs) in their area who will accept the plan's benefit amount as payment in full, and to assist plan enrollees in receiving real-time cost estimates prior to care being furnished.
(a) * * *
(1) * * *
(viii) Provider access; and
(c) * * *
(2) * * *
(iv)
(c)
(6)
(b)
(b)
(f)
(2) If HHS is responsible under paragraph (f)(1) of this section for enforcement of the requirements applicable to the actions identified in paragraph (a) of this section that are applicable to issuers offering a QHP in a State Exchange or State-based Exchange on the Federal platform, HHS may impose civil money penalties on an issuer in such Exchange, in accordance with the bases and process for imposing civil money penalties set forth in this section.
(a) * * *
(8) The QHP issuer substantially fails to meet the requirements under § 156.230 related to provider access standards for network plans, § 156.235 related to essential community provider access standards for network plans, or § 156.236 related to provider access and essential community providers standards for non-network plans, as applicable;
(d) The ALJ, upon his or her own motion or at the request of a party, may issue subpoenas if they are reasonably necessary for the full presentation of a case.
(1) The party must file a written request for a subpoena with the ALJ at least 5 calendar days before the date set for the hearing.
(2) The request must:
(i) Identify the witnesses or documents to be produced;
(ii) Describe their addresses or location with sufficient particularity to permit them to be found; and
(iii) Specify the pertinent facts the party expects to establish by the witnesses or documents, and indicate why those facts could not be established without use of a subpoena.
(3) Subpoenas are issued in the name of the Secretary.
(f) This section does not apply to appeals of civil money penalties imposed under § 156.805 for violations identified during audits or compliance reviews conducted in accordance with § 156.480(c).
(b)
(c)
(b) * * *
(1)