The Centers for Medicare & Medicaid Services (CMS) on Monday issued the final HHS Notice of Benefit and Payment Parameters (Payment Notice) for 2026 that sets standards for the Affordable Care Act (ACA) marketplace, health insurers, brokers, and agents who connect millions to ACA coverage.
The rule takes effect January 15 and finalizes safeguards, beginning in 2026, to protect consumers from unauthorized changes to their health care coverage, options to ensure the federally-facilitated marketplaces, and make it easier for consumers to understand their costs and enroll in coverage through HealthCare.gov beginning in plan year 2026.
It also updates the Health and Human Services (HHS)-operated risk adjustment program, finalizes 2026 user fee rates for issuers, makes changes to calculations for the Basic Health Program, and annual public reporting of aggregated, summary-level information from the ACA Quality Improvement Strategy (QIS), a program that aims to incentivize improved health outcomes for plan enrollees.
CMS said in a fact sheet that the final policies are designed to reduce administrative burdens, ensure accurate risk adjustment transfers, promote transparency, and enhance health equity in the Marketplace.
RELATED: CMS issues 2026 proposed rule for ACA plans: Addresses broker fraud, risk adjustment model
Here are a few highlights:
Prevents unauthorized agent and broker marketplace activity
CMS will now be able to take enforcement actions against lead agents at insurance agencies for violations of marketplace standards. The final rule will allow CMS to immediately suspend agents and brokers if the agency discovers circumstances that pose an unacceptable risk to the accuracy of marketplace eligibility determinations, operations, applicants, or enrollees, or marketplace information technology systems. CMS said the policy will improve the security and integrity of the marketplace, resulting in fewer unauthorized changes to coverage and preventing further harm to consumers and compliant agents and brokers.
The final rule also updates the model consent form, which was created to help agents, brokers, and web-brokers document consent from consumers to assist with their marketplace enrollments and submission of marketplace eligibility applications. The updated form is designed to help document that consumers or their authorized representative reviewed and confirmed the accuracy of their eligibility application information before their application was submitted to a marketplace. The updated form will also include scripts that agents, brokers, and web brokers can use to document compliance with requirements for consumer consent and consumer review and confirmation of the accuracy of their eligibility application information via an audio recording.
CMS said these updates will increase transparency and accountability in the application and enrollment process, help ensure that marketplace application information is accurate, and reduce the risk of financial errors, such as receiving an incorrect advance payment of the premium tax credit amount that consumers need to repay during tax reconciliation, or enrollment in health care coverage without consumers’ consent.
Updates premium payment thresholds to permit fixed/premium-percent thresholds
The final rule will allow issuers to implement a fixed-dollar premium payment threshold and/or one of two percentage-based premium payment thresholds to enable consumers to maintain their coverage even if they have not paid the full amount owed, as long as the amount paid does not exceed the premium payment threshold set by the issuer.
CMS said this will help avoid triggering a “grace period,” which typically begins when consumers first fail to pay their monthly premium, and by the end of which, they need to pay the full amount of their premium due to avoid losing coverage. For the fixed-dollar threshold, CMS has finalized a cap of $10 or less (adjusted for inflation), which means that if an issuer adopts a $10 fixed-dollar threshold, consumers who have paid their first premium and then subsequently owe $10 or less after the application of their advance payment of the premium tax credit and will not be put into a grace period as long as they owe $10 or less in premiums
CMS said issuers can also choose between one of two percentage-based thresholds:
Net premium threshold: Issuers have the option to adopt a net percentage-based premium payment threshold, which allows consumers to maintain their coverage even if they have paid the enrollee-responsible portion of the premium that is at least 95 percent, as long it is within the reasonable threshold set by the issuer. This means that if consumers have paid at least 95 percent of their premium due (depending on the threshold the issuer sets) after the application of the monthly tax credit, the issuer will not be required to trigger a grace period.
Gross premium threshold: A gross percentage-based premium payment threshold will allow consumers who have paid their first premium to maintain their coverage even if they have paid a portion of the total premium that is less than 98 percent or more, as set by the issuer. This means that if consumers have paid at least 98 percent of their total premium amount due (depending on the threshold the issuer sets), they will not trigger a grace period.
CMS said these policies will allow issuers to choose a method that works best for them and their consumers. Thresholds generally help to reduce terminations of coverage for enrollees–particularly people with low and modest incomes–who risk losing coverage when they fail to pay a small amount they might owe for their premium.
Simplifies plan choice and improves plan selection
CMS finalized updates to standardized plan options for plan year 2026 to ensure these plans continue to have actuarial values aligned with the plans’ metal levels and to maintain continuity in plan designs. In addition, issuers that offer multiple standardized plan options within the same product network type, metal level, and service area must meaningfully differentiate these plans from one another to reduce the risk of duplicative offerings. This will help consumers better understand the benefits, networks, and drug coverage included when making plan selections and comparisons.
CMS has also finalized amendments to the regulation to clarify the flexibility that issuers have to vary whether they include coverage for adult dental, pediatric dental, and adult vision benefits within their non-standardized plan options. These amendments clarify how non-standardized plan options may vary benefit coverage within the plan limit and will align the regulation text with the flexibility that issuers have been operationally permitted since these requirements were introduced in the 2024 Payment Notice.
CMS said these complementary policies will continue to reduce the risk of plan choice overload and facilitate a more meaningful evaluation of available plan choices for consumers on the marketplaces, while simultaneously ensuring that consumers continue to have access to plans with a sufficient variety of design features. This includes plans offered under the non-standardized plan option limit exceptions process that facilitate the treatment of chronic and high-cost conditions, which could play an important role in combatting health disparities and advancing health equity.
Improve public reporting on marketplaces
CMS finalized a policy to increase transparency and promote program improvements by publicly releasing state marketplace operations data, including spending on outreach and additional Open Enrollment customer service metrics, such as for call centers and websites.
CMS said the changes will help enhance public understanding of and confidence in marketplace operations, ensure transparent compliance activities, and improve marketplace efficiency and accountability.
CMS noted it will not publicly release the state marketplaces’ annual State-based Marketplace Annual Reporting Tools (SMARTS), which was originally suggested in the proposed rule.
Promotes quality improvement strategy information sharing
CMS will share aggregated, summary-level quality improvement strategy information publicly each year starting January 1, 2026 (with data submitted during the 2025 Qualified Health Plans Application Period). CMS said the information sharing will increase public transparency and accountability for quality health plan issuers and encourage best practices for improving health care coverage quality.
Recalibrates the 2026 benefit year HHS-operated risk adjustment models
To continue to keep the risk adjustment models up to date while promoting model stability, CMS finalized the recalibration of the HHS risk adjustment models for the 2026 benefit year using 2020, 2021, and 2022 benefit years’ enrollee-level EDGE data.
CMS also said it will begin phasing out the market pricing adjustment to the plan liability associated with Hepatitis C drugs starting with the 2026 benefit year so that the costs associated with these drugs will be modeled more consistently with other specialty drugs. The agency will also add human immunodeficiency virus (HIV) pre-exposure prophylaxis (PrEP) drugs into the 2026 benefit year HHS risk adjustment models as a new, separate factor in the adult and child models. This addition will help address potentially high costs associated with PrEP, thereby reducing issuer incentives to restrict coverage and access to care. Generic drugs will be excluded from the definition of PrEP in both the adult and child risk adjustment models.
Updates HHS Risk Adjustment Data Validation (HHS-RADV) policies
As part of HHS-RADV, issuers that offer risk adjustment covered plans must have initial and second validation audits performed on a sample of risk adjustment data selected by CMS. To improve the precision of these results, which are used to adjust risk scores and risk adjustment state transfers, CMS has amended the initial and second validation audit policies.
For the initial validation audit sampling, CMS will:
- Exclude enrollees without Hierarchical Condition Categories (HCCs), which includes adult enrollees with only Prescription Drug Categories (RXCs), from the initial validation audit sample.
- Remove the Finite Population Correction, which is used to determine modified initial validation audit sample sizes for smaller issuers.
- Replace the source of the Neyman allocation data used to determine the initial validation audit sample stratum allocation with the three most recent consecutive years of HHS-RADV data.
For the second validation audit, CMS will
- Modify the second validation audit pairwise means test to use a bootstrapped 90 percent confidence interval to test for statistically significant differences between initial and second validation audits and second validation audit results and increase the initial second validation audit subsample size from 12 to 24 enrollees.
CMS said these policies will improve the precision of these audits and issuers’ HHS-RADV results.
Improve HHS-RADV’s actionable discrepancy and appeal threshold
CMS offers an opportunity for issuers of risk adjustment-covered plans to submit an appeal to contest HHS-RADV SVA results (if applicable) or error rate findings if the amount in dispute meets the materiality threshold for filing. It has finalized a second materiality threshold for rerunning HHS-RADV results in response to a successful appeal. Under this new threshold, HHS will only take action to rerun HHS-RADV results if the financial impact on the filing issuer’s HHS-RADV adjustment is greater than or equal to $10,000. This will promote the stability of HHS-RADV and reduce administrative costs for issuers and the federal government.
Finalizes user fee rates
The marketplaces rely on user fees to remain financially viable and sustainably meet necessary obligations. For the 2026 benefit year, CMS finalized federally-facilitated marketplace user fee rate of 2.5 percent of monthly premiums and a state-based marketplace on the federal platform (user fee rate to 2.0 percent of monthly premiums.
Because enrollment projections are a key component to the calculation of user fee rates, CMS also said it considered the availability of enhanced PTC subsidies provided by the American Rescue Plan Act of 2021, which were extended by the Inflation Reduction Act of 2022. These subsidies have increased Marketplace enrollment by millions of new consumers and are set to expire at the end of 2025. As a result, CMS has finalized an alternative set of user fee rates, where, if enhanced premium tax credits subsidies are extended through the 2026 benefit year by July 31, 2025, the federally-facilitated marketplace user fee rate would be 2.2 percent of monthly premiums, and the state-based marketplace on the federal platform user fee rate would be 1.8 percent of total monthly premiums. These lower user fee rates account for projected higher consumer enrollment in the marketplaces due to the continued availability of enhanced premium tax credits subsidies.
Finalizes risk adjustment user fee
CMS will be responsible for operating risk adjustment in every state and the District of Columbia for the 2026 benefit year. CMS finalized a risk adjustment user fee of $0.20 per member per month to cover a wide range of activities that support risk adjustment program activities. This is higher than the 2025 benefit year user fee, CMS said, to account for updated enrollment estimates in the individual and small group markets if enhanced premium tax credit subsidies expire as currently enacted.