On April 2, 2024, the Centers for Medicare and Medicaid Services (CMS) released a final rule titled “HHS Notice of Benefit and Payment Parameters for 2025” (link) with accompanying fact sheet (link).

The annual NBPP issues standards for insurance companies and the state and federal Marketplaces. This year’s final rule addresses prescription drug provisions, network adequacy, standardized plan options, essential health benefit (EHB) benchmark updates, and special enrollment periods.

Notably, CMS finalized that unless mandated by state action, any drug covered by a health plan in excess of those covered by a State’s EHB-benchmark plan is considered an EHB and is subject to annual cost-sharing limits. CMS noted that they are concerned consumers lose important protections if a covered drug is no longer considered EHB, and as such finalized the policy to address individual and small group market plans’ use of copay maximizers and designation of drugs as “non-EHB”.

Prescription Drug Provisions

Prescription Drugs as EHB
CMS is codifying its current policy that prescription drugs in excess of those covered by a State’s EHB-benchmark plan are considered EHBs, subject to EHB protections. Accordingly, these drugs would be subject to the annual limitation on cost sharing and the restriction on annual and lifetime dollar limits, unless coverage of the drug is mandated by state action such that it would not be considered EHB.
CMS noted that they are now clarifying that this interpretation means that issuers subject to the requirement to cover EHB will be considered to be failing to provide EHB if they do not treat those drugs as EHB, including by subjecting them to the annual limitation on cost sharing, by not applying annual or lifetime dollar limits, and by factoring them in the availability of advance premium tax credits (APTCs), unless the drugs are mandated by State action.
The final rule notes in response to commenter clarification on copay maximizer and alternative funding programs that CMS is concerned that consumers lose important protections if a covered drug is no longer considered EHB and that the impacts of these practices, including additional out-of-pocket costs and loss of consumer protections, justify the finalization of this policy. CMS noted they will consider copay maximizer programs, as relevant, in any subsequent policy making about drug manufacturer assistance programs.
The final rule notes that Departments of Labor, HHS, and the Treasury intend to propose rulemaking that would align the standards applicable to large group market health plans and self-insured group health plans with those applicable to individual and small group market plans, so that all group health plans and health insurance coverage subject to sections 2711 and 2707(b) of the Public Health Service (PHS) Act, as applicable, would be required to treat prescription drugs covered by the plan or coverage in excess of the applicable EHB-benchmark plan as EHB for purposes of the prohibition of lifetime and annual limits and the annual limitation on cost sharing.
Drug Classification System for EHB
In the proposed rule, CMS requested information to confirm or further expand their understanding of the risks and benefits associated with replacing the reference to the United States Pharmacopeia (USP) Medicare Model Guidelines (MMG) with a reference to the USP Drug Classification system (DC) as a means of classifying the drugs required to be covered as EHB.
CMS has taken the comments into consideration but has not made any changes to the reference system and will take the comments into consideration if they pursue updates in future benefit years.
Pharmacy and Therapeutics (P&T) Committee Standards
For plan years beginning on or after January 1, 2026, CMS is revising the minimum membership standards for Pharmacy & Therapeutics (P&T) Committees to require, at a minimum, one patient representative. CMS is also finalizing requirements related to the patient representative, including that the patient representative must:
Represent the patient perspective;
Have relevant experience or participation in patient or community-based organizations;
Be able to demonstrate the ability to integrate data interpretations with practical patient considerations;
Have no fiduciary obligation to a health facility or other health agency and have no material financial interest in the rendering of health services;
Have a broad understanding of one or more conditions or diseases, associated treatment options, and research; and
Disclose financial interests on their conflict-of-interest statements.

Network Adequacy

For plan years beginning on or after January 1, 2026, CMS is finalizing that State Marketplaces and State-based Marketplaces on the Federal platform (SBM-FPs) establish and impose quantitative time and distance Qualified Health Plan (QHP) network adequacy standards that are at least as stringent as the standards for QHPs in the Federally-facilitated Marketplace (FFM).
The time and distance standards for State Marketplaces and SBM-FPs will be calculated at the county level and vary by county designation and will apply to lists of provider specialties that include at least those used for the FFMs.
State Marketplaces and SBM-FPs must conduct network adequacy reviews to evaluate a plan’s compliance with network adequacy standards prior to certifying a plan as a QHP.
Issuers unable to meet the specified standards can submit a justification to their State Marketplace or SBM-FP.
CMS may grant an exception to a State Marketplace or SBM-FP that demonstrates:
The Exchange applies and enforces alternate quantitative network adequacy standards that are reasonably calculated to ensure a level of access to providers that is as great as the Federal network adequacy standards.
The Exchange evaluates whether plans comply with applicable network adequacy standards prior to certifying any plan as a QHP.
CMS is finalizing a requirement that all issuers seeking QHP certification submit information to the State Marketplace or SBM-FP about whether network providers offer telehealth services.

Standardized Plan Options

CMS is finalizing as proposed to follow the approach finalized in the 2024 NBPP concerning standardized plan option metal levels.
CMS finalized minor updates to plan designs to ensure the plans have actuarial values within the permissible de minimis range for each metal level.
Non-Standardized Plan Options: As previously finalized, for 2025 and subsequent years, issuers can offer two non-standardized plan options. In the 2025 NBPP final rule, CMS finalized an exceptions process to this non-standardized plan option limit.
Under the exceptions process, an issuer may offer additional non-standardized plan options beyond the limit of two for each product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area if it demonstrates that the additional plans have reduced cost sharing of 25 percent or more for benefits related to the treatment of “chronic and high-cost conditions,” including benefits in the form of prescription drugs. The reduced cost sharing will be evaluated at the level of total out-of-pocket costs for the treatment of the chronic and high-cost condition for a population of enrollees with the relevant chronic and high-cost condition.
CMS defines “chronic and high-cost conditions” as conditions “that have an average duration of one year or more and require ongoing medical attention or limit activities of daily living, or both” and “that account for a disproportionately high portion of total Federal health expenditures.” Examples of chronic and high-cost conditions include hepatitis C virus, HIV, multiple sclerosis, and rheumatoid arthritis.
Issuers are limited to one exception per product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area, for each chronic and high-cost condition. Issuers will be required to submit a written justification and actuarial memorandum demonstrating the underlying actuarial assumptions made in the plan design.

EHB-Benchmark Update Process Improvements

For plan years beginning on or after January 1, 2026, CMS is finalizing the following changes:
Consolidate the options for states to change EHB-benchmark plans so states would select a set of benefits that would become the state’s EHB-benchmark plan.
CMS notes that any changes to a state’s EHB-benchmark plan options also apply to states when choosing a benchmark plan used to define EHBs in a Medicaid Alternative Benefit Plan (ABP) or Basic Health Program (BHP) standard health plan.
Remove the generosity standard and revise the typicality standard, such that a state’s new EHB-benchmark plan would be required to provide a scope of benefits that is equal to the scope of benefits of a typical employer plan in the state.
CMS clarifies the definition of the typical scope of benefits of a typical employer plan in the state as “any scope of benefits that is as or more generous than the scope of benefits in the state’s least generous typical employer plan, and as or less generous than the scope of benefits in the state’s most generous typical employer plan, from a defined set of plans identified as typical employer plans.”
Remove the requirement for states to submit a formulary drug list as part of their documentation to change EHB-benchmark plans, unless the state changes its prescription drug EHBs.

Special Enrollment Periods

CMS is finalizing the alignment of effective dates of coverage after selecting a plan during certain special enrollment periods across all Exchanges, including State Exchanges, beginning January 1, 2025, or an earlier date at the option of the Exchange.
CMS will require all State Exchanges to provide coverage effective on the first day of the month following plan selection if a consumer enrolls in a QHP during a special enrollment period with a regular coverage effective date.
CMS notes this policy will prevent coverage gaps, particularly for consumers transitioning between different Exchanges or from other insurance coverage.
CMS is also finalizing a revision of the parameters around the availability of a special enrollment period for APTC-eligible qualified individuals with a projected household income no greater than 150% of the Federal Poverty Level (FPL).
Specifically, CMS is removing the limitation that this special enrollment period is only available during periods when APTC benefits are available such that the applicable taxpayers’ applicable percentage is set to zero.
CMS notes that making this special enrollment period permanently available is optional for all Marketplaces.

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