HHS Notice of Benefit and Payment Parameters for 2025 Final Rule

In the U.S. Department of Health and Human Services (HHS) Notice of Benefit and Payment Parameters (Payment Notice) for 2025 final rule released, the Centers for Medicare & Medicaid Services (CMS) finalized standards for issuers and Marketplaces, as well as requirements for agents, brokers, web-brokers, direct enrollment entities, and assisters that help Marketplace consumers. This final rule also includes several policies impacting the Medicaid program, Children’s Health Insurance Program (CHIP), and the Basic Health Program (BHP). These changes further the Biden-Harris Administration’s goals of advancing health equity by addressing the health disparities that underlie our health system. The policies build on the Affordable Care Act’s promise to expand access to quality, affordable health coverage and care by increasing access to health care services, simplifying choice, and improving the plan selection process, making it easier to enroll in coverage, enhancing standards and guaranteed consumer protections, reinterpreting the authority to access certain data through Medicaid, CHIP, and Marketplace Hub services, and strengthening markets.   

Increasing Access to Health Care Services

Network Adequacy

To help ensure that Marketplace enrollees across the nation have reasonable, timely access to health care providers as mandated by the Affordable Care Act (ACA), CMS finalizes that, for plan years beginning on or after January 1, 2026, State Marketplaces and State-based Marketplaces on the Federal platform (SBM-FPs) must establish and impose quantitative time and distance qualified health plan (QHP) network adequacy standards that are at least as stringent as the Federally-facilitated Marketplaces’ (FFMs) time and distance standards established for QHPs under § 156.230(a)(2)(i)(A). This standard will not apply to stand-alone dental plan (SADP) issuers operating in states that qualify for the limited SADP exception as described under § 156.230(a)(4). Consistent with the standards for the FFMs, 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. CMS also finalizes, for plans years beginning on or after January 1, 2026, that State Marketplaces and SBM-FPs must conduct 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. Similar to the process for the FFMs, issuers that are unable to meet the specified standards will be able to submit a justification to their State Marketplace or SBM-FP to account for variance(s) as described under § 156.230(a)(2)(ii). State Marketplaces and SBM-FPs must review the issuer’s justification to determine whether making such health plans available through the Marketplace is in the interests of qualified individuals in the state or states in which such Marketplace operates as specified under § 156.230(a)(3). In making this determination, State Marketplaces and SBM-FPs can consider whether the exception is reasonable based on circumstances such as the local availability of providers and variables reflected in local patterns of care. The State Marketplace or SBM-FP can then certify a QHP that failed to meet the specified standards if the State Marketplace or SBM-FP determines that making such health plan available through its Marketplace is in the interests of qualified individuals in the state or states in which such Marketplace operates. In addition, for plan years beginning on or after January 1, 2026, HHS may grant an exception to the requirements described under § 155.1050(a)(2)(i) to a State Marketplace or SBM-FP that demonstrates with evidence-based data, in a form and manner specified by HHS, that (1) 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 that ensured by the Federal network adequacy standards established for QHPs under § 156.230(a)(1)(iii), (a)(2)(i)(A), and (a)(4); and (2) the Exchange evaluates whether plans comply with applicable network adequacy standards prior to certifying any plan as a QHP. Finally, for plan years beginning on or after January 1, 2026, CMS finalizes that State Marketplaces and SBM-FPs must require all issuers seeking QHP certification to submit information to the State Marketplace or SBM-FP about whether network providers offer telehealth services.

Allowing States to Add Routine Non-Pediatric Dental Benefits as Essential Health Benefits (EHBs)

CMS finalizes removing the regulatory prohibition on issuers, including routine non-pediatric dental services as an EHB, which allows states to add routine non-pediatric dental services as an EHB by updating their EHB-benchmark plans. Removing the prohibition on routine non-pediatric dental services as an EHB removes regulatory and coverage barriers to expanding access to non-pediatric dental benefits. This also gives states the opportunity to improve non-pediatric oral health and overall health outcomes, which could help reduce health disparities and advance health equity since these health outcomes are disproportionately low among marginalized communities. Under this policy, states may include routine non-pediatric dental services such as EHB for purposes of their Alternative Benefit Plans (ABPs) or BHP standard health plans. In the final rule, CMS clarified that this policy will allow states to update their EHB-benchmark plans to include routine non-pediatric dental services via the EHB-benchmark application process beginning in 2025, which would first be effective for benefit years beginning on or after January 1, 2027. 

Prescription Drug Benefits

CMS finalizes revisions to certain EHB prescription drug benefit requirements. First, CMS is revising the minimum membership standards for Pharmacy & Therapeutics (P&T) Committees to require at a minimum one patient representative, as this addition would ensure that the consumer experience with a disease or condition is considered in the design of formulary benefits and would offer insights into real consumer experiences unknown to P&T committees, which would educate the committee on consumer challenges related to medication use and assist the committee in exploring solutions to these challenges during the formulary development process. CMS is also finalizing requirements related to the patient representative, including that the patient representative must (1) represent the patient perspective; (2) have relevant experience or participation in patient or community-based organizations; (3) be able to demonstrate the ability to integrate data interpretations with practical patient considerations; (4) have no fiduciary obligation to a health facility or other health agency and have no material financial interest in the rendering of health services; (5) have a broad understanding of one or more conditions or diseases, associated treatment options, and research; and (6) disclose financial interests on their conflict-of-interest statements. 

Second, CMS is codifying its current policy that prescription drugs that a plan covers in excess of those covered by a state’s EHB-benchmark plan are considered EHBs, subject to EHB protections, including the annual limitation on cost sharing and the restriction on annual and lifetime dollar limits, unless the coverage of the drug is mandated by state action such that it would not be considered EHB. The final rule does not address the application of this policy to large group market health plans and self-insured group health plans. The Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Departments) will be issuing a FAQ to address the applicability of this provision in the final 2025 NBPP to self-insured group health plans and large group market plans for purposes of the prohibition on lifetime and annual limits under PHS Act section 2711 and the annual limitation on cost sharing under PHS Act section 2707(b).

Increase State Flexibility in the Use of Income and Resource Disregards for Non- Modified Adjusted Gross Income (MAGI) Populations

CMS is not finalizing providing states with greater flexibility to adopt income and/or resource disregards in determining financial eligibility for Medicaid under section 1902(r)(2) of the Social Security Act for individuals excepted from application of the MAGI financial methodologies. Some commenters raised concerns that the proposal leaves open the possibility that states could use the offered flexibility to narrow existing disregards and that CMS should impose safeguards, guardrails, or no-harm requirements that would effectively prohibit the states’ use of the flexibility to reduce eligibility. CMS intends to further evaluate the comments regarding the additional flexibility and will consider commenters’ recommendations as well as whether there are other modifications to its proposal that would address these commenters’ concerns in future rulemaking.

Simplifying Choice and Improving the Plan Selection Process

Standardized and Non-Standardized Plan Options

CMS finalizes to follow the approach finalized in the 2024 Payment Notice concerning standardized plan option metal levels and to otherwise maintain continuity with the approach to standardized plan options finalized in the 2023 and 2024 Payment Notices. CMS finalizes only minor updates to the plan designs for plan year (PY) 2025 to ensure these plans have actuarial values within the permissible de minimis range for each metal level. CMS believes these standardized plan options continue to play a meaningful role in simplifying and streamlining the plan selection process by reducing the number of variables consumers must consider when selecting a plan option, making it easier for consumers to compare available plan options more meaningfully. CMS further believes these standardized plan options include several distinctive features, such as enhanced pre-deductible coverage for several benefit categories and copayments instead of coinsurance rates for a greater number of benefit categories, that continue to play an important role in reducing barriers to access, combatting discriminatory benefit designs, and advancing health equity.

In addition, CMS finalizes an exceptions process to the non-standardized plan option limit to promote consumer access to plans with design features that facilitate the treatment of chronic and high-cost conditions while simultaneously continuing to reduce the risk of plan choice overload. Under this exceptions process, for PY 2025 and subsequent years, 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 these additional plans’ cost sharing for benefits pertaining to the treatment of chronic and high-cost conditions (including benefits in the form of prescription drugs, if pertaining to the treatment of the condition(s)) is at least 25% lower, as applied without restriction in scope throughout the plan year, than the cost sharing for the same corresponding benefits in an issuer’s other non-standardized plan option offerings in the same product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area. Reduced cost sharing for these benefits will reduce barriers to accessing services important to consumers with chronic and high-cost conditions. This exceptions process will play an important role in combatting health disparities and advancing health equity since the chronic and high-cost conditions these plans will target disproportionately impact disadvantaged populations.

EHB-Benchmark Plan Update Process Improvements 

For plan years beginning on or after January 1, 2026, CMS finalizes three revisions to the standards for state selection of EHB-benchmark plans to address long-standing requests from states to improve, and reduce the burden of, the EHB-benchmark plan update process. First, CMS is consolidating the options for states to change EHB-benchmark plans such that a state may change its EHB-benchmark plan by selecting a set of benefits that would become the state’s EHB-benchmark plan. 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 ABP or BHP standard health plan. Second, CMS is removing the generosity standard and revising the typicality standard so that, in demonstrating that a state’s new EHB-benchmark plan provides a scope of benefits that is equal to the scope of benefits of a typical employer plan in the state, the scope of benefits of a typical employer plan in the state is defined 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. Third, CMS is removing 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. 

Re-enrollment Hierarchy 

CMS finalizes revisions to the Marketplace re-enrollment hierarchy to require all Marketplaces (Marketplaces on the Federal platform and State Marketplaces) to re-enroll enrollees with catastrophic coverage, including enrollees who will lose eligibility for catastrophic coverage, into a new QHP for the coming plan year, to the extent consistent with applicable state law. Enrollees whose current plan is no longer available and/or who will lose eligibility for catastrophic coverage must be re-enrolled in a plan in the same product as the enrollee’s current QHP or, if that product is no longer available, in the product offered that is the most similar to the enrollee’s current product, and that has the most similar network compared to the enrollee’s current QHP. If no bronze plan is available through the applicable product, the Marketplace must enroll the enrollee in the QHP with the lowest coverage level offered under the product. CMS also finalizes that a Marketplace may not newly auto-re-enroll into catastrophic coverage an enrollee who is currently enrolled in coverage of a metal level as defined in section 1302(d) of the ACA. This policy codifies the current re-enrollment process for Marketplaces on the Federal platform. CMS finalizes that all Marketplaces (including Marketplaces on the Federal platform and State Marketplaces) must implement this policy beginning with the Open Enrollment period for PY 2025 coverage unless they secure approval from the HHS Secretary for an alternative approach to auto re-enrollment through the existing process for Exchange to request such auto re-enrollment flexibility. 

Making It Easier to Enroll in Coverage

Special Enrollment Periods 

CMS finalizes the alignment of coverage effective dates after a consumer selects a plan during a special enrollment period subject to regular coverage effective dates across all Marketplaces, including State Marketplaces, beginning January 1, 2025, or an earlier date at the option of the Marketplace. For ease of consumer experience and to prevent coverage gaps for consumers transitioning between different Marketplaces or from other insurance coverage, consumers who select and enroll in a QHP during a special enrollment period with a regular coverage effective date receives coverage beginning the first day of the month after the consumer selects a QHP.  

CMS also finalizes extending the availability of a special enrollment period that is granted to advance payment of the premium tax credit (APTC)-eligible, qualified individuals with a projected annual household income at or below 150% of the federal poverty level by removing the limitation that this special enrollment period is only available to a consumer whose applicable premium credit percentage, which is used to determine the amount of the consumer’s premium not covered by APTC, is zero. Making this special enrollment period available is optional for all Marketplaces.

Failure to File and Reconcile Process

CMS finalizes that all Marketplaces must send notices to consumers or tax filers found to have failed to reconcile for one year to inform them of the risk of being determined ineligible for APTC. This policy codifies the procedures of Marketplaces on the Federal platform and imposes the obligation on State Marketplaces to ensure that tax filers enrolled in a State Marketplace have more adequate notice to correct potential failed APTC reconciliation. Nothing in this policy relieves the consumer of their requirement to file and reconcile taxes after the receipt of APTC. In the final rule, CMS noted that it will provide State Marketplaces with additional guidance and technical assistance on implementation.

Improving Incarceration Status Check for the Purposes of QHP Eligibility Verification

CMS finalizes that all Marketplaces may accept consumer attestation of incarceration status without further verification. CMS found that connecting to an alternative incarceration data source would be administratively costly for Marketplaces on the Federal platform, and the rate of incarcerated individuals applying for coverage is very low. Continuing to use electronic data sources to verify incarceration status adds to current costs and health equity challenges for Marketplaces on the Federal platform because incarceration data matching issues (DMIs), which are costly and burdensome to applicants, would continue to be generated. CMS finalizes that State Marketplaces may continue using existing data sources, and if they wish to verify incarceration status using an alternative electronic data source, they should submit their proposed alternative data source for HHS approval if they have not already done so. If HHS approves their use of an alternative electronic data source, they must continue to generate DMIs whenever a mismatch is present between the applicant’s attestation and the data source or other information provided by the applicant or in the Marketplace’s records. 

Effective Date of Coverage in the Basic Health Program 

CMS finalizes to provide states that operate a BHP additional flexibility in establishing an effective date of eligibility for enrollment in BHP coverage. This allows a state to select a standard in which all BHP-eligible applicants have an effective date of coverage on the first day of the month following the month of application or eligibility determination, regardless of when they apply or are found eligible to enroll in a standard health plan in the BHP. CMS finalizes an additional option allowing a state to establish its own uniform effective date policy for enrollment, subject to HHS approval. States continue to have the option to follow the Marketplace standards or the Medicaid process to determine the effective date of eligibility for enrollment in a standard health plan in the BHP.

Enhancing Standards and Guaranteed Consumer Protections 

State-Mandated Benefits and Defrayal

CMS finalizes that state-mandated benefits are not considered “in addition to EHB” under CMS’ defrayal policy if the mandated benefit is an EHB in the state’s EHB-benchmark plan. This helps protect consumers by ensuring that existing EHB benefits in states’ EHB-benchmark plans remain subject to EHB nondiscrimination rules, the annual limitation on cost sharing, and restrictions on annual or lifetime dollar limits. This change may also impact BHPs and Medicaid ABPs.

At Least One Year of Operation as SBM-FP Before State Marketplace Transition

CMS finalizes requiring a state to operate for at least one year, including its Open Enrollment period, an SBM-FP prior to transitioning to operating a State Marketplace. This gives the state sufficient time to create, staff, and structure a State Marketplace organization that could transition to operating its own eligibility and enrollment platform, strengthen its Navigator and consumer outreach programs, and communicate effectively with consumers to support enrollment and avoid health care coverage gaps. Further, a year operating an SBM-FP provides the state time to prepare and familiarize consumers, consumer assisters, partners in the coordination of eligibility functions, and other interested parties with the operations of the new State Marketplace.

State Marketplaces to Operate a Centralized Eligibility and Enrollment Platform on the State Marketplace’s Website

CMS finalizes that a Marketplace must operate a centralized eligibility and enrollment platform on the Marketplace’s website (or, for an SBM-FP, on the Federal eligibility and enrollment platform), allowing for the submission of the single, streamlined application for enrollment in QHPs and insurance affordability programs by consumers through the Marketplace’s website (or, for an SBM-FP, on the Federal eligibility and enrollment platform). This codifies and ties together existing requirements that the Marketplace is the entity responsible for making all determinations regarding eligibility for QHP coverage and insurance affordability programs through the Marketplace’s operation of a centralized eligibility platform, regardless of whether an individual files an application for enrollment in a QHP on the Marketplace’s website or a non-Marketplace website operated by an entity such as a web-broker, a direct enrollment entity, or QHP issuer. This policy also requires that only state entities or other eligible contracting entities that a Marketplace contracts with to operate its centralized eligibility and enrollment platform can perform the eligibility determination function on behalf of the Marketplace.

Establishing Marketplace Call Center Standards

CMS finalizes call center standards to require that all Marketplace call centers provide consumer access to a live call center representative during a Marketplace’s published hours of operation. Marketplace call centers for SBM-FPs and Small Business Health Options Program (SHOP) Marketplaces that do not provide for enrollment in SHOP coverage through an online SHOP enrollment platform are exempt. CMS finalizes that the Marketplace’s live call center representatives must assist consumers with their Marketplace application during the Marketplace’s hours of operation, which includes providing consumers information on their APTC and cost-sharing reduction (CSR) eligibility, helping consumers understand their QHP options, facilitating a consumer’s comparison of QHPs, and helping consumers submit QHP enrollment applications to the Marketplace.   

Annual Open Enrollment Dates for State Marketplaces Not Utilizing the Federal Platform

CMS finalizes that State Marketplaces not utilizing the Federal platform must generally provide an annual Open Enrollment period that starts on November 1 and ends no earlier than January 15. CMS finalizes this policy with an exception grandfathering the Open Enrollment period of any State Marketplace that held an Open Enrollment period that began before November 1, 2023, and ended before January 15, 2024, for the 2024 benefit year, to permit such a State Marketplace to continue doing so for consecutive future benefit years if the Open Enrollment period continues uninterrupted for at least 11 weeks. If the State Marketplace later changes the date(s) of its Open Enrollment period, it must comply with this minimum standard. Overall, these policies help ensure a more consistent minimum Open Enrollment period across Marketplaces while maintaining the flexibility for a State Marketplace to hold a lengthier Open Enrollment period or to grandfather the Open Enrollment period with certain caveats. 

Ensure Web-brokers and Direct Enrollment Entities Operating in State Marketplaces Meet Certain HHS Standards Applicable in the FFMs and SBM-FPs

CMS finalizes extending certain existing HHS standards for Marketplaces that use the Federal platform that apply to web-brokers and direct enrollment entities assisting consumers on those Marketplaces to newly apply to web-brokers and direct enrollment entities assisting consumers on Individual Marketplaces and SHOPs in State Marketplaces. CMS finalizes minimum federal standards that govern web-broker website display of standardized comparative QHP information, information pertaining to a consumer’s eligibility for APTC or CSRs, disclaimer language, providing consumers with correct information, access by downstream agents and brokers, and operational readiness apply to web-brokers across all Marketplaces. CMS also finalizes minimum federal standards that govern direct enrollment entity marketing and displaying QHPs and non-QHPs, website disclaimer language, application assisters, providing consumers with correct information, and operational readiness apply across all Marketplaces. Under these policies, State Marketplaces that do not use the Federal platform retain some flexibility to customize certain processes to best meet their needs consistent with these minimum requirements. 

Require HealthCare.gov Changes be Reflected on Direct Enrollment Entity Non-Marketplace Websites within a Time Period Set by HHS

CMS finalizes that direct enrollment entities in FFM and SBM-FP states must implement and prominently display changes to their non-Marketplace websites in a manner that is consistent with display changes made by HHS to HealthCare.gov by meeting standards communicated and defined by HHS within a time period set by HHS unless HHS approves a deviation. For State Marketplaces that implement DE programs, CMS finalizes without modification but with technical changes that State Marketplace website changes be implemented and prominently displayed on their direct enrollment entity non-Marketplace websites within a time period set by the State Marketplace, unless the State Marketplace approves a deviation. The types of changes that HHS will require direct enrollment entities in FFM and SBM-FP states to make to their non-Marketplace websites to align with HealthCare.gov changes focus on enhancing the consumer experience, simplifying the plan selection process, and increasing consumer understanding of plan benefits, cost-sharing responsibilities, and eligibility for financial assistance.

Section 1332 Waiver Public Notice Requirements

The Department of Health & Human Services (HHS) and the Department of the Treasury (collectively, the Departments) finalize flexibilities to the public notice requirements and post-award forum participation requirements for section 1332 waivers. Specifically, the Departments permit states applying for section 1332 waivers to conduct public hearings in a virtual (that is, one that uses telephonic, digital, and/or web-based platforms) or hybrid (that is, one that provides for both in-person and virtual attendance) format in lieu of conducting an in-person meeting as part of state public notice requirements. The Departments also finalize flexibilities regarding the annual post-award forum, where states may conduct the forum in an in-person, virtual, or hybrid format. By allowing states the opportunity to hold post-award forums and public hearings virtually and through digital platforms, states are able to continue facilitating attendance from interested parties, increase opportunities for engagement in policymaking for communities and local partners who may face barriers to in-person participation, and enhance public participation in the section 1332 waiver review and monitoring process.

Reinterpreting the Authority to Access Certain Data through Medicaid, CHIP, and Marketplace Hub Services

Requiring State Marketplaces and State Medicaid and CHIP Agencies to Pay to Access Income Data via the Verify Current Income Hub Service

CMS finalizes the reinterpretation of State Exchange and State Medicaid and CHIP agency use of the Federal Data Services Hub (Hub) to access and use the income data provided by the optional VCI Hub service as a State Exchange or a State Medicaid and CHIP agency function, and that beginning July 1, 2024, State Exchanges and State Medicaid and CHIP agencies will be required to pay for the costs of their access to and use of the VCI Hub service. We are also finalizing the proposal with a modification: rather than requiring states to pay in advance for their use of the VCI Hub Service, HHS will invoice states monthly for the amount the state must pay to reimburse HHS for the costs of their access and actual utilization of CSI income data from the prior month. Specifically, HHS will invoice states on a monthly basis for their actual utilization of the CSI income data accessed through the VCI Hub Service, as well as an administrative fee to account for any direct or indirect costs of making CSI income data accessed through the VCI Hub service available to Exchanges and State Medicaid and CHIP agencies, in accordance with the Intergovernmental Cooperation Act and interpretive OMB Circulars A-97 and A-25. State Medicaid and CHIP agencies that choose to utilize the VCI Hub service may request federal financial participation for their share of the costs. States may be eligible for a 75% federal match for their Medicaid system operational costs to obtain CSI income data via the VCI Hub service. State Medicaid agencies may submit an Advance Planning Document (APD) to request the 75% federal match.

Strengthening Markets

FFM and SBM-FP User Fees

For the 2025 benefit year, CMS finalizes an FFM user fee rate of 1.5% of total monthly premiums and an SBM-FP user fee rate of 1.2% of total monthly premiums, which are lower than user fee rates for the 2024 benefit year.

HHS-Operated Risk Adjustment Program

For the 2025 benefit year, CMS finalizes the use of the 2019, 2020, and 2021 enrollee-level EDGE data for recalibration of the HHS risk adjustment models. Consistent with prior benefit year model recalibrations, this involves the use of the three most recent consecutive years of enrollee-level EDGE data that were available at the time CMS incorporated the data in the draft recalibrated coefficients for the applicable benefit year. Using the three most recent consecutive years to recalibrate the HHS risk adjustment models provides stability. It minimizes volatility in changes to risk scores between benefit years due to differences in the dataset’s underlying populations, while reflecting the most recent years’ claims experience available. Additionally, CMS will continue to apply a market pricing adjustment to the plan liability associated with Hepatitis C drugs in the risk adjustment models for the 2025 benefit year.

CMS finalizes updates to the CSR adjustment factors for American Indian and Alaska Native (AI/AN) zero cost sharing and limited cost sharing plan variant enrollees for the 2025 benefit year and beyond unless changed through notice-and-comment rulemaking. These changes align with CMS’ efforts to continuously update the HHS risk adjustment models with incremental changes to improve model prediction by updating the AI/AN CSR adjustment factors to predict plan liability more accurately for this subpopulation. CMS also believes that these changes increase the incentives for issuers to engage the AI/AN population, whose communities have been historically underserved and face significant health disparities. In addition, CMS finalizes retaining the current CSR adjustment factors for silver plan variant enrollees for the 2025 benefit year and beyond, unless changed through future notice-and-comment rulemaking. 

Risk Adjustment User Fee for the 2025 Benefit Year

CMS finalizes a risk adjustment user fee for the 2025 benefit year of $0.18 per member per month, which is a decrease from the 2024 benefit year risk adjustment user fee rate of $0.21 per member per month. For the 2025 benefit year, HHS will operate the risk adjustment program applicable to the individual, small group, and merged markets in every state and the District of Columbia. These costs cover development of the models and methodology, collections, payments, account management, data collection, data validation, program integrity and audit functions, operational and fraud analytics, interested parties training, operational support, and administrative and personnel costs dedicated to HHS-operated risk adjustment program activities. 

Premium Adjustment Percentage and Payment Parameters

On November 15, 2023, CMS issued the 2025 benefit year premium adjustment percentage index and related payment parameters in guidance, consistent with the policy finalized in the 2022 Payment Notice (86 FR 24238).