February 19, 2025 • 12 mins
🚨 The 2026 Notice of Benefit and Payment Parameters (NBPP) is here! What does it mean for health plans?
In this episode of Regulatory Joe, we break down the latest ACA compliance updates for 2026, including key changes in AV calculations, special enrollment periods, state-based marketplace transitions, and income verification requirements. With CMS moving up the timeline for finalizing regulations, issuers have more time than ever to strategize—but also more details to analyze.
Key Topics Covered: ✔️ The impact of the finalized 2026 NBPP on health plan filings ✔️ CMS’s latest approach to AV calculator updates ✔️ Special Enrollment Periods (SEPs) and subsidy expansion ✔️ What new call center standards mean for issuers ✔️ How state-based marketplaces (SBMs) are evolving
🔗 For more insights, visit: regulatoryjoe.co
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hey, everybody.
Welcome to Regulatory Joe.
I'm Joe Boyle, President ofRegulatory Solutions here at Penstock.
On today's episode, we'll bediscussing the Notice of Benefit
and Payment Parameters for Plan Year2026 and everything you need to know.
The NBPP at baseline is amulti-hundred page policy document
released by CMS each year.
It touches on all the core fundamentalcomponents of the Affordable Care
(00:21):
Act and outlines all the programmaticrequirements that issuers must follow to
be successful and compliant to serve theirmembers in the future upcoming plan year.
They collect feedback forperformance from all plan issuers
for the previous past plan year.
They evaluate feedback through qualitystar ratings, through public comment
periods from issuers in the generalpublic, and formulate an opinion where
(00:43):
they actually publish this final rule.
For the past many years, CMS hasactually delayed the release of the
NBPP in its final state until as lateas February of each calendar year.
This past plan year, CMS has actuallypushed that date up where they
released the draft document in Novemberof last year and they've actually
released the final version aroundthe January 15th timeframe of 2025.
(01:06):
It's important to call out that thatis the earliest CMS has actually
published the final rule eversince the inception of the ACA.
This is favorable to issuers because itallows us more time to review and ingest
the documentation with all the proposedchanges, as well as evaluating impact
to plan portfolio strategy and analysis.
We have seen a common theme ofcertain focus areas that continue
(01:27):
to be strengthened by CMS.
A couple of these key topics include theAV calculator, special enrollment periods,
such things as strengthening networkadequacy requirements and even standard
plan and non-standard plan options.
While it is clear that CMS continuesto repeat topics year over year, they
are strengthening certain things thatcan be favorable for issuers for plan
year 2026 (01:48):
increasing speed to market, increasing efficiencies in the systems
that we use, such as SERFF, HIOS and MPMS.
So that being said, let's talkabout some key updates for
the NBPP for plan year 2026.
If you did listen in to a fewof our most recent episodes, we
did have a spotlight on AVs, andspecifically for Plan Year 2026.
(02:10):
The big change is there will only be onesingle version of the AV calculator and
AV methodology published for this year.
And you may think it's crazy, but inprior years, if you were actually close
to the work running AVs for differentmetallic tiers, for your bronze,
expanded bronze, silver, platinum orgold plans, you may have realized that
(02:30):
CMS actually published new versionsmid-cycle within filing season.
Now that's a problem because you canrun AVs all day long and make sure
that you're compliant with all yourmetallic tiers, but once CMS releases
that new version of the calculator,you have to rerun all your plans.
Whether you have one plan, five plansor, even with your variants, could
be up to a couple hundred plans.
(02:51):
We did see issuers with a mad dashand a scramble to reconcile plans
that may have fell out of compliance.
But the good news is that the AVcalculator was released in tandem with
the final NBPP for plan year 2026.
There's no more waitingfor that final calculator.
And even when the draft was released,last November, issuers should have been
running that draft to actually planfor their portfolio strategy anyways.
(03:14):
We do know that some issuers are juststarting their plan portfolio strategies
as states are releasing their newplan guidance, but what we do know
is that, look in the NBPP, find CMS'sstandard plan design options, pull
those out of the appendix, probablyappendix C or D, and use those plan
cost shares and copays to input inyour AV calculator to get a head start.
(03:35):
Even if you don't know where yourplan's going, what your leadership
team needs to do to increase membershipor lower their cost position, you can
still model some plan designs, makesome recommendations to the business
and get ahead of decision-making.
It's important to track the versionsof your cost shares and copays as
you're running them through the tool.
For example, if you're changing a PCPcopay from $10 to $20, make sure you
(04:00):
flag that change and make a commentand note of when it changed, what
version of the document has changedand the outputs for the AV results
and save those in a separate folder.
It's going to be really important tohave versioning control and continuity
for your data, or else it's going to getreally messy and hard to keep track of.
Make sure you keep a changelog as well,because what you can actually derive from
(04:21):
the AV calculator is a lot of metrics.
So making sure that you can actuallyset goals and benchmarks for next
year that says okay, I ran thecalculator X amount of times.
We're going to reduce that byhalf in year two, reduce that
by three quarters in year three.
Another topic CMS put emphasis onfor Plan Year 2026 is state-based
marketplaces operating on the federalplatform, also known as SBM-FPs.
(04:43):
As we see the ongoing trend of statestransitioning to SBMs, retaining more
control over their state policies forACA plan filings year over year, we
can actually anticipate that CMS willcontinue to strengthen the impact on
state-based marketplaces, possiblyeven extending the transition period
for greater than one year for statesthat must be operating on the federal
(05:05):
platform before they transition tothe state-based platform standalone.
For plan year 2026, we do see CMSproviding states with more control
during the SBM-FP transition process.
What that means is that states are givenmore control to create new policies
and procedures, new requirements forissuers to deploy for the new plan year.
(05:25):
Some of these changes could be newvalue-based insurance design programs,
new plan design requirements, capson cost shares and copays or even
drug and formulary requirements.
While we do see that states having morecontrol is generally more favorable for
members and their health outcomes, wedo see that this will come at a greater
expense to issuers in the long run.
Understanding the user fees of an SBM-FPversus an FFM will be very important
(05:49):
with how you conduct your operations.
Working with your states and theregulators day-to-day is going to also
be important on how you price your plans.
As a lot of the analysis andinterpretation of some of the final rule
is still underway, it's going to be reallyhard to actually have one finite solution
for your plan strategy for this year.
We recommend making about three or fourportfolio strategies based on some of
(06:10):
the implications that we think willimpact your plan for the user fees,
the actual conversion of state-basedmarketplaces on the federal platform,
and other state-mandated implicationsand policies that will be released
over the course of February and Marchprior to your plan filing season.
If your team doesn't know where to beginin terms of initial analyses, a couple
(06:31):
places where you can start is evaluatingthe user fees a little bit further.
So yes, while we understand that aconversion from a federal marketplace
to a state-based marketplace state couldyield higher user fees, please make
sure you include that in your pricingmodeling for your planned premiums.
But then also be mindful as you'readjusting your plan premiums to account
for the user fees on the state-basedmarketplace federal platform.
(06:54):
Please also make sure that you'readjusting the cost shares and
copays that go alongside that.
Another critical update CMS isenforcing in the 2026 NBPP is
income verification during theeligibility and enrollment process.
It will be important for your coreteam to understand, for plan year
2026, the general structure andoverall theme of how federal poverty
(07:15):
level percentages and APTCs work.
Come 11/1, later this year, whenmembers enroll into their system and
input their income eligibility andverification information, that could
actually change how their APTCs applyto their planned premiums for next year.
The big change here and the big differencethat you need to be mindful of is that
CMS inherently dictates the FederalPoverty Level Percentage Schedule and
(07:39):
income verification in the eligibilityapplication hosted on healthcare.gov.
Specifically speaking, CMS will beincorporating different components
into the eligibility validation whenmembers input their household income on
healthcare.gov within their application.
What we recommend is that issuersprior to 11/1 enrollment actually can
(08:00):
create an account using your enrollmentpartner, whether it's using Enhanced
Direct Enrollment or Direct Enrollmentto actually test eligibility and test
income thresholds before members evenget a chance to apply for coverage.
The big problem that you want to avoidis that if a member, whether it's an
existing member or a renewing member, isactually applying for coverage at your
plan again for a second year, third yearor fourth year, the last thing you want
(08:23):
to do is to produce incorrect values orincorrect premium dollar amounts on the
shopping experience for your members.
We recommend creatinga subset of scenarios.
We generally use your average 40 yearold, non smoker, whether it's a male
or female with one or more dependents,to test eligibility validation.
The purpose of this exerciseis really just to validate the
methodology that CMS has updatedduring the application process.
(08:47):
The last thing you want to do islose a member based on incorrect
information coming through on yourfederal application or even on a
state-based exchange application.
Regardless of the type of exchange thatyou participate in, whether it's an
FFM or SBM, it's really important tounderstand what CMS is changing for call
center standards and wait times for 2026.
So really evaluating the growth ofthe ACA over the past number of years,
(09:11):
we've seen membership grow from amodest 14 million members to 16 and
a half million members to over 21million members for plan year 2026.
That being said, as membership isexploding this plan year, that's
a direct correlation to havingmore calls into the call center.
Now, whether it's CMS's call centeron healthcare.gov fielding these calls
(09:33):
with their agents, or a state-basedmarketplace fielding those calls day
in and day out, standards are changing.
For an example, if you do participatein a state-based marketplace today,
you may be used to receiving alevel of metrics on a regular basis.
We can expect a little bit moretransparency from CMS with the
Federal Call Center Standardsand Reporting for Plan Year 2026.
(09:53):
Issuers can expect to receive agreater level of detail in the reports,
whether it's more specifics on calltimes, wait time standards, hold
times, drop times or even repeat callvisits to an agent from a member.
Now what's really interesting andwhere it could be a little bit
more problematic is specific tonew issuers, not existing issuers.
(10:14):
And the reason why I'm calling out newmarket entrants is because when you enter
a new marketplace, whether it's an FFM oran SBM, it's important to understand the
implications of who's taking the callsand the actual process that takes place.
Most especially for new issuers, whenyou actually stand up a process, for
example, in a federal marketplace,you either have to build or buy
(10:35):
service operations capabilities.
That either means you have to contractwith a call center outside of your
organization to take calls and toingest that into your organization,
or you have to staff up temporarycall center agents or full-time call
center agents by hiring and onboarding.
With the increase of membership, weencourage you to evaluate your membership
projections, staff accordingly based onhow many calls you anticipate receiving
(10:59):
and augment your staffing model and orgdesign throughout enrollment season.
One of the last topics we wanted totouch on for today is Special Enrollment
Periods, or SEPs, and this acronymcomes up throughout the year, every
year since the inception of the ACA.
The last time we really honedin on this as a topic was during
COVID when the pandemic was here.
(11:20):
Enrollment was extended for months at atime, well beyond January 15 throughout
each plan year and calendar year untilthe public health emergency was lifted.
As CMS and each individual state topermanently expand subsidy eligibility,
specifically focused on members who areeligible for 150 percent of the poverty
level could qualify for special enrollmentperiods throughout each calendar year,
(11:43):
every year with no limitations at all.
So while we agree that's very favorablefor the membership that it impacts,
allowing them to enroll at anypoint throughout the year, it really
splits membership into differentcategories, leaving it unfavorable
for the rest of the population.
Really the lesson here is to understandwhere you participate today, because
understanding that the way CMSlooks at APTCs, the expansion of
(12:06):
subsidy eligibility and the AmericanRescue Plan, could be different from
some of the state-based exchangesthat you participate in today.
We are seeing a trend that evenas special enrollment periods are
carrying forward with CMS, thatcertain states are augmenting how
they apply subsidies to membershipwithin their state specifically.
So even if the NBPP is now officiallyfinal for Plan Year 2026, the
(12:29):
review will still be ongoing.
I think the major takeaway for allissuers across the country is to simply
invest the time with your teams to reviewthe NBPP, disseminate the topics that
mean the most to your plan strategy,and implement a workgroup, and just
really make this an ongoing processthat's a priority for your organization.
And just remember, it's going to comeup the same time later this year.
Hey, everybody.
Welcome to Regulatory Joe.
I'm Joe Boyle, President ofRegulatory Solutions here at Penstock.
On today's episode, we'll bediscussing the Notice of Benefit
and Payment Parameters for Plan Year2026 and everything you need to know.
The NBPP at baseline is amulti-hundred page policy document
released by CMS each year.
It touches on all the core fundamentalcomponents of the Affordable Care
(00:21):
Act and outlines all the programmaticrequirements that issuers must follow to
be successful and compliant to serve theirmembers in the future upcoming plan year.
They collect feedback forperformance from all plan issuers
for the previous past plan year.
They evaluate feedback through qualitystar ratings, through public comment
periods from issuers in the generalpublic, and formulate an opinion where
(00:43):
they actually publish this final rule.
For the past many years, CMS hasactually delayed the release of the
NBPP in its final state until as lateas February of each calendar year.
This past plan year, CMS has actuallypushed that date up where they
released the draft document in Novemberof last year and they've actually
released the final version aroundthe January 15th timeframe of 2025.
(01:06):
It's important to call out that thatis the earliest CMS has actually
published the final rule eversince the inception of the ACA.
This is favorable to issuers because itallows us more time to review and ingest
the documentation with all the proposedchanges, as well as evaluating impact
to plan portfolio strategy and analysis.
We have seen a common theme ofcertain focus areas that continue
(01:27):
to be strengthened by CMS.
A couple of these key topics include theAV calculator, special enrollment periods,
such things as strengthening networkadequacy requirements and even standard
plan and non-standard plan options.
While it is clear that CMS continuesto repeat topics year over year, they
are strengthening certain things thatcan be favorable for issuers for plan
year 2026 (01:48):
increasing speed to market, increasing efficiencies in the systems
that we use, such as SERFF, HIOS and MPMS.
So that being said, let's talkabout some key updates for
the NBPP for plan year 2026.
If you did listen in to a fewof our most recent episodes, we
did have a spotlight on AVs, andspecifically for Plan Year 2026.
(02:10):
The big change is there will only be onesingle version of the AV calculator and
AV methodology published for this year.
And you may think it's crazy, but inprior years, if you were actually close
to the work running AVs for differentmetallic tiers, for your bronze,
expanded bronze, silver, platinum orgold plans, you may have realized that
(02:30):
CMS actually published new versionsmid-cycle within filing season.
Now that's a problem because you canrun AVs all day long and make sure
that you're compliant with all yourmetallic tiers, but once CMS releases
that new version of the calculator,you have to rerun all your plans.
Whether you have one plan, five plansor, even with your variants, could
be up to a couple hundred plans.
(02:51):
We did see issuers with a mad dashand a scramble to reconcile plans
that may have fell out of compliance.
But the good news is that the AVcalculator was released in tandem with
the final NBPP for plan year 2026.
There's no more waitingfor that final calculator.
And even when the draft was released,last November, issuers should have been
running that draft to actually planfor their portfolio strategy anyways.
(03:14):
We do know that some issuers are juststarting their plan portfolio strategies
as states are releasing their newplan guidance, but what we do know
is that, look in the NBPP, find CMS'sstandard plan design options, pull
those out of the appendix, probablyappendix C or D, and use those plan
cost shares and copays to input inyour AV calculator to get a head start.
(03:35):
Even if you don't know where yourplan's going, what your leadership
team needs to do to increase membershipor lower their cost position, you can
still model some plan designs, makesome recommendations to the business
and get ahead of decision-making.
It's important to track the versionsof your cost shares and copays as
you're running them through the tool.
For example, if you're changing a PCPcopay from $10 to $20, make sure you
(04:00):
flag that change and make a commentand note of when it changed, what
version of the document has changedand the outputs for the AV results
and save those in a separate folder.
It's going to be really important tohave versioning control and continuity
for your data, or else it's going to getreally messy and hard to keep track of.
Make sure you keep a changelog as well,because what you can actually derive from
(04:21):
the AV calculator is a lot of metrics.
So making sure that you can actuallyset goals and benchmarks for next
year that says okay, I ran thecalculator X amount of times.
We're going to reduce that byhalf in year two, reduce that
by three quarters in year three.
Another topic CMS put emphasis onfor Plan Year 2026 is state-based
marketplaces operating on the federalplatform, also known as SBM-FPs.
(04:43):
As we see the ongoing trend of statestransitioning to SBMs, retaining more
control over their state policies forACA plan filings year over year, we
can actually anticipate that CMS willcontinue to strengthen the impact on
state-based marketplaces, possiblyeven extending the transition period
for greater than one year for statesthat must be operating on the federal
(05:05):
platform before they transition tothe state-based platform standalone.
For plan year 2026, we do see CMSproviding states with more control
during the SBM-FP transition process.
What that means is that states are givenmore control to create new policies
and procedures, new requirements forissuers to deploy for the new plan year.
(05:25):
Some of these changes could be newvalue-based insurance design programs,
new plan design requirements, capson cost shares and copays or even
drug and formulary requirements.
While we do see that states having morecontrol is generally more favorable for
members and their health outcomes, wedo see that this will come at a greater
expense to issuers in the long run.
Understanding the user fees of an SBM-FPversus an FFM will be very important
(05:49):
with how you conduct your operations.
Working with your states and theregulators day-to-day is going to also
be important on how you price your plans.
As a lot of the analysis andinterpretation of some of the final rule
is still underway, it's going to be reallyhard to actually have one finite solution
for your plan strategy for this year.
We recommend making about three or fourportfolio strategies based on some of
(06:10):
the implications that we think willimpact your plan for the user fees,
the actual conversion of state-basedmarketplaces on the federal platform,
and other state-mandated implicationsand policies that will be released
over the course of February and Marchprior to your plan filing season.
If your team doesn't know where to beginin terms of initial analyses, a couple
(06:31):
places where you can start is evaluatingthe user fees a little bit further.
So yes, while we understand that aconversion from a federal marketplace
to a state-based marketplace state couldyield higher user fees, please make
sure you include that in your pricingmodeling for your planned premiums.
But then also be mindful as you'readjusting your plan premiums to account
for the user fees on the state-basedmarketplace federal platform.
(06:54):
Please also make sure that you'readjusting the cost shares and
copays that go alongside that.
Another critical update CMS isenforcing in the 2026 NBPP is
income verification during theeligibility and enrollment process.
It will be important for your coreteam to understand, for plan year
2026, the general structure andoverall theme of how federal poverty
(07:15):
level percentages and APTCs work.
Come 11/1, later this year, whenmembers enroll into their system and
input their income eligibility andverification information, that could
actually change how their APTCs applyto their planned premiums for next year.
The big change here and the big differencethat you need to be mindful of is that
CMS inherently dictates the FederalPoverty Level Percentage Schedule and
(07:39):
income verification in the eligibilityapplication hosted on healthcare.gov.
Specifically speaking, CMS will beincorporating different components
into the eligibility validation whenmembers input their household income on
healthcare.gov within their application.
What we recommend is that issuersprior to 11/1 enrollment actually can
(08:00):
create an account using your enrollmentpartner, whether it's using Enhanced
Direct Enrollment or Direct Enrollmentto actually test eligibility and test
income thresholds before members evenget a chance to apply for coverage.
The big problem that you want to avoidis that if a member, whether it's an
existing member or a renewing member, isactually applying for coverage at your
plan again for a second year, third yearor fourth year, the last thing you want
(08:23):
to do is to produce incorrect values orincorrect premium dollar amounts on the
shopping experience for your members.
We recommend creatinga subset of scenarios.
We generally use your average 40 yearold, non smoker, whether it's a male
or female with one or more dependents,to test eligibility validation.
The purpose of this exerciseis really just to validate the
methodology that CMS has updatedduring the application process.
(08:47):
The last thing you want to do islose a member based on incorrect
information coming through on yourfederal application or even on a
state-based exchange application.
Regardless of the type of exchange thatyou participate in, whether it's an
FFM or SBM, it's really important tounderstand what CMS is changing for call
center standards and wait times for 2026.
So really evaluating the growth ofthe ACA over the past number of years,
(09:11):
we've seen membership grow from amodest 14 million members to 16 and
a half million members to over 21million members for plan year 2026.
That being said, as membership isexploding this plan year, that's
a direct correlation to havingmore calls into the call center.
Now, whether it's CMS's call centeron healthcare.gov fielding these calls
(09:33):
with their agents, or a state-basedmarketplace fielding those calls day
in and day out, standards are changing.
For an example, if you do participatein a state-based marketplace today,
you may be used to receiving alevel of metrics on a regular basis.
We can expect a little bit moretransparency from CMS with the
Federal Call Center Standardsand Reporting for Plan Year 2026.
(09:53):
Issuers can expect to receive agreater level of detail in the reports,
whether it's more specifics on calltimes, wait time standards, hold
times, drop times or even repeat callvisits to an agent from a member.
Now what's really interesting andwhere it could be a little bit
more problematic is specific tonew issuers, not existing issuers.
(10:14):
And the reason why I'm calling out newmarket entrants is because when you enter
a new marketplace, whether it's an FFM oran SBM, it's important to understand the
implications of who's taking the callsand the actual process that takes place.
Most especially for new issuers, whenyou actually stand up a process, for
example, in a federal marketplace,you either have to build or buy
(10:35):
service operations capabilities.
That either means you have to contractwith a call center outside of your
organization to take calls and toingest that into your organization,
or you have to staff up temporarycall center agents or full-time call
center agents by hiring and onboarding.
With the increase of membership, weencourage you to evaluate your membership
projections, staff accordingly based onhow many calls you anticipate receiving
(10:59):
and augment your staffing model and orgdesign throughout enrollment season.
One of the last topics we wanted totouch on for today is Special Enrollment
Periods, or SEPs, and this acronymcomes up throughout the year, every
year since the inception of the ACA.
The last time we really honedin on this as a topic was during
COVID when the pandemic was here.
(11:20):
Enrollment was extended for months at atime, well beyond January 15 throughout
each plan year and calendar year untilthe public health emergency was lifted.
As CMS and each individual state topermanently expand subsidy eligibility,
specifically focused on members who areeligible for 150 percent of the poverty
level could qualify for special enrollmentperiods throughout each calendar year,
(11:43):
every year with no limitations at all.
So while we agree that's very favorablefor the membership that it impacts,
allowing them to enroll at anypoint throughout the year, it really
splits membership into differentcategories, leaving it unfavorable
for the rest of the population.
Really the lesson here is to understandwhere you participate today, because
understanding that the way CMSlooks at APTCs, the expansion of
(12:06):
subsidy eligibility and the AmericanRescue Plan, could be different from
some of the state-based exchangesthat you participate in today.
We are seeing a trend that evenas special enrollment periods are
carrying forward with CMS, thatcertain states are augmenting how
they apply subsidies to membershipwithin their state specifically.
So even if the NBPP is now officiallyfinal for Plan Year 2026, the
(12:29):
review will still be ongoing.
I think the major takeaway for allissuers across the country is to simply
invest the time with your teams to reviewthe NBPP, disseminate the topics that
mean the most to your plan strategy,and implement a workgroup, and just
really make this an ongoing processthat's a priority for your organization.
And just remember, it's going to comeup the same time later this year.
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