HHS finalized the Notice of Benefit & Payment Parameters for plan year 2025, adopting several long sought after changes to the essential health benefits (EHBs). The Affordable Care Act established EHBs to ensure that people who enroll in individual and small group plans, as well as Medicaid expansion plans, receive a comprehensive set of health care benefits. As we have explained, EHBs are an important protection to ensure that health insurance coverage is not only affordable, but meets the needs of people, many of whom were uninsured or under-insured before the ACA. EHBs can also advance health equity and reduce disparities among underserved populations, including low-income individuals and families.
The 2025 NBPP Final Rule introduces important opportunities for states to close remaining gaps in accessing essential services. States are, and will continue to be for the foreseeable future, the primary regulators of EHB. States have the responsibility of defining the benefits that will be required under the different categories by selecting plans (base-benchmark plans) that serve as the model for other plans to follow. Since 2018, HHS has allowed states to add or improve the services covered, as long as the resulting benchmark plan meets certain actuarial requirements. The 2025 NBPP Final Rule expands on these recent flexibilities.
For example, prior to 2024, only nine states had taken advantage of the new benchmarking flexibilities. State regulators complained that the process was often too burdensome. In the 2025 NBPP Final Rule, HHS responded by streamlining the benchmarking process. First, HHS eliminated two of the current benchmark plan options and kept only the third option (to create a new benchmark plan altogether). Second, starting in January 1, 2026 states seeking benchmark changes would not be required to submit a drug formulary unless the state is requesting changes to their prescription drug coverage. These two policies would save states time and money increasing the likelihood that they will seek changes to their benchmark plans.
While the 2025 NBPP Final Rule maintains the actuarial limits imposed on states seeking benchmark changes, HHS clarified those limits by requiring that proposed benchmark plans be, actuarially, at least as generous as the least generous typical employer plan in the state. A typical employer plan is one of the selecting state’s 10 base-benchmark plan options available for the 2017 plan year, or the largest health insurance plan by enrollment within one of the five largest large group health insurance products by enrollment, in the state. The final rule also imposes a maximum level of actuarial scope for the proposed benchmark plans represented by the typical employer plan with the most generous actuarial scope of benefits. This provision effectively expands the number of plans that could be considered typical employer plans, potentially allowing states to have more actuarial room to expand coverage requirements under the benchmarking process.
The 2025 NBPP Final Rule also codifies a long-standing policy whereby, when plans cover prescription drugs beyond the bare minimum, those additional medications are still considered EHB. This ensures that cost-sharing protections, including prohibitions on annual and lifetime limits, apply. Some insurance companies and pharmacy benefit managers (PBMs) have tried to exclude some drugs from the EHB cost-sharing protections, imposing exorbitant financial burdens on consumers. As expected, the heaviest burden falls on individuals with complex health needs who rely on prescription drugs. Codifying HHS’ policy will protect these patients and strengthen equitable access to prescription drugs.
The 2025 NBPP Final Rule also builds upon 2016 regulations establishing Pharmacy and Therapeutics (P&T) Committees, by requiring a consumer or patient representative to serve on the committee. P&T Committees play a key role in developing and updating prescription drug formularies. P&T Committees also review prior authorization, step therapy, and other utilization management criteria, as well as exceptions policies so plan enrollees may obtain non-formulary drugs. Giving patient-advocates a voice on P&T Committees, consistent with the principle Nothing About Us Without Us developed by disability rights advocates, is an important step in ensuring that prescription drug formularies meet the needs of health care consumers.
Another important provision finalized in the 2025 NBPP is a rule that clarifies that benefits added through the benchmarking process would not be considered in addition to EHBs even if the benefits have also been added through legislation or other state action outside of the benchmarking process. Without this clarification, states that enacted new state mandates through legislation after 2012 would have had to defray the cost of covering those services. Now, those states will have the option of moving those coverage requirements to the benchmark plan in order to stop defraying the costs, as long as actuarial requirements are met.
Finally, and perhaps most importantly, the 2025 NBPP Final Rule provides states the opportunity to include adult dental services as EHB beginning in Plan Year 2027. NHeLP has long urged HHS to remove an unnecessary regulatory barrier that prevented states from requiring coverage of routine adult dental care as EHB. The rescinded provision was based on an improper reading of the ACA that excluded adult dental care from coverage requirements. While the new rule does not go as far as requiring plans to cover adult dental services as EHBs, it expands on states’ flexibilities to allow them to incorporate these services into their benchmark plans. Of course, states seeking to do so would have to comply with all the actuarial requirements discussed above.
Allowing states to expand access to adult dental care is a critical move in the fight towards health equity. Black, Indigenous, or People of Color (BIPOC) are less likely than their white counterparts to receive dental care, in part because of lack of coverage. Moreover, lack of access to dental services also leads to other serious conditions, including cardiovascular disease and low birthweights, which are more prevalent in underserved communities. By allowing states to require dental care coverage, the 2025 NBPP opens the door to the possibility that states will use the benchmarking process to require dental care as a way to address health disparities regarding dental care and related conditions.
NHeLP has called on HHS to use its statutory authority to define EHBs in order to advance health equity and improve access to care. As we have repeatedly raised, such regulatory actions may be one of the few alternatives left in the face of congressional gridlock. While much work remains, HHS just took an important big step towards achieving the goal of the ACA of expanding access to comprehensive and equitable health coverage.
