May 10, 2024

On April 2, the Tri-Agencies released a new Frequently Asked Questions (FAQs) document (ACA FAQ Part 66) highlighting and clarifying requirements set forth by the Plan Year 2025 Notice of Benefit and Payment Parameters (NBPP). The NBPP, issued annually, primarily impacts small group and individual market insurance policies and various requirements from year-to-year. This ACA FAQ Part 66 document, released alongside the final NBPP, provided insight into the applicability of certain NBPP provisions to self-insured and large group market plans, and indicates that future guidance will be undertaken by the departments.

Under the ACA, large group and self-insured plans are not technically required to provide “essential health benefits” (EHB). However, for practical purposes, most large group and self-insured plans do provide benefits that would fall within the definition of EHBs – and those benefits are required to comply with certain standards, including a prohibition on annual or lifetime limits. While the ACA set the original list of services that constitute EHBs, states are permitted to craft their own EHB requirements, which are referred to as EHB-benchmark plans. Self-insured and large group employers have a choice of which benchmark plan to use, but must select an EHB-benchmark plan to use as a reference to define which of the plan’s benefits are EHBs (and to show it is meeting any applicable standards).

For these provisions, the 2025 NBPP explicitly applies to non-grandfathered individual and small group market plans. According to the final NBPP, if a non-grandfathered individual and small group market plan chooses to cover more prescription drugs than required by the EHB-benchmark plan in the applicable state, those additional prescription drugs must also be covered as EHBs. This means that, although they are beyond the minimum requirement, if they are covered, they must be covered without annual or lifetime limits and included in the annual cost-sharing limit calculation. An exception to this rule would be if the coverage of the drug is mandated by the state independent of the state’s EHBs. In such cases, those mandated drugs are not treated as EHBs.

Since the 2025 NBPP regulation only explicitly mentions non-grandfathered individual and small group market plans, CMS received several inquiries questioning if there would be similar requirements when a large group or self-insured plan covers prescription drugs beyond those that would be consistent with the EHB-benchmark plan it selected for reference.

ACA FAQ Part 66 clarifies that these provisions of the final 2025 NBPP do not currently apply to large group market health plans and self-insured group health plans. But the Departments also make it clear that there will likely be future rulemaking to align the standards and eventually require large group and self-insured plans to treat prescription drugs covered beyond the selected EHB-benchmark plan (as if they too are EHBs not subject to annual and lifetime limits) and counted towards cost-sharing maximums – i.e., the same way small group and individual market plans now must. The Business Group will continue to monitor regulatory updates and offer timely guidance to ensure our members are prepared for any changes ahead.

We provide this material for informational purposes only; it is not a substitute for legal advice.

More Topics

Resource Compliance