The Centers for Medicare and Medicaid Services (CMS) recently issued a final rule making a variety of changes to health insurance offered through Affordable Care Act (ACA) marketplaces. The changes are intended to reduce costs, target fraudulent enrollments, and allow states greater flexibility in administering their marketplaces, according to a CMS news release. While the rule contains over a dozen substantive provisions, the one most likely to impact Arkansas concerns a requirement that states defray the cost of state-mandated benefits offered in marketplace plans.
States Must Defray Costs of State-Mandated Benefits
Since the passage of the ACA, all 50 states and the District of Columbia have passed legislation mandating that marketplace plans include certain benefits in addition to the 10 essential health benefits required under the ACA. Under ACA rules, the portion of a premium attributable to a state-mandated benefit must be defrayed by the state; neither the consumer nor the federal government is responsible for the cost.
However, a 2025 CMS rule allowed a state to avoid defraying the cost of state-mandated benefits if it integrated the benefits into its benchmark plan — the plan selected by the state to define its minimum level of coverage. The new rule undoes this change, again requiring that a state defray the cost of state-mandated benefits, even if the benefits are included in the state’s benchmark plan. This provision will take effect in plan year 2028 and will apply to any benefit mandated by a state after December 31, 2011.
Arkansas last updated its benchmark plan in 2017, so this provision is likely to have limited direct effect in Arkansas, but other related wording in the rule has already impacted the state. The final rule notes that CMS concurs with a recommendation in a 2024 report from the Government Accountability Office that the agency consider increasing scrutiny of the methods by which states implement defrayals. In response to federal guidance, the Arkansas Insurance Department released a bulletin on May 12 directing insurers to include in their marketplace plans for 2027 and thereafter only the 10 essential health benefits required by the ACA and benefits that were mandated by the state on or before December 31, 2011.
Arkansas allows an insurer to exclude mandated benefits from its plans if the insurer provides a written notice to policyholders acknowledging the exclusions. The new guidance directs insurers to use this pathway to exclude mandated benefits from their marketplace plans while still complying with state rules and regulations. State-mandated benefits may still be included in off-exchange individual plans. Under the previous guidance, insurers had the option to include the benefits in their marketplace plans on the condition that the benefits be excluded from consideration when determining plan premiums, leaving the state with no costs to defray.
The new CMS rule also explicitly prohibits routine adult dental benefits from being counted as an essential health benefit. Previous guidance allowed states to include adult dental benefits with updates to their benchmark plans. Arkansas has never included routine adult dental in its benchmark plan, so this provision will not directly impact the state.
Non-Network Plans Allowed
Currently, all plans sold on ACA marketplaces use the provider network model. Under this model, insurers contract with healthcare providers who then offer discounts to the insurers’ members. These contracted providers are collectively called a network, and insurers offer members reduced cost sharing when they receive care from an in-network provider.
The newly finalized CMS rule allows states’ ACA marketplaces to offer non-network plans, which pay a predetermined amount for each healthcare service, regardless of provider. CMS claims that these plans give consumers greater freedom to select providers and reduce insurers’ administrative costs for negotiating contracts, allowing for lower premiums.
This provision drew heavy criticism during the rule’s public comment period. Objections ranged from concern over poorly defined regulatory oversight of the plans to fundamental opposition to the plan design. While the provision was retained in the final rule, some limited consumer protections were added in response to the criticism, including requirements that plans develop strategies to regularly update benefit amounts, assist members with navigating single episodes of care with multiple providers, and provide members with cost estimates before care is received. Regardless, responses to this provision in the final rule have remained critical.
The final rule also delays implementation of this provision until plan year 2028 for federally facilitated exchanges, or exchanges in states that allow the federal government to administer their marketplaces and use the federal government’s insurance exchange website, Healthcare.gov. The provision takes effect in plan year 2027 for state-based exchanges, or exchanges in states that administer their own marketplaces and sell marketplace plans on a state-run website. The provision also takes effect in 2027 for state-based exchanges on the federal platform — i.e., exchanges in states such as Arkansas that administer their own marketplaces but sell plans through Healthcare.gov.
The rule also clarifies that states are under no obligation to offer non-network plans and are free to ban the plans on their marketplaces.
Standardized Plan Options No Longer Required
Since 2023, all insurers selling plans on Healthcare.gov have been required to offer at least one standardized plan in every category of plan that includes non-standardized plans. This was intended to help consumers compare coverage across categories. In 2024, CMS imposed a limit on the number of non-standardized plans insurers could sell, to keep the number of plan choices on the marketplace from becoming overwhelming.
The new CMS rule eliminates both of these requirements, a change that CMS says will increase insurer flexibility in plan design and offer consumers more plan choices. Insurers may continue selling these plans, but they will not be displayed preferentially on Healthcare.gov. Together, these changes may lead to a larger number of more varied plan designs on the 2027 marketplace.
Changed Rules for Bronze and Catastrophic Plans
Plans sold on the marketplace are categorized into tiers depending on their premiums and cost-sharing parameters. Plans in the bronze and catastrophic tiers generally have low premiums but high exposure to cost sharing. The new CMS rule includes several changes to the rules surrounding these plans:
- Marketplace plans set a maximum limit on policyholders’ annual out-of-pocket costs, and CMS sets a cap each year on what the out-of-pocket maximum can be. In 2026, a plan’s out-of-pocket maximum can be no higher than $10,600, but in 2027 it can be as high as $12,000. This is the second-highest annual increase since the ACA was implemented in 2014.
- For bronze plans, the new rule will allow the annual out-of-pocket maximum to be as high as 130% of the standard cap if the insurer also offers a plan with an out-of-pocket maximum that is below the standard cap. This change will allow a bronze plan’s out-of-pocket maximum to be as high as $15,600, effective in 2027.
- For catastrophic plans, the new rule will require the out-of-pocket maximum to be 130% of the standard cap, effective in 2028.
- Catastrophic plans may now last up to 10 years, and these multi-year plans can offer pre-deductible coverage for some expenses. This change is effective in 2027.
CMS says these changes are intended to enable insurers to offer lower-premium bronze plan options and ensure a greater difference between bronze and catastrophic plans. Bronze and catastrophic plans have seen limited enrollment in Arkansas, possibly due to plan pricing strategies that have made them less attractive to consumers.
Other Provisions
Other changes in the rule include a slight reduction in ACA marketplace user fees, new limits on federal subsidies for legally present noncitizen residents, changes intended to make it easier for states to transition to state-based exchanges, and stricter documentation standards for agents and brokers.
One provision that was proposed for the rule was eliminated after CMS received pushback in public comments. To qualify for sale on the marketplace, a plan’s network must include a minimum of 35% of essential community providers —  healthcare providers that primarily treat low-income or otherwise vulnerable populations — located within the plan’s service area. The proposed provision would have reduced this threshold to 20%, which would have allowed insurers to offer plans with more limited networks. CMS did not finalize that change, so the 35% threshold will remain in effect.
