On June 20, 2025, CMS issued the “Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability Final Rule.” The rule makes several changes to annual cost-sharing limits and the definition of essential health benefits.
The rule updates the methodology for calculating the “premium adjustment percentage,” which results in a revision of the previously announced maximum annual limit on cost-sharing for 2026 (which we originally reported on in an article in the October 22, 2024, edition of Compliance Corner). The maximum annual limit is now $10,600 for self-only coverage and $21,200 for other than self-only coverage (an increase from $10,150 for self-only coverage and $20,300 for family coverage).
The rule also prohibits coverage of certain sex-trait modification procedures as an essential health benefit (EHB). Effective beginning in plan year 2026, issuers subject to EHB requirements (that is, non-grandfathered individual and small group market plans) may not cover specified sex-trait modification procedures as an EHB. Specifically, the term “specified sex-trait modification procedure” means any pharmaceutical or surgical intervention that is provided for the purpose of attempting to align an individual's physical appearance or body with an asserted identity that differs from the individual's sex either by 1) intentionally disrupting or suppressing the normal development of natural biological functions, including primary or secondary sex-based traits, or 2) intentionally altering an individual's physical appearance or body, including amputating, minimizing, or destroying primary or secondary sex-based traits such as the sexual and reproductive organs. Such a term does not include procedures undertaken 1) to treat a person with a medically verifiable disorder of sexual development or 2) for purposes other than attempting to align an individual's physical appearance or body with an asserted identity that differs from the individual's sex. This revision allows issuers of coverage subject to EHB requirements to voluntarily cover specified sex-trait modification procedures, and states will not be prohibited from requiring coverage of such services.
Additionally, the rule made changes to how the exchanges are administered, including making DACA recipients (i.e., eligible young adults brought to the U.S. as children) ineligible to enroll in Marketplace plans and receive premium tax credits. The rule also made changes to minimize improper enrollments and the improper flow of federal funds that the agency believes were the result of the temporary expansion of subsidies in response to the COVID-19 crisis.
Employer Takeaway
Although this rule primarily focuses on changes to the Exchange, employers should take note of the revised maximum annual limit on cost-sharing, as well as the revisions to what the federal government considers to be an EHB.