CMS Issues Proposed Rule on the ACA 2025 Benefit and Payment Parameters

On November 15, 2023, CMS released the proposed Notice of Benefit and Payment Parameters Rule for 2025. This notice is issued annually preceding the applicable benefit year and, once final, adopts certain changes. Additionally, CMS issued Premium Adjustment Percentage and related guidance to inform the payment parameters for the 2025 benefit year. While the proposed rule primarily impacts the individual market and the Exchange, CMS’s Premium Adjustment Percentage and related guidance addresses certain ACA provisions and related topics that impact employer-sponsored group health plans. Below are the highlights.

Annual Cost-Sharing Limits. The ACA requires non-grandfathered group health plans to comply with an out-of-pocket maximum on expenses for essential health benefits. CMS proposes that this maximum annual limitation on cost-sharing for 2025 will be $9,200 for self-only coverage and $18,400 for family coverage (a decrease from $9,450 and $18,900 for self-only/family coverage respectively in 2024).

Premium Adjustment Percentage and Payment Parameters. CMS announced the premium adjustment percentage for the 2025 benefit year as 1.4519093322 ($7,110/$4,897), which indicates an increase in employer-sponsored insurance premiums of approximately 45.2% over the period from 2013 to 2024. This premium adjustment percentage will also be used to index the Employer Mandate provision’s penalty amounts for the 2025 benefit year.

The proposed Notice of Benefit and Payment Parameters Rule proposes updates to marketplace requirements, and includes provisions to address network adequacy, improve access to healthcare items and services, such as prescription drugs and adult dental benefits, and promote fair marketing standards. For further details of the specific proposed rule, please refer to the CMS Notice.

Once the regulations are finalized, employers should review them and implement any changes needed for the 2025 plan year.

Proposed Rule »
Fact Sheet »
2025 PAPI Parameters Guidance »