What Do the New CMS EHB Benchmark Updates Mean for Your Health Plan?

In today’s episode of Regulatory Joe, Joe Boyle is diving into an important topic that is shaping the future of health plan offerings: Essential Health Benefit (EHB) benchmark updates. These changes, outlined in the 2025 Notice of Benefit Payment Parameters (NBPP), have significant implications for health plans across the country. Let’s break down what you need to know and how to prepare for upcoming changes.

EHBs are the core set of ten services that health plans are required to cover under the Affordable Care Act. EHB benchmark plans, typically based on larger carriers’ offerings, provide a detailed template for what an ideal health plan portfolio should look like in each market.

Historically, these benchmarks have remained static for years in many states. However, CMS is now pushing for updates to reflect evolving healthcare needs and market conditions.

Key Changes for 2025 and Beyond

One big shift for health plans is that CMS is introducing more flexibility around formulary requirements within EHB benchmark plans. Plans offering standalone medical coverage will no longer be obligated to cover?formulary information, simplifying the process for medical-only submissions. It is important to note that this may still impact carriers offering combined medical and pharmacy portfolios, so plans should carefully review their current strategy.

Another major update involves the process of benchmark plan revisions. In a move that grants carriers more control over their plan designs, CMS will no longer require the replacement of entire benchmark plans. Instead, carriers can?update specific subsets of benefits. This selective approach allows for more tailored and strategic plan designs, enabling health plans to adapt more nimbly to market demands and member needs.

In addition, CMS is proposing a significant change in how they evaluate EHB benchmark plans. The plan is to eliminate the prioritization of generosity standards in these updates, representing a more equitable approach to mandated benefits.

Regulatory Joe Recommendations

• Establish a dedicated workgroup Form a specialized team within your organization to address new EHB benchmark changes. This team should focus on understanding the new requirements, lobbying against unfavorable changes and ensuring timely implementation. This includes ensuring appropriately resourced compliance and government advocacy for the states that you have a footprint in as of today. Having a depth of understanding (whether you are in one or multiple markets) with dedicated resources and strengthening relationships with your regulators to justify your market position and strategy will help you be very proactive in engaging states—as well as preparing you for being “reactive” where needed as new policies, bills and rules are passed into law. Remember: this is a long-term game, as updates can only be made by the state-allotted window and you traditionally have one plan year to ready your team for changes.
• Regularly update your benchmark plans Review and update your benchmark plans annually to stay compliant and competitive. This involves extracting the latest benchmark plan from the CMS application website or your respective division of insurance. Each year CMS will publish updates via their EHB benchmark plan carrier website for users to review the latest plan summary, benefit summary and full benchmark plan by the company that has been selected to lead this by state. We understand this may be overwhelming, but it’s best practice for our issuer and carrier partners.
• Leverage new flexibilities Take advantage of the new flexibility in the benchmark update process. This includes selectively updating cost-sharing parameters and benefits without having to replace the entire benchmark plan, allowing for more strategic and creative adjustments. Carve out all the time you need with your product strategy team and benefit specialists to understand how your benefits are coded today. Understanding TCoC (total cost of care) is critical to understanding how your benefits currently are being utilized, the cost of those benefits and what is driving the members’ need for care in the right way.
• Monitor state-specific changes Stay informed about changes specific to the states you play in and how they impact your benchmark plans. States converting from federally facilitated marketplaces to state-based exchanges will have more flexibility, which could affect how benchmarks are defined and implemented. One way to do this is to delegate or assign your team state assignments by region to establish recurring communications with specific regulators. You can also track their websites and develop a standard process that articulates how to track these not just on an ongoing (versus annual) basis.

All in all, these EHB benchmark updates signal a positive shift for health plans. The increased flexibility in formulary requirements and benchmark updates gives health plans more tools to craft competitive, member-centric offerings while the shift away from prioritizing generosity standards opens the door for more nuanced, locally appropriate benefit designs.

While implementation will require careful planning and execution, these changes ultimately empower health plans to be more responsive and innovative in serving their members.

Be sure to watch the full episode for a more detailed run-down of changes and recommendations.