On February 9, 2026, the U.S. Department of Health and Human Services (HHS) released the proposed HHS Notice of Benefit and Payment Parameters for 2027 (2027 Payment Notice), with public comments due by March 13, 2026. The rule covers a broad range of Affordable Care Act (ACA) marketplace topics, but several provisions carry specific implications for dental carriers that offer stand-alone dental plans (SADPs) and health insurers that embed dental benefits in their qualified health plans (QHPs). Here are four worth understanding.
1. Adult dental as an essential health benefit: The door opens and closes again
The ACA’s list of 10 essential health benefit (EHB) categories explicitly includes dental care for children as part of the pediatric services category. Exchanges are required to ensure that pediatric dental coverage is made available via SADPs and/or QHPs in all rating areas. Routine adult dental, however, is not an EHB, and federal regulators established from the outset that routine nonpediatric dental services cannot be considered an EHB even when included in a state’s benchmark plan.1 As with any other benefit, issuers may include adult dental benefits in a QHP or SADP, but these benefits would not be treated as an EHB, rendering that portion of premium ineligible for premium tax credits on the exchange.
The 2025 Payment Notice removed this prohibition effective plan year (PY) 2027, opening the door for states to refile their benchmark plans to include adult dental services.2 Several states had begun exploring and analyzing the potential impacts of adding adult dental services to their benchmark; while no states ultimately submitted a revised benchmark plan including adult dental for the 2027 plan year by the deadline in the 2025 Payment Notice, some were continuing to consider it for the future.3 One complicating factor is that “federal rules require that, if adopted, adult dental coverage be embedded into qualified health plans,” rather than also allowing the EHB to be sold via separate SADPs as is common for the pediatric dental benefit.4 All QHPs in the state would then need to have the capability to offer dental benefits, rather than defer responsibility for the dental EHB to SADPs, as has been common practice to date.
The 2027 Payment Notice would reverse course, reinstating the original prohibition on offering routine nonpediatric dental services as an EHB. For dental carriers, this preserves the status quo: SADPs remain the primary vehicle for adult dental coverage (as a non-EHB) on the exchanges, and the potential to expand avenues for access to adult dental benefits has been removed. States still contemplating the addition of adult dental coverage as an EHB can likely set those plans aside, at least for now. It remains to be seen whether the potential to include adult dental services as an EHB will be revisited.
2. Network adequacy standards: A shift toward flexibility, with preservation of a dental-specific exception
Previously, State-based Exchanges (SBEs) and State-based Exchanges on the Federal platform (SBE-FPs) were required to establish quantitative time-and-distance network adequacy standards at least as stringent as those used by the Federally-facilitated Exchange (FFE). The 2027 Payment Notice proposes to remove this requirement, replacing it with a more general standard that exchanges must "ensure that each QHP provides sufficient access to providers."5 SBE and SBE-FP states would no longer be required to conduct quantitative network adequacy reviews before certifying plans as QHPs, and a new "Effective Provider Access Review Program" framework would allow FFE states to gain similar authority.
A related provider access dimension is the essential community provider (ECP) requirement. ECPs are safety-net providers, such as federally qualified health centers (FQHCs), that serve predominantly low-income and medically underserved populations. QHP and SADP issuers seeking FFE certification must currently contract with at least 35% of available ECPs in each plan's service area. The proposed rule reduces this threshold to 20% for both medical QHP and SADP issuers, reverting to the standard previously in place from 2018 through 2022. For SADPs, the separate FQHC threshold would apply only to FQHCs offering dental services. The Centers for Medicare and Medicaid Services (CMS) cites aggregate data showing that FFE issuers broadly exceed the current minimums, noting that overall ECP participation averaged 71% across all QHP issuers for PY 2026, and frames the reduction as a way to lower administrative burden while freeing resources for plan innovation.
The proposed rule also preserves a dental-specific exception: SADP issuers in states where 80% or more of counties qualify as Counties with Extreme Access Considerations (CEACs) may receive an exception from network adequacy requirements based on a state department of insurance attestation.6 This provision acknowledges the unique difficulty of developing contracted dental networks in predominantly rural states. These proposed changes have mixed implications for dental carriers. Moving away from rigid time-and-distance benchmarks may ease compliance burdens for SADP issuers in states where the CEAC exception does not apply, particularly in geographies where dental provider density is relatively low and meeting medical-oriented distance standards has been a persistent pain point. However, the absence of uniform quantitative benchmarks introduces less predictability; what constitutes "sufficient access" for dental services may be interpreted differently across states, potentially affecting access to dental care in a nonuniform way.
3. Non-network plans: An opportunity for new dental offerings
The proposed rule removes a 2025 Payment Notice provision that required all QHPs (including SADP plans) to have a network. For SADPs, this change may open the potential for new dental plan offerings on an indemnity chassis. It also provides opportunity to increase plan options in geographies where meeting contracted network adequacy requirements has been difficult. It will be interesting to see whether SADPs historically challenged with network adequacy will find that the relaxed adequacy standards are sufficient to warrant the continuation of network-based dental offerings, or whether indemnity dental plans will become more prevalent in the ACA marketplace.
Non-network plans come with concerns about consumer protections, particularly with regards to adequacy of access to care. HHS outlines nine different elements non-network plans must submit to as part of rate filings to ensure the plan provides reasonable access, as well as distinct review standards for states that obtain the new provider access and ECP review authorities outlined in the Payment Notice. The rule is quite clear that states retain general rate review authority and can determine when non-network plans’ payment rates are sufficient. The rule does not address whether QHPs with medical provider networks that include embedded dental coverage would also be able to adjust their dental offerings to remove the contracted network element while retaining a network structure for other services.
4. Removal of standardized plan limits: More dental plan options, more complexity
With the goal of reducing consumer confusion, the 2023 Payment Notice introduced standardized plan options on the FFE and SBE-FPs and the 2024 Payment Notice capped the number of nonstandardized plans an issuer could offer.7 The 2027 Payment Notice proposes removing both sections entirely, along with the standardized plan definition and the related differential display requirement. Issuers would regain the flexibility to offer as many nonstandardized plan designs as they choose.
While this change targets medical QHPs, the downstream effects on dental are worth considering. With no cap on nonstandardized plans, medical issuers have broader latitude to vary how they structure the pediatric dental EHB component embedded in their QHPs, and we may see more plan variations with differing dental components. An increase in total plan offerings may also create additional confusion for consumers already navigating a complex array of medical and dental options. Dental carriers should monitor how medical issuers in their markets respond to this flexibility and consider whether their own product strategies need to adapt.
Looking ahead: The impact of the 2027 Notice of Benefit and Payment Parameters on dental coverage
Taken together, the proposed rule’s effects on dental coverage in the individual and small group markets are a mixed bag. The restoration of non-network plans provides the potential for additional dental plan offerings, while the return to clear non-EHB status for adult dental benefits limits state-level creativity in increasing affordability of and access to dental care for adults. Lowering network adequacy standards and removing limitations on the number of plans offered by a carrier both improve flexibility but come with cautionary elements such as consumer confusion and potential dissatisfaction with availability of in-network dentists.
These provisions are still just proposals, and HHS may modify them in response to public comments as part of final rulemaking (likely in late April or May). Whether this direction holds—and how it evolves in future rulemaking cycles—warrants continued attention from dental carriers and health plans alike.
The views expressed in this paper are those of the author and do not represent the views of Milliman. This paper is intended for informational purposes only and does not constitute professional advice. It should not be relied upon as a substitute for specific professional advice from qualified professionals. Milliman does not endorse any specific products or services mentioned in this paper.
1 Patient Protection and Affordable Care Act, HHS Notice of Benefit and Payment Parameters for 2027; and Basic Health Program. 45 C.F.R., § 156 (proposed February 11, 2026). Retrieved February 19, 2026, from https://www.ecfr.gov/current/title-45/subtitle-A/subchapter-B/part-156.
2 Department of the Treasury, Department of Health and Human Services, and Centers for Medicare and Medicaid Services. (April 15, 2024). Patient Protection and Affordable Care Act, HHS Notice of Benefit and Payment Parameters for 2025; Updating Section 1332 Waiver Public Notice Procedures; Medicaid; Consumer Operated and Oriented Plan (CO-OP) Program; and Basic Health Program. Federal Register, vol. 89, no. 73. Retrieved February 19, 2026, from https://www.federalregister.gov/documents/2024/04/15/2024-07274/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2025.
3 McBride, M., Bielic, E., Celik, Z., Volk, J., & Lucia, K. (April 8, 2025). State flexibility to add adult dental care to essential health benefits: An update on state action. Center on Health Insurance Reforms, Georgetown University. Retrieved February 19, 2026, from https://chir.georgetown.edu/state-flexibility-to-add-adult-dental-care-to-essential-health-benefits-an-update-on-state-action-2.
4 McBride, M., Bielic, E., Celik, Z., Volk, J., & Lucia, K. (July 29, 2025). Kentucky drops adult dental care from state’s Essential Health Benefits benchmark plan submission. Center on Health Insurance Reforms, Georgetown University. Retrieved February 19, 2026, from https://chir.georgetown.edu/kentucky-drops-adult-dental-care-from-states-essential-health-benefits-benchmark-plan-submission.
5 Patient Protection and Affordable Care Act, HHS Notice of Benefit and Payment Parameters for 2027; and Basic Health Program. 45 C.F.R., § 155 (proposed February 11, 2026). Retrieved February 19, 2026, from https://www.ecfr.gov/current/title-45/subtitle-A/subchapter-B/part-155.
6 Patient Protection and Affordable Care Act, HHS Notice of Benefit and Payment Parameters for 2027; and Basic Health Program. 45 C.F.R., § 156 (proposed February 11, 2026). Retrieved February 19, 2026, from https://www.ecfr.gov/current/title-45/subtitle-A/subchapter-B/part-156.