Overview
New regulations have been issued that address two matters that are relevant for group health plans:
- The 2026 maximum out-of-pocket (OOP) limits for group health plans under the Affordable Care Ace (ACA) were increased.
- The definition of Essential Health Benefits (EHB) was changed to exclude certain sex-based modification procedures.
The two issues addressed below were part of regulatory guidance that addressed a multitude of Exchange-related policies and procedures. They were jointly issued by the Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services (HHS).
Updated OOP Limits
The revised OOP maximums for 2026 reflect a change in underlying methodology for calculating the “premium adjustment percentage.” This percentage is applied when calculating certain policy limits under the ACA. As a result of this modification, the previously announced annual OOP limits have been updated.
As an overview, the ACA requires that non-grandfathered group health plans apply an OOP limit for each individual enrolled in coverage. The maximum out of pocket exposure (for essential health benefits) cannot be higher than the OOP limits specified.
| Coverage Tier |
Prior Limit for 2026 |
Updated Limit for 2026 |
| Self-Coverage Only |
$10,150 |
$10,600 |
| Family Coverage |
$20,300 |
$21,200 |
Note: These OOP limits are different from the OOP limits that apply to qualified high-deductible health plans.
Sex-Trait Modification Eliminated from Definition of EHB
The regulations also modified the definition of Essential Health Benefits to eliminate “specified sex-trait modification procedures” which are commonly known as gender-affirming surgeries. The change applies to non-grandfathered plans in the individual and small group markets.
This means that issuers of such policies may not cover specified sex-trait modification procedures under the Essential Health Benefits umbrella. The revision does not prohibit issuers of coverage plans from voluntarily covering sex-trait modification procedures as non-Essential Health Benefits. It also does not prohibit states from requiring coverage of such services, subject to the applicable state mandate rules.
The regulations added a definition of “specified sex-trait modification procedure.” In addition, certain services are specified as not qualifying as “specified sex-trait modification procedures” under the definition. (Link to definition provided below.)
This change is effective beginning with 2026 plan years.
References
- 2025 Marketplace Integrity and Affordability Final Rule: Link
- CMS Fact Sheet: Link
- Definition of Sex-Trait Modification Procedures: Link (Navigate to the second to last page, third column at the bottom of the page)