On July 16, 2026, the U.S. District Court for the District of Maryland granted the Plaintiff’s motion for a stay in City of Columbus v. Kennedy (Columbus II). The Plaintiffs’ challenges were focused on provisions of the 2027 Notice of Benefit and Payment Parameters Final Rule (NBPP final rule) which they argued imposed barriers to coverage, increased costs for enrollees, and permitted issuers to offer less comprehensive coverage. 

The court granted all of the Plaintiffs’ motions for a stay in Columbus II as follows:

• Expansion of Eligibility for Less Comprehensive Forms of Coverage: Under the stay, a hardship exemption to enroll in catastrophic plans is no longer available to individuals who are ineligible for Advanced Premium Tax Credit (APTC) or Cost-sharing Reduction (CSR) due to projected household income below 100 percent or above 250 percent of the Federal Poverty Level (FPL).
• Increased Out-of-Pocket Spending Burdens for Certain Enrollees (bronze plans with annual limitations on cost-sharing higher than the statutory limitation): Under the stay, all bronze plans must meet the cost-sharing and the levels of coverage requirements, including meeting the standard annual limitation on cost sharing. Issuers are prohibited from offering bronze plans with out-of-pocket maximums that exceed the statutory limit.
• Mandatory Verification for Low-Income Enrollees: Under the stay, Exchanges are required to accept applicants’ attestations of their household income. Exchanges will not be required to generate data matching issues for APTC applicants if Federal data sources indicate that the applicant's income is below 100% FPL.
• Refusal to Accept Attestation from Applicants When Tax Data is Lacking: Under the stay, Exchanges are required to accept a household’s income attestation when IRS returns no data for the household.
• Verification Requirements for Special Enrollment Periods: Under the stay, Exchanges will not be required to conduct pre-enrollment SEP verification (SEPV) for at least 75% of new enrollments. SEPV will only be permitted for the Loss of MEC SEP.
• Failure-to-Reconcile Penalty: Exchanges are required to determine that a tax filer is ineligible for APTCs under the Affordable Care Act if the applicant received APTCs the prior year and failed to comply with the statutory requirement to file a tax return and reconcile APTC for that year. Under the stay, Exchanges will make that determination after a tax filer fails to reconcile for two consecutive tax years, rather than one tax year.
• Reduced Standards for Network Adequacy: Under the stay, State Exchanges and State Based Exchanges on the Federal Platform (SBE-FPs) are required to establish and implement quantitative time and distance standards that are at least as stringent as those for QHPs participating in the Federally Facilitated Exchanges (FFEs).  
• Elimination of Standardized Plans and Non-Standardized Plan Limits: Under the stay, issuers participating in the FFE and SBE-FP will be required to offer standardized plan options in the individual market and will be limited in how many non-standardized plan options they can offer.

Issuers will now have to quickly re-adjust plan options in preparation for the 2027 plan year. We expect CMS to issue guidance on its approach to necessary changes given the stay. We will continue monitoring for updates.

For more information on the NBPP final rule and Columbus II litigation, see our prior publications:

• Feasible or Impossible? Competing Declarations Follow Oral Argument in City of Columbus II, Michelle Koltov, Lisa Campbell
• HHS Files Opposition in Columbus II Litigation, Michelle Koltov, Lisa Campbell
• CMS Issues 2027 HHS Notice of Benefit and Payment Parameters Final Rule | Groom Law Group
• City of Columbus et al. Challenge Provisions of the HHS 2027 Payment Notice Final Rule, Michelle Koltov, Lisa Campbell
• The Friday Evening Surprise: CMS Releases the 2027 Payment Notice Final Rule, Michelle Koltov, Lisa Campbell