SECTION 3. GUIDANCE

The percentage increase in the CPI-U over a preceding year is calculated by dividing the average CPI-U for the preceding year by the average CPI-U for the year immediately prior to the preceding year. For this purpose, the average CPI-U for a year is the average of the monthly CPI-Us published by the Bureau of Labor Statistics of the Department of Labor for the 12-month period ending on August 31 of each year, rounded to 10 decimal places. The percentage increase in the CPI-U for items and services provided in 2025

over the preceding year is the average CPI-U for 2024 over the average CPI-U for 2023. Pursuant to this calculation, the percentage increase from 2024 to 2025 is 1.0317904930. Further, pursuant to prior notices, plans and issuers may round any resulting QPAs to the nearest dollar.

To calculate the adjusted QPA, the prior year’s adjusted QPA is multiplied by the percentage increase for the most recent year. To simplify this calculation, this notice provides cumulative percentage increases. To calculate the adjusted QPA for items and services furnished in 2025 using the cumulative percentage increase, the “base year” QPA is multiplied by the cumulative percentage increase for the year the base QPA originated. A plan or issuer may choose whether to use the cumulative percentage increase or the percentage increase, but the selected method must be applied consistently for all QPAs calculated for items and services furnished during 2025. A plan or issuer is not permitted to use one method for certain QPAs and a different method for other QPAs.

Consult Notice 2024–1 regarding the application of these percentage increases.