U.S. Department of Health and Human Services Adopts The Uniform Guidance Plus 2 CFR Part 300

This article is part of the Vander Weele Group’s ongoing series discussing changes in federal grant-making rules.

As part of an ongoing effort to streamline federal regulations, the U.S. Department of Health and Human Services (HHS) has changed its regulatory framework. Until October 1, 2025, HHS has been an outlier among federal grant-making agencies, maintaining its own rules rather than following the Uniform Guidance (2 CFR Part 200), a set of regulations that apply to other grant-making agencies.

On October 1, 2025, HHS fully adopted the Uniform Guidance (2 CFR Part 200).

The agency, however, supplemented 2 CFR Part 200 with twelve modifications housed in a new section called 2 CFR Part 300. HHS, the nation’s largest grant-making institution, historically regulated its grants under a 100-page set of provisions located at 45 CFR Part 75, long before the Uniform Guidance first became effective in 2014.

Grant managers for the broad spectrum of HHS awards—including Head Start, LIHEAP, and the Office of Refugee Resettlement—should be aware of this new regimen to ensure their compliance policies are current. Here, we’ll distill the revisions from a somewhat complicated Federal Register notice (Vol. 89, No. 191, 80055, October 2, 2024).

In October 2024, the Office of Management and Budget conducted a major revision to the Uniform Guidance that incorporated many of HHS’s long-standing modifications. After it further streamlined the provisions in 45 CFR Part 75, HHS was left with only twelve department-specific modifications, as noted above. These unique requirements—such as audit options for for-profit organizations or specific conflict of interest rules for research—were incorporated into 2 CFR Part 300.  We outline these provisions below:

1. 2 CFR § 300.106. Formally adopts OMB’s 2 CFR Part 200 along with the specific HHS modifications in this part.

2. 2 CFR § 300.112. Adds “teeth” to Conflict of Interest (COI) policies for HHS agencies, requiring details on outside activities, relationships, and financial interests and their propriety. In addition to the provisions of 2 CFR § 200.112, the COI policies must address the advance notice – and subsequent review – of outside activities, relationships, and financial interests, and how financial conflicts of interest may be addressed. In addition, agencies receiving Public Health Services research funding must align their COI policies with requirements in 42 CFR Part 50 Subpart F.

3. 2 CFR § 300.18. Outlines unique provisions for the for-profit organizations that receive HHS awards. Except for awards under the Small Business Innovation Research (SBIR) and Small Business Technology Transfer Research  (STTR) programs, no recipient of HHS awards, including for-profit organizations, may receive those funds as profit (an amount exceeding allowable direct and indirect costs).  Also, excepting grants for research, for-profit organizations cannot use their program income to further eligible project or program objectives. This prohibition does not apply to the SBIR or STTR programs.

   • For-profit organizations that receive awards exceeding the annual audit threshold (expenditures of Federal awards exceeding $1 million for the non-federal entity’s fiscal year) have two options regarding audits: a financial audit of all awards in accordance with GAGAS; or an audit that meets the requirements contained in 2 CFR 200, Subpart F (previously codified at 45 CFR 75.216 and 75.322(f)).

   • For-profit organizations that receive awards less than the audit threshold are exempt from audits for that year but must maintain records for review by Federal agencies.

   • The provisions for intangible property at § 200.325 (e) do not apply to for-profit entities in receipt of HHS awards.  They are not required to provide data related to published research findings from Federal funding.

4. 2 CFR § 300.219. Outlines specific requirements for awards to other Federal agencies.  Except for research funding, any program income earned by a Federal agency is used pursuant to the deduction alternative at § 200.307(b)(1) or deducted from the total allowable costs to, effectively, reduce the total federal award.  The Federal agency must return program income earned after the period of performance to the U.S. Treasury.

   • The provision also limits certain salary and fringe benefit payments from HHS funds to the receiving agency’s employees.

   • Federal agencies may not be reimbursed for indirect costs.

   • The HHS awarding agency must have explicit statutory authority that makes Federal agencies eligible for awards (previously codified at 45 CFR 75.217).

5. 2 CFR § 300.300. Details specific protections from discrimination for all applicants and recipients. HHS-specific protections from various forms of discrimination for applicants and recipients are detailed here (previously codified at 45 CFR 75.300).

6. 2 CFR § 300.305. In addition to 2 CFR 200.305(b), payments for recipients and subrecipients other than states, this addresses the requirement for the expenditure of program income, rebates, refunds, contract settlements, audit recoveries and interest earned before requesting additional cash payments from the Federal agency.  (previously codified at 45 CFR 75.305(a)).

7. 2 CFR § 300.308. In addition to the requirements of 2 CFR 200.308(f), a recipient or subrecipient must also request approval from the Federal agency or pass-through entity to include patient care costs in awards for performing research work (previously codified at 45 CFR 75.308(c)(1)(ix)).

8. 2 CFR § 300.315. In addition to 2 CFR 315(c), governing patents and inventions, this prohibits HHS from asserting rights to inventions created under awards for educational purposes, such as scholarships, fellowships or training grants (previously codified at 45 CFR 75.307(c)(2)).

9. 2 CFR § 300.414. Caps indirect costs at 8% of Modified Total Direct Costs (MTDC) for training awards and foreign organizations performing work outside the U.S. Allows negotiated indirect cost rates for American University in Beirut and the World Health Organization (previously codified at 45 CFR 75.414(c)(1)).

10. 2 CFR § 300.477. Mandates that independent research and development be allocated the same proportionate share of indirect costs as sponsored research and development, though the costs themselves remain unallowable. (previously codified at 45 CFR 75.476).

11. 2 CFR § 300.478. Explicitly prohibits using grant funds to pay IRS “shared responsibility” payments or health coverage penalties. Payments or assessments for failing to maintain minimum essential health coverage and/or failing to offer health coverage to employees, pursuant to the Internal Revenue Code, are not allowable expenses under Federal awards from an HHS awarding agency (previously codified at 45 CFR 75.477).

12. 2 CFR § 300, Appendix IX.  Re-codifies the principles used to determine costs for R&D grants and contracts specifically with hospitals (previously codified at 45 CFR Part 75, Appendix IX).

Key Threshold Changes Summarized

Earlier flexibility updates already shifted several key numbers to reduce administrative burden: The provisions that took effect on October 1, 2024, include

• Micro-purchase Threshold: Increased to $50,000.

• Equipment Threshold: Increased from $5,000 to $10,000.

• De Minimis Indirect Rate: Boosted from 10% to 15%.

• Single Audit Threshold: Now triggered at $1,000,000 in federal expenditures.

Regulation	Key Requirement	Impact on Operations
2 CFR § 300.112	"Teeth" in COI Policies	You must now disclose outside activities and financial interests in detail, not just general conflicts.
2 CFR § 300.18	For-Profit Restrictions	Profit is strictly prohibited (except for SBIR/STTR). Program income cannot be reused for project goals.
2 CFR § 300.414	Indirect Cost Cap	Training and foreign awards are capped at 8% MTDC.
2 CFR § 300.478	IRS Penalties	You cannot use grant funds to pay ACA "shared responsibility" or health coverage penalties.

Why No Public Comment Period?

HHS used the Interim Final Rule (IFR) process for this transition. Because the public had already commented on the broader Office of Management and Budget (OMB) revisions and the previous HHS versions of these rules, the agency chose to skip a new comment period and get the benefits to the community faster. The IFR was subject to regulatory analysis under the Paperwork Reduction Act, the Regulatory Flexibility Act, the Unfunded Mandates Reform Act, and numerous Executive Orders. Rather than increasing red tape, however, HHS determined that aligning the requirements for HHS awards with those of agencies outside HHS reduces the administrative burden for applicants and the recipient community.

We’re Here to Help

Don’t let opaque Federal Register notices slow your mission down. The Vander Weele Group specializes in translating these complex regulations into actionable success. Contact us at VanderWeeleGroup.com or (773) 929-3030 to learn how we can help you foster success in administering your HHS awards and serve your subrecipients while remaining compliant. We’re ready to provide guidance that will help you adjust to the revised regulatory framework.