Background: The noninvasive subtype of encapsulated follicular variant of papillary thyroid carcinoma (eFVPTC) has been reclassified as noninvasive follicular thyroid neoplasm with papillary-like nuclear features (NIFTP) in 2016 to reflect the indolent behavior and favorable prognosis of this type of tumor. This terminology change has also de-escalated its management approach from cancer treatment to a more conservative treatment strategy befitting a benign thyroid neoplasm. Objective: To characterize the reduced health care costs and improved quality of life (QOL) from management of NIFTP as a nonmalignant tumor compared with the previous management as eFVPTC. Methods: A cost-effectiveness analysis was performed by creating Markov models to simulate two management strategies for NIFTP: (i) de-escalated management of the tumor as NIFTP involving lobectomy with reduced follow-up, (ii) management of the tumor as eFVPTC involving completion thyroidectomy/radioactive iodine ablation for some patients, and follow-up recommended for carcinoma. The model was simulated for 5 and 20 years following diagnosis of NIFTP. Aggregate costs and quality-life years were measured. One-way sensitivity analysis was performed for all variables. Results: Over a five-year simulation period, de-escalated management of NIFTP had a total cost of $12,380.99 per patient while the more aggressive management of the tumor as eFVPTC had a total cost of $16,264.03 per patient (saving $3883.05 over five years). Management of NIFTP provided 5.00 quality-adjusted life years, whereas management as eFVPTC provided 4.97 quality-adjusted life years. Sensitivity analyses showed that management of NIFTP always resulted in lower costs and greater quality-adjusted life years (QALYs) over the sensitivity ranges for individual variables. De-escalated management for NIFTP is expected to produce ∼$6-42 million in cost savings over a five-year period for these patients, and incremental 54-370 QALYs of increased utility in the United States. Conclusion: The degree of cost savings and improved patient utility of de-escalated NIFTP management compared with traditional management was estimated to be $3883.05 and 0.03 QALYs per patient. We demonstrate that these findings persisted in sensitivity analysis to account for variability in recurrence rate, surveillance approaches, and other model inputs. These findings allow for greater understanding of the economic and QOL impact of the NIFTP reclassification.