diff --git a/.changeset/thirty-timers-repair.md b/.changeset/thirty-timers-repair.md
new file mode 100644
index 0000000000..b8e55752e9
--- /dev/null
+++ b/.changeset/thirty-timers-repair.md
@@ -0,0 +1,5 @@
+---
+'@backstage/cli': patch
+---
+
+Updated backend plugin template to work better with new backend system
diff --git a/docs/plugins/backend-plugin.md b/docs/plugins/backend-plugin.md
index 22d4bae371..497a6be9b9 100644
--- a/docs/plugins/backend-plugin.md
+++ b/docs/plugins/backend-plugin.md
@@ -41,16 +41,16 @@ standalone mode. You can do a first-light test of your service:
 
 ```sh
 cd plugins/carmen-backend
-LEGACY_BACKEND_START=true yarn start
+yarn start
 ```
 
-> Note: `LEGACY_BACKEND_START=true` is needed while we transition fully to the [New Backend System](../backend-system/index.md). The templates have not been migrated yet; you can track this in [issue 21288](https://github.com/backstage/backstage/issues/21288)
+> Note: this documentation assumes you are using the latest version of Backstage and the new backend system. If you are not please upgrade and migrate your backend using the [Migration Guide](../backend-system/building-backends/08-migrating.md)
 
 This will think for a bit, and then say `Listening on :7007`. In a different
 terminal window, now run
 
 ```sh
-curl localhost:7007/carmen/health
+curl localhost:7007/api/carmen/health
 ```
 
 This should return `{"status":"ok"}`. Success! Press `Ctrl + c` to stop it
diff --git a/packages/cli/templates/default-backend-plugin/README.md.hbs b/packages/cli/templates/default-backend-plugin/README.md.hbs
index 5c34b40360..e95c626167 100644
--- a/packages/cli/templates/default-backend-plugin/README.md.hbs
+++ b/packages/cli/templates/default-backend-plugin/README.md.hbs
@@ -7,7 +7,7 @@ _This plugin was created through the Backstage CLI_
 ## Getting started
 
 Your plugin has been added to the example app in this repository, meaning you'll be able to access it by running `yarn
-start` in the root directory, and then navigating to [/{{id}}](http://localhost:3000/{{id}}).
+start` in the root directory, and then navigating to [/{{pluginVar}}/health](http://localhost:7007/api/{{pluginVar}}/health).
 
 You can also serve the plugin in isolation by running `yarn start` in the plugin directory.
 This method of serving the plugin provides quicker iteration speed and a faster startup and hot reloads.
diff --git a/packages/cli/templates/default-backend-plugin/src/plugin.ts.hbs b/packages/cli/templates/default-backend-plugin/src/plugin.ts.hbs
index cdc30b561b..c631f1df0d 100644
--- a/packages/cli/templates/default-backend-plugin/src/plugin.ts.hbs
+++ b/packages/cli/templates/default-backend-plugin/src/plugin.ts.hbs
@@ -26,6 +26,10 @@ export const {{pluginVar}} = createBackendPlugin({
             logger,
           }),
         );
+        httpRouter.addAuthPolicy({
+          path: '/health',
+          allow: 'unauthenticated',
+        });
       },
     });
   },