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The Affordable Care Act (ACA) requires that, starting in 2014, all non-grandfathered health plans offered in the individual and small-group markets, both inside and outside of the state-operated insurance exchanges, offer a specific package of items and services, known as “essential health benefits,” or EHB.
Scope
The ACA directs that the EHB reflect the scope of benefits covered by a typical employer plan.
Regulatory citations
- None
Key definitions
- None
Summary of requirements
Essential health benefits must include items and services within at least the following 10 categories:
- Ambulatory patient services
- Emergency services
- Hospitalization
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management, and
- Pediatric services, including oral and vision care
Defining EHB. The ACA requires that EHB be defined so that they do not discriminate based on age, disability, or expected length of life. EHB also may not deny essential benefits based on age, life expectancy, disability, or degree of medical dependency and quality of life.
EHB will be defined using a benchmark approach. States will be able to select a benchmark plan that reflects the scope of services offered by a typical employer plan.
States would choose one of the following benchmark health insurance plans:
- One of the three largest small group plans in the state by enrollment,
- One of the three largest state employee health plans by enrollment,
- One of the three largest federal employee health plan options by enrollment, or
- The largest HMO plan offered in the state’s commercial market by enrollment.
Benefits and services. The benefits and services included in the benchmark health insurance plan selected by the state would be the essential health benefits package. Plans could modify coverage within a benefit category so long as they do not reduce the value of coverage.
Plan flexibility. HHS intends to require that a health plan offer benefits that are “substantially equal” to the benchmark plan selected by the state and modified as necessary to reflect the 10 coverage categories. Health plans would have flexibility to adjust benefits, including both the specific services covered and any quantitative limits, provided they continue to offer coverage for all 10 statutory EHB categories and the coverage has the same value.
Updating. The department intends to propose that benchmarks will be updated in the future, and that state mandates outside the definition of essential health benefits may not be included in future years.