From the Desk of
What Are “Essential Health Benefits”?
Under Section 1302(b) of the Affordable Care Act, “essential health benefits” include minimum benefits in ten general categories and the items and services within those categories:
* Ambulatory patient services
* Emergency services
* 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
* Pediatric services, including oral and vision care.
Who is required to offer essential health benefits?
Beginning in 2014, health plans offered in the small group and individual market will be required to cover essential health benefits. The scope of coverage for these items must be equal to that provided under a “typical employer plan.”
In a bulletin released in December, the Department of Health and Human Services (HHS) indicated that each state will establish its own essential health benefit package by selecting a benchmark plan that reflects the “typical employer plan” in the state. A state can choose as its benchmark one of the following based on enrollment: the largest HMO offered in the state, one of the three largest small group health plans in the state, one of the three largest state employee health plans, or one of the three largest federal employee health plan options. The default election will be the largest small group market plan in the state.
In a series of frequently asked questions released in February 2012 by HHS, it indicated that it intended to identify each state’s default benchmark in the fall of 2012.
Are large group market health plans, grandfathered plans or self-insured group health plans required to provide essential health benefits?
Large group market health plans, grandfathered plans and self-insured group health plans are not required to cover essential health benefits. However, these plans are subject to the Affordable Care Act’s prohibition against imposing annual and lifetime dollar limits on benefits that fall within the definition of essential health benefits. These rules were effective for plan years beginning on or after September 23, 2010 (i.e., January 1, 2011 for calendar-year plans),
These plans are permitted to impose non-dollar limits, consistent with other guidance, on essential health benefits as long as they comply with other applicable statutory provisions. In addition, these plans can continue to impose annual and lifetime dollar limits on benefits that do not fall within the definition of essential health benefits.
How are large group market health plans, grandfathered health plans or self-insured group health plans to determine which benefits offered are essential health benefits?
In the series of frequently asked questions, HHS indicated that it will consider a self-insured group health plan, a large group market health plan, or a grandfathered group health plan to have used a permissible definition of essential health benefits if the definition is one that is authorized by the Secretary of HHS (including any available benchmark option, supplemented as needed to ensure coverage of all ten statutory categories).
In addition, HHS indicated that the Departments of Labor, Treasury and HHS intend to use their enforcement discretion and work with those plans that make a good faith effort to apply an authorized definition of essential health benefits to ensure there are no annual or lifetime dollar limits on essential health benefits.
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