Defining Essential Health BenefitsPosted on: July 29, 2014Categories: HR & Compliance
The Affordable Care Act (ACA) directed the Department of Health and Human Services (HHS) to provide detail as to which items and services are considered essential health benefits (EHBs). In December of 2011, HHS released a new bulletin regarding this request however they decided to give the individual states the authority to decide their own benchmarks for defining EHBs. They released a final rule in 2013 confirming this guidance.
In the beginning of 2014, the ACA began to require non-grandfathered plans in small group and individual markets to offer a package of EHBs. Excluded from this requirement are self-insured group health plans, health insurance coverage offered in the large group market and grandfathered plans. The non-excluded plans are required to include EHBs that reflect the benefits covered by an average employer and must cover at least ten general categories of items and services. However, the HHS finalized their benchmark approach with their final rule. Therefore each state selects a benchmark insurance plan that reflects what they believe offers the services provided by a typical employer in the state. There are four different options states can select their benchmark plans from, but if they do not select one a default plan, small group plan with the largest enrollment in the state, is selected by the HHS.
Referring back to the final rule released by the HHS, the benefits offered by the health plans must be significantly equal to the applicable benchmark plan. The benefits can be modified if necessary to include the ten categories listed by the ACA. The final rule also includes many guidelines to protect consumers from discrimination and guarantee the plans offer several EHBs. This way benefit designs that could discriminate against enrollees will be prohibited, special standards for benefits will be included that may not be covered by individual and small group plans, and it assures access to needed prescription medications.
States typically have benefit mandates requiring health insurance issuers to provide coverage for certain items and services. However, for 2014 and 2015 if a state chooses a benchmark subject to state mandates the benchmark must include those mandates in the state’s EHBs package. The HHS final rule declares any state-mandated benefits enacted on or before December 31, 2011 will be included in the EHBs package for at least 2014 and 2015.