On Dec. 16, 2011 the Department of Health and Human Services (HHS) issued a bulletin outlining proposed polic ies and the approach it intends to pursue for defining Essential Health Benefits (EHB). Per the Patient Protection and Affordable Care Act (PPACA), beginning on Jan. 1, 2014, non-grandfathered Individual and Small Group plans offered inside and outside the Exchanges must cover the EHB. In addition, PPACA prohibits the use of lifetime and annual limits on the dollar amount of EHB.
In developing the regulation, HHS stated that its aim is to balance comprehensiveness, affordability, and States flexibility. It is, therefore, proposing to allow each State to select an existing health plan as a “benchmark” to establish the services and items included in the Essential Health Benefits package for 2014 and 2015.
States will choose from one of four health insurance plan options as a benchmark:
- the largest plan based on enrollment in any of the three largest small group products in the State
- any of the three largest State employee health plans
- any one of the three largest Federal employee health plan options
- the largest HMO plan offered in the State’s commercial market
HHS will propose that the default for States choosing not to set benchmark wll be the small group plan with the largest enrollment in the State. For 2016 and beyond, HHS would reassess the proposed benchmark process.
The bulletin did not address cost sharing, e.g., deductibles, copayments, and coinsurance, which will be covered in future guidance. Cost sharing rules will determine the actuarial value of the plan. It also does not address how this state-by-state approach is to be applied to the ban on lifetime and annual limits for plans that cover people in multiple States.
However, the bulletin did affirm that Essential Health Benefits must include items and services within the following 10 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,
- preventative and wellness services and chronic disease management, and
- pediatric services, including oral and vision care.