What Are "Essential Health Benefits"?
By Larry Grudzien (used with permission)
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
* 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
* 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.
If you have any comments or questions
regarding any of above information, please do not hesitate to e-mail larry [at] larrygrudzien [dot] com.
Larry Grudzien
Attorney-At-Law
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