Essential Health Benefits

With health care reform, fully insured small group and individual health plans on and off the Exchange must cover essential health benefits beginning January 1, 2014. The Department of Health and Human Services (HHS) stated that its aim is to balance comprehensiveness, affordability and state flexibility in the development of Essential Health Benefits.

To support fulfilling this aim, HHS has instructed 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 one 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 a benchmark will be the small group plan with the largest enrollment in the state. For 2016 and beyond, HHS would reassess the proposed benchmark process.

Please note that the states define “small group.” Currently, groups with up to 50 employees are classified as small group. In 2014, some states may raise the limit to 100. In 2016, the standard for small group will be the national definition of 1-100 employees.

Essential health benefits under the Patient Protection and Affordable Care Act will include the following general categories:

• Ambulatory patient services
• Emergency services
• Hospitalization
• Laboratory services
• Maternity and newborn care
• Mental health and substance abuse disorder services (including behavioral health treatment)
• Pediatric services, including oral and vision care
• Prescription drugs
• Preventive and wellness services and chronic disease management
• Rehabilitative and habilitative services and devices

Reform says that plans of all sizes that cover benefits designated as Essential Health Benefits, including self-funded plans, must cover these benefits with no annual limits or lifetime maximums.

For more information about Cigna’s position and advocacy on essential health benefits, please read our Essential Health Benefits white paper.