Essential Health Benefits
The health care reform law is intended to help ensure all Americans have access to quality, affordable health insurance. Providing coverage for a core package of "essential health benefits" (EHB) is described as key to this goal.
There has been a lot of discussion around what the EHB package should include. On February 20, 2013, the Department of Health and Human Services (HHS) issued its final rules, providing confirmation on the categories of standard befnefits and placing responsibility wfith the states for defining the benefits to be considered EHB.
Now that HHS has made its ruling, there is a lot of state-level work to be done to create what could be as many as 50 different state EHB packages, plus the District of Columbia and the U.S. Territories.
As we await further definition from the states, I hope that this column gives you a better understanding of essential health benefits – what they are, the state’s role, who’s impacted (hint, just about everyone in some way), and what employers and brokers should consider as they prepare for 2014.
Standard core benefits
So, what are these essential health benefits? At first glance, the 10 EHB categories are fairly typical of most employer plans, with the exception of pediatric oral (dental) and vision care. Dental and vision care are usually kept separate from the core medical plan.
- 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
The state-by-state twist
Each state was instructed to select an existing health plan as a "benchmark" to establish the services and items included in its EHB package for 2014 and 2015. States chose from one of four health insurance plan options as a benchmark: the largest plan based on enrollment; any one of three largest state employee health plans; any one of the three largest federal employee health plan options; or the largest HMO plan offered in the state’s commercial market. If states didn’t make a selection, the default is the largest small group plan in the state.
For 2016 and beyond, HHS will reassess the benchmark process.
For high level summary information about benchmark plans, you can review the information posted on the HHS site: http://cciio.cms.gov/resources/data/ehb.html; or, more detailed information can be found for most states on this National Association of Insurance Commissioners (NAIC) site: http://www.naic.org/index_health_reform_section.htm.
Impact on employers and brokers
So, which plans need to cover EHB? All non-grandfathered insured small group and individual health plans – sold on and off the Exchanges – must cover all essential health benefits beginning in 2014. As a reminder, small group continues to be defined as 1-50 until 2016, when the small group definition expands to 1-100. At this point, no state has established a different definition.
What do other types of plans need to know? All other plans (grandfathered individual and small group insurance policies, and all insured and self-insured large group plans/policies) are not required to provide EHB, but if they do, they may not impose any annual or lifetime dollar maximum limits on the EHBs.
By now you are probably wondering "how do employers determine which benefits are essential or not?"
Insured plans will use their "situs" state to determine which benefits are considered essential in the state. Self-funded plans do not typically have a situs state, but should use a similar process to determine their "EHB state" for purposes of complying. Logically, it would be the state that the employer feels most closely aligns or resembles a situs state, if situs pertained to them. But that’s not to say that an employer headquartered in New York, and that has the majority of their employees in New York, couldn’t use the benchmark plan in Idaho as a reference to design their benefit plan.
Considerations as employers and brokers prepare
Employers and brokers should do what you've always done – work with your Cigna sales person to design a plan that best meets the needs of your employees as well as your business goals. Employers/brokers with 1/1 plan years will need to think about plan designs pretty soon. Meanwhile, many of you are asking whether infertility, acupuncture, hearing aids, and certain autism treatments are considered EHB. The short answer is: it depends on the state. We’re continuing to review detailed state level information.
As an example of how EHB could impact employer plans, consider infertility benefits. If providing infertility coverage is important to you and your employees, be aware that various forms of this coverage will be considered essential in approximately 20 states. This means you could not place an annual or lifetime dollar limit on these benefits if your plan is modeled after one of those “EHB states". As another example, bariatric surgery is considered essential in approximately 15 states and would be similar to the infertility example in terms of no annual or lifetime dollar limits.
Cigna continues to monitor the evolution of the state-level essential health benefits. We also continue to work with our clients and broker partners to help you prepare for decisions you may need to make heading into 2014. To learn more, please see our essential health benefits section on InformedOnReform.com, which includes a fact sheet with the benchmark map and other helpful information.
Be sure to bookmark InformedonReform.com for the latest updates as the year goes on.