Essential Health Benefits
Understand what plans must cover these health benefits, and how various plans are impacted by respective cost sharing limits and rules.
The Affordable Care Act (ACA) requires fully insured small group and individual health plans (both on and off the public exchange/Marketplace) provide coverage for a core package of health care services, known as “essential health benefits” (EHBs). This rule is intended to balance comprehensiveness and affordability for consumers by ensuring essential services are covered and consumer out-of-pocket expenses are limited.
In addition to the standard 10 EHB categories detailed below, states may include additional benefit requirements under their own state regulations or within a state’s selected benchmark plan.
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance abuse 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
Any health plan that covers EHBs must cover these benefits with no annual limits or lifetime maximums. This includes self-insured and large group plans (having 51 or more employees). Effective January 1, 2017, plans that offer out-of-network benefits on EHBs may no longer place limits or maximums on those benefits.
Out-of-pocket limits on EHBs
Out-of-pocket (OOP) consumer spending, which typically includes deductibles, copays and coinsurance, is limited for in-network essential health benefit services. The OOP spending limits are adjusted annually:
- $7,150 for individual
- $14,300 for family
- $7,350 for individual
- $14,700 for family
State benchmark plans
Effective Jan. 1, 2014, each state selected a benchmark plan that was to be used through the 2016 plan year. States have had the option to select a new benchmark plan for plan years on and after Jan. 1, 2017. It’s important for employers who sponsor group health plans to understand which benchmark plan they must follow so they know which benefits cannot have annual or lifetime limits. The state benchmark plan is determined differently based on the plan’s funding type:
- Employers that self-insure their plans can choose a state to use for their benchmark plan.
- Employers with insured plans must use the benchmark plan of employer’s contract/situs state, except for HMO plans which must follow the HMO plan state.
More on Reform
EMPLOYER MANDATE IN REFORM
Businesses must offer affordable medical insurance that provides “minimum value” to employees and their dependents.
Public Marketplaces/ Exchanges
Marketplaces are the government run online shopping hubs for health insurance, available in every state.
INDIVIDUAL MANDATE IN REFORM
Under the health care reform law, all people must have minimum essential coverage beginning January 1, 2014.
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