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What are Essential Health Benefits

Commencing in 2014, the Affordable Care Act requires health plans offered in the individual and small group markets, both inside and outside of the Health Insurance Exchange, to offer a comprehensive package of items and services, known as Essential Health Benefits.

Essential Health Benefits (EHB)

Under the Affordable Care Act (ACA), health plans must cover ten benefit categories called Essential Health Benefits (EHB) offered in the individual and small group markets, both inside and outside of Health Insurance Exchanges and Medicaid plans must also cover these services by 2014.

The EHB plan must take into account the health care needs of Minnesota’s diverse segments of the population, and may not discriminate based on age, disability, or expected length of life.

The EHB plan must include and set an appropriate balance between the ten specific categories of services listed below

  1. ambulatory patient services
  2. emergency services 
  3. hospitalization
  4. maternity and newborn care
  5. mental health and substance use disorder services, including behavioral health  treatment
  6. prescription drugs
  7. rehabilitative and habilitative services and devices
  8. laboratory services 
  9. preventive and wellness services and chronic disease management
  10. pediatric services, including oral and vision care

The EHB must also:

  • Reflect typical employer health benefit plans
  • Comply with Mental Health Parity and Addiction Equity Act of 2008
  • Balance comprehensiveness and affordability for those purchasing coverage
  • Starting with plan years or policy years that began on or after September 23, 2010, health plans can no longer impose a lifetime dollar limit on spending for these services.  All health plans, except grandfathered individual health insurance policies, must phase out annual dollar spending limits for these services by 2014.

Selection of EHB “Benchmark Plan”

In order to implement the Essential Health Benefits, the U.S. Department of Health and Human Services (HHS) decided to use a benchmark approach for 2014 and 2015, allowing states to select a benchmark plan that reflects the scope of services offered by a “typical employee plan.” HHS identified four options of health plans, for states to select from to be the EHB “Benchmark Plan” for each state, or a default plan will be selected.  

The four options for states to choose from, and the health plans for Minnesota that fulfill these options, are listed below:

  1. The largest plan by enrollment in any of the three largest small group insurance products in the state’s small group market;
    • HealthPartners Small Group Product (HealthPartners 500 25 Open Access PPO)
    • Blue Cross/Blue Shield Comprehensive Major Medical with Deductible Plan
    • Blue Cross/Blue Shield Options Blue HSA 100
  2. Any of the three largest state employee health benefit plans by enrollment;
    • Minnesota Advantage Health Plan (SEGIP)
  3. Any of the three largest Federal Employee Health Benefit Plan (FEHBP) options by enrollment; or
  4. The largest insured commercial non-Medicaid HMO operating in the state.
    • Health Partners Open Access

HHS also determined that if states choose not to select one of the four options, then that state’s default plan will be the small group plan with the largest enrollment in the state. HHS has determined that the HealthPartners Small Group Product is the small group plan with the largest enrollment in Minnesota, and thus will be Minnesota’s default EHB Benchmark Plan.  In addition, the Governor’s Health Reform and its Task Force Access Work Group reviewed this default plan and confirmed it contains all of Minnesota’s state mandated coverages.  

HHS originally required a state’s selection by September 30, 2012 as part of a data request.  However, HHS’s confirmation of the EHB Benchmark Plan has been postponed until December 26, 2012.  The Commerce Department, in consultation with the Minnesota Department of Health, submitted information regarding Minnesota’s state mandated benefits to HHS as part of the September 30th data reporting request.  At the time of this data request, Minnesota did not submit a choice from the four HHS options to be the state’s EHB Benchmark Plan. Thus, HHS indicated the HealthPartners Small Group Product as the default plan for Minnesota’s EHB Benchmark Plan in the Notice for Proposed Rulemaking released on November 26, 2012.

Who makes the EHB determination?

  • HHS provided guidance on this subject in the CMS Frequently Asked Questions on Essential Health Benefits Bulletin:

    Each State would be permitted to select a benchmark plan from the options provided by HHS by whatever process and through whatever State entity is appropriate under State law.  In general, we expect that the State executive branch would have the authority to select the benchmark plan.  It is also possible that, in some States, legislation would be necessary for benchmark plan selection.  It is important to note that, regardless of the entity making these State selections, it is the State Medicaid Agency that will be held responsible for the implementation of the EHB through the Medicaid benchmark coverage option.

  • Minnesota statutes and rules do not explicitly delegate the responsibility to any specific state agency to select the EHB option.
  • Minnesota continues to have the flexibility to choose one of the four EHB options for Minnesota during HHS’s Notice for Proposed Rulemaking (NPRM) 30-day comment period, ending December 26, 2012. Otherwise, the default option (HealthPartners 500 25 Open Access PPO) will be selected under HHS’s process for EHB selection.
  • The state communicated to HHS directly that although the default would be indicated for Minnesota in the NPRM, that the state is awaiting additional guidance from HHS on EHB and may elect to indicate a different choice during the rulemaking period.

Where are we now?

  • HHS used the information submitted by states for the September 30, 2012 data reporting deadline to prepare a Notice of Proposed Rulemaking (NPRM) which will provide further guidance with regards to EHB.  During the NPRM comment period, states will have the opportunity to choose an EHB.
  • HHS has indicated the following timeline:

November 26, 2012

HHS used the information reported by September 30 to prepare a Notice of Proposed Rulemaking (NPRM) where they reported the following:

  1. What states have chosen as EHBs to date
  2. States’ default EHB for those who elect not to choose, and
  3. Additional guidance on EHB.

On November 26, 2012, HHS defined Minnesota’s (largest small group plan) default EHB as:  HealthPartners 500 25 Open Access PPO.

December 26, 2012

States may indicate their choice of EHB during the NPRM comment period, which closes on December 26, 2012.

After the NPRM comment period closes 

If Minnesota does not choose an EHB during the NPRM comment period, HHS will apply the default as discussed above.