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Essential Health Benefits

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Essential Health Benefits covered beginning in 2014

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: 

  • 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
In addition to the requirement that 10 specific categories of services be part of the Essential Health Benefits (EHB), are there any other requirements for the EHB?

Yes.  Besides the requirement to cover the 10 specific categories of services, the According to the Affordable Care Act (ACA) requires that the EHB:

  • 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.
Is there a role for the state in defining EHB?

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;
    a. HealthPartners Small Group Product (HealthPartners 500 25 Open Access PPO)
    b. Blue Cross/Blue Shield Comprehensive Major Medical with Deductible Plan
    c. Blue Cross/Blue Shield Options Blue HSA 100

2. Any of the three largest state employee health benefit plans by enrollment;
    a. 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.
    a. Health Partners Open Access

Are all the plans that could be Minnesota's benchmark very similar?

The benchmark plan options governed under state law (small group plans, largest HMO plan, state employee health plan) are all subject to Minnesota's current state mandated benefits.  Therefore, they are very similar in the benefits covered (although they may vary in cost-sharing, which is not part of the essential health benefits decision).  The Federal Employee Health Benefit Plan (FEHBP) differs from the options governed under state law because it is not subject to state mandated benefits and the state must pay the cost of state mandated benefits that are not in the EHB.  The Access Work Group considered the benefits covered under the four benchmark options and concluded that the three benchmark options governed under state law are generally similar since they include Minnesota's current state mandated benefits. 

What happens if a state does not choose an EHB benchmark plan?

If a state does not choose a EHB benchmark plan, then the U.S. Department of Health and Human Services (HHS) has indicated that there will be a default plan assigned.  The default plan will be the largest plan by enrollment in the largest small group insurance product in the state’s small group market.  Enrollment from March 31, 2012 was used by HHS to determine the largest small group market plan.  In Minnesota, that is the HealthPartners Open Access Choice plan for Small Employers. The HealthPartners' Schedule of Payments and Group Membership Contract are available to the public.

What happens if a state’s EHB benchmark plan does not have all the benefit categories required under the Affordable Care Act?

If the Chosen or Default Plan is missing a required benefit category, the next largest plan of the benchmark type is used to set benefits in the missing category.  For example, if the chosen EHB is a small group market plan and it is missing a required benefit category, another of the three largest small employer plans in a state could be used to supplement for the missing category of benefits.  If none of that benchmark type includes a particular category of benefit, the supplement will be the Federal Employee Health Benefit Plan.

There are three categories of benefits that HHS has identified for special handling since they are not covered in most benchmark plans.  These three categories are (1) Habilitative Care; (2) Pediatric Oral Services; and (3) Pediatric Vision Services. 

If the EHB benchmark does not include Habilitative care, health plans may offer habilitative services at parity with rehabilitative services.  This would mean that a plan covering services such as physical therapy, occupational therapy, and speech therapy for rehabilitation must also cover those services in similar scope, amount and duration for habilitation.  Another alternative is for health plans to decide what habilitation services they wish to cover and submit their proposal to HHS.  HHS would evaluate those decisions and further define habilitative services in the future

If the EHB benchmark plan does not include pediatric oral services, states may chose from the following two options for pediatric oral services:  (1) The Federal Employees Dental and Vision Insurance Program (FEDVIP) dental plan with the largest national enrollment or (2) the States separate CHIP program.

If the EHB benchmark plan does not include pediatric vision services, the Federal Employees Dental and Vision Insurance Program (FEDVIP) vision plan with the largest national enrollment will be used to set the pediatric vision benefits.

For how long does the essential health benefits benchmark apply?

The essential health benefits benchmark will apply for 2014-2015.  In 2015, the US Department of Health and Human Services (HHS) likely will provide information for essential health options in 2016 and beyond. 

Could a State add a new State-mandated benefit to the EHB benchmark plan today without having to defray the cost of those mandated benefits?

No.  HHS has indicated that any State-mandated benefits enacted after December 31, 2011 cannot be part of EHB for 2014 or 2015.

Once the EHB for 2014-2015 is decided, does that mean that all health plans will cover exactly the same benefits?

No.  HHS has indicated that it will provide flexibility to issuers by permitting actuarially equivalent substitution of benefits within the ten categories of benefits required by the Affordable Care Act.  Plans must be "substantially equal" to benchmark plan in both scope of benefits offered and any limitations on those benefits such as visit limits.  The plan cannot be discriminatory in benefit design and must still comply with prohibition on lifetime and annual limits (i.e. only non-dollar limits).  We are awaiting additional guidance on substitution allowed by carriers and what would be considered "substantially equal".

Currently, there are situations when a patient who has insurance still ends up paying most of the cost of their care. Their health plan may have a benefit for the type of service they need but there may be a deductible, coinsurance or copayment requirement under the insurance policy. In 2014, when health plans will be required to cover the EHB, will this change?

No.  Plans will still have deductibles, coinsurance and copayments. The EHB only addresses the categories of services that must be included as benefits under the policy.  The EHB does not address how much of the cost is covered by the plan.  Other provisions of the Affordable Care Act impact costs, including medical loss ratio requirements, the actuarial levels (i.e. cost sharing) of the different metal plans (bronze, silver, gold and platinum) available in the Exchange, etc.

Can Minnesota adopt different benchmark plans for its individual and small group markets?

No.  HHS has indicated that one benchmark option will be the essential health benefits for the state’s individual and small group markets.

What are the next steps in the EHB process?

HHS is expected to issue a Notice of Proposed Rulemaking (NPRM) sometime in the fall of 2012.  States will have an opportunity to make a state choice of EHB during a 30 to 60 day comment period after the NPRM is released and deference will be given to the state choice.

Has any Minnesota agency been given specific statutory or regulatory authority to select from the EHB options?

Minnesota statutes and rules do not explicitly delegate to any specific state agency the responsibility to select from the EHB options for the ACA’s EHB. 

Will plans that are self-insured be required to use Minnesota’s state benchmark EHB?

No.  Self-insured plans will not be required to offer the state benchmark EHB.  However, to the extent that they provide coverage for any EHB, the self-funded plan will not be able to restrict lifetime and annual maximums for the EHB.

Did Minnesota make a choice of EHB as part of the September 30, 2012 data reporting to HHS?

No.  Minnesota state agencies did not indicate a choice of EHB as part of the data reporting.  Information regarding Minnesota’s state mandated benefits was provided to HHS by the Minnesota Department of Commerce, working in consultation with the Minnesota Department of Health.

What is the final deadline for the state to elect an EHB?

The final deadline for the state to elect an EHB will depend on when the U.S. Department of Health and Human Services releases its Notice of Proposed Rulemaking (NPRM) on Essential Health Benefits.  Once the NPRM is released, states have been told that there would be a 30 to 60 day comment period and that, during that comment period, states may continue to express a choice of EHB to HHS.