Understanding essential health benefits

What you need to know about the new requirements

Starting with plan years beginning on or after January 1, 2014, the Affordable Care Act (ACA) requires nongrandfathered individual and small group commercial plans (with some exceptions, such as retiree and dental-only plans) to cover essential health benefits (EHBs) as defined by ACA regulations (see the 10 general categories of EHBs).

For at least 2014 and 2015 plan years, the definition of EHBs will differ from state to state. Each state may define EHBs by first choosing a base benchmark plan from among four specified options and then supplementing that plan as necessary to include any benefits missing from the 10 general categories defined by the ACA. This modified benchmark plan will serve as the EHB benchmark plan for that state. Plans subject to this requirement must provide benefits that are substantially equal to the EHB benchmark plan, and must meet other requirements included in the regulations.

The ACA also allows benefits mandated by state laws enacted through December 31, 2011, to be considered EHBs.

What you need to know

Small business

  • Starting with plan years beginning on or after January 1, 2014, all our nongrandfathered individual and small business plans will include coverage for EHBs.
  • If you currently have a nongrandfathered plan, youll be offered the metal tier plan closest to your current plan. You can choose the offered plan or select a different metal tier plan. Youll be able to select options from among the metal tiers whether you choose to enroll employees inside or outside of the Small Business Health Options Program (SHOP).

Large and small business

  • Well make any necessary changes to make sure that our plans comply with ACA and state requirements regarding EHBs.
  • Were analyzing the federal guidance about how to define EHBs for the purpose of applying both the annual and lifetime dollar limit mandate and the annual cost-sharing maximum requirements to large group plans.

The benchmark plan for California and other requirements

California law designated the Kaiser Foundation Health Plan Small Group HMO 30 plan (as offered in the first quarter of 2012) as the states base benchmark plan. To be considered the EHB benchmark, this plan must include at least the 10 general categories of EHBs identified in the ACA, plus all medically necessary basic health care services and mandated benefits as defined in Californias Knox-Keene Act. Mandated benefits in the Knox-Keene Act include:

  • AIDS vaccines
  • alpha-fetoprotein testing
  • ambulance transport services or emergency response ambulances
  • anesthesia for dental services
  • autism and behavioral health services
  • breast cancer mastectomy and reconstructive services
  • diabetes education, management, and treatment
  • HIV-related organ transplants
  • HIV testing
  • hospice care
  • laryngectomy prosthetics
  • maternity services, both inpatient hospital stay and ambulatory
  • mental health services required under the federal Mental Health Parity Act
  • osteoporosis diagnosis and treatment
  • phenylketonuria (PKU) screening
  • prescription contraception
  • preventive services for children
  • prostate screening
  • select cancer screening tests and clinical trials
  • select surgical procedures for jaw bones
  • sterilization operations and procedures
  • treatment of conditions attributable to diethylstilbestrol (DES) exposure

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