Which of the following are essential health benefits required by all qualified health plans?

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What are essential health benefits?

Since 2014, under the Affordable Care Act, all new individual and small-group health insurance policies (including those sold in the ACA’s health insurance exchanges and off-exchange) must cover essential health benefits for all enrollees.

And there cannot be annual or lifetime caps on the amount of money the insurer will pay for the services (note that there can still be a cap on the number of covered visits; for example, an insurer might cover 20 physical therapy visits in a year, and that’s still allowed).

What are the essential benefits mandated by the ACA?

The ACA defines ten essential health benefits:

• hospitalization
• ambulatory services (visits to doctors and other healthcare professionals and outpatient hospital care)
• emergency services
• maternity and newborn care
• mental health and substance abuse treatment
• prescription drugs
• lab tests
• chronic disease management, “well” services and preventive services recommended by the U.S. Preventive Services Task Force, the Health Resources and Services Administration, and the CDC’s Advisory Committee on Immunization Practices. There is normally a waiting period of a year (after a service is newly added to the recommended preventive care list) before health plans must start to cover it at no charge, and even then, it only has to be added when the plan renews or a new policy takes effect. But an exception was made for COVID-19 vaccines: Under the terms of the CARES Act, all private non-grandfathered health plans must offer coverage for COVID-19 vaccines, with zero cost-sharing, within 15 business days of the date the CDC’s Advisory Committee on Immunization Practices voted to add it to the list of recommended vaccines (this happened on December 13, 2020).
• pediatric dental and vision care (there is some flexibility on the inclusion of pediatric dental if the plan is purchased within the exchange)
• rehabilitative and “habilitative” services
  

Are ACA’s essential benefits the same in every state?

Those are broad categories of care, and it’s up to each state to define exactly what has to be covered under each essential health benefit category. States do this by designating a benchmark health plan (see definition 2 here). So although the ACA’s essential health benefit categories are the same in every state, the specifics of exactly what has to be covered by individual and small group health plans will vary from one state to another.

Prior to 2014, it was common for individual market plans in many states to not include maternity benefits, prescription drug coverage, or mental health/substance abuse coverage. But since 2014, all new individual major medical plans have included these benefits — along with the rest of the essential health benefits — for all enrollees.

Grandmothered and grandfathered plans are not required to cover the ACA’s essential health benefits, although grandmothered plans are required to cover recommended preventive care with no cost-sharing. Large group plans are also not required to cover essential health benefits (but if they do, they cannot impose dollar limits on the benefit), although they are required to cover recommended preventive care without any cost-sharing, unless they’re grandfathered.

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Obamacare: the Affordable Care Act (ACA)

Learn how the Affordable Care Act (Obamacare) improved individual health coverage and delivered plan affordability through subsidies, Medicaid expansion and other ACA provisions.

Overview

The Affordable Care Act (ACA) requires the establishment of an “essential health benefits (EHB) package” for certain health insurance plans including qualified health plans (QHPs) and the Medicaid expansion population. Under federal guidance, states were allowed to define and update the EHB package by choosing among 4 benchmarks and supplementing those benchmarks to ensure all 10 categories of EHB are met. In 2018, a new federal rule gave states new authority to change EHB benchmarks by choosing from new benchmark options and substituting benefits between categories. These changes allow states to provide fewer benefits in EHB packages starting in 2020. The new rule also makes EHB benchmark selection an annual activity.
If states choose a less robust benchmark, children and families in individual and small group coverage will have fewer needed benefits covered and may be subject to higher out-of-pocket costs. Large group and self-insured plans could also be impacted by these changes, as ACA annual and lifetime dollar limits and out-of-pocket spending protections are connected to EHB benefits. If a service is removed from EHB, these protections would no longer apply to that service.

AAP Position

• EHB benefit packages should not be weakened by state selection of a less robust benchmark option or by allowing substitution between categories. If substitutions are made, they should be extremely limited and ensure that benefit packages meet the needs of children.
• Medicaid’s Early and Periodic Screening, Diagnosis and Treatment (EPSDT) guarantee or the Children’s Health Insurance Program’s (CHIP) benefit package should be the benchmark plan for children, to ensure all children receive the care they need.
• Habilitation services should be offered at parity with rehabilitation services.
• In instances where states need to supplement pediatric oral or vision services in the EHB benchmark plan, states should use the most robust option available for these services.

Facts

• The 10 categories of benefits in an EHB package are: 1) ambulatory patient services, 2) emergency services, 3) hospitalization, 4) maternity and newborn care, 5) mental health and substance use disorder services, 6) prescription drugs, 7) rehabilitative and habilitative services and devices, 8) lab services, 9) preventive and wellness services and chronic disease management, and 10) pediatric services, including oral and vision care.
• States that do not change their benchmark plans will continue to use their benchmark selection from the previous year. Under the 2018 rule, states can now select EHB benchmark plans by:
• Selecting an EHB benchmark plan from another state
• Replacing one or more existing EHB benefit categories with the same categories of benefits
  used in another state’s EHB benchmark plan;
• Selecting a new set of benefits that would provide the state’s EHB benchmark.
• The new federal rule creates a “generosity standard” that imposes a maximum set of benefits for all state EHB plans starting in 2020; it requires that no EHB package include more generous benefits by actuarial value than the most generous of the 10 benchmark plan option available to the state.

Progress

[State choices for 2020 plan year]

• 46 states and DC – largest small group product
• 1 state – largest HMO product
• 3 states – state employee product

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