Reform Alert - News from the Blues' Office of National Health Reform

Preliminary guidance released on essential health benefits

Feb. 2, 2012

The Department of Health and Human Services has issued a bulletin outlining the proposed policy to define essential benefits by using a "benchmark" approach for health plans. Under the proposed policy, the benefits and services included in the state's selected benchmark plan would serve as a reference plan for the essential health benefits package, reflecting both scope and limits offered by a "typical employer plan." Plans would have the ability to modify coverage within a benefit category, so long as the coverage level is substantially equal to the essential health benefit package.

All insured non-grandfathered individual and small group market coverage (offered on or off the Exchange) must provide essential health benefits, which must include at least the following 10 categories:

  • 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 and chronic disease management 
  • Pediatric service, including oral and vision care 

HHS intends to propose use of the benchmark option to give states the flexibility to choose a plan that is similar to a typical small employer plan in the state. The agency believes that by doing so, states will be able to account for state-specific needs.

States would be able to choose one of the following benchmark health insurance plans:

  • One of the three largest small group plans in the state by enrollment 
  • One of the three largest state employee health plans by enrollment 
  • One of the three largest federal employee health plan options by enrollment 
  • The largest HMO plan offered in the state's commercial market by enrollment 

Health plans also would have flexibility to adjust benefits, including both the specific services covered and any quantitative limits, provided they continue to offer coverage for all 10 essential health benefits categories that are "substantially equal" to the benchmark plan.

In the transitional years of 2014 and 2015, if a state chooses a benchmark subject to state mandates, such as a small group market plan, the benchmark must include the mandates in the state essential health benefits package. 

Additionally, under the currently proposed approach, a state could also select a benchmark, such as a Federal Employees Health Benefits Plan, which may not include all of the state's benefit mandates. In that case, the state would be required to cover the cost of the mandates outside of the state's essential health benefits package. If the benchmark plan does not include all 10 categories, it is recommended other benchmark options could provide possible guidance on coverage of a missing category. 

As proposed, if a state does not select one benchmark plan among these options, HHS will default to the small group plan with the largest enrollment in the state as the state's benchmark plan. 

Blue Cross Blue Shield of Michigan will continue to monitor activity on essential health benefits and provide updates as they become available. 

For more information, please view the Essential Health Benefits: HHS Informational Bulletin.

The information on this website is based on BCBSM's review of the national health care reform legislation and is not intended to impart legal advice. Interpretations of the reform legislation vary, and efforts will be made to present and update accurate information. This overview is intended as an educational tool only and does not replace a more rigorous review of the law's applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Analysis is ongoing and additional guidance is also anticipated from the Department of Health and Human Services. Additionally, some reform regulations may differ for particular members enrolled in certain programs such as the Federal Employee Program, and those members are encouraged to consult with their benefit administrators for specific details.

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