ACA Final Rule on Essential Health Benefits and Plan Value Released
Author: Tracy Morley, XpertHR Legal Editor
On February 20, 2013, the Department of Health and Human Services (HHS) released a final rule under the Affordable Care Act (ACA) that will allow insurers and states to forge ahead with both federal and state health exchanges. The rule specifically outlines insurance issuer standards related to the coverage of essential health benefits (EHBs) and the determination of actuarial value.
Essential Health Benefits
The requirement to offer EHBs is intended to ensure that consumers have access to quality affordable health coverage and to enhance competition among health plans by standardizing health coverage choices. Beginning in 2014, the ACA requires nongrandfathered health plans in the individual and small group market to provide a core package of items and services in the following 10 benefit categories:
- Ambulatory patient services;
- Emergency services;
- Hospitalization;
- Maternity and newborn care;
- Mental health and substance abuse 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; and
- Pediatric services, including oral and vision care.
The EHBs should be equal in scope to a typical employee benefit programs. In order to meet this requirement, each state will be permitted to select a benchmark plan from one of the following four options:
- The largest health plan by enrollment in any of the three largest small group insurance products in the state;
- Any of the largest three state employee health benefit plan options;
- Any of the largest three national Federal Employees Health Benefit Program plan options; or
- The HMO with the largest insured commercial non-Medicaid enrollment in the state.
The final rule clarifies that if a state does not make a selection, the default benchmark plan will be option one.
Actuarial Value
Actuarial value (AV) is the percentage of the total covered expenses that the plan would, on average, cover. The final rule finalized the AVs, also referred to as metal levels, which allow consumers to compare plans with similar coverage levels.
Starting in 2014, nongrandfathered health plans in the individual and small group markets are required to meet certain AVs or metal levels: 60 percent for a bronze health plan, 70 percent for a silver health plan, 80 percent for a gold health plan and 90 percent for a platinum health plan. The HHS has determined that a plan's value may vary by plus or minus two percent and has created the AV calculator to help determine a plan's AV.
Employer-sponsored group health plans meet the ACA's minimum value (MV) requirement if the percentage of the total allowed cost of benefits provided under the plan is no less than 60 percent. To determine if a plan provides minimum value, an employer-sponsored group health plan can use the MV calculator provided by the HHS and Internal Revenue Service. Employers can also rely on an array of design-based safe harbors in the form of checklists to determine whether a plan provides MV. A group health plan may also obtain certification of nonstandard features by an actuary.
Accreditation
The final rule establishes a timeline for when qualified health plans (QHPs) in federally facilitated exchanges must become accredited. A QHP is a plan that provides EHBs, follows limits on cost-sharing and meets minimum value requirements.
Additional Resources
Health Care Reform Resource Center
