HHS Issues Informational Bulletin on Intended Approach for Defining Essential Health Benefits

The Department of Health and Human Services (“HHS”) issued a bulletin outlining proposed policies for implementation of the Patient Protection and Affordable Care Act’s (“PPACA”) mandate that insured plans in the individual and small group markets provide “essential health benefits” within the following 10 categories beginning in 2014: (1) ambulatory patient services; (2) emergency services; (3) hospitalization; (4) maternity and newborn care; (5) mental health and substance use disorder services, including behavioral health treatment; (6) prescription drugs; (7) rehabilitative services; (8) laboratory services; (9) preventive and wellness services and chronic disease management; and (10) pediatric services.  Absent a waiver of the annual limit requirements granted by HHS, the PPACA already prohibits all plans from imposing annual or lifetime limits on these benefits.

Under the proposal, states are provided a framework for adopting their own definitions of “essential health benefits” based on benchmarks established by HHS.  States would chose one of the following benchmark insurance plans that reflects the scope of services offered by a “typical employer plan” in the state: (1) one of the largest small group plans in the state by enrollment; (2) one of the three largest state employee health plans by enrollment; (3) one of the three largest federal employee health plan options by enrollment; or (4) the largest HMO plan offered in the state’s commercial market by enrollment.  The benefits and services offered by the selected benchmark plan would be the “essential health benefits” package for the state. If no benchmark is selected, the default benchmark would be the small group health plan with the largest enrollment in the state.

Please feel free to contact us with any questions regarding compliance with the new health care reform law, or any other matters involving employee benefits law.