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States to select from among four health insurance plan benchmarks
The U.S. Department of Health and Human Services (HHS) is giving individual
states greater flexibility to implement the Affordable Care Act (ACA) coverage provisions for plans in the individual and small group insured markets.
The ACA mandates that indivdiual and small group market plans provide coverage of 10
essential health benefits determined by HHS. An HHS bulletin released in December 2011 described an approach that would allow individual states to choose one of the following health insurance plans to set the
benchmark for items and services included in the essential health benefits package
The benefits and services included in the health insurance plan selected by the state would be the essential health benefits package for that state. Plans could modify coverage within a benefit category so long as they did not reduce the value of coverage.
If a state chooses not to select a benchmark, HHS intends to propose that the default benchmark will be the small group plan with the largest enrollment in the state.
Mandated Items and Services
Consistent with the reform law, states must ensure the essential health benefits package covers items and services in at least 10 categories of care:
If a state selects a plan that does not cover all 10 categories of care, the state will have the option to examine other benchmark insurance plans to determine the type of benefits that must be added to its essential health benefits package.
“More than 30 million Americans who newly have insurance coverage in 2014 will have a comprehensive benefit package,” said Sherry Glied, HHS assistant secretary for planning and evaluation, in a statement. “In addition to assuring comprehensive coverage for the newly insured, many millions of Americans buying their own insurance today will gain valuable new coverage, including more than 8 million Americans who currently do not have maternity coverage, and more than 1 million who will gain prescription drug coverage.”
Just to Clarify...Small Group Plans and Essential Health Benefits
The Affordable Care Act defines a small employer as having at least one but no more than 100 employees. However, it provides states the option of defining small employers as having at least one but not more than 50 employees in plan years beginning before Jan. 1, 2016.
In most states, if you have 50 or fewer full-time employees (including full-time equivalents in part-time hours) you will be purchasing coverage in the small group market.
As of Jan. 1, 2014, nongrandfathered, fully insured plans in the individual and small group markets and those in the public marketplace exchanges were required to provide coverage of benefits or services in the 10 categories listed above, which reflect the scope of benefits covered by a typical employer plan.
Self-insured small group plans, large group plans, and grandfathered plans are not required to offer essential health benefits.
Employers Express Concerns
Some business advocates expressed concerns that the approach could allow states to mandate a rich benefit package, particularly because the federal employees' health benefits plan is among the country's most generous packages.
"While the essential health benefits bulletin issued by HHS allows for flexibility, the devil will be in the details," said Neil Trautwein, chairman of the Essential Health Benefits Coalition, an employers group, in a released statement.
"The bulletin leaves unanswered the question of affordability in the states," he added. "Employers, health plans and state governments should have as much flexibility as possible in order to design and choose plans that are affordable and meet the needs of American families. HHS should continue to work to develop a rule that balances state-selected and reasonably comprehensive benefits with affordability for employers and individuals. A final rule that does otherwise will make health coverage more expensive for employers and individuals to purchase and make jobs more difficult for employers to create."
The HHS bulletin addresses only the services and items to be covered by health plans and not Affordable Care Act limits on cost-sharing such as deductibles, co-payments, and co-insurance. The cost-sharing features will be addressed in future bulletins and rules addressing formulas for determining the actuarial value of the plan.
‘Bulletin’ Sidesteps Important Disclosure Requirements, Republicans Charge
The Department of Health and Human Services (HHS) sidestepped several important disclosure requirements with the new health care law and is preventing Congress and the American public from being able to assess the true costs associated with the health care reform law's “essential health benefits” mandate, according to a Jan. 13, 2012,
letter sent to HHS Secretary Kathleen Sebelius from several House chairmen and Senate ranking members.
The letter was signed by Energy and Commerce Chairman Fred Upton (R-Mich.), Ways and Means Chairman Dave Camp (R-Mich.), and Education and the Workforce Chairman John Kline (R-Minn.) and their counterparts in the Senate, Senator Mike Enzi (R-Wyo.), Ranking Member on the Senate Health, Education, Labor and Pensions (HELP) Committee, and Senator Orrin Hatch (R-Utah), Ranking Member on the Senate Finance Committee.
“By issuing a ‘bulletin’ rather than a proposed rule, the administration has sidestepped the requirement to publish a cost benefit analysis estimating the impact these mandates will have on health insurance premiums and the increased costs to the federal government,” the chairmen and ranking members wrote. “Additionally, the administration has avoided publishing a list of unfunded mandates on states and the private sector by issuing a ‘bulletin’ rather than a proposed rule, and has also avoided publishing a list of regulatory alternatives. Finally, the administration is not required to respond to comments received regarding this ‘bulletin.’ Publishing a ‘bulletin' rather than a proposed rule is the antithesis of an ‘open and transparent’ process.”
The letter requested HHS provide the following information by Jan. 27, 2012:
"The information requested by the Republican chairmen and ranking members will help ensure the public is fully informed of the consequences of the recent health care law," according to a statement issued by the Republican congressional leadership.
CEBS, is an online editor/manager for SHRM.
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