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On Feb. 17, 2012, the U.S. Department of Health and Human Services (HHS) issued
guidance in the form of FAQs (frequently asked questions) addressing the requirement for insurers to provide coverage of "essential health benefits" under the Patient Protection and Affordable Care Act (PPACA).
provide additional guidance on HHS’ approach to defining essential health benefits as described initially in a Dec, 16, 2011, HHS
Bulletin. (See the
SHRM Online article
HHS to Give States More Flexibility to Set 'Essential Health Benefits.')
Under the PPACA, nongrandfathered individual and small group plans must at least match the coverage provided by a benchmark plan selected by the state that regulates the plan. Possible benchmark plans that a state may choose are:
The new FAQs clarify several points including the following:
Compliance Questions Remain
"The FAQs do go some distance toward clarifying a number of the issues left open by the initial bulletin," commented Timothy Jost, a professor at the Washington and Lee University School of Law. Writing at the
Health Affairs blog, Jost noted, "The approach selected by HHS will allow states to maintain their coverage mandates (or at least those that apply to the small group market) until 2016 but will preclude the addition of new mandates. It is still hard to imagine how this is all going to work out in practice, however, and more to the point how plan compliance will ever be monitored, given the ability of plans to substitute services within categories. One must wonder whether in the end it might not have been more straightforward simply to come up with a federal menu of services."
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.
Generally, if you have fewer than 100 employees (using the definition for full-time equivalents) you will be purchasing coverage in the small group market.
Starting Jan. 1, 2014, nongrandfathered, fully insured plans in the individual and small group market and those in the exchanges are required to provide coverage of benefits or services in
10 separate categories that 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.
is an online editor/manager for SHRM.
HHS to Give States More Flexibility to Set 'Essential Health Benefits,'
SHRM Online Benefits Discipline, December 2011
SHRM Online Health Care Reform Resource Page
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