Within the Affordable Care Act (ACA), one important new feature to all health insurance is the Essential Benefits Package – with the exception of health insurance plans that have been in place since March of 2010 which are considered ‘grandfathered’. Because of the importance of the Essentials Benefit Package, we felt that it should be something we covered in more detail than you will find elsewhere.
What the Essential Benefits Package Is
The Affordable Care Act has made a number of changes to health insurance plans and the Essential Benefits package requires most health insurers to contain a minimum set of core benefits to each of their insured and at little – or no cost to you. All of the details of the Essential Benefits Package (EBP) will be determined by the Secretary of Health and Human Services (HHS), however, the ACA has a list of core, federally required health benefits that will be a part of the EBP.
Included in the EBP
The following medical services and treatments are all a part of the Essential Benefits Package. While the ACA requires the coverage in each of the following categories, the ACA does not define the duration, scope, specific services nor the amount of coverage. It will be up to the HHS Secretary to define the specific benefits within each category, thus enabling the HHS to address gaps in service and to respond to changes in medical practices as they occur. The categories of the EBP are as follows:
- Emergency Services
- Paramedic Services
- Prescribed Medications
- Outpatient Services and ambulatory service
- Rehabilitation Services
- Chronic Disease treatment and prevention services
- Maternity Care
- Newborn Care
- Wellness Visits
The Role of the Secretary of Health and Human Services
In the process of defining the Essential Benefits Package, the Secretary must not only decide which services to include but also decide on how much discretion allowed to health insurance companies as to how much of such services is to be covered. For instance, if the Secretary decides that physical therapy for a back injury is to be covered, she also must decide on how many therapy sessions will be covered – or the Secretary may choose to leave that entirely at the discretion of the individual insurers.
At this time, many health insurance companies must cover certain specific health services which are required by the law within the state of residents of the policy holder. The ACA does allow each state to continue these requirements, however if the states mandated benefits coverage does not include the Essential Benefits Package benefits as defined by the HHS Secretary, those state will have to pay for any increase in cost of premiums. Future regulations will be determined by the HHS for this process.
Essential Benefits Package Cost Sharing Rules
The Essential Benefits Package is linked to limits on cost sharing by the ACA. Health insurance policies which are required to provide the EBP will also be required, under the ACA, to limit the out-of-pocket expenses of the policy holder. Currently those limits are set at $5,950 per year for an individual and $11,900 per year for families. In addition to this, small group plans will be required to limit deductibles to $2,000 for an individual and $4,000 for family coverage. All health plans under the ACA will have no cost sharing for certain preventative health services as recommended by the US Preventive Services Task Force.
Within the limits, as outlined above, every health plan – with the exception of grandfathered plans and self-insured plans – will be required to provide its policy holders specified levels of coverage. The levels of coverage (Bronze, Silver, Gold and Platinum) will be set as percentages of the actuarial value of the plan that covers the full EBP with no cost sharing.
What Health Plans will have the EBP
The EBP will be included in all new policies issued to individual and small group insurance plans these plans will limit the out-of-pocket expenses of the insured and must meet the Bronze, Silver, Gold or Platinum level standards. However, any plan which is grandfathered (in effect before the March 2010 date) and self-insured plans are exempt from having the EBP.
In addition, large group plans (employment based plans with more than 50 employees) will be required to meet the cost sharing limits and benefit levels, however they will not be required to provide the full scope of the EBP package.
To find out if your insurance plan will contain the EBP, and to what extent consult the Summary of Benefits and Coverage (SBC) from your insurance provider.