When the Affordable Care Act took effect on Jan. 1, 2014, individual and small group health insurance plans were required to start covering a set of health care services categories known as essential health benefits.
Essential health benefits, also known as EHBs, must now be equal in scope to benefits offered by a “typical employer plan,” according to The Center for Consumer Information & Insurance Oversight.
Under this ACA provision, plans sold on and away from the state-based and federally facilitated health insurance exchanges must include coverage for at least the following 10 categories1:
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance 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
- Pediatric services, including oral and vision care
Additionally, plans and policies that began on or after September 23, 2010, cannot impose a lifetime limit for EHB services.
EHBs help establish consistency across major medical plans and limit out-of-pocket expenses,2 helping ensure consumers have access to quality, affordable health insurance.
Prior to the ACA, the Department of Health and Human Services reported that individuals and families who purchased their own health insurance did not have coverage for several of the EHB categories, including the following3:
- Maternity services – 62% of enrollees did not have coverage
- Substance abuse services – 34% of enrollees did not have coverage
- Mental health services – 18% of enrollees did not have coverage
- Prescription drugs – 9% of enrollees did not have coverage
HHS predicted that essential health benefits helped an estimated 8.7 million people gain maternity coverage, 4.8 million gain substance abuse coverage, 2.3 million gain mental health coverage, and 1.3 million gain prescription drug coverage.
Do different insurance plans cover different essential health benefits?
At their core, no. But to really understand how plan costs and essential health benefits are related, it helps to understand the concept of “benchmark” plans.
Each year, every state is required to select a benchmark plan from the existing health insurance plans offered within their market. The health insurance plan selected serves as a model, and all plans required to cover EHBs must offer similar benefits to those in the benchmark plan.
In states that fail to select a benchmark plan, the small group health plan with the largest enrollment is selected by default.
Essential health benefits represent minimum plan requirements. Plans may offer additional benefits including dental coverage, vision coverage, and medical management programs for specific needs such as weight management.4
The EHB benchmark only defines what benefits must be covered, not what cost-sharing levels will be.
Carriers develop cost-sharing for their own products based on actuarial value levels given by the Affordable Care Act. The Center for Consumer Information and Insurance Oversight offers additional information on benchmark plans and essential health benefits.
Are services listed as essential health benefits free?
The services included among the 10 categories of EHBs are, for the most part, subject to your plan deductible, copayment, coinsurance and other out-of-pocket costs.5 Certain preventive care services may be provided at no additional cost under the ACA. As always, check with your health insurance provider to verify your policy’s benefits.
Learn more and get a quote on your own, or call the number on your screen to speak with a licensed producer who can help you find the right benefits for your situation.