An advance release of a final rule outlines health insurance issuer standards for a core package of benefits, called essential health benefits (EHBs), which health insurance issuers must cover both inside and outside of the Health Insurance Marketplace, HHS Secretary Kathleen Sebelius announced. In addition, the rule outlines the determination of actual value (AV), while providing flexibility to states to shape how EHBs are defined, the Center for Consumer Information & Insurance Oversight (CCIIO) explained. The EHBs standards included in the final rule expand coverage of mental health and substance use disorder services, including behavioral health treatment.
The final rule also provides for an annual limit on out-of-pocket cost sharing for individuals and families beginning in 2014, to ensure that insured Americans will not face catastrophic costs associated with an illness or injury, according to the HHS news release. In addition, the rule finalizes the timeline for when qualified health plans must be accredited in federally-facilitated Exchanges and amends the regulations providing an application process for the recognition of additional accrediting entities for purposes of certification of qualified health plans.
Essential Health Benefits
EHBs must include items and services within at least the following 10 categories: ambulatory patient services; emergency services; hospitalization, 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; and pediatric services, including oral and vision care. EHB must be equal in scope to benefits offered by a typical employer plan. The final rule defines EHBs based on a state-specific benchmark plan.
States can select a benchmark plan from several options. All plans subject to EHBs must offer benefits substantially equal to benefits offered by the benchmark plan. Under the final rule, issuers have the flexibility to offer innovative benefit designs and a choice of health plans, CCIIO explained. Twenty six states have selected their own benchmark. For states that do not make a selection, HHS will select the largest plan by enrollment in the largest product by enrollment in the state’s small group market as the default base-benchmark plan. The selected benchmark plans have been finalized for benefit year 2014.
Actuarial Value Levels
The final rule outlines actuarial value levels in the individual and small group markets to help distinguish health plans offering different levels of coverage. Plans that cover EHBs must cover a certain percentage of costs, known as actuarial value or “metal levels.” Metal levels are 60 percent for a bronze plan, 70 percent for a silver plan, 80 percent for a gold plan, and 90 percent for a platinum plan. Metal levels will allow consumers to compare insurance plans with similar levels of coverage and cost-sharing based on premiums, provider networks, and other factors, CCIIO said. HHS will provide a publicly available AV calculator for issuers to use to determine health plan AVs based on a standard population, as required by law. In 2014, the AV calculator will use a standard population. Beginning in 2015, however, HHS will accept state-specific data sets for the standard population if states choose to submit alternate data for the calculator.
Expansion of Mental Health and Substance Use Disorder Services
An HHS report provides the details how these provisions will expand mental health and substance use disorder benefits and federal parity protections for 62 million more Americans. Beginning in 2014, all new small group and individual market plans will be required to include mental health and substance use disorder services as part of the EHBs. The final rule requires mental health and substance use disorder services to be covered at parity with medical and surgical benefits. The final rule expands coverage of mental health and substance use disorder services in three ways, by: (1) including mental health and substance use disorder benefits as EHBs, (2) applying federal parity protections to mental health and substance use disorder benefits in the individual and small group markets, and (3) providing more Americans with access to quality health care that includes coverage for mental health and substance use disorder services.
This final rule sets forth standards for health insurance issuers consistent with Title I of the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (HCERA) (P.L. 111-152), referred to collectively as the Affordable Care Act. The rule will help consumers shop for and compare health insurance options in the individual and small group markets by promoting consistency across plans, protecting consumers by ensuring that plans cover a core package of items that are equal in scope to benefits offered by a typical employer plan, and limiting their out of pocket expenses, CCIIO said.