HHS “Minimum Value” Calculator Allows Employers to Test Health Insurance Plans

In conjunction with the release in late February of the Final rule on essential health benefits (EHB) that health insurance companies must include in their plans starting in 2014, (see “HHS Releases Essential Health Benefits Final Rule”) the Center for Consumer Information & Insurance Oversight (CCIO) at HHS has released a “minimum value calculator” to be used by employers to determine if their health insurance plans meet standards set out in the final rule.

First, some background. Section 1302(d)(2)(C) of the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) sets forth the rules for calculating the percentage of the total allowed costs of benefits provided under an employer-sponsored group health plan. A plan provides minimum value if the percentage of total allowed costs is no less than 60 percent. The EHB final rule  laid out the rules that employers have to follow to determine if they meet the standard, and the calculator is a tool that helps them do that.

According to a methodology document prepared by CCIO in conjunction with the calculator, HHS gathered data for the calculator based on utilization and total costs for health services for a population of health plan enrollees similar to those likely to be covered by large group plans in 2014. The data contains spending, demographic and enrollment information, including age, sex, family structure, enrollment, spending, member cost-sharing, and number of claims from contract year 2009, then “trended forward” to 2014.

Spending and claims information used in designing the calculator includes data on emergency room services; inpatient hospital services (including mental health and substance use disorder services); primary care and specialist visits; mental/behavioral health and substance abuse disorder outpatient services; imaging (CT/PET Scans, MRIs); rehabilitative speech, occupational and physical therapy; and preventive care/screening/immunization. Calculator users can also input cost-sharing features—such as deductibles, general rates for coinsurance, and out-of-pocket maximums.

According to the CCIO, minimum value is calculated as the cost of benefits covered by a group health plan as a percentage of total allowed costs of benefits under the plan. The final rule notes that  “the denominator of this calculation is simply the average allowed cost of all services for the standard population in the year; the numerator is calculated as the share of average allowed cost covered by the plan, using the cost-sharing parameters specified.” The calculator is designed to produce a summarized minimum value figure.

HHS invites testers to send any technical issues or operational concerns related to the calculator to minimumvalue@cms.hhs.gov.