Under the Affordable Care Act all of the following are the required essential benefits EXCEPT

Since 2014, the Affordable Care Act (ACA) has mandated that insurance plans cover 10 specific services. This mandatory list of services applies to many individual health plans or plans offered through the small-group marketplace (employers with up to 50 employees). Because these general services have been deemed “essential,” they are known as the 10 Essential Health Benefits (EHB).

What Are the 10 Essential Health Benefits?

Here is a list of the 10 essential health benefits and what they mean.

1. Prescription Drugs
   The federal government has categorized approved prescription drugs. One from each category must be covered.
2. Pediatric Services
   This includes dental care, vision care, well-child visits, vaccinations, and immunizations. Dental and vision care must be offered to children through the age of 19 (pediatric oral health services can include two routine dental exams per year; ocular care can include one annual eye exam).
3. Preventive and Wellness Services and Chronic Disease Management
   This includes services such as diet counseling, colorectal cancer screening, Type 2 diabetes screenings, and immunization vaccines.
4. Emergency Services
   This is a trip to the emergency room where you truly need care as soon as possible. It means that you won’t be penalized if the hospital is out of network.
5. Hospitalization
   Treatment you receive in the hospital as part of inpatient care. Plans may limit coverage for extended stay.
6. Mental Health and Addiction Services
   This includes services to treat behavioral health, provide counseling, or provide psychotherapy.
7. Pregnancy, Maternity, and Newborn Care
   These are services that care for you and your baby before, during, and shortly after giving birth.
8. Ambulatory Patient Services
   This is outpatient care you receive without being admitted to the hospital.
9. Laboratory Services
   This includes testing to diagnose, to gauge effectiveness, and some preventive screenings.
10. Rehabilitative and Habilitative Services and Devices
    These services help you recover if you are injured, have a disability, or have a chronic condition. Services may include physical therapy, occupational therapy, or speech therapy.

Are My Needs Outside of the 10 Essential Health Benefits Covered?

The 10 essential health benefits do not guarantee that your health insurance policy will cover any service within the 10 categories. Even within our list you may notice that only one prescription from every categorized medication must be covered.

For example, you could be prescribed a generic blood pressure medicine called “bumetanide,” but your health insurance only covers “spironolactone,” despite the diuretic differences. This means that if you want your coverage to apply to the former medication, you would need your doctor to switch your prescription. However, if you find one formula serves your health better than what is covered under your health insurance policy, the entire cost of the prescription would be out-of-pocket.

The 10 essential health benefits were designed to make sure individual and small-group health insurance plans offer you these services. Although they may not fulfill all your needs, they are a sturdy base to make certain that insured adults and dependents are given the opportunity to receive much needed medical care.

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Overview

Every state has a substantial number of laws that require private market health insurance to cover specific benefits and provider services. An introduction to such laws is provided below, titled Understanding Mandated Health Insurance Benefits.

State Mandated Benefits

Traditionally states counted health mandate laws to include required categories of up to 70 distinct "benefits" as well as "health providers" (such as acupuncturists or chiropractors) and "persons covered" (such as adopted children, handicapped dependents or adult dependents). Adding up these laws, there are more than 1,900 such statutes among all 50 states; another analysis tallies more than 2,200 individual statute provisions, adopted over a 30+ year period. 

Federal "Essential Health Benefits (EHB)

The Patient Protection and Affordable Care Act (ACA) provides for "essential health benefits," defined as health treatment and services benefits in sections 1302(a) and (b). These combined benefit requirements apply to all policies sold in Exchanges and in the small group and individual markets, effective October 1, 2013. The benefits are covered for individual patient treatments beginning January 1, 2014 and continuing at least through policy plan years 2017 and 2018. 1,2

• April 2018 Update: On April 9, the Centers for Medicare & Medicaid Services (CMS) issued an annual HHS "Notice of Benefit and Payment Parameters for 2019". The agency release described this as a final rule that "will mitigate the harmful impacts of Obamacare and empower states to regulate their insurance market.” The specifics include a substantial change away from the benefit requirements in many health plans offered for 2014-2018. These changes are described as:

  • (2019) "Essential Health Benefits (EHB): To allow insurers to offer more affordable health plans, CMS is providing states with additional flexibility in how they select their EHB-benchmark plan.  The final rule provides states with substantially more options in what they can select as an EHB-benchmark plan. Instead of being limited to 10 options, states will now be able to choose from the 50 EHB-benchmark plans used for the 2017 plan year in other states or select specific EHB categories, such as drug coverage or hospitalization, from among the categories used for the 2017 plan year in other states. States will also now be able to build their own set of benefits that could potentially become their EHB-benchmark plan, subject to certain scope of benefits requirements"  
           These rules will have a widespread and major impact on health insurance access and benefits in many or virtually all states.  Further analysis on anticipated state responses for 2019 will be shared as information is developed.  See:
  • Unpacking the Final 2019 Payment Notice:
    • Part 1 - [Link to full anlysis - finalized  Benefit and Payment Parameters rule for 2019. CMS also released the final 2019 letter to issuers in the federally facilitated exchanges and extended the previous policy for “grandmothered” or “transitional” policies for another year]
    • Part 2 - [Link to full anlysis: Rate Review, Medical Loss Ratio, Special Enrollment Periods, Prior Coverage Requirement, Termination Dates, The SHOP Program]
    • Part 3 - [Link to full anlysis - the rule’s changes to the Affordable Care Act’s (ACA’s) risk adjustment program.]
  • New Jersey lawmakers vote to bring back health insurance mandate - Lawmakers have sent to Gov. Phil Murphy a bill that will require nearly all New Jerseyans to have health insurance or pay a penalty. Associated Press (links back to this NCSL resources on state insurance mandates.) 4/16/2018
     

• October Update: On Oct. 12, 2017 the Trump Administration announced an immediate halt to subsidies known as cost sharing reductions (CSR) [CMS explanation]. This affects the several million individuals with annual incomes up to 250 pecrent of federal poverty, who purchase a policy from a health exchange in their state. The requirement for policies to cover "Essential Health Benefits" is not directly affected by subsidy payments .

  • See NCSL's related report on Health Exchanges, for general information on premiums and subsidies.
  • See NCSL information on Purchasing out-of-state health insurance. Updated October 2017.
• See your states' insurance benefits mandates, which continue in force integrated with the federal "EHB" requirements. [Your state]

50-State Table of Essential Health Benefits Benchmarks

In 2013 the Department of Health and Human Services (HHS) released rules on essential health benefits, actuarial value and accreditation. NCSL has compiled an easy-to-use 50-state table, including state selections and federal fall-backs, with links to details for each final plan.

Essential Health Benefits Benchmarks (Plans by States for 2017 and 2016)

The links and table below describe the final EHB benchmark plans for the 50 states and the District of Columbia.  As described in the EHB Bulletins published February 2012, and in §156.100 of the applicable HHS regulation, each state could select a benchmark plan to serve as the standard for plans required to offer EHB in the state. HHS also established that the default benchmark plan for states that do not exercise the option to select a benchmark health plan would be the largest plan by enrollment in the largest product in the state’s small group market. As described in §156.110, an EHB-benchmark plan must offer coverage in each of the 10 statutory benefit categories. In the summary table that follows, we list the final EHB benchmark plans. Additional information on the specific benefits, limits, and prescription drug categories and classes covered by the EHB-benchmark plans, and state-required benefits, is provided on the Center for Consumer Information and Insurance Oversight (CCIIO) Web site (http://cciio.cms.gov/resources/data/ehb.html).  Note:  If the base-benchmark plan does not include habilitative services, then states have the opportunity to define those benefits.  

List of Essential Health Benefits Benchmark Plans - Published by CMS/CCIIO

Updated as final,** effective for 2013-2018  (Select links to 50-state plans for 2017-2018**)

** Final; approved as of February 20, 2013. 2017 plans added 8/27/2015; Verified on CMS site for "2017 and beyond" plan years, 8/1/2017.

Source: CMS-9980-P: Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation -2012

Related Reports from NCSL

• State Actions to Address Health Insurance Exchanges - Latest results and implementation details for all 50 states. Updated October 2017.
• NCSL Survey: Coverage of Diabetes Drugs. NCSL Survey of 2016 Insurance Plans in 50 states, examining 1) patient access to the scores of diabetes drug treatments and 2) results in the 46 states with laws mandating diabetes coverage.  NCSL original research, published summer 2016.
• 2011-2014 Enacted State Mandate Laws - NCSL published a tally of post ACA enactment state mandate additions and changes, both related and unrelated to the ACA.
  • State Example: North Dakota 2015 EHB state study.
• Changes for 2016: Observations on a Potential Approach to Essential Health Benefits - an opinion and projected analysis article by Avalere Health. Published July 2014 - Read full article.

Key: 
FEDVIP = Federal Employees Dental and Vision Program
CHIP = Children's Health Insurance Program
FEHBP = Federal Employees Health Benefits Plan

Source:  CMS-9980-P: Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation - November 26, 2012

Prescription Drug Coverage as an Essential Health Benefit

Prescription drugs are one of the 10 essential health benefits that the ACA statute requires marketplace and individual and small group health policies plans to cover, effective January 1, 2014. . Pharmaceuticals are already widely included in commercial plans as well as in Medicaid, state employee health programs and Medicare. However, with almost 10,000 FDA-approved prescription products and the industry-standard practice of using formularies (or approved lists) to determine the specific drugs covered and the related cost sharing, consumers may have difficulty identifying a plan that both includes the drugs they need and the out-of-pocket costs they can afford. The graphic map below provides a snapshot of how drugs assured of coverage may vary based on 2012 in-state plan practices that are now the official benchmark.  Insurers may cover additional pharmaceuticals not listed in the official benchmark.  Enrollees are advised to examine the covered drugs within each insurance company's offered plans.

Comparative Coverage of State Benchmark Plan Rx Formularies Vary Greatly From State to State

Source: Based on data released by CMS on State Benchmark Plans, February 20, 2013, available online.  Maximum potential drug count is 1032; totals may double-count drugs that are categorized in more than one standard treatment class (set by the US Pharmacopeia).  Map design (c) 2013 by Avalere, as released 9/19/2013.

Prescription Drugs as EHB -  Rules Updated 2015

In early 2015, the U.S. Department of Health and Human Services revised the Essential Health Benefits (EHB) standard, including significant changes to the EHB prescription drug requirements. The National Health Law Program published a 5-part series providing a comprehensive analysis of the new (EHB) prescription drug requirements. Each fact sheet provides an overview of changes made to the EHB prescription drug standard, and also identifies areas where low income and underserved populations can obtain prescription drugs.  Published July, 2015. 

• Issue #1 - Formulary Transparency
• Issue #2 - Exceptions Process
• Issue #3 - Mail-Order Pharmacies 
• Issue #4 - U.S. Pharmacopeia Classification System 
• Issue #5 - Pharmacy and Therapeutics (P&T) Committee

Expedited Partner Therapy (EPT) - State Information - Legal status and barriers by state to providing medications to persons infected with certain STDs to be administered to their sexual partners. For 2017, 40 states permit EPT; seven states are classified as "potentially allowable" and only two states prohibit EPT.  The information applies generally regardless of the source of insurance coverage. (Compiled by CDC, updated July 2017)

Table Key: 
FEDVIP = Federal Employees Dental and Vision Program
CHIP = Children's Health Insurance Program
FEHBP = Federal Employees Health Benefits Plan

HHS Bulletins

• Types of Health Insurance available in 2014 - a consumer-oriented explanation of differences among HMOs, PPOs, to catastrophic coverage. (Updated September 2013)
• On Feb. 20, 2013, HHS issued a final rule on Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation.
• On Nov. 20, 2012 HHS issued new Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation.
• On July 2, 2012 HHS issued Essential Health Benefits: List of the Largest Three Largest Small Group Products by State - providing updated details on the options for benchmark plans.
• On Dec. 16, 2011, the Department of Health and Human Services issued an “Essential Health Benefits: HHS Informational Bulletin” outlining proposed policies that will give states considerably more flexibility and freedom in implementing the Patient Protection and Affordable Care Act.

Federal Approach Establishing State Choices for EHB - (Archive)

"HHS intends to propose that essential health benefits are defined using a benchmark approach. Under the department’s intended approach announced Dec. 16, 2011 states would have the flexibility to select a benchmark plan that reflects the scope of services offered by a “typical employer plan.” This would give states the flexibility to select a plan that would best meet the needs of their citizens.

States would choose one of the following benchmark health insurance plans:

• One of the three largest small group plans in the State by enrollment;
• One of the three largest State employee health plans by enrollment;
• One of the three largest federal employee health plan options by enrollment;
• The largest HMO plan offered in the State’s commercial market by enrollment.

If states choose not to select a benchmark, HHS has proposed that the default benchmark will be the small group plan with the largest enrollment in the state.

The benefits and services included in the benchmark health insurance plan selected by the state would be the essential health benefits package. Plans could modify coverage within a benefit category so long as they do not reduce the value of coverage.

To prevent Federal dollars going to state benefit mandates, the health reform law requires states to defray the cost of benefits required by state law in excess of essential health benefits for individuals enrolled in any plan offered through an Exchange. However, as a transition in 2014 and 2015, some of the benchmark options will include health plans in the state’s small group market and state employee health benefit plans.  These benchmarks are generally regulated by the state and would be subject to state mandates applicable to the small group market. Thus, those mandates would be included in the state essential health benefits package if the state elected one of the three largest small group plans in that state as its benchmark.

This approach would provide maximum flexibility to states, employers and issuers while providing quality, comprehensive, coverage for consumers."
Also read:

• HHS Bulletin FACT SHEET on Essential Health Benefits.12/16/11  [2 pages, HTML]
• Full essential health benefits bulletin. 12/16/11 [15 pages, PDF]
• Summary of individual market coverage as it relates to essential health benefits. 12/16/11 [2 pages]
• Report comparing benefits in small group products and state and Federal employee plans. 12/16/11  [7 pages]

IOM Issues Recommendations on Essential Benefits - Report Released Oct. 6, 2011

On Oct. 6, 2011, the Institute of Medicine (IOM) issued guidance to the Department of Health and Human Services (HHS) on "essential benefits," or mandated coverage, to be offered in the health reform law's insurance exchanges. The long awaited report, issued at the request of HHS, does not list the specific medical services to be covered (and paid for by insurers). Instead it recommends a framework of how to define the minimum benefits that will be included in insurance policies.

From the IOM Introduction: The Patient Protection and Affordable Care Act (ACA) has made the most comprehensive changes to the provision of health insurance since the development of Medicare and Medicaid by requiring all Americans to have health insurance by 2016. An estimated 30 million individuals who would otherwise be uninsured are expected to obtain insurance through the private health insurance market or state expansion of Medicaid programs.

The success of the ACA depends on the design of the essential health benefits (EHB) package and its affordability.

- IOM Statement 10/6/2011

For the first time on a nationwide level, "costs must be taken into account," the report states. "Unless we are able to balance the cost with the breadth of benefits, we may never be able to achieve the health care coverage envisioned in the Patient Protection and Affordable Care Act. If benefits are not affordable, fewer individuals will buy insurance."

The IOM also said that HHS should define a "typical employer plan" based on the coverage provided by small employers (currently defined as up to 50 or 100 employees). The resulting package of health insurance should be based on the national average premium cost for a typical small employer plan (in 2014) and should not exceed that amount.

IOM's release summary states, "(t)he committee saw its primary task as finding the right balance between making a breadth of coverage available for individuals at a cost they could afford. This balance will help ensure that an estimated 68 million people will have access to care covered" by the Essential Health Benefits.

The report, Essential Health Benefits: Balancing Coverage and Cost is available online as an Overview, a summary Report Brief, Criteria List and free PDF (requires free account member sign up with The National Academies Press).

State Roles

As noted in the NCSL report above, all 50 states already have a total of more than 1,800 separate laws that mandate specific insurance coverage and payment. However, more than half the states also have special requirements known as mandate review or mandate evaluation laws and boards, that already can and do evaluate costs of adding new benefit coverage within their state.  The IOM also recommended that the HHS secretary grant state requests for a variant of the essential health-benefits package for those states administering their own exchanges. These will be granted where states produce a package that is “actuarially equivalent” to the national package. The IOM encouraged the HHS secretary to conduct a “public deliberative process” that it described in the report.

The IOM report urges the HHS formal list of essential benefits be announced by May 1, 2012. The report issued on Oct. 6 does not have a binding effect.

The HHS Bulletin  "describes a comprehensive, affordable and flexible proposal and informs the public about the approach that HHS intends to pursue in rulemaking to define essential health benefits." | Bulletin PDF

Overview of ACA mandate features

The Patient Protection and Affordable Care Act (ACA)3 does not directly change or preempt state laws that require or "mandate" coverage of specific benefits and provider services. In the 2010-2013 start-up period, there are no direct effects on existing state health mandates. However, beginning January 1, 2014, the new ACA Exchange marketplaces will require a more uniform, 50-state standard coverage of "essential benefits"- partly defined in statute (below) and partly subject to federal HHS regulations, being issued in preliminary form and in parts as of February 2012.  [See material and citations above.]  As noted below, starting 2014, if state laws mandate benefit features not-included in the final HHS "essential benefits" list, the state will pay any additional costs for those benefits for exchange enrollees.

For the first two years after the ACA was signed (mid-2010-2012) this aspect of the law was difficult, in some cases nearly impossible, to calculate in terms of its financial, political or policy result. There are several reasons for this:

• Existing state benefit mandates have widely different effects -- some may be used by only a small number of enrollees (such as hair prosthesis for cancer patients); others are widely accepted "good practices" that insurers already voluntarily cover in many cases (PSA tests or mammogram screening). Some have a very low incremental cost, while others can cost tens of millions of dollars across the entire insured population.
• Insurers participating in an Exchange can in fact choose to cover selected "mandated" benefits on a voluntary basis, either at no additional charge, or with a specified policy rider which may be judged a cost-effective state investment.
• Many state laws already have exceptions or exemptions that allow sale of certain insurance without some or all mandates. For example High Deductible Health Plans with HSAs may exclude all state mandates until the enrollee spends $1,200 or up to $5,000 out-of-pocket.
• The "Essential Health Benefits Package"(defined in part below) already includes some of the more costly services.
• The method by which states will calculate and “will pay any additional costs” has not yet been determined and will require new federal regulations and guidance. The cost of additional benefits may be payable to the insurer or to the individual enrollee.
• About 33 states currently have a required state mandate review requirement, which restricts the adoption of new mandates, and is intended to analyze and in some cases justify the medical efficacy and cost-effect of these mandates.
• States remain free to repeal, restrict, modify or expand these state mandates -- the ACA does not interfere with this state legal process.  Federal regulations proposed in early 2012 clarify that state laws effective as of December 31, 2011 can be included in state selected EHB plans; state laws passed after that date may not be covered as EHBs within the  federal law. (Updated December 2012)

Protecting Grandfathered Plan Status4

For existing health insurance benefit packages and coverage plans, whose sponsors want to qualify for “grandfathered status”, the ACA includes fairly specific requirements and restrictions on changes occurring after March 23, 2010. This includes “certain changes to benefits, including a “substantial cut to diagnose or treat a particular condition.” However, this provision is not dependent on a state law mandate – the expectation is on the insurer and the employer’s choice of benefit package – these can offer benefits within or beyond those stated in state, or in federal law. An increase in benefit coverage would have no negative effect on an employer’s grandfathered status.

What Is a Health Insurance Exchange? Health reform requires the establishment of American Health Benefits Exchanges, or simply “exchanges,” to provide a regulated marketplace where eligible consumers can buy health insurance. Initially, individuals and small businesses will be eligible to buy health insurance through the exchanges.

Depending on their incomes, they may qualify for tax credits to help defray the cost of coverage. Individuals will select coverage through one exchange, and small businesses will select their small business coverage through another, known as the Small Business Health Options Program, or “SHOP exchange.” Beginning in 2017, states will have the option of allowing large groups to purchase coverage through the SHOP exchange.

“Qualified Health Plans”

Plans that meet certain qualifications can sell to individuals and small businesses in the health insurance exchange. (Those plans can sell policies at the same price outside of the exchange, as well.) To be qualified, these plans must cover the essential package of benefits, offering at least silver and gold level coverage. They can cover benefits that are outside the essential benefit package, as well, but with two caveats: 1) if they cover abortion services, they must collect separate premium checks for that coverage and cannot use any premium tax credits or other federal funding for those services; and 2) if they are required under state law to cover services beyond the essential benefit package, states will pay any additional costs for those benefits for exchange enrollees. [See law text in Appendix 2, below]

States may also already have their own definition of qualified benefit plans that goes beyond the federal definition. While the ACA does not legally preempt those laws, states may want to consider, at least, conforming the terms “qualified” or otherwise clarifying which provisions are federal and which are state. State and federal regulations also are very likely to play a role in implementing these provisions.

Congressional Research Analysis

The following material is excerpted verbatim from the Congressional Research Service: Report R40942, Private Health Insurance Provisions in Senate-Passed H.R. 3590, the Patient Protection and Affordable Care Act.  Footnotes #5-15 are from that report.

• “Essential health benefits package” refers to health insurance coverage that will provide “essential health benefits,” will not exceed out-of-pocket and deductible limits specified in the law, and will not impose a deductible on preventive services.
• “Essential health benefits” refers to categories of benefits specified in the law (described below) which will be provided in an “essential health benefits package.”

Essential Health Benefits (EHB) Package Required by the ACA

The secretary must specify the “essential health benefits” (EHB) included in the “essential health benefits package” that Qualified Health Plans (QHPs) will be required to cover (effective beginning in 2014). In December 2012, HHS clarified and redefined essential health benefits for 2013-2015 as based on one of nine categories of major operational health plans by state, with each state able to submit their selected choice.  EHB is defined in Section 1302(b) of the Patient Protection and Affordable Care Act.5 

The permanent statute citation is 42 U. S. C. § 300gg-13(a)(4), and related regulations.  It  includes at least the following general categories:

• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorder services, including behavioral health treatment [new details, 11/2013]
• Prescription drugs
• Rehabilitative and habilitative services and devices [definitions]
• Laboratory services
• Preventive and wellness and chronic disease management (details directly below)
• Pediatric services, including oral and vision care.

Preventive Services for Adults, Women and Children

63 specific preventive services are explained in more detail in a separate NCSL web report and related HHS fact sheets.

• Covered Preventive Services for Adults (total of 16)
• Covered Preventive Services for Children (total of 26)
• Covered Preventive Services for Women, Including Pregnant Women (total of 22)

Women's preventive health services were defined in detail via federal regulations published August 1, 2011, requiring broad coverage, without copayments or deductibles, of:

• Annual preventive-care medical visits and exams
• Contraceptives (products approved by the FDA) - with exemptions for religious employers, a temporary enforcement safe harbor. 
• 
  UPDATE-see: U.S. Supreme Court ruling of June 30, 2014; other recent developments and changes4B]
• Mammograms
• Colonoscopies
• Blood pressure tests
• Childhood immunizations
• Domestic violence screenings for interpersonal and domestic violence should be provided for all women
• H.I.V. screenings
• Breast feeding counseling and equipment, including breast pumps at no charge.
• Gestational diabetes in pregnant women screening
• DNA tests for HPV as part of cervical cancer screening

2012-2013 Implementation

New health plans were required to include these services without cost sharing for insurance policies with plan years beginning on or after August 1, 2012.  The rules governing coverage of preventive services which allow plans to use reasonable medical management to help define the nature of the covered service apply to women’s preventive services.  Plans will retain the flexibility to control costs and promote efficient delivery of care by, for example, continuing to charge cost-sharing for branded drugs if a generic version is available and is just as effective and safe for the patient to use.  (Note: 2012 health plans based on a January-December calendar year  changed coverage effective January 1, 2013.)

Beginning Jan. 1, 2014, coverage provided for the essential health benefits package will provide bronze, silver, gold, or platinum level of coverage (described below).6 A health plan providing the essential health benefits package will be prohibited from imposing an annual cost-sharing limit that exceeds the thresholds applicable to HSA-qualified HDHPs.7  Small group health plans providing the essential health benefits package will be prohibited from imposing a deductible greater than $2,000 for self-only coverage, or $4,000 for any other coverage in 2014 (annually adjusted thereafter).8   Such limits will be applied in a manner that will not affect the actuarial value of any health plan,9 including a bronze level plan (described below). Consistent with the immediate reforms described above, plans providing the essential health benefits package will be prohibited from applying a deductible to preventive health services.10

The ACA requires the Secretary to define and periodically update coverage that provides essential health benefits. The Secretary will ensure that the scope of essential health benefits is equal to the scope of benefits under a typical employer-provided health plan (as certified by the Chief Actuary of the Centers for Medicare and Medicaid Services).11  A health plan will be allowed to provide benefits in excess of the essential health benefits defined by the Secretary.12

However, if a state requires such additional benefits (beyond the certified list publish) in QHPs, the state must reimburse individuals for the additional costs of those benefits.13

Mental Health Update

The departments of Health and Human Services, Labor, and the Treasury on Nov. 8, 2013,  jointly issued a final mental health and substance use disorder parity rule, which increases parity between mental health/substance use disorder benefits and medical/surgical benefits in group and individual health plans. A fact sheet on the rules is available here.

Essential Benefits as Applied in 2010-2013

While the major, nationwide requirements for essential benefits will go into effect Jan. 1, 2014, there are at least two ACA provisions already in effect which reference use of “essential benefits”.

• The provision which establishes restrictions on the imposition of annual limits on the dollar value of health plans effective September 23, 2010, requiring coverage value of at least $750,000 per year, and higher maximum in 2011-2013,  refers to the “dollar value of essential health benefits (as defined in Section 1302(b) of the Patient Protection and Affordable Care Act)”, including a waiver process that allows certain plans to have a lower total value for a one-year period. [Recent history and chronology in the next section, below]
• The provision which establishes Medical Loss Ratios (MLRs), effective January 2011, references essential benefits as part of the calculation of actual medical payments by insurers.

Archive: Annual Limits and Exceptions | 2010 - 2014

Under HHS regulations, plans offered between September 2010 and September 2011 could not limit annual coverage of essential benefits such as hospital, physician and pharmacy benefits to less than $750,000. The restricted annual limit was $1.25 million for plan years starting on or after Sept. 23, 2011, and $2 million for plan year starting between Sept. 23, 2012 and Jan. 1, 2014.

HHS approved limited, selected waiver exemptions from annual limits for selected states or employer sponsor situations.  In February, 2011 it was announced that Florida, Massachusetts, New Jersey, Ohio and Tennessee, received waivers allowing health insurance companies to continue offering less generous annual limits on benefits. In these cases, existing state law already mandates that policies with lower annual limits on coverage be offered. The Center for Consumer Information and Insurance Oversight (CCIIO), explained that because “limited benefit plans, or mini-med plans, are often the only type of insurance offered to some workers,” the one-year waivers allow continuity.

Levels of Coverage

Beginning in 2014, the ACA generally required QHPs to provide coverage at one of the following federally established benefit levels: bronze, silver, gold, or platinum. This requirement applies regardless of whether or not the QHP is offered through an exchange (and premiums must be the same for QHPs inside and outside of the exchange). Excluding dental-only plans, health insurance issuers must offer a silver plan and a gold plan in the exchange. Each coverage level is based on a specified share of the full actuarial value of the essential health benefits (see Figure 1). A health insurance issuer that offers coverage in any of these four levels will be required to offer the same level of coverage in a plan specifically designed for individuals under age 21. [Updated Sep. 2016]; 14

Another plan option permitted under ACA as of 2014 is the Catastrophic Plan. A catastrophic plan must provide coverage for essential health benefits, but coverage is paid for by the insurer only after the enrollee pays deductibles equal to the amounts specified as out-of-pocket (OOP) limits for HSA-qualified HDHPs. The maximum OOP limits for 2015-16 commercial market tax-deductible HSA/HDHP combinations are $6,450 individual / $12,900 family. Such deductibles will not apply to at least three primary care visits per plan year. A catastrophic plan will be permitted only in the individual market (1) for young adults (those under age 30 before the plan year begins), and (2) for those persons exempt from the individual mandate because no affordable coverage is available or they have a hardship exemption.   By comparison federal HSA/high deductible plan minimum deductibles for 2015-16 were established to require enrollees to pay the first $1,300 of their medical expenses ($2,600 for family coverage) before insurance benefits begin. [Dollar limits updated Sep.2016]

• Types of Health Insurance available in 2015-16 - a consumer-oriented explanation of differences among HMOs, PPOs, and catastrophic coverage.

Notes and Sources

1 .Introduction to required health benefits
2 Council for Affordable Health Insurance.  "Health Insurance Mandates in the States 2011."  Victoria Craig Bunce, JP Wieske.
3 The Affordable Care Act (ACA) is formally named the Patient Protection and Affordable Care Act (PPACA), Pub. L. 111–148.
4 Congressional Research Service. Grandfathered Health Plans Under the Patient Protection and Affordable Care Act (PPACA). January 3, 2011.
4A - For a discussion of the definitions of these treatments and services, see Habilitative Services Coverage for Children Under the Essential Health Benefit Provisions of the Affordable Care Act
Lucile Packard Foundation for Children’s Health, May 2013
4B -Contraceptive Services Background: On August 1, 2011 the administration also released an amendment to the women's prevention regulation that allows religious institutions that offer insurance to their employees the choice of whether or not to cover contraception services. This regulation is modeled on the most common accommodation for churches available in the majority of the 28 states that already require insurance companies to cover contraception.  On February 20, 2012 an addition exemption was announced for employers that are charities or hospitals with a religious objection to providing contraception services as part of their health plan.  In these circumstances, the insurance company would be required to reimburse for the services.  Also the "temporary enforcement safe harbor" applies until the first plan year that begins on or after August 1, 2013. On February 1, 2013 the "contraception rule" was further altered  to expand the number of groups that do not need to pay directly for this coverage. See:

- CMS Fact Sheet: Women’s Preventive Services Coverage and Religious Organizations (cms.gov) 

- CMS Document: Full Text of the Notice of Proposed Rulemaking on Women’s Preventive Services Coverage

CRS FOOTNOTES (#5-14) Cited in Congressional Research Service: Report R40942
5 §1302(b). [Cited in Congressional Research Service: Report R40942, Private Health Insurance Provisions in Senate-Passed H.R. 3590, the Patient Protection and Affordable Care Act.
6 §1302(d).
7 §1302(c).
8  Ibid.
9  “Actuarial value” is a summary measure of a health plan’s benefit generosity. It is expressed as the percentage of medical expenses estimated to be paid by the insurer for a standard population and set of allowed charges. For a background discussion about actuarial value, see CRS Report R40491, Setting and Valuing Health Insurance Benefits, by Chris L. Peterson.
10  §1302(c)
11  §1302(b)
12  §1302(b)(5)
13  §1311(d)(3)(B), as amended by §10104(e).
14  §1302(d).
15  Excerpted from Michael Bihari, MD, former About.com Guide editor.   Updated February 11, 2010

Archive: News and Information on EHB Implementation | 2012-2013

A Comparative Review of Essential Health Benefits Pertinent to Children in Large Federal, State, and Small Group Health Insurance Plans: Implications for Selecting State Benchmark Plans - American Academy of Pediatrics, July 2012

Essential Health Benefit Benchmark Plans, as of Dec. 4, 2012 -Kaiser Family Foundation, StateHealthFacts.org, December 4, 2012

Health Care Law Will Let States Tailor Benefits - New York Times, December 17, 2011>

"Defining 'Typical': A Critical Step In Determining The Health Law's Essential Benefits Package" - article by State  Rep. James Dunnigan (Utah), in  Kaiser Health News, September 15, 2011

Insurance Coverage for Contraception Is Required-  The Obama administration requires health plans to cover government-approved contraceptives for women.- published August 2,2011 by NY Times.

<Mandated Coverage: Several Blues Plans Face Scrutiny Over Refusal to Cover Cost of Autism Treatment - BCBS Plans Report, August 18, 2011.

These state-authorized or created programs are tasked with examining proposed new mandates or changes in existing mandates to determine the health and economic affect of such laws.  The agency links below provide examples of these state evaluations.

Arkansas, Colorado, New York, North Carolina - mandate review program no longer active.

Sources: NCSL State Research; California Health Benefits Review Program.  "Other States' Health Benefit Review Programs, 2011."

Appendix I | Background: Understanding Mandated Health Insurance Benefits15

Mandated benefits (also known as “mandated health insurance benefits” and “mandates”) are benefits that are required to cover the treatment of specific health conditions, certain types of healthcare providers, and some categories of dependents, such as children placed for adoption. A number of health care benefits are mandated by either state law, federal law — or in some cases — both. Prior to passage of the PPACA, between the states and the federal government there are upwards of 2,000 health insurance mandates.

Although mandates continue to be added as health insurance requirements, they are controversial. Patient advocates claim that mandates help to ensure adequate health insurance protection while others (especially health insurance companies) complain that mandates increase the cost of healthcare and health insurance.

Mandated Health Insurance Benefit Laws

Mandated health insurance laws passed at either the federal or state level usually fall into one of three categories:

• Health care services or treatments that must be covered, such as substance abuse treatment, contraception, in vitro fertilization, maternity services, prescription drugs, and smoking cessation.
• Healthcare providers other than physicians, such as acupuncturists, chiropractors, nurse midwives, occupational therapists, and social workers.
• Dependents and other related individuals, such as adopted children, dependent students, grandchildren, and domestic partners.

The mandated benefit laws most often apply to health insurance coverage offered by employers and private health insurance purchased directly by an individual.

Mandated Insurance Benefits and the Cost of Health Insurance

Most people – whether for or against mandates – agree that mandated health benefits increase health insurance premiums. Depending on the mandated benefit and how that benefit is defined, the increase cost of a monthly premium can increase from less than 0.1% to more than 5%.

Trying to figure out how a mandated benefit will impact an insurance premium has been very complicated. The mandate laws differ from state to state and even for the same mandate, the rules and regulations may vary.

For example: Most states mandate coverage for chiropractors, but the number of allowed visits may vary from state to state. One state may limit the number of chiropractor visits to four each year, while another state may allow up to 12 chiropractor visits each year. Since chiropractor services can be expensive, the impact on health insurance premiums may be greater in the state with the more generous benefit.

Additionally, the lack of mandates could also increase the cost of healthcare and health insurance premiums. If someone who has a medical problem goes without necessary health care because it is not covered by his or her insurance, he or she may become sicker and need more expensive services in the future.

Appendix 2 - Text Excerpt From PPACA

Section 10104(e)

• (3) RULES RELATING TO ADDITIONAL REQUIRED BENEFITS.—
  • (A) IN GENERAL.—Except as provided in subparagraph (B), an Exchange may make available a qualified health plan notwithstanding any provision of law that may require benefits other than the essential health benefits specified under section 1302(b).
  • (B) STATES MAY REQUIRE ADDITIONAL BENEFITS.—
    • (i) IN GENERAL.—Subject to the requirements of clause (ii), a State may require that a qualified health plan offered in such State offer benefits in addition to the essential health benefits specified under section 1302(b).
    • (ii) STATE MUST ASSUME COST.—Replaced by section 10104(e)(1).
• A State shall make payments—
  • (I) to an individual enrolled in a qualified health plan offered in such State; or (II) on behalf of an individual described in subclause (I) directly to the qualified health plan in which such individual is enrolled; to defray the cost of any additional benefits described in clause (i).

Federal Health Law and the Supreme Court

On June 28, 2012, the Supreme Court issued an opinion upholding the Patient Protection and Affordable Care Act, with limitations on penalties for states that choose not to expand their Medicaid programs. The decision did not affect other provisions. The information on this web page continues to reflect state actions addressing the ACA. 
For NCSL’s updated summary and analysis of the Court’s decision and its effects see: U.S. Supreme Court and Federal ACA

The state sections of this online report are an informal summary explanation of state and federal requirements and are not intended as legal advice. The PPACA "Recent News" and links from HHS/CMS and the sections excerpted from the Congressional Research Service may be cited as such. Appendix 2 is the exact text from section 10104(e) of the federal law.

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