Final Rules and FAQs on Essential Health Benefits and Preventive Services
On February 20, 2013, the Departments of Labor, Health and Human Services, and the Treasury (collectively, the “Departments”) released its final rule to define the essential health benefits (EHBs) package under the Affordable Care Act (ACA). Beginning in 2014, the ACA requires health plans offered in the individual and small group markets to offer a package of benefits from ten categories. The ten categories of EHBs include:
- 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
Self-funded plans, large group market insurers, and grandfathered plans are not subject to the EHB requirements. Nevertheless, the regulations do impact employer-sponsored plans.
(a) Essential Health Benefits
Under the ACA, health plans offered in the individual and small group markets must offer a core package of benefits known as the Essential Health Benefits (EHBs). The final regulations allow states to select from the following benchmark plan options:
- The largest plan by enrollment in any of the three largest products in the state’s small group market;
- Any of the largest three state employee health benefit plan options by enrollment;
- Any of the largest three national Federal Employees Health Benefits Program (FEHBP) plan options by enrollment; or
- The largest insured commercial HMO in the state.
If a state does not select from one of these options, the default benchmark will be the largest small group product in the state. If the benchmark plan selected by a state does not include one of the ten categories of EHBs, the benchmark plan must be supplemented by the addition of the entire category of the benefits offered under another benchmark plan.
(b) Minimum Value Calculator
Beginning in 2014, certain large employer plans may be subject to a penalty tax for failing to (i) offer minimum essential coverage for all full-time employees and dependents, or (ii) offering eligible employer-sponsored coverage that is either unaffordable or does not offer minimum value. A plan offers “minimum value” if the plan’s share of total allowed cost of benefits is at least 60%. The regulations announce a Minimum Value (MV) Calculator for self-funded plans and large fully-insured group plans to utilize in determining whether the plan offers minimum value.
Consequently, under the regulations, a self-funded plan may use one of the following methods to determine whether it offers minimum value:
- The MV Calculator made available by HHS and IRS
- Any safe harbor established by HHS and IRS
- A plan may seek certification by an actuary to determine minimum value if the plan contains non-standard features that are not suitable for either of the methods described above. This determination must be made by a member of the American Academy of Actuaries.
The preamble to the regulations proposes that employer contributions to an HSA and certain amounts newly made available under an HRA integrated with the major medical plan may be taken into account when determining minimum value. However, further guidance is will likely be issued on this topic.
The Minimum Value Calculator is posted on the Center for Consumer Information and Insurance Oversight (CCIIO) website, under Plan Management regulations, February 20, 2013. http://cciio.cms.gov/resources/regulations/index.html
(c) Cost-Sharing Limits and Actuarial Values
The final regulations also address the cost-sharing limitations and actuarial values that correspond to the bronze, silver, gold, and platinum metal levels required for the EHB package.
Limits on Deductibles – The ACA imposes cost-sharing limits on deductibles ($2,000 for self-only coverage and $4,000 for other coverage). The Departments interpret that these limits only apply to employers and insurers in the small group market, and not to self-insured employer plans, large group employer plans, or large group market insurers. The Departments are, however, seeking further comments from stakeholders before finalizing this interpretation. Until then, self-insured plans do not have to comply with the limits on deductibles.
- Out-of-Pocket Maximums – The regulations confirm that all non-grandfathered group health plans must comply with the cost-sharing limits on out-of-pocket maximums. While the out-of-pocket maximum has not been set for 2014, the comparable limit this year is $6,250 for self-only coverage and $12,500 for non-self only coverage. The 2014 limits will be announced in future guidance. The Departments will allow for transitional relief for the 2014 plan year if a group health plan has multiple service providers (i.e., major medical, prescription drug and behavioral health) making coordination of a single maximum across the plan difficult. As such, plans will be deemed to have satisfied the out-of-pocket limitation if:
- The plan complies with the out-of-pocket limits with respect to its major medical component; and
- If any other component of the plan has its own out-of-pocket limits and methodology, such out-of-pocket maximum does not exceed the limits in place for high deductible health plans.
- Actuarial Values – Under the ACA, health plans must meet specific actuarial values for each metal level: (i) 60% for bronze plans; (ii) 70% for silver plans; (iii) 80% for gold plans; and (iv) 90% for platinum plans. The regulations allow plans to be within 2% of the standard actuarial value of the metal plans. As such, the actuarial value can be as follows: (i) 58% to 62% for bronze plans; (ii) 68% to 72% for silver plans; (iii) 78% to 82% for gold plans; and (iv) 88% to 92% for platinum plans.
(d) Preventive Services
The most recent FAQs issued by the Departments clarify certain aspects of the preventive services mandate. Under the ACA, non-grandfathered plans must cover preventive services at 100% without cost-sharing. The FAQs clarify the following items:
- If a plan does not have an in-network provider that can provide a particular preventive service, the plan must cover the service without cost-sharing if performed by an out-of-network provider.
- Aspirin and other OTC-recommended items and services must be covered without cost-sharing only when prescribed by a health care provider.
- If a colonoscopy is scheduled and performed as a screening procedure pursuant to the USPTF recommendation, it is not permissible for the plan to impose cost-sharing for the cost of a polyp removal during the colonoscopy. However, a plan may impose cost-sharing for a treatment that is not a recommended preventive service, even if the treatment results from a recommended preventive service.
- Genetic counseling and breast cancer susceptibility gene (BRCA) testing, if appropriate, must be made available as a preventive service without cost-sharing.
- For USPTF recommendations that apply only to certain populations identified as high-risk, if the attending provider determines that a patient belongs to a certain high-risk population, that service is required to be covered without cost-sharing, subject to reasonable medical management.
- Any immunizations following new ACIP recommendations must be covered without cost-sharing by the first day of the plan year beginning one year on or after the date the recommendation is issued.
- The HRSA Guidelines recommend at least one well-woman preventive care visit for adult women each year. Although the HRSA Guidelines list services individually, there is no requirement that each service be provided in a separate visit. The delivery of multiple prevention and screening services at a single visit is considered a reasonable medical management technique and permissible under the regulations.
- Screening for domestic violence is recommended and may be accomplished by a provider asking a few, brief, open-ended questions.
- The HRSA Guidelines recommend high-risk HPV DNA testing for women with normal cytology results who are 30 years of age or older to occur no more frequently than every 3 years.
- With respect to the HRSA Guidelines recommendation for annual HIV counseling and screening for all sexually active women, “screening” means testing in this context.
- Health plans may not cover only oral contraceptives. Plans must cover the full range of FDA-approved contraceptive methods including barrier methods, hormonal methods, and implanted devices, as well as patient education and counseling, as prescribed by a health care provider. Plans may, however, use reasonable medical management techniques to control costs. For example, plans may cover a generic drug without cost-sharing and impose cost-sharing for equivalent branded drugs. However, in this instance, a plan must accommodate any individual for whom the generic or brand name drug would be medically appropriate, as determined by the patient’s provider, by having a mechanism for waiving the otherwise applicable cost-sharing for the branded or non-preferred brand version. If, however, a generic is not available, or would not be medically appropriate for the patient as a prescribed brand name contraceptive method, the plan must provide coverage for the brand name drug without cost-sharing.
- OTC contraceptive methods must be provided without cost-sharing if they are both FDA-approved and prescribed for a woman by her health care provider. This does not include contraception for men.
- Intrauterine devices and implants must be covered without cost-sharing, provided they are FDA-approved and prescribed by a woman’s health care provider.
- Coverage of comprehensive lactation support and counseling and costs of renting or purchasing breastfeeding equipment extends for the duration of breastfeeding. However, plans may use reasonable medical management techniques to determine the frequency, method, treatment, or setting for a recommended preventive item or service, to the extent not specified in the recommendation or guideline.