HHS Issues Essential Health Benefits Bulletin on Benchmarking

//HHS Issues Essential Health Benefits Bulletin on Benchmarking

HHS Issues Essential Health Benefits Bulletin on Benchmarking

HHS Issues Essential Health Benefits Bulletin on Benchmarking

Gives States Greater Flexibility in Determining What’s Covered Under New Exchange Plans in 2014

On December 16, 2011, the Department of Health and Human Services (HHS) issued a bulletin outlining proposed policies and the approach it intends to pursue in rulemaking for defining Essential Health Benefits (EHB). Per the Patient Protection and Affordable Care Act (PPACA), beginning on January 1, 2014, non-grandfathered Individual and Small Group plans offered inside and outside the Exchanges must cover the EHB. In addition, PPACA prohibits the use of lifetime and annual limits on the dollar amount of EHB.

In developing the regulation, HHS stated that its aim is to balance comprehensiveness, affordability, and State flexibility. It is, therefore, proposing to allow each State to select an existing health plan as a “benchmark” to establish the services and items included in the Essential Health Benefits package for 2014 and 2015.

States will choose from one of four health insurance plan options as a benchmark:

the largest plan based on enrollment in any of the three largest small group products in the State
any one of the three largest State employee health plans
any one of the three largest Federal employee health plan options
the largest HMO plan offered in the State’s commercial market

HHS will propose that the default for States choosing not to set a benchmark will be the small group plan with the largest enrollment in the State. For 2016 and beyond, HHS would reassess the proposed benchmark process.

The bulletin did not address cost sharing, e.g., deductibles, copayments, and coinsurance, which will be covered in future guidance. Cost-sharing rules will determine the actuarial value of the plan. It also does not address how this state-by-state approach is to be applied to the ban on lifetime and annual limits for plans that cover people in multiple States.

However, the bulletin did reaffirm that Essential Health Benefits must include items and services within the following 10 benefit categories:

(1) ambulatory patient services,
(2) emergency services,
(3) hospitalization,
(4) maternity and newborn care,
(5) mental health and substance use disorder services, including behavioral health treatment,
(6) prescription drugs,
(7) rehabilitative and habilitative services and devices,
(8) laboratory services,
(9) preventive and wellness services and chronic disease management, and
(10) pediatric services, including oral and vision care.

HHS encourages public input on this proposal. Comments are due by January 31, 2012 and can be sent to: EssentialHealthBenefits@cms.hhs.gov.

For additional information, please visit:

  • The Centers for Medicare and Medicaid site at cms.gov to read the Essential Health Benefits bulletin
  • The HHS consumer site at healthcare.gov to read the fact sheet on the Essential Health Benefits bulletin
  • The Assistant Secretary for Planning and Evaluation site on HHS at aspe.hhs.gov for a summary of individual market coverage as it relates to Essential Health Benefits
  • Our Essential Health Benefits page on InformedOnReform.com
  • The Assistant Secretary for Planning and Evaluation site on HHS aspe.hhs.gov for information comparing benefits in small group products and State and Federal employee plans


This document is for general informational purposes only. While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and CIGNA makes no representations or warranties regarding its accuracy or completeness. The information provided should not be construed as legal or tax advice or as a recommendation of any kind. External users should seek professional advice from their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

“Cigna” is a registered service mark and the “Tree of Life” logo is a service mark of Cigna Intellectual Property, Inc., licensed for use by Cigna Corporation and its operating subsidiaries. All products and services are provided exclusively by such operating subsidiaries and not by Cigna Corporation. Such operating subsidiaries include Connecticut General Life Insurance Company (CGLIC), Cigna Health and Life Insurance Company (CHLIC), and HMO or service company subsidiaries of Cigna Health Corporation and Cigna Dental Health, Inc. In Arizona, HMO plans are offered by Cigna HealthCare of Arizona, Inc. In California, HMO plans are offered by Cigna HealthCare of California, Inc. In Connecticut, HMO plans are offered by Cigna HealthCare of Connecticut, Inc. In North Carolina, HMO plans are offered by Cigna HealthCare of North Carolina, Inc. All other medical plans in these states are insured or administered by CGLIC or CHLIC. 10/11 © 2011 Cigna. Some content provided under license.

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About the Author:

Jesse is the Founder and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. He is a licensed health and life insurance broker in 47 states and the District of Columbia. Jesse specializes in Medicare and health insurance benefits packages for businesses and their employees. Jesse is the designated responsible broker for Smedley Insurance Group, Inc. He founded Smedley Insurance Group after working for a small captive insurance agency where he was required to sell perhaps the worst health insurance plans to consumers because it was all the company had to offer. He knew there had to be a better way and thus, SIG was born. Jesse can be reached toll free at (866) 260-9829, Ext. 101. His email address is: his first name @iHealthBrokers.com.

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