HHS Releases Final Rules on Essential Health Benefits

With reelection in its rearview mirror, the Obama administration released a flurry of Affordable Care Act (ACA) regulations Tuesday, including new specifics about health plans to be sold on health exchanges.
by | November 21, 2012

With reelection in the rearview mirror, the U.S. Department of Health and Human Services (HHS) released a flurry of Affordable Care Act (ACA) regulations Tuesday, including new specifics about plans to be sold on health insurance exchanges.

Of particular interest to states is guidance on essential health benefits, the actuarial value of plans sold on the exchanges and the accreditation process for plans sold on federal-run or partnership exchanges.

Essential health benefits are 10 core areas of coverage that all insurance plans (sold both on and outside the exchanges) must cover. Tuesday's rule essentially codifies guidance that HHS previously released. To simplify the process, states can choose an existing health plan (a federal employee plan, a state employee plan or a small-group plan, for example) to serve as the benchmark for what should be covered in those 10 areas.

Many states have already done so, as Governing has reported. If states opt to not choose their own benchmark plan, HHS will default to the largest small-group plan in the state, according to Tuesday's rule.

Actuarial value is the percentage of expected health costs that a plan will cover. For example, an actuarial value of 70 means the plan is expected to cover 70 percent of costs, leaving 30 percent to the consumer. Again, Tuesday's rule largely codified guidance that HHS had already released. Plans sold on the health exchanges will be branded based on their actuarial value: 60 is a "bronze" plan, 70 is a "silver" plan, 80 is a "gold plan" and 90 is a "platinum" plan. Those designations are intended to simplify the decision-making process for customers shopping on the exchanges.

As HHS previously detailed, it will create a national calculator (based on a national, standard population) to determine a plan's actuarial value. That calculator is now available for public review. According to Tuesday's rule, starting in 2015, states can submit state-specific data to HHS that, if approved, would serve as the basis for a state-level calculator.

One bit of new guidance in Tuesday's rule were the standards for plan accreditation on a partnership or federal exchange (which at least 30 states are expected to have). Any health plans already accredited by the National Committee on Quality Assurance and URAC will be grandfathered in for the first four years of the exchange's operation (through 2017). Plans that are not already accredited must become so before the exchanges open in 2014. Other accreditation entitites would be allowed, according to Tuesday's rule, but must apply to HHS to gain that status.

Public comments on the proposed rules are due by Dec. 20, after which they will be reviewed and the rules will be finalized.

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