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HHS Issues Proposed Rule Defining Essential Health Benefits Package and Actuarial Value for Health Plans
On November 20, 2012, the Department of Health and Human Services (HHS) issued a much-anticipated proposed rule providing detailed standards for the essential health benefits package as well as actuarial value requirements for plans that must offer essential health benefits. Under the Patient Protection and Affordable Care Act (ACA), the “essential health benefits” (EHB) are the minimum benefits that must be covered by health insurance policies known as qualified health plans (QHPs), which are plans offered on a health insurance exchange. Medicaid benchmark and benchmark-equivalent plans, Basic Health Programs, and non-grandfathered plans offered in the individual and small group markets (inside and outside the Exchanges) also must cover EHB. On December 16, 2011, the Center for Consumer Information and Insurance Oversight (CCIIO) within the Centers for Medicare & Medicaid Services (CMS) released a pre-rule document entitled the “Essential Health Benefits Bulletin” outlining HHS’ intended regulatory approach to implement the EHB requirements, and on February 24, 2012, HHS issued the “Actuarial Value and Cost-Sharing Reductions Bulletin” describing an approach for calculating the actuarial value of Qualified Health Plans. The proposed rule is largely consistent with the approaches outlined in both bulletins and gives additional detail about the standards for the EHB package and the calculation of actuarial value (AV) of health plans offered in the individual and small group markets. Comments are due on the proposed rule by December 26, 2012.
Among other things, the proposed rule addresses:
- The process for state selection of an EHB benchmark plan and a deadline of December 26, 2012 for a state to make such a selection or use the default benchmark plan;
- Detailed standards for the EHB package;
- The treatment of state-required benefits in addition to EHB, proposing a revised approach that appears to make more clear that a state can select any of the four benchmark options without triggering a requirement that states pay for most state-required benefits;
- The definition and calculation of actuarial value (AV) for purposes QHPs offered through the health insurance exchanges and non-grandfathered plans offered in the individual and small group markets (both inside and outside of the Exchanges);
- The annual limits on cost-sharing for QHPs and non-grandfathered health plans in the individual and small group market.
Importantly, the proposed rule appears to address advocates’ concerns that the originally proposed coverage of one drug per therapeutic class does not meet the current standard of benefits offered by employer plans. In the revision, the coverage requirement is the greater of one drug per class or the coverage offered under the benchmark plan selected by the state.
CMS also separately issued guidance to State Medicaid programs on November 20 detailing how Medicaid programs will meet the standards of the Essential Health Benefits provision. CMS notes that additional rulemaking will be forthcoming on how Medicaid program implementation of the EHB.
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