On February 17, 2012, the U.S. Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services (CMS) released a Frequently Asked Questions (FAQs) document intended to provide clarification of the agency’s December 16, 2011, Essential Health Benefits (EHB) Bulletin. States and other stakeholders submitted comments on the Bulletin asking for additional guidance.
The FAQ document responds to a number of questions raised by states, including the timeframe for choosing a benchmark plan and how states should chose benefits. Specifically, the FAQ clarifies that states will have to choose the EHB in the third quarter of 2012. The EHB would include the benchmark plan, any state-supplemented benefits that are needed to satisfy the benefit requirements of the 10 statutory categories, and any state mandates that were enacted before December 31, 2011. This is a temporary approach as the EHB selected in 2012 will only apply in 2014 and 2015. HHS will revisit this approach for 2016.
The FAQ document also clarifies that:
- States would defray the costs of state-mandated benefits if they chose an EHB that does not include them.
- If a state chooses a small group market benchmark plan that includes all the state mandates for the small group market, but the state has other mandated benefits that apply only to the individual market or to HMOs, the state would need to include these benefits in the EHB and defray the costs.
- The EHB benchmark plan applies to the individual and small group markets as well as inside and outside the exchange. However, it does not apply to the Medicaid benchmark plan.
- If a benchmark plan does not include benefits from one or more of the 10 statutory categories, the state can add the missing benefits by referencing another benchmark option in the following manner. Assuming the state selects the largest small group market plan, which is the default benchmark plan, the state would then first look to the second largest small group market benchmark plan, then to the third, then to the FEHBP with the highest enrollment.
- If a small group plan offers coverage to employees in more than one state, the EHB benchmark plan for the state in which the insurance policy is issued would determine the EHB for all of the enrollees, regardless of what state they live in.
- Scope and duration limitations (i.e., visit limits) can be included in the EHB, but are subject to review pursuant to statutory prohibitions on discrimination in benefit design. Lifetime dollar limits are already prohibited and annual dollar limits will be completely prohibited beginning in January 2014. However, grandfathered individual market policies are exempt from the annual dollar limits prohibition.
- HHS will provide states with the top three small group market products in each state based on data from HealthCare.gov. The agency will work with states to reconcile discrepancies between its small group market product enrollment data and the state’s data.
- Medicaid benchmark plan must include at least the 10 statutory categories of EHB. The secretary may designate the state’s largest non-Medicaid HMO, the state’s employee health plan and the FEHBP BCBS plan as EHB benchmark plans, but there will be no default EHB benchmark plan for Medicaid. States could propose their Medicaid benefit package as a benchmark plan, but would have to ensure it includes the 10 statutory categories.
