National Association of Insurance and Financial Advisors

Essential Health Benefits (ACA)

The Department of Health and Human Services’ (HHS) recently finalized a rule detailing the minimum specifications that approved plans will be required to meet, or Essential Health Benefits (EHB). The ACA states that as of Jan. 1, 2014, Qualified Health Plans (QHP) must contain coverage under 10 categorical areas, meet a minimum coverage value, and limit cost-sharing for individuals. For employer plans, HHS has given states criteria to select among certain preexisting plans in that given state for setting EHB benchmarks, which may be required to be modified in order to meet the other EHB standards. Applicable employers not offering QHPs by Jan. 1, 2015, may be subject to financial penalties.
The 10categorical areas for required coverage include:
  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance abuse services
  • Prescription drugs
  • Rehabilitation services
  • Laboratory services
  • Preventive and wellness services (including chronic diseases management)
  • Pediatric services
It is important to note that many of these categorical areas are significant expansions from current market coverage trends. A recent study by HealthPocket found that only two percent of all current individual and family plans meet all 10 required categorical EHB coverage areas. Maternity and pediatric care, as well as mental health and substance abuse services were particularly under-covered. NAIFA is concerned that requiring individuals to purchase coverage for services they are unlikely to need will further drive up premium costs.

Minimum Value

The ACA establishes a “metal tier” system to determine a variety of minimum actuarial values (AV) that QHPs are required to meet as well. Four levels are established – bronze, silver, gold, and platinum. Bronze, the minimum plan, has an AV of 60 percent, silver at 70 percent, gold at 80, and platinum at 90 percent. There is also an individual market only catastrophic coverage plan available for individuals under the age of 30 that with cost-share that meets current HSA limits.


There is also an affordability standard provision within the EHB that will be imposed on large, applicable businesses. Businesses with 50 or more non-exempt, full-time employees will be expected to provide coverage that does not exceed 9.5 percent of their employee’s household income, or a fee will be assessed. This cost-share percentage may be less depending on the employee’s household income. Beginning in 2015, cost-sharing provisions also cap deductibles at $2,000 for individual employees and $4,000 for plans that include dependents. Premium increases beyond the individual capped contribution will fall on employers.

This flow chart provides an additional guide to employers as to whether they can expect to be assessed an EHB or affordability fee.