On November 20, 2012, the HHS published a proposed rule outlining health insurance issuer standards related to the coverage of essential health benefits (EHB) and the determination of actuarial value (AV). Additionally, the rule proposes a timeline for when issuers offering coverage in a federally-facilitated Exchange or State Partnership Exchange must become accredited. The rule also proposes an application process for accrediting entities seeking to be recognized to fulfill the accreditation requirements for issuers offering coverage in any Exchange.
- Essential Health Benefits - Benchmark Plan Options. PPACA requires that health plans offered in the individual and small group markets cover a core package of items and services (referred to as EHB.) EHB include items and services in 10 statutory benefit categories, such as hospitalization, prescription drugs and maternity and newborn care, and are equal in scope to a typical employer health plan. To meet the requirement in PPACA that EHB be equal in scope to benefits offered by a "typical employer plan," the proposed rule defines EHB based on a state-specific benchmark plan, including the largest small group health plan in the state. The rule proposes that states select a benchmark plan from among several options identified in the proposed rule, and that all plans that cover EHB must offer benefits that are substantially equal to the benefits offered by the benchmark plan. The benchmark plan options include: (1) the largest plan by enrollment in any of the three largest products in the stateʼs small group market, (2) any of the three largest state employee health benefit plans options by enrollment, (3) any of the three largest national Federal Employees Health Benefits Program (FEHBP) plan options by enrollment, or (4) the largest insured commercial Health Maintenance Organization in the state. The proposed rule also clarifies that in the event a state does not make a selection, HHS will select as the default benchmark the largest small group product in the state, as described in option (1).
- Actuarial Value. PPACA provides that non-grandfathered individual and small group plans, both inside and outside of the Exchanges, will be offered at certain specific AV targets (or metal levels): 60% for a bronze plan, 70% for a silver plan, 80% for a gold plan and 90% for a platinum plan. AVs are calculated based on the provision of EHB to a standard population. Under the proposed regulations, HHS has proposed the use of an AV calculator to determine levels of coverage for non-grandfathered health insurance plans offered in the individual and small group markets, both inside and outside the Exchanges. The proposed rule includes standards and considerations for plans with benefit designs that the AV calculator cannot easily accommodate. Consumer-driven health plans, such as high-deductible health plans and health savings accounts, are compatible with the AV calculator. The proposed AV calculator is posted on the Center for Consumer Information & Insurance Oversight's website.
- Accreditation Standards. PPACA requires that qualified health plans (QHPs) must secure accreditation on the basis of local performance from recognized accrediting entities, on a timeline established by each Exchange that certifies the QHP. The new rule proposes a timeline for the accreditation requirement for issuers offering qualified health plans in a federally-facilitated Exchange or state partnership Exchange, and provides an application process for additional accrediting entities to be recognized for the purposes of providing accreditation to fulfill the requirements for QHP certification.