On February 27, 2014, the D.C. Department of Insurance, Securities, and Banking (DISB) released a bulletin reminding insurers that medically necessary treatment for gender dysphoria, including gender reassignment surgeries, is a mandated benefit in the District of Columbia. This is not the case in every state and serves as a reminder for health insurance plans required by federal law to offer “essential health benefits” (EHBs) that state law continues to play the primary role in defining that state’s EHBs.
Since 2011 when the U.S. Secretary of Health and Human Services opted to define EHBs under the Patient Protection and Affordable Care Act (PPACA) based on a “benchmark” plan selected for each state, the specific EHBs that insurers must offer in a state have often remained an enigma. After all, PPACA merely requires the Secretary to define EHBs for ten broad benefit categories:
- ambulatory patient services;
- emergency services;
- maternity and newborn care;
- mental health and substance use disorder services, including behavioral health treatment;
- prescription drugs;
- rehabilitative and habilitative services and devices;
- laboratory services;
- preventive and wellness services and chronic disease management; and
- pediatric services, including oral and vision care.
The problem is that none of the benchmark plans are EHB compliant. The reason is that the plans were approved for use in the market before the EHB laws took effect. So, when federal law refers to the EHB “benchmark” plan, it is not actually referring to the plan that was selected to define EHBs for a state. Federal law categorizes that plan as simply the “base-benchmark plan.” Instead, the EHB benchmark plan is a “standardized set” of EHBs that most likely cannot be located in one simple, exhaustive document.
In other words, EHBs are something seemingly more nebulous and ethereal. One must look to a broad range of sources to discover the EHBs for a given state, including the base-benchmark plan, insurance department bulletins, state law, and the like.
Identifying the overall EHBs for a state is only the first step as the substance of each benefit also varies from state to state. The recently released DISB memorandum is a strong reminder of this. While treatment of gender dysphoria is not required to be a standalone benefit, plans must be prepared to cover this treatment under other applicable benefit categories. A failure to identify these state-specific benefits that may not be expressly listed in existing approved policies can lead to lengthy delays in obtaining state insurance department approval for newly filed policies and can even lead to the need to file amendments or riders to existing polices, as the DISB is requiring.
With the approval of qualified health plans last summer that are being offered in the health insurance exchanges, states made a lot of progress toward defining their EHBs. Still, as demonstrated by the DISB memorandum, EHBs continue to be clarified. Both insurers with existing plans in the market and those insurers gearing up to file qualified health plans and off-exchange products for 2015 must be sure to take these developments into account.