Must self-insured plans provide essential health benefits?

Question: We understand that the Affordable Care Act (ACA) requires some health care plans to cover certain “essential health benefits.” Does that include our self-insured plan?

Answer: No, self-insured plans aren’t required to include essential health benefits. However, as discussed below, they’re prohibited from imposing annual or lifetime dollar limits on any essential health benefits they do offer. The Department of Health and Human Services (HHS) has established a process for self-insured plans to identify essential health benefits, based on rules applicable in the individual and small group markets.

Choosing a benchmark

The ACA requires insured health plans in the individual and small group markets to contain an “essential health benefits package.” The basic building block of the essential health benefits package is a benchmark plan designated by each state (or by the HHS, absent state action), based on the largest insurance products sold in the state. The statutory definition of “essential health benefits” includes items and services in ten general categories:

  1. Ambulatory patient services,
  2. Emergency services,
  3. Hospitalization,
  4. Maternity and newborn care,
  5. Mental health and substance use disorder services (including behavioral health treatment),
  6. Prescription drugs,
  7. Rehabilitative and habilitative services and devices,
  8. Laboratory services,
  9. Preventive and wellness services and chronic disease management, and
  10. Pediatric services (including oral and vision care).

Although your self-insured plan isn’t required to cover essential health benefits, you still need to understand what constitutes essential health benefits under your plan. This is because, if your plan imposes any annual or lifetime dollar limits, you’ll need to ensure that the limits aren’t applied to essential health benefits.

For this purpose, your plan may use as its definition of essential health benefits your choice of any HHS-approved benchmark plan from any state. The HHS has indicated that the benchmark plan you select must be “supplemented as needed to ensure coverage of all ten statutory categories,” though there’s no specific guidance on how to do this.

Minding other mandates

If your plan doesn’t impose any annual or lifetime dollar limits, you’ll not need to define the scope of benefits that are subject (and not subject) to the limits. Thus, your plan may not need to adopt a definition of essential health benefits. But keep in mind that, though your plan isn’t required to offer essential health benefits, there are other mandates that may require your plan to cover certain services, such as preventive care services.