Federal Change to Essential Health Benefits Rule Creates More Challenges for States

Earlier this month, the Department of Health and Human Services (HHS) released a final rule regarding health insurance provisions related to the 2010 Affordable Care Act (Act). Among the myriad of provisions contained in the rule were several that could have an impact on chiropractic coverage. With the rule designed to give more power to the states in determining plan structure, chiropractic state associations will need to be vigilant in monitoring state action, especially the rule’s impact on states now being able to develop essential health benefits for plans that fall under the Act’s umbrella. (Read ACA’s comments on the proposed rule, issued in November 2017, here).

In respect to essential health benefits (EHB), the final rule makes significant changes to the way in which states can select a benchmark plan for plan year 2020 and annually thereafter. It also grants insurers greater flexibility to substitute benefits across the 10 EHB benefit categories originally called for under the Act, if ultimately permitted by the state. Specifically, the final rule allows states to change their EHB benchmark plan using a variety of options.

Rules Surrounding Changes to Benchmark Plans

First, a state may simply choose a benchmark plan that was used by another state in 2017. For example, New Hampshire can choose the benchmark plan being used in Texas. Second, a state can replace one or more EHB categories of benefits in its benchmark plan used for 2017 with the same categories of benefits from another state’s benchmark. Here too, states will have flexibility to determine benefits that must be in a plan by cherry picking from another state’s benchmark. Finally, the state would be able to select a complete set of benefits that would become the state’s benchmark plan, therefore have complete autonomy in selecting EHBs available in the exchange, individual, and small group plans.

In all the above scenarios, the scope of benefits in the benchmark must be equal to that provided in a typical employer plan. In the final rule, HHS has defined “typical” to include either one of the 10 plan options available for 2017 or the largest health insurance plan by enrollment in any of the five largest large-group products. If the state chooses a large-group plan as its EHB option, it must have significant enrollment in the state, meet the Act’s minimum value standard, benefits cannot be excepted benefits (i.e., stand-alone dental or vision plans), and the plan must be from 2014 or later.

In addition, the richness of the state’s new benchmark plan cannot exceed the generosity of the richest plan options described above. Further, if the state selects a benchmark plan or category from another state that includes benefit mandates enacted after Dec. 31, 2011, then the selecting state will have to defray any additional costs associated with those mandates (this is similar to provisions called for under the original Affordable Care Act).

Also, states will need to act quickly if they want to change their benchmark plan, as they only have until July 2, 2018 to have a new structure in place for the 2020 plan year. States that choose to change their benchmark plan must also provide reasonable public notice and give opportunity for comment. This short timetable may force many states to wait until next year if they are looking to change their benefit structure. It is also important to note that Section 2706 of the Affordable Care Act (the provider non-discrimination provision) will still apply to all plans that could be affected by the rule. ACA members can find out more about this landmark provision here.

More Flexibility for Oversight of Qualified Health Plans

In addition to the new provisions related to EHBs, the new rule also affects states’ ability to continue oversight of health plans participating in the insurance marketplaces, or Qualified Health Plans (QHP). The rule gives states greater flexibility to determine how to implement the Act’s network adequacy and essential community provider standards, so long as those states have an adequate review process. HHS was prepared to give states even more authority on determining the structure of a QHP; however, the agency deferred to the appeal of many states that claimed they were not equipped to handle a wholesale change to the QHP approval process.

This latest rule issued by HHS is further proof of the Administration’s desire to both give more latitude to the states in implementing the Affordable Care Act, while at the same time lessening the scope of federal oversight of the controversial 2010 law. ACA members can read comments on recent proposed federal rules here.

John Falardeau is ACA Sr. Vice President for Public Policy and Advocacy. Follow @ACAonTheHill for news emanating from Washington on issues affecting chiropractic. For questions, email [email protected].


  1. Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2019, A Rule by the Health and Human Services Department on April 17, 2018
  2. The 2019 Affordable Care Act Payment Rule: Summary and Implications for States, Georgetown Center on Health Insurance Reforms, April 13, 2018