Essential Health Benefits Final Rule, Calculators and FAQs on Preventive Care and Cost Sharing

 

On February 20, 2013, the Department of Health and Human Services (HHS) issued its final rules on Standards Related to Essential Health Benefits (EHB), Actuarial Value and Accreditation. It also provided additional guidance in the form of Frequently Asked Questions.

 

The final rules and FAQs include details on:

 

• Determining Actuarial Value (AV) and Employer Mandate Minimum Value (MV)
• Preventive Care
• Cost-sharing requirements
• EHB-benchmark and default plans. Notably, the benchmark for the 50 states remains the same, but for Guam, the U.S. Virgin Islands, American Samoa, and the Northern Mariana Islands, the default benchmark plan is the largest Federal Employees Health Benefits (FEHBP) plan by enrollment; Puerto Rico’s is the largest small group product.

 

With few exceptions, the final rule aligns with earlier regulatory guidance related to EHB: see the November 20, 2012 proposed rule, and the December 16, 2011 Essential Health Benefits Bulletin. There is no comment period for the final rule, but as noted in this alert, HHS requests comments on several items included in the guidance.

 

 

Calculators
Actuarial Value (AV) Calculator
HHS requires use of an AV calculator by non-grandfathered health plans offered in the individual and small group markets, both on and off the Exchange. The calculator determines the health plan’s level of coverage and calculates the percentage of total average costs for benefits that a plan will cover.

For instance, if a plan has an AV of 70 percent, on average, an individual would be responsible for 30 percent of the costs of all covered benefits in that plan. Plans with cost sharing features different from those available in the AV calculator will need to submit documentation in the form of actuarial certification.

• Methodology: http://cciio.cms.gov/resources/files/av-calculator-methodology.pdf
• Calculator: http://cciio.cms.gov/resources/files/av-calculator-final-2-20-2013.xlsm

 

Employer Mandate Minimum Value (MV) Calculator
The MV calculator was developed based on claim data that reflects typical employer-sponsored plans. This calculator will test whether an employer-sponsored group health plan provides minimum value based on the total allowed costs of benefits. It will determine whether an employee is eligible for a premium tax credit. However, various safe harbors will be available. HHS welcomes comments. There is no deadline for submission.

Health Savings Account (HSA) and integrated Health Reimbursement Account (HRA) contributions can be taken into account in the minimum value calculation. The full employer contribution for the year counts to reduce the deductible, as long as the contribution does not exceed the deductible.

For example, the MV calculator counts a $1,000 HSA employer contribution as the average dollar value it would cost to reduce a $1,000 deductible to $0.

• Methodology: http://cciio.cms.gov/resources/files/mv-calculator-methodology.pdf
• Calculator: http://cciio.cms.gov/resources/files/mv-calculator-final-2-20-2013.xlsm

 

 

 

ADDITIONAL RESOURCES

Final Rule
http://cciio.cms.gov/resources/factsheets/ehb-2-20-2013.html

Fact Sheet
 http://cciio.cms.gov/resources/factsheets/ehb-2-20-2013.html

EHB Coverage for Mental Health and Substance Use Disorders
http://aspe.hhs.gov/health/reports/2013/mental/rb_mental.cfm

State-by-State Benchmark Plans
http://cciio.cms.gov/resources/data/ehb.html

Frequently Asked Questions on Cost Sharing and Preventive Services
http://cciio.cms.gov/resources/factsheets/aca_implementation_faqs12.html#coverage