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Focus on Regulation

CMS Releases Additional Information Regarding the Benchmark Plans to be Used in Defining the Essential Health Benefits

CMS’ Center for Consumer Information and Insurance Oversight (CCIIO) posted a document entitled “Essential Health Benefits: List of the Largest Three Small Group Products by State” on its website on July 2, 2012. 

Beginning in 2014, non-grandfathered plans in the individual and small group markets offered both inside and outside of the state health insurance exchanges, as well as Medicaid benchmark and benchmark-equivalent, and Basic Health Programs must provide coverage for the Essential Health Benefits (EHB).  Section 1302(b) of the Patient Protection and Affordable Care Act (PPACA) directs the Secretary of HHS to define the EHB, subject to certain requirements, including that the EHB must include each of ten statutory benefit categories.

In its EHB Bulletin released December 16, 2011, CMS proposed to allow each state to select a “benchmark plan” to serve as a “reference plan” for purposes of defining the EHB for that particular state, supplemented as necessary to ensure that plans cover each of the ten statutory benefit categories.  States are permitted to choose a benchmark from among the following health insurance plans: 

  • the largest plan by enrollment in any of the three largest small group insurance products in the state’s small group market;
  • any of the largest three state employee health benefit plans by enrollment;
  • any of the largest three national Federal Employees Health Benefits Program (FEHBP) plan options by enrollment; or
  • the largest insured commercial non-Medicaid Health Maintenance Organization (HMO) operating in the state.

If a state does not exercise the option to select a benchmark health plan, CMS proposes that the default benchmark plan for that state would be the largest plan by enrollment in the largest product in the state’s small group market.

The purpose of the list released on July 2 is to provide information to facilitate states’ selection of the benchmark plans that would serve as the reference plans in order to define the EHB.  This list updates the agency’s prior publication “Essential Health Benefits: Illustrative List of the Largest Three Small Group Products by State” released on January 25, 2012.