Essential Health Benefits

Under ACA, non­-grandfathered, small group plans and Qualified Health Plans in an Exchange (Marketplace) must cover essential health benefits. ACA defines essential health benefits to include the following categories:

  • Ambulatory patient services;
  • Emergency services;
  • Hospitalization;
  • 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.

Under final regulations, Department of Health and Human Services will allow each state to select one of the following plans as a benchmark plan (where supplemented as necessary):

  • The largest health plan by enrollment in any of the three largest small group products
  • Any of the largest three employee health benefit plan options by enrollment offered to state employees
  • Any of the largest three national Federal Employees Health Benefits Programs plan options by enrollment
  • The largest non-­Medicaid HMO in the state
  • If a state does not make a selection, the default benchmark plan is the largest product by enrollment in the state’s small group   market.

Although self­-funded plans are not required to offer essential health benefits, self­-funded plans cannot impose lifetime or annual dollar limits on essential health benefits.  For this purpose, a self­-funded plan may use any permissible definition of essential health benefit, including any available benchmark plan.

Note: The limit on essential health benefits only applies to certain types of health plans, such as major medical insurance. It does not apply to HIPAA excepted benefits, such as disability, cancer, hospital indemnity, or accident insurance. Click here for more information about the types of benefits that are exempt from the ACA plan design mandates.


Neither American Fidelity Assurance Company nor American Fidelity Administrative Services provides tax or legal advice and, given the complexity of these laws, we always recommend working with your legal counsel on how the laws impact your specific situation. 

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