Limits May Not Be Imposed on Essential Health Benefits

Posted by BAS - 24 April, 2014

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The Affordable Care Act prohibits group health plans from imposing lifetime and annual dollar limits on what are deemed “essential health benefits.” Dollar limits may be imposed on benefits that are not considered essential.

Essential health benefits are set by statute. They include items in ten categories:

  • Ambulatory patient services;
  • Emergency care;
  • Hospitalization;
  • Maternity and newborn care;
  • Mental health and substance use disorder services;
  • 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.

Lifetime Limits

A lifetime limit is a limitation on the amount of benefits payable over a participant’s life. Health plans may not impose any lifetime limit on the dollar amount of essential health benefits.

Annual Limits

Annual limits are imposed on a year by year basis. For plan years beginning on or after January 1, 2014, plans may not impose any annual dollar limit on essential health benefits.

Cost Sharing Limits

For plan years beginning on or after January 1, 2014, plans must limit cost sharing (deductibles, co-insurance, co-payments or similar charges) for essential health benefits. Certain exceptions may apply to grandfathered health plans and to plans that use one or more insurer/service provider.

Employers should confirm that their plans meet the essential heath benefit requirements under health care reform.

Topics: Health Care Reform (ACA)


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