Health Care Reform: Defining "Essential Health Benefits"


On December 16, 2011, the Center for Consumer Information and Insurance Oversight issued an Essential Health Benefits Bulletin (the "Bulletin") providing information regarding how the Department of Health and Human Services ("HHS") intends to define "essential health benefits" under the Patient Protection and Affordable Care Act of 2010 ("PPACA"). The Bulletin does not include much additional detail on what constitutes an essential health benefit, but does include more information on how these benefits will be determined.

Significance of Defining Essential Health Benefits The definition of essential health benefits has dual significance under PPACA. First, effective January 1, 2014, all non-grandfathered insured products offered in the individual and small group health insurance markets (both inside and outside of the new health insurance Exchanges) will be required to provide essential health benefits. Second, all health plans, including self-insured employer plans, are prohibited from applying lifetime and annual limits1 on essential health benefits.

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