Affordable Care Act Standards Related to Essential Health Benefits, Minimum Value, Actuarial Value and Accreditation

by Spilman Thomas & Battle, PLLC

On February 25, 2013, the Department of Health and Human Services (HHS) released its final rule (the Final Rule) setting forth standards for health insurance issuers under the Patient Protection and Affordable Care Act (the Affordable Care Act). Specifically, the Final Rule outlines exchange and issuer standards related to coverage of essential health benefits, minimum value and actuarial value. The Final Rule also confirms a timeline for qualified health plans (QHP) to be accredited in federally-facilitated exchanges, among other provisions.
The requirements set forth in the Final Rule are applicable to non-grandfathered health insurance plans as of January 1, 2014, and therefore need to be addressed well in advance of that date. Employers and insurers need to consider how these standards might affect their health insurance plans and how to avoid noncompliance issues as the deadline approaches.

Essential Health Benefits
As initially stated in the Affordable Care Act, the Final Rule confirms that health insurance plans in the individual and small group market must cover the following categories of services: (1) ambulatory patient services; (2) emergency services; (3) hospitalization; (4) maternity and newborn care; (5) mental health and substance use disorder services including behavioral health treatment; (6) prescription drugs; (7) rehabilitative and habilitative services and devices; (8) laboratory services; (9) preventive and wellness services and chronic disease management; and (10) pediatric services, including oral and vision care.

The Final Rule defines Essential Health Benefits based on state-specific benchmark plans. Pursuant to the Final Rule, a state may select its benchmark plan from among four types of health insurance plans that must be met by a qualified health plan: (1) the largest plan by enrollment in any of the three largest small group insurance products in the state’s small-group market; (2) any of the largest three state employee health benefit plans by enrollment; (3) any of the largest three national Federal Employees Health Benefits Program plan options by enrollment that are open to federal employees; or (4) the largest insured commercial non-Medicaid plan offered by a health maintenance organization operating in the state. The first benchmark referenced above will be the default option for states that decline to make a selection.

Minimum Value  
At the start of 2014, employers with 50 or more full-time or full-time equivalent employees that do not offer “minimum value” coverage will have to pay the Affordable Care Act penalty of $3,000 for each full-time employee who obtains coverage through a public exchange. Pursuant to the Final Rule, an employer-sponsored plan satisfies Minimum Value if it is designed to pay at least 60 percent (60%) of the total allowed costs of benefits. In the Final Rule, HHS provides several ways for determining whether an employer-sponsored plan provides Minimum Value. First, an employer may use the Minimum Value calculator published by HHS, which allows the employer to input information about its health insurance plan coverage and cost-sharing options to determine if the plan satisfies the Minimum Value requirement. Second, an employer can rely upon the design-based safe harbor checklists published by HHS to examine whether an employer-sponsored plan meets the Minimum Value threshold. Finally, an actuary can certify whether a group health plan that contains non-standard features meets the Minimum Value test.

Actuarial Value
With respect to actuarial value, the Final Rule affirms the metal levels (i.e., platinum - 90 percent (90%), gold - 80 percent (80%), silver - 70 percent (70%), and bronze - 60 percent (60%)) of coverage previously set forth in the Affordable Care Act; however, it also allows for variance of two percentage points. In order to determine the Actuarial Value of a health insurance plan, QHP issuers must use the Actuarial Value calculator published by HHS. If the Actuarial Value calculator is incompatible with the design of the health insurance plan, the Final Rule provides certain alternatives for determining Actuarial Value (e.g., an actuarial certification by the QHP issuer that conveys the process used to determine Actuarial Value).

Under the Final Rule, future exchanges are required to establish a uniform period following certification of a qualified health plan within which a QHP issuer must become accredited. Multi-state plans will be subject to the accreditation period established by the U.S. Office of Personnel Management. For participation in federally-facilitated exchanges, the Final Rule allows QHP issuers to become accredited during the first three years of QHP certification.

For more information, please contact:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Spilman Thomas & Battle, PLLC | Attorney Advertising

Written by:

Spilman Thomas & Battle, PLLC

Spilman Thomas & Battle, PLLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.