A Guide for Determining Essential Benefits under the PPACA

9/6/2011

The Patient Protection and Affordable Care Act (PPACA) has determined that essential health benefits must be covered by certain plans in 2014. The PPACA has defined essential health benefits to "include at least the following general categories and the items and services covered within the 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.''
Starting with plans that began on or after September 23, 2010 plans can no longer enforce a lifetime dollar limit on spending for essential health benefits. The following is a guide created by POMCO Group that includes its interpretation of essential health benefits:

Phase-Out of Annual Dollar Limits

The PPACA prohibits lifetime dollar limits on "Essential Health Benefits" and imposes a three-year phase-out of annual dollar limits in amounts no less than the following:

• Plan years beginning on or after September 23, 2010 but before September 23, 2011: $750,000
• Plan years beginning on or after September 23, 2011 but before September 23, 2012: $1,250,000
• Plan years beginning on or after September 23, 2012 but before January 1, 2014: $2,000,000
• Plan years beginning January 1, 2014: no annual limits allowed

If otherwise allowed, health plans may impose or keep their lifetime and annual limits on benefits that are not "Essential Health Benefits."

Essential, Non-Essential and Reviewable Benefits

The regulators have stated that they will take into account good faith efforts to comply with a reasonable interpretation of "Essential Health Benefits" for purposes of enforcement. Since the PPACA does not yet require that plans offer all Essential Health Benefits, healths plan may not necessarily cover all of the items on the lists that follow. Individuals should review their own plan to determine the applicable benefits and limits.

POMCO Group's Medical Services department has reviewed the Essential Health Benefit categories and, after comparing them to industry standard benefits provided in a typical health plan, have divided the following benefits into three groups: Essential, Non-Essential, and Reviewable.

Please note that the list below is only to exemplify what is an essential health benefit under the regulations. Specific plan benefits are detailed in an organization's summary plan document. The summary plan document language always prevails when determining benefits.

Essential Benefits

Essential Benefits are those that POMCO Group considers to be Essential Health Benefits under the PPACA until further regulatory guidance provides otherwise. If your plan includes these items, they will not have lifetime dollar limits. If there is an annual limit, it will comply with the three-year phase-out amounts indicated above. All dollar limits on these benefits will be removed by 2014.

• Allergy
• Ambulance
• Cardiac rehabilitation
• Cochlear implant
• CT, PET, MRI, nuclear medicine
• Diabetic supplies / insulin pump
• Emergency room services - facility & physician
• Home health care
• Hospital - inpatient stay
• Infertility - diagnostic only
• Infusion therapy
• Lab, x-ray, and diagnostics
• Mental health services
• Orthopedic surgery
• Outpatient facility - surgery, scopes
• Outpatient facility - therapeutic (dialysis, chemotherapy, radiation)
• Pharmacy
• Physician's office - sickness / injury
• Pregnancy
• Preventive care
• Prosthetic devices / limbs
• Rehabilitative services (PT, OT, ST, RT)
• Skilled nursing facility / inpatient rehabilitation
• Substance use disorders
• Tobacco use cessation
• Transplant services
• Urgent care services

Non-essential Benefits

Non-essential Benefits are those that POMCO Group does not consider to be Essential Health Benefits under the PPACA until further regulatory guidance provides otherwise. Plans administered by POMCO Group may keep any existing dollar limits on these benefits.

• Acupuncture
• Bereavement counseling
• Child birth classes
• Chiropractic
• Dental services (accidental)
• Food / nutritional supplements
• Hearing aids
• Hospice
• Infertility - Advanced (including Rx)
• Obesity surgery
• TMJ
• Vision exams (USPSTF)*
• Weight control programs
• Wigs

*See the United States Preventive Services Task Force ("USPSTF") A&B recommendations on pediatric vision screening.

Reviewable Benefits

Reviewable Benefits are those that can be Essential or Non-essential, depending on the patient's particular needs at the time the service is rendered. These benefits are subject to review by POMCO Group's Medical Services department to determine whether the benefit is essential to the patient's care at that time. If the Medical Services department determines that a claim for benefits is essential to the patient's care at that time, the claim will be paid according to the health plan, as if there were no dollar limit on that benefit. If the Medical Services department determines that a claim for benefits is non-essential to the patient's care at that time, the cost of the service will either be paid according to the plan if the limit has not yet been exceeded, or the claim will be denied as exceeding the plan limit, and must be paid by the enrollee/participant.

• Crutches
• Durable medical equipment
• Foot care
• Hospital beds
• Medical supplies
• Nursing
• Orthotics
• Oxygen
• Prostheses
• Wheelchairs