Defining Essential Health Benefits: Federal Guidance and New York Options

Overview

This United Hospital Fund (UHF) report, supported by NYSHealth, examines the various plan options that will serve as a benchmark plan for implementing the essential health benefits rule required for all individual and small group policies beginning in 2014. The report reviews the benefits in these existing plans in New York and how they correspond to the new set of federally required essential health benefits; current New York benefit mandates; the potential policy implications of the various choices; and areas for further study and guidance. 

In less than six months, New York State must make a pivotal decision that will define the set of health benefits available in all health insurance plans in the individual and small group markets in the State. These essential health benefits, which will be required of plans both inside and outside of New York’s Health Insurance Exchange, must incorporate 10 broad categories established by the Federal government.

In addition to coverage of the essential health benefits, states must select, by the third quarter of 2012, a plan from current popular state insurance products in four categories—small group plan, state employee plan, Federal employee plan, and HMO plan—to serve as a state’s designated benchmark plan. This benchmark plan will be the model for how all plans must, at minimum, define and incorporate these essential health benefits in their policies in a state’s individual and small group insurance markets starting in 2014.

This report is the fifth in a series of reports focused on New York’s health insurance exchanges. The first report examined the initial set of governance and organizational choices for states in designing their exchanges. The second report examined the organizational improvements necessary to successfully integrate the State’s Medicaid program into the health insurance exchange. The third report focused on two discretionary decisions for New York involving the exchange: merging the exchanges for individuals and small businesses and merging the individual and small group markets. The fourth report examines the roles New York’s health benefit exchange should play, ranging from a passive market organizer model to an active purchaser.