A House member has an idea for making employer-sponsored health coverage cheaper and more flexible: Exempt the plans from the Affordable Care Act essential health benefits rules.
The bill would, in effect, give small employers with fully insured group health plans a choice about whether to cover prescription drugs, maternity care or surgery, and it might free all employer plans from having to provide unlimited annual and lifetime benefits for any covered health care services that are classified as essential health benefits.
Rep. Rick Allen, R-Ga., introduced the Employer Health Plan Flexibility Act bill last week.
The bill is under the jurisdiction of the House Energy & Commerce Committee and the House Education and Workforce Committee.
What it means: Policymakers who want to change the current essential health benefits framework could use the Allen bill to start conversations.
The backdrop: Drafters of the ACA created the essential health benefits package to serve as the foundation of efforts to eliminate use of medical underwriting in the major medical market and let people shop for major medical coverage online, without worrying about whether their weight or their diabetes might block the sale.
The EHB package is supposed to be the framework for solid major medical coverage, or “minimum essential coverage,” and it’s supposed to help consumers shop for coverage on an apples-to-apples basis and to keep insurers from using skimpy benefits to undercut competitors.
State regulators can fine-tune a state’s EHB package. A state’s EHB package is supposed to include 10 types of benefits, such as coverage for prescription drugs and coverage for surgery, and it’s supposed to be based on a common, mid-level “benchmark plan,” such as a state’s public employee health plans.
An issuer of any ordinary individual or small-group major medical coverage sold since the ACA system came to life must cover at least about 60% of the actuarial value of a state’s EHB package, and it must provide unlimited annual and lifetime coverage for in-network care for EHBs, once patients have reached their deductibles and annual out-of-pocket spending limits.
Issuers of the self-insured plans governed by the Employee Retirement Income Security Act and large fully insured group health plans can choose what, if any, EHBs to cover, but, if they cover EHBs, they must provide unlimited annual and lifetime benefits for those EHBs.
The package fight: Many critics of the ACA system, including officials in the administration of President Donald Trump, have objected to state efforts to add benefits to their EHBs.
Some supporters of the ACA system also contend that EHB package expansion can make coverage too expensive.
But many benefits advisors who wrote to comment on a proposed Trump administration EHB update project have argued that some of the state EHB additions, such as efforts to add telehealth benefits and behavioral health benefits, are important and reflect the evolution of typical U.S. major medical coverage benefits.
The Allen bill: The Allen bill would let employers choose to cover a state’s EHB package voluntarily.
The bill would also keep many other ACA rules in place.
An employer plan would still have to provide coverage for basic preventive services, such as checkups, without imposing copayments or other cost-sharing requirements on the patients.
Any coverage provided for mental health or addiction services would have to be comparable to the plan’s coverage for other types of services.