What's considered an essential health benefit?

<p> As employers work to comply with some initial health care reform mandates, many are confused about a provision that could have significant impact on their future health benefit spending.</p> <p> &ldquo;Essential health benefits&rdquo; make up part of the health care reform law&rsquo;s mandates to broaden affordable access to adequate health coverage. For plan years starting on or after Sept. 23, 2010, group health plans &ndash; whether insured or self-insured &ndash; cannot impose lifetime dollar limits and they must gradually eliminate annual dollar limits on essential health benefits.</p> <p> Employers who have had to make changes in compliance with the dollar-limit requirements have found that it isn&rsquo;t always obvious whether a particular service or item is an essential health benefit. &nbsp;And then, of course, there&rsquo;s the ever-popular difference of opinion.</p> <p> That&rsquo;s why Mercer recently surveyed nearly 800 employers about what&rsquo;s offered in a &ldquo;typical&rdquo; plan.</p> <p> Mercer asked employers about 26 specific services and items and whether those services were covered under the plan in 2010 and whether any special benefit limitations applied. If an annual benefit dollar limitation was used, Mercer asked about the amount. Finally, the report found whether employers with benefit limits in place had made changes for their 2011 plan year.</p> <p> Overall, the report found that employer medical plans differ significantly in the types of coverage they include. Of the 26 services included in the survey, 10 are covered by at least 90 percent of respondents and seven are covered by 50 percent or less.</p> <p> While benefits such as chiropractic services, physical and occupational therapy, organ transplants and contraceptives were most covered by employers; orthodontia, hearing aids, infertility treatments, vision therapy (and pediatric vision) as well as speech, occupational and physical therapies for autism were less often covered.</p> <p> While the prevalence of these types of coverage varies somewhat by employer size, the difference in offer rates depends on the type of service covered, the report found. &nbsp;Some of the biggest differences were seen for bariatric surgery (covered by 70 percent of respondents with 5,000 or more employees, but only by 54 percent of those with fewer than 500 employees); acupuncture (covered by 52 percent and 34 percent of large and small employers, respectively); and TMJ treatment (covered by 62 percent and 48 percent, respectively).</p> <p> For most common types of coverage, such as outpatient facilities, kidney dialysis or physical therapy, there was very little difference in the prevalence of coverage by employer size. If very small employers &ndash; those with fewer than 100 employees, for example &ndash; were examined separately, the gap in offer rates would very likely be wider.</p> <p> When it comes to special coverage limitations, they generally vary widely by the type of service. The types of coverage for which respondents were most likely to place special limitations were orthodontia (82 percent of those providing this coverage), chiropractic care (72 percent), hearing aids (66 percent) and skilled nursing care (60 percent). The services least likely to have coverage limits were outpatient facility services and kidney dialysis (for each, only 8 percent of respondents imposed special limits).</p> <p> Relatively few of the respondents with limits on the specific coverage categories examined in this survey made changes for 2011 &ndash; for the majority of the services, less than a fourth made changes. The most common change was simply to drop the use of a special coverage limitation, although some employers reported changing from a dollar maximum to a limit on the number of days or visits covered, which is permitted without restriction for essential health benefits.</p> <p> Employers were most likely to make changes to limitations on coverage for organ transplants (45 percent), outpatient facility charges (41 percent), durable medical equipment (34 percent), kidney dialysis (34 percent) and two forms of autism treatment (about 30 percent for each). Some of these changes may have been in response to the mental health parity law, which requires parity in the financial restrictions, such as dollar maximums, imposed on medical and mental health conditions.</p> <!-- /page -->
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