Applies to coverage both inside and outside the health insurance exchanges to be established under the ACA.

Includes ten statutory categories required under the ACA (for example, emergency services and hospitalization).

Outlined HHS' proposed approach to defining the EHB package.

Provided states flexibility to choose an existing health plan to set the benchmark for items and services included in the EHB package (see Legal Update, HHS Proposes Benchmark Approach for Essential Health Benefits Under the ACA).

Consistency in benchmark plans. To promote consistency, HHS will not allow states to select different benchmark plans for the small group and individual markets. Rather, states must choose only one benchmark plan, which will apply both inside and outside the health insurance exchanges.

Paying for state-mandated benefits. States must pay for the cost of state-mandated benefits that exceed the EHB package. Any state-mandated benefits enacted after December 31, 2011, will not be permitted as EHBs for 2014 or 2015.

State supplementation of benchmark plans. HHS intends to propose that if a benchmark plan is missing one or more of the ten categories required under the ACA, the state must supplement the benchmark by reference to another benchmark plan that includes coverage of services in the missing category. The FAQs set out a process for how this supplementation is to occur. Also, the FAQs describe special rules for three categories of benefits (pediatric oral services, pediatric vision services and habilitative services) that are not presently included in many insured plans.

Scope and duration limits for EHBs. The FAQs clarify that both the scope of benefits offered under the benchmark plan and any limits on those benefits (for example, visit limits) be reflected in the EHB. Scope and duration limits must be substantially equal to the benchmark plan and are subject to review under provisions on discrimination in benefit design. The FAQs note that lifetime and annual dollar limits on EHBs are prohibited, though the prohibition on annual dollar limits does not apply in full until 2014 (see Practice Note, Lifetime Limits, Annual Limits, and Essential Health Benefits Under the ACA). A related FAQ provides that if a state-mandated benefit included in a state-selected EHB benchmark plan had a dollar limit, that benefit would be included in the EHB definition without the dollar limit. However, plans would be permitted to impose non-dollar limits that are at least actuarially equivalent to the annual dollar limits.

Preventive services and parity requirements. Coverage of preventive services and parity requirements under the Mental Health Parity and Addiction Equity Act will be included in EHB. For more information, see Practice Note, Coverage of Preventive Health Services Under the ACA.

Timing for selecting benchmark plans. HHS anticipates that states will need to select the benchmark plan for 2014 and 2015 in the third quarter of 2012, based on enrollment from the first quarter of that year.

Updating benefits in benchmark plans. The benchmark benefits selected in 2012 will apply for 2014 and 2015 plan years. HHS asserts that a consistent set of benefits across this period will limit market disruption during the transition period. HHS will revisit this approach for plan years starting in 2016.

Which state-selected EHB benchmark plan will apply for plans that offer coverage to employees in more than one state.

How states will communicate their choice of benchmark plan to HHS.