What the Essential Health Benefits Provision Means for You

Jayson Slotnik, JD, MPH; Ross D. Margulies

February 2011, Vol 2, No 1 - VBCC Perspectives

The Patient Protection and Affordable Care Act (ACA) not only bars discrimination in enrollment or the availability of coverage based on health status, it also establishes a minimum standard of coverage that must be satisfied by individual and small group health plans sold in exchange and nonexchange markets, as well as by any qualified health plan sold in the state exchange market, regardless of group size. This minimum standard of coverage is known as an “essential benefit” package, and its requirements take effect beginning in 2014.1

Although the terms “essential health benefits package” and “qualified health plan” are described in detail in the ACA, the term “essential health benefits” is left largely to the discretion of the Secretary of the Department of Health and Human Services (DHHS) to determine its specific meaning, within the statutory parameters, through regulation.

The essential benefit statute sets forth a series of broad benefit classes that the secretary’s definition must include (eg, ambulatory patient services, maternity and newborn care, and prescription drugs) and also sets forth important rules for developing essential benefit standards.

Implementation Process
The “essential health benefits” provision will be implemented by DHHS in several steps prior to 2014. One step is the employer-sponsored coverage survey that the Department of Labor (DOL) must conduct to determine the benefits typically covered by employers, including multiemployer plans.

As of January 2011, the Bureau of Labor Statistics has identified the existing National Compensation Survey (NCS) to fulfill the ACA requirement that DOL conduct a survey of employer- based health plans to advise DHHS on a “typical” employer plan. NCS is voluntary and some employers may choose not to participate.

DHHS requested the Institute of Medicine (IOM) to conduct a study that will help to inform the determination of “essential health benefits.” On November 8, 2010, the IOM launched a Consensus Study on Essential Health Benefits, with an accompanying public comment period.2 The comment period closed on December 6, 2010, and the committee received 300 responses from the public.

The IOM Committee on Essential Health Benefits held its first public meeting January 13-14, 2011. (For a full list of committee members visit www.iom.edu/Activities/HealthServices/Essential HealthBenefits.aspx.)

Individuals from DHHS’ Office of Assistant Secretary for Planning and Evaluation, the DOL, the Centers for Medicare & Medicaid Services and other experts and stakeholders discussed the statutory requirements of the ACA, as well as the implementation process. Stake holders, including the National Coali tion for Cancer Survivorship, advocated for a broad interpretation of the 10 categories of essential benefits in the ACA and sought further clarification on coverage requirements.

Relevance for Payers, Providers, and Other Oncology Stakeholders
The essential health benefit standards reflect value-based purchasing principles in their emphasis on prevention without cost-sharing, chronic disease management, and coverage (with cost-sharing assistance for lower-income individuals and sharing) for a broad array of treatment and health promotion activities that better enable appropriate management of serious illness.

Because the ACA does not name the specific services that must be covered or the amount, duration, and scope of covered services, and merely sets forth coverage categories (of most relevance for the oncology community are “chronic disease management” and “prescription drugs”), payers, providers, and other oncology stakeholders are closely monitoring the regulatory development process.

At the recent IOM meeting, Thomas P. Sellers, MPA, of the National Coalition for Cancer Survivorship, urged the committee, for purposes of defining essential health benefits, to define cancer as a chronic disease and to include cancer care planning and care coordination services in the list of essential health benefits. In addition, Mr Sellers noted the urgent need for access to and coverage of off-label uses of cancer drugs.

As the regulatory process continues, the oncology community has an important role to play while the DHHS secretary works to define the specifics of the essential health benefits package.

Although the ACA enumerates certain considerations that must be taken into account, the secretary retains wide authority in making determinations on covered benefits and services.

Payers, provi d ers, and other oncology stakeholders must seek out opportunities to weigh in to make sure important benefits are included in this major new development in the insurance market.


  1. ACA § 1301(a)(1)(B). Internal Revenue Code § 36B(b)(2)(A), added by ACA § 1401(a).
  2. Institute of Medicine. Determination of Essential Health Benefits. www.iom.edu/Activities/Health Services/EssentialHealthBenefits.aspx. Accessed January 31, 2011.