15.1 ACA Essential Health Benefits and Metal Levels

Essential Health Benefits (EHB)

The Affordable Care Act (ACA), signed March 23, 2010, requires that all non-grandfathered individual and small-group plans cover a federally defined package of Essential Health Benefits (EHB). These are the minimum services a qualified plan must include; an insurer cannot strip them out to lower the premium, and cost-sharing for in-network EHB cannot be unlimited.

The ten EHB categories are tested directly on the national exam. Memorize them:

A common trap: adult dental and vision are NOT essential health benefits. Only pediatric oral and vision care are mandated.

Preventive Care and the First-Dollar Rule

Category 9 carries a sharp consumer-protection rule: ACA-defined preventive services (annual physicals, recommended immunizations, many cancer screenings, contraception) must be covered with zero cost-sharing when delivered in-network. The insured pays $0 even before meeting the deductible. This is the only place on most plans where the deductible does not apply.

Exam trap: zero cost-sharing applies only in-network. An out-of-network mammogram can still be billed to the patient.

The Four Metal Levels

The ACA standardizes plan generosity using actuarial value (AV) — the percentage of total covered medical costs the plan is expected to pay for a standard population. The remainder is paid by the enrollee through deductibles, copays, and coinsurance.

Actuarial value is allowed a de minimis variation (generally +2 / -2 percentage points, with a wider bronze floor). All four metal tiers cover the same ten EHBs — the metal level changes only the cost-sharing split, never the benefit list.

Worked Numeric: Reading Actuarial Value

Suppose a standard population is expected to incur $10,000 of covered claims in a year.

• Bronze (60% AV): plan pays ~$6,000; enrollee bears ~$4,000.
• Gold (80% AV): plan pays ~$8,000; enrollee bears ~$2,000.

The higher-AV plan carries a higher premium but a lower out-of-pocket exposure. Counsel a healthy, low-utilization client toward bronze; counsel a client with chronic, predictable claims toward gold or platinum.

Catastrophic Plans and the Out-of-Pocket Maximum

A fifth design, the catastrophic plan, exists below bronze. It is restricted to enrollees under 30 or those with a hardship/affordability exemption. It still covers the ten EHBs and at least three primary-care visits plus preventive care before the deductible, but otherwise pairs a very high deductible with a low premium.

Every non-grandfathered plan must also cap total in-network cost-sharing for EHBs at an annual out-of-pocket maximum (MOOP) set yearly by HHS. Once the enrollee hits the MOOP, the plan pays 100% of covered in-network EHB for the rest of the year. Premiums never count toward the MOOP.

Grandfathered Plans and What EHB Does Not Reach

Not every plan must carry the ten EHBs. A grandfathered plan — one continuously in force since on or before March 23, 2010, with no significant benefit cuts or cost-shifting since — is exempt from many ACA mandates, including the full EHB package and metal-level structure. Once an insurer materially reduces benefits or raises the insured's cost-sharing beyond allowed thresholds, the plan loses grandfathered status and must comply going forward.

Large-group and self-funded employer plans are also not required to embed the state EHB benchmark, although they remain subject to the annual and lifetime dollar-limit ban below.

Ban on Annual and Lifetime Dollar Limits

A defining ACA protection is the prohibition on annual and lifetime dollar limits on Essential Health Benefits. Before the ACA, a policy might cap lifetime payouts at, say, $1 million — catastrophic for a cancer or transplant patient. Today an insurer may still limit the number of covered visits where clinically appropriate, but it cannot impose a dollar ceiling on any EHB category.

Dependent Coverage to Age 26

The ACA also requires plans that offer dependent child coverage to extend it to an adult child up to age 26, regardless of the child's marital status, residency, student status, financial dependency, or eligibility for other coverage. This rule is frequently paired with EHB questions on the exam because both are core consumer protections that travel with any ACA-compliant plan.

Exam trap: the age-26 rule does not force a plan to add dependent coverage that never existed — it only governs plans that already cover children.

The Ten Essential Health Benefits and Actuarial Value

The ACA requires all non-grandfathered individual and small-group plans to cover ten essential health benefits (EHBs): ambulatory (outpatient) care; emergency services; hospitalization; maternity and newborn care; mental health and substance-use treatment; prescription drugs; rehabilitative and habilitative services; laboratory services; preventive/wellness and chronic-disease management; and pediatric services including dental and vision. Preventive services on the approved list must be covered with no cost-sharing.

Metal Levels by Actuarial Value

Plans are tiered by actuarial value (AV) - the average share of covered costs the plan pays:

A catastrophic plan is available to those under 30 or with a hardship exemption; it carries very high deductibles and covers three primary-care visits plus EHBs after the deductible. Higher metal tiers cost more in premium but less at the point of care - bronze suits the healthy, platinum suits heavy utilizers. Annual out-of-pocket maximums apply at every level and there are no lifetime or annual dollar limits on EHBs.