15.1 ACA Essential Health Benefits and Metal Levels
Key Takeaways
- Non-grandfathered individual and small-group plans must cover all ten essential health benefit categories with no annual or lifetime dollar limits.
- Pediatric dental and vision are EHBs; adult dental and adult vision are not.
- Metal tiers are set by actuarial value: Bronze 60%, Silver 70%, Gold 80%, Platinum 90%.
- Higher metal tier means higher premium but lower out-of-pocket cost-sharing; AV is a population average, not a per-claim guarantee.
- Catastrophic plans (under-30 or hardship only) carry very high deductibles and cannot receive premium tax credits.
The Affordable Care Act (ACA), signed March 23, 2010, with major market reforms effective January 1, 2014, reshaped how individual and small-group health coverage is designed. Two structural pillars dominate the exam: the ten essential health benefits (EHBs) that every non-grandfathered plan must cover, and the four metal levels that standardize how generous each plan is.
Essential Health Benefits (EHBs)
EHBs are the floor of covered services. A plan in the individual or small-group market cannot omit any category, and it may not impose annual or lifetime dollar limits on EHBs. Large-group and self-insured plans are not required to cover EHBs, though most do; if they offer an EHB, they still cannot cap it.
The 10 EHB Categories
| # | Category | Typical services |
|---|---|---|
| 1 | Ambulatory (outpatient) | Office visits, outpatient surgery |
| 2 | Emergency services | ER care, ambulance |
| 3 | Hospitalization | Inpatient stays, surgery |
| 4 | Maternity and newborn | Prenatal, delivery, postnatal |
| 5 | Mental health and substance use | Therapy, addiction treatment |
| 6 | Prescription drugs | Formulary medications |
| 7 | Rehabilitative and habilitative | Physical/occupational therapy |
| 8 | Laboratory services | Blood work, diagnostics |
| 9 | Preventive/wellness and chronic care | Screenings, immunizations |
| 10 | Pediatric services | Including pediatric dental and vision |
Trap: Pediatric dental and vision ARE essential health benefits; adult dental and adult vision are NOT. Exam questions frequently offer "adult dental" as a tempting wrong answer.
Grandfathered vs. Non-Grandfathered Plans
A grandfathered plan is one that existed on March 23, 2010 and has not made significant benefit cuts or cost-sharing increases since. Grandfathered plans are exempt from several ACA mandates, including the full EHB package and some preventive-care rules, but they lose that status the moment the issuer materially reduces benefits or raises member cost-sharing beyond allowed thresholds. Almost every plan sold today is non-grandfathered and therefore fully subject to EHB and metal-tier rules. The exam likes to test that a plan can quietly lose grandfathered status by changing its design.
Preventive Services at No Cost
Non-grandfathered plans must cover a defined set of preventive services with no cost-sharing when delivered in-network: no copay, no coinsurance, and no deductible. Examples include immunizations, blood-pressure and cholesterol screenings, certain cancer screenings, contraception, and well-child visits. The list is built from recommendations of bodies such as the U.S. Preventive Services Task Force. A crucial distinction: a service ordered as a routine screening is free, but if the same provider performs a diagnostic procedure because the patient already has symptoms, normal cost-sharing may apply.
Cost-sharing can also apply when the preventive service is delivered out-of-network.
Metal Levels and Actuarial Value
Qualified health plans are grouped by actuarial value (AV) — the share of total covered medical costs the plan pays on average across a standard population. The remainder is the member's expected cost-sharing.
The Four Metal Tiers (plus Catastrophic)
| Tier | Actuarial value | Plan pays / member pays (avg) |
|---|---|---|
| Bronze | 60% | Plan 60% / member 40% |
| Silver | 70% | Plan 70% / member 30% |
| Gold | 80% | Plan 80% / member 20% |
| Platinum | 90% | Plan 90% / member 10% |
| Catastrophic | <60% | High deductible; under-30 or hardship only |
A permitted AV variation (the "de minimis" range, generally plus or minus 2 percentage points) lets a plan qualify for a tier without hitting the exact number.
Key relationship: Higher metal tier = higher premium but lower out-of-pocket cost-sharing. Bronze has the lowest premium and the highest deductible; Platinum is the reverse. AV is an AVERAGE across enrollees, not a promise that the plan pays 60% of YOUR specific bill.
Worked Actuarial-Value Example
Assume a standard population is expected to incur $10,000 in covered medical costs in a year.
- A Bronze plan (60% AV) is expected to pay about $6,000, leaving roughly $4,000 in member cost-sharing.
- A Gold plan (80% AV) is expected to pay about $8,000, leaving roughly $2,000 in member cost-sharing.
The $2,000 difference in expected out-of-pocket cost is what the higher Gold premium effectively pre-pays. This is why a healthy, low-utilization buyer often chooses Bronze, while a buyer expecting heavy claims chooses Gold or Platinum.
Catastrophic Plans
Catastrophic coverage is available only to people under age 30 or those with a hardship/affordability exemption. It still covers all EHBs and at least three primary-care visits plus preventive care before the deductible, but otherwise carries a very high deductible. Premium tax credits cannot be applied to catastrophic plans.
Out-of-Pocket Maximum
All non-grandfathered plans must cap the annual member out-of-pocket spending on in-network EHBs. Once the member reaches the out-of-pocket maximum, the plan pays 100% of covered in-network EHB costs for the rest of the year. Premiums do not count toward this maximum; deductibles, copays, and coinsurance do count. Charges for non-EHB services, balance billing from out-of-network providers, and the cost of services the plan does not cover at all do not count toward the cap. Watch for a wrong answer that claims premiums apply to the out-of-pocket maximum — they never do.
How These Pieces Fit Together
The four building blocks interlock: EHBs define what must be covered, the metal tier defines how generously it is covered on average, the no-cost preventive list defines a free subset, and the out-of-pocket maximum defines the member's worst-case annual exposure. A complete exam answer often requires recognizing which of these layers a fact pattern is testing. For example, a question describing a $0 mammogram is about preventive coverage, while a question comparing a $7,000 deductible to a $1,500 deductible is about metal tiers and actuarial value.
Which of the following is NOT one of the ten essential health benefits required under the ACA?
A Silver plan has an actuarial value of 70%. For a standard population expected to incur $10,000 in covered medical costs, approximately how much is the plan expected to pay on average?