15.1 ACA Essential Health Benefits and Metal Levels

Essential Health Benefits (EHB)

The Affordable Care Act (ACA) requires every non-grandfathered individual and small-group health plan to cover ten categories of Essential Health Benefits (EHB). These categories are the floor of coverage. An exam answer that says a marketplace plan can simply exclude maternity care, mental health, or prescription drugs is wrong, because those are EHB categories.

The ten EHB categories are:

• Ambulatory (outpatient) patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance-use disorder services, including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic-disease management
• Pediatric services, including oral and vision care

No dollar limits on EHB

A defining ACA rule: plans cannot impose annual or lifetime dollar limits on EHB. An insurer may still apply non-dollar limits (for example, a visit count on a non-EHB service), but it may not cap the dollar value of an EHB category. This is a frequent trap: the prohibition is on dollar limits for essential benefits, not on every limit of any kind.

Metal levels and actuarial value

Marketplace and individual plans are sorted into metal levels based on actuarial value (AV) — the percentage of total covered medical costs for a standard population the plan is expected to pay. AV is a population-level estimate, not the share paid on any one claim.

A common misread: "Gold pays 80% of my hospital bill." No — Gold has an 80% actuarial value across a standard population. On a specific claim the member could pay far more or far less depending on the deductible, copays, and coinsurance. Generally, lower metal levels = lower premium but higher cost-sharing (deductibles, copays). Higher metal levels reverse that trade-off.

Worked example

A Silver plan has a $4,000 deductible and 20% coinsurance after the deductible. A member incurs $10,000 in covered in-network charges. The member pays the $4,000 deductible, then 20% of the remaining $6,000 = $1,200, for $5,200 total — unless the out-of-pocket maximum stops them sooner. The 70% AV figure does not mean the member's bill on this claim is 30% of $10,000.

Preventive services at no cost-sharing

The ACA requires non-grandfathered plans to cover a federally defined list of preventive services with no cost-sharing (no copay, coinsurance, or deductible) when received in-network. This list includes certain immunizations, recommended cancer screenings (such as colonoscopy and mammography), blood-pressure and diabetes screening, and recommended contraceptive services.

Key traps:

• The zero cost-sharing applies in-network. Out-of-network preventive care can still carry cost-sharing.
• It applies even before the deductible is met — preventive care is not subject to the deductible.
• If a preventive screening turns into a diagnostic or treatment service (for example, a polyp is removed during a screening colonoscopy), normal cost-sharing rules can apply to the diagnostic portion.

Out-of-pocket maximum

Every ACA-compliant plan has an annual out-of-pocket (OOP) maximum that caps a member's in-network cost-sharing on EHB. Once the member's deductibles, copays, and coinsurance reach the OOP max, the plan pays 100% of covered in-network EHB for the rest of the plan year.

Important: premiums do not count toward the OOP max, and out-of-network charges and non-covered services generally do not count either. The OOP max limits cost-sharing, not premium.

Catastrophic plans

Catastrophic plans are a limited individual-market option. Eligibility is restricted to people under age 30 or those who qualify for a hardship or affordability exemption. These plans have a very high deductible (set at the year's OOP maximum), but they still cover the three ACA-required "free" primary-care visits and the no-cost preventive services before the deductible.

Exam points:

• Catastrophic plans are not assigned a metal level and are generally not eligible for premium tax credits.
• They are designed as worst-case protection for younger or exemption-qualified buyers, not as comprehensive everyday coverage.

Grandfathered plans

A grandfathered plan existed on March 23, 2010 and has not made disqualifying changes. Grandfathered plans are exempt from some ACA mandates (for example, they need not cover the full preventive list at no cost), but they remain subject to others, such as the ban on lifetime dollar limits on EHB and the dependent-coverage-to-age-26 rule. Losing grandfathered status (by significantly cutting benefits or raising cost-sharing) means the plan must then meet the full ACA market rules.

Benchmark plans set the EHB package

EHB categories are federal, but the specific services and limits within each category are defined by a state benchmark plan the state selects. That is why two ACA plans can both cover "prescription drugs" yet use different formularies. On the exam, treat the ten categories as the tested floor; the benchmark detail is administrative.

Habilitative vs. rehabilitative

A frequently confused pair: rehabilitative services help a person regain a skill lost to injury or illness (physical therapy after a stroke). Habilitative services help a person attain a skill never developed (speech therapy for a child with a developmental delay). Both are EHB categories, so a plan may not exclude habilitative care simply because the skill was never present.