15.1 ACA Essential Health Benefits and Metal Levels

The Affordable Care Act (ACA), enacted March 23, 2010, reshaped the individual and small-group health insurance markets. For the life and health exam, you must know two pillars cold: the ten Essential Health Benefits (EHBs) that every non-grandfathered individual and small-group plan must cover, and the four metal levels that standardize how much of covered costs a plan pays.

EHBs guarantee a floor of coverage. Before the ACA, a plan could exclude maternity care, mental health, or prescription drugs entirely. Now those exclusions are illegal in the regulated market.

The Ten Essential Health Benefits

Memorize all ten. Exams frequently ask which of four listed services is not an EHB (common distractors: cosmetic surgery, adult dental, weight-loss surgery, long-term custodial care).

Trap: Adult dental and adult vision are NOT EHBs. Only pediatric dental and vision are required. Preventive services rated A or B by the U.S. Preventive Services Task Force must be covered at 100% with no cost sharing when delivered in network.

Metal Levels and Actuarial Value

The four metal tiers do not change what is covered (EHBs are the same across all four). They change the actuarial value (AV) — the percentage of total covered medical expenses the plan is expected to pay for a standard population. The member pays the rest through deductibles, copays, and coinsurance.

A de minimis range of roughly +/-2 percentage points is allowed, so a Silver plan may land at 68%-72% AV. Note the inverse relationship: higher metal level = higher premium but lower out-of-pocket cost when you use care.

Worked Example

A Gold plan (80% AV) member incurs $10,000 in covered, in-network claims after meeting the deductible, with 20% coinsurance and no copays. The plan is expected to pay about $8,000 and the member $2,000 — until the member hits the annual out-of-pocket maximum, after which the plan pays 100% of EHBs.

Catastrophic plans are a separate, fifth option available only to people under 30 or those with a hardship/affordability exemption. They cover the EHBs but only after a very high deductible, plus at least three primary-care visits and preventive care before the deductible.

Annual Out-of-Pocket Maximum

Every EHB plan must cap a member's annual cost sharing. Once the member's combined deductible, copays, and coinsurance for in-network EHBs reach the out-of-pocket (OOP) maximum, the plan pays 100% of covered EHBs for the rest of the year.

Key rules tested on the exam:

• Premiums do NOT count toward the OOP maximum.
• Charges for non-EHB services and out-of-network care generally do not count.
• Balance billing above the allowed amount does not count.
• The federal cap is indexed annually and is higher for family coverage than for an individual.

Worked Example

Suppose a Silver plan has a $4,000 individual OOP maximum. A member who has already paid $3,500 in deductible and coinsurance faces a $2,000 hospital coinsurance charge. The member pays only the remaining $500 to reach the cap; the plan absorbs the other $1,500, and all further in-network EHB care that year is free to the member.

Grandfathered vs. Non-Grandfathered Plans

The EHB and metal-level rules apply to non-grandfathered plans in the individual and small-group markets. 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 some ACA mandates (such as covering all ten EHBs and providing free preventive care) but still must follow core protections like the ban on lifetime dollar limits and the prohibition on rescissions except for fraud. If an employer or insurer materially reduces benefits or raises the member's cost share beyond allowed thresholds, the plan loses grandfathered status permanently and must then meet full ACA requirements.

Trap: Large-group and self-funded employer plans are not required to cover the full EHB package, though they cannot impose annual or lifetime dollar limits on the EHBs they do cover. Exam questions often test that EHB mandates attach to the individual and small-group markets specifically.

The Ten Essential Health Benefits

Every non-grandfathered individual and small-group plan must cover the ten essential health benefits (EHBs) without annual or lifetime dollar limits:

1. Ambulatory (outpatient) services
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance-use disorder services
6. Prescription drugs
7. Rehabilitative and habilitative services and devices
8. Laboratory services
9. Preventive and wellness services and chronic-disease management
10. Pediatric services, including oral and vision care

The ACA also mandates first-dollar preventive care (no cost-sharing for recommended screenings and immunizations) and coverage of dependents to age 26. The exam tests that EHB plans cannot impose annual or lifetime dollar caps on these categories and that preventive services are covered with no copay or deductible.

Metal Levels and Actuarial Value

ACA plans are tiered by actuarial value (AV) — the share of total covered costs the plan (not the member) is expected to pay:

Higher metal tiers mean higher premiums but lower out-of-pocket costs. The tiers describe cost-sharing generosity, not the breadth of covered services — all tiers cover the same ten EHBs. Silver plans matter most because cost-sharing reductions attach only to Silver. The exam tests the AV percentages and the fact that the metal level affects who pays, not what is covered.