Essential Benefits

Ten Categories of Coverage   New Mandate Benefits   Minimum Actuarial Value   


Starting on January 1, 2014, all health insurance policies will be required to cover a broad range of mandated benefits, many of which are not included in some policies today.  As a result, millions of people will be forced to purchase health insurance that is more comprehensive – and more expensive – than they currently have. The CBO found that premiums would increase because policies “would cover a substantially larger share of enrollees’ costs for health care (on average) and a slightly wider range of benefits.”   

EHB Infographic 

Ten Categories of Coverage

The ACA outlines 10 general categories of benefits that have to be included in any policies offered in the “exchange” as well as plans sold in states’ small-group and individual markets:   

EHB Categories 


According to the U.S. Department of Health and Human Services, many individuals and families purchasing coverage on their own do not currently have coverage for some of these services, such as maternity services (62 percent), substance abuse services (34 percent), mental health services (18 percent), and prescription drugs (nine percent).

As the non-partisan Institute of Medicine noted in its recommendations to HHS:
"If cost is not taken into account, the EHB package becomes increasingly expensive and, individuals and small businesses will find it increasingly unaffordable. If this occurs, the principal reason for the ACA - enabling more people to purchase health insurance, and covering more of the population will not be met." 


Back to top 

New Benefit Mandates

The ACA also imposes other benefit mandates, some of which have already gone into effect, such as first-dollar coverage for preventive care, no annual limits on coverage, and no lifetime limits on coverage.  The ACA also establishes limits on deductibles for health insurance plans in the small group market at $2,000 for individuals and $4,000 for families—effective January 1, 2014.  In order to meet these new limits, many small group plans—particularly high-deductible/HSA plans—would have to lower deductibles substantially, thereby increasing the cost of coverage.   

Back to top 

Minimum Actuarial Value

The exchanges establish different tiers of coverage based on the “actuarial value” of a health insurance policy. Actuarial value is a summary measure of a health insurance plan’s benefit levels—measuring the relative percentage paid by a health benefits plan and its enrollees for a standard/average population.  For example, a plan with an actuarial value of 70% means that the insurance plan would pay 70% of covered health care expenses—while the enrollee would pay 30% out-of-pocket in the form of co-payments, co-insurance, and deductibles. The most affordable tier, known as the “bronze” tier, will require a minimum actuarial value of 60 percent – which likely represents a higher actuarial value that many plans purchased today in the individual market which, in turn, would result in higher premiums for those plans. 

AHIP has launched Time for Affordability to raise awareness of how essential health benefits and other provisions will affect premiums.  


Latest Resources

AHIP Issue Brief on Essential Health Benefits - [PDF]


Fact Sheets/Issue Briefs/Talking Points | Federal | 10/10/2014

Comprehensive Assessment of ACA Factors That Will Affect Individual Market Premiums in 2014

A new report from Milliman, Inc. helps explain how the Affordable Care Act’s (ACA) coverage expansion, new benefits, and market reforms will impact individual market health insurance premiums in 2014. The report highlights how some provisions will increase premiums while others will make health care coverage more affordable for consumers. The focus of this report is to highlight the broad range of changes happening in the marketplace and the wide variation in impact that is likely to occur.

Reports/Research/White Papers | Strategic Communications | 04/25/2013

AHIP Statement on Essential Health Benefits

America’s Health Insurance Plans’ (AHIP) President and CEO Karen Ignagni released the following statement in response to the final rule on essential health benefits released today by the U.S. Department of Health and Human Services.

Press Releases | Strategic Communications | 02/20/2013

AHIP Statement on ACA Implementation

Press Releases | Strategic Communications | 11/20/2012

AHIP Statement on Essential Health Benefits

America’s Health Insurance Plans (AHIP) President and CEO Karen Ignagni released the following statement on new guidance from the Department of Health and Human Services on essential health benefits. 

Press Releases | Strategic Communications | 12/16/2011

AHIP Statement on IOM Report on Essential Health Benefits

AHIP President and CEO Karen Ignagni issued the following statement regarding the Institute of Medicine’s new report, Essential Health Benefits, Balancing Coverage and Cost.

Press Releases | Strategic Communications | 10/06/2011

Statement on Essential Health Benefits to the IOM Committee on the Determination of Essential Health Benefits - [PDF]

Testimony from Carmella Bocchino, Executive Vice President of Clinical Affairs and Strategic Planning for AHIP, who participated on a panel discussion at the Institute of Medicine’s (IOM) meeting on the determination of essential health benefits.

Congressional Correspondence | 01/13/2011