Under the Affordable Care Act (ACA), new small group insurance plans and individual health insurance policies are required to cover essential health benefits for people enrolled. However, large group plans do not have the same requirements. If large group policies do cover the essential health benefits, they may not impose a spending limit on the amount covered for these benefits.

The size of the employer, current group plans in place, and even the state can have some impact on the rules about the ten essential benefits. Also, employers have some discretion about their choice to offer a group health insurance plan that meets the government’s definition of minimum essential coverage. 

As a business owner, it’s important to understand what benefits are included in your group health insurance plan. Our team at eHealth explains what you need to know about essential health benefits for large group plans in the article below.

Do group health insurance plans need to include essential health benefits?

The Kaiser Family Foundation describes the ten essential benefits as broad categories of healthcare services. These categories include hospitalization, maternity and mental health care, outpatient services, and others important kinds of healthcare.

The ACA rules require insurance companies to offer small businesses a new group plan that offers this minimum essential coverage. Larger employers could face penalties if their plan doesn’t cover the essential health benefits; however, some small business owners may find that offering these ten essential benefit will help them earn tax benefits for providing qualified health insurance, although it’s not mandatory.

ACA requirements for essential health benefits for large group plans

This list briefly touches upon the way that ACA requirements for essential health benefits from a group health insurance plan could affect employers:

• The law allows insurance companies to grandfather older plans that their clients might have already had (grandfathered plans may not include the ten essential benefits). Small businesses may not have to switch plans; however, some companies may have an incentive in the form of  tax credits if they do.
• Each state has some leeway to determine how average employer plans should work within the state. These “state benchmark plans” may vary somewhat in different parts of the country. Any health insurance company authorized to conduct business in the state will know the rules and can offer information about appropriate group plans that offer the ten essential benefits.
• Smaller companies with fewer than 50 employees usually don’t have to provide health insurance to employees. Companies with fewer than 50 employees might not need to offer group medical plans; however, the companies will need to comply with ACA rules if they want to earn tax credits. This means, if you want to benefit from the small business health-care tax credit, you will likely need to offer a group plan with the essential health benefits.
• Laws governing large groups with at least than 50 employees or self-funded insurance are somewhat more complex. According to this flowchart from the  KFF, these big companies could face penalties if they do not provide coverage with essential health benefits and employees seek coverage on the ACA Marketplace.

Are essential group health benefits the same in every state?

While all the required categories of essential group health insurance benefits are the same across the nation, each state can determine the specifics of the policy. There are mandates in every state with which small group insurance plans must comply. The minimum requirement is called the essential health benefits (EHB) benchmark.

All insurers offering individual and small group policies must provide plans that include benefits that are equal to the essential benefits found in the benchmark plan for their state. Some states require insurers to provide additional coverage that goes beyond essential health benefits, which may include vision and dental care.

Why should small businesses offer group health insurance benefits?

The government offers incentives for small businesses to offer health insurance that provides essential health benefits. The government also may penalize larger companies that don’t have group plans that will cover the ten essential benefits. It’s fair to say that the ACA does not force any business to offer essential health benefits; however, the rules strongly encourage offering ACA-qualified group health plans.

The reason for these rules is because individual employees may qualify for tax credits if they lack access to qualified group plans and can apply for individual health insurance. The government hopes to encourage employers to assume more responsibility by offering major medical insurance that includes the essential health benefits.

Essential health benefits for large group plans: FAQs

What are essential health benefits under the Affordable Care Act?

There are 10 essential health benefits under the ACA:

• Hospitalization
• Emergency services
• Lab tests
• Outpatient care
• Services for mental health and substance abuse treatment
• Prescription drugs
• Preventive care, wellness services, and management of chronic diseases
• Rehabilitative and habilitative services
• Maternity and childbirth services and newborn care
• Pediatric services, including dental and vision care

What is not considered an essential health benefit under the ACA?

While some states will include certain services outside of the Affordable Care Act’s requirements, the ACA does not consider these to be essential health benefits:

• Adult dental coverage
• Adult vision coverage
• Long-term care in a nursing home
• Vasectomies

Do essential health benefits apply to self-insured plans?

No, self-insured plans are not required to offer all of the essential health benefits. However, these plans cannot impose lifetime or annual dollar limits on any essential health benefits that are offered through the policy.

What is considered an applicable large employer (ALE)?

According to the Internal Revenue Service (IRS), there must be on average at least 50 full-time employees in the previous year for an employer to be considered an ALE. If your company falls into this category, you must provide the minimum essential coverage to all employees and dependents through an affordable health insurance policy.

How to find group health insurance plans

Business owners can find a variety of group health insurance plans by entering their ZIP code and the size of their employee group on the quote form at eHealth. Employer and employee contributions vary by plan, the average age of employees, and location. Of course, eHealth also offers information about individual health insurance and other types of coverage.