10 Essential Health Benefits Under the ACA

The Affordable Care Act (ACA, also known as Obamacare) set basic standards in terms of the general benefits that individual/family and small group health plans have to cover. This article will explain what those benefits are, how they are regulated, and how they differ from one state to another.

Before the ACA took effect, the scope of coverage offered by health insurance plans varied considerably from one state to another and from one plan to another. Consumer protections amounted to a patchwork of state-based regulations that were robust in some states and minimal in others.

State requirements that are more comprehensive than the ACA still apply, but in every state, the ACA has established minimum standards. Essential Health Benefits (EHBs) are ten types of medical care that must be covered—with no dollar limits on annual or lifetime benefits—on all individual and small group major medical plans with effective dates of January 2014 or later. EHBs are covered regardless of whether the plan is sold through the exchange or off-exchange.

Grandmothered (transitional) and grandfathered plans are still in existence, but they had effective dates prior to 2014. So EHB requirements generally do not apply to grandmothered and grandfathered plans. The exception is preventive care, which is required to be covered on grandmothered—but not grandfathered—plans.

Most EHB requirements also do not apply to large group plans (in most states, "large group" means 50 or more employees, although there are four states where the threshold is 100+ employees ). But preventive care benefits, which are described in more detail below, do apply to large group plans (including self-insured plans) as well as individual and small group plans.

Here's what the EHBs are, and how they work:

Ambulatory Services

This includes visits to doctors' offices and clinics, as well as hospital care provided on an outpatient basis ("ambulatory" refers to walking around, so it pertains to non-inpatient services. People sometimes assume that ambulatory services refer to ambulances and emergency transportation, but that's not the case).

Chronic Disease Management, Wellness Care, and Preventive Services

Preventive care is covered with no cost-sharing for the patient (ie, the insurance company pays the full cost), but only if the preventive service in question is on the list of covered preventive care.

Unlike the rest of the EHBs, preventive care benefits are required to be covered by large group and self-insured plans as well as individual and small group plans (the rest of the EHBs are only required to be covered by individual and small group plans).

There are four agencies whose recommendations are used to create the list of covered preventive care. These agencies include the U.S. Preventive Services Task Force (USPTF), the Advisory Committee on Immunization Practices (ACIP), the Health Resources and Service Administration's (HRSA's) Bright Futures Project, and the HRSA and the Institute of Medicine (IOM) committee on women's clinical preventive services.

The list is developed primarily based on services that receive an "A" or "B" rating from the U.S. Preventive Services Task Force (USPSTF). Breast cancer screening for women aged 40 to 49 only has a "C" rating from the USPSTF, but an exception was made to include it in the list of covered preventive services under the ACA.

In addition to USPSTF guidelines, the CDC's Advisory Committee on Immunization Practices (ACIP) provides vaccine recommendations, and the Health Resources and Services Administration (HRSA) provides additional recommendations for preventive care for women, infants, and children.

In 2023, a federal judge ruled that the federal government cannot require health plans to cover USPSTF recommendations that have been made since the ACA was signed into law on March 23, 2010 (USPSTF recommendations that pre-date the ACA still have to be covered under that ruling). That decision was appealed and a stay was soon granted, ensuring that throughout the appeals process, health plans must continue to fully cover all of the preventive care recommended by the USPSTF. (There's an exception for the platintiffs in the case, who are allowed to obtain health coverage that doesn't cover recent USPSTF recommendations.)

There is normally a one-year delay before new preventive care recommendations must be added to health plans' covered benefits (and the delay can be up to two years in reality, since it applies to the next renewal after a one-year period has passed; if the plan renews shortly before that one-year mark, the benefits wouldn't have to be added until the following renewal).

But the process was much faster for the COVID-19 vaccine. Health plans were required to fully cover the vaccine beginning just 15 days after the FDA granted the first emergency use authorization in December 2020. 

Contraception is covered under preventive care, which means it's available at no cost to the insured. But health insurance plans are only required to cover at least one version of each of the FDA-approved types of female contraceptives, which means that there are many specific contraceptives that still have a cost associated with them, with the details varying from one policy to another.

Emergency Services

Although health insurance carriers can limit most coverage to in-network providers, that's not true for emergency services.​

Your health insurer cannot impose higher cost-sharing for out-of-network hospital emergency room care and must allow you to go to the closest emergency room, even if it's not in your plan's network.

The requirement that health insurers cover emergency treatment also extends to ambulance transport, including air ambulance.

And as of 2022, the federal No Surprises Act prohibits balance billing in emergency situations, with the exception of ground ambulance charges. This protection applies to individual, small group, and large group plans, including self-insured plans.

Hospitalization

This includes the full range of inpatient care, including treatment by doctors and nurses, inpatient lab and pharmacy services, and surgical care.

Laboratory Services

Lab work that falls under the scope of the preventive care described above is covered with no cost-sharing for the patient.

Other necessary lab work is covered under the plan's normal cost-sharing guidelines.

Maternity and Newborn Care

This includes all maternity, delivery, and newborn care, although prenatal checkups are generally covered under preventive care (described above) and may be covered with no cost-sharing for the expectant mother. According to HRSA, prenatal care falls under the category of well-woman care. And although in most cases that's covered once per year, the agency notes that in some cases "several visits may be needed to obtain all necessary recommended preventive services."

In addition to the checkups themselves, there are some specific tests (for gestational diabetes, Hepatitis B, and Rh Incompatibility) that are covered for pregnant women under the category of preventive care, with no cost-sharing.

Other routine screening and lab work that accompanies prenatal visits, such as ultrasounds and genetic testing, will generally have cost-sharing (deductible, coinsurance, or copays) that varies from one health plan to another.

Mental Health and Substance Abuse Treatment

This includes inpatient and outpatient treatment for mental health and substance abuse treatment.

Mental health parity requirements predate the ACA, although the ACA expanded the parity law to apply to individual market plans as well as employer-sponsored coverage. Under the parity requirement, a health plan cannot have more restrictive coverage limits for mental health treatment than it has for medical/surgical treatment.

Pediatric Services, Including Dental and Vision Care for Children

Unlike the other EHBs, pediatric dental does not have to be included in health insurance plans on the exchange, as long as there's also a stand-alone pediatric dental plan available on the exchange.

Premium subsidies are not necessarily available to help cover the cost of the dental coverage if it is purchased as separate stand-alone coverage on the exchange. The subsidy amount available may or may not be based on the addition of the cost for a separate stand-alone dental plan. It depends on how the premiums compare to each other when the cost of a stand-alone dental plan is added to the cost of the silver plans that don’t cover pediatric dental services.

There's no requirement that health plans cover dental or vision care for adults.

Prescription Drugs

Individual and small group plans must cover prescription drugs, and their formularies (covered drug lists) must include at least one drug in every United States Pharmacopeia (USP) category and class—or more, if the state's benchmark plan includes more.

Formularies are also developed with input from pharmacy and therapeutics (P&T) committees, but they can vary considerably from one health insurer to another.

Under the preventive care guidelines described above, health plans must cover—at no cost to the insured—at least one version of every type of FDA-approved female contraceptive, as well as recommended vaccines.

For other drugs, the plan's cost-sharing rules apply. And plans can require step therapy (a requirement that the insured start with the most cost-effective and least-risky drugs to see if they work, before trying more expensive, riskier medications) or prior authorization for expensive drugs.

Most health insurers place covered drugs into four or five tiers. Tier one drugs have the lowest out-of-pocket costs, and Tier four or five drugs (generally specialty drugs) have the highest out-of-pocket costs.

Rehabilitative and Habilitative Services

This includes both therapy and devices needed for rehabilitation and habilitation.

Rehabilitative services focus on regaining lost abilities, such as occupational or physical therapy following an accident or stroke.

Habilitative services provide assistance with gaining skills in the first place, such as speech or occupational therapy for a child who isn't talking or walking according to expectations.

Limits on the number of visits per year typically apply (although plans cannot impose dollar limits on EHBs, visit limits are allowed). In some states, the limit applies to the combination of physical therapy, occupational therapy, and speech therapy, while others have separate limits for each type of therapy. The specifics of this will vary depending on the state's benchmark plan, so visit limits differ from one state to another.

Within EHB Categories, States Define What Has to Be Covered

Although the ACA lays out ten categories of services that individual and small group insurers are required to cover, the law gives states some leeway in terms of defining exactly how that coverage should look. Each state gets to select a benchmark plan for that, and those plans differ from one state to another.

So although the ACA's essential health benefits are included in any ACA-compliant individual or small group plan anywhere in the U.S., the specific details in terms of minimum coverage requirements will vary from one state to another.

Summary

Under the Affordable Care Act (ACA), health plans in the individual/family and small group market are required to provide coverage for ten basic benefit categories, known as essential health benefits (EHBs). The health plans cannot set dollar limits on how much they'll pay for services that fall within these categories, but for most services, cost-sharing (deductible, copays, coinsurance) can apply. The ACA broadly defines the ten categories of coverage, but each state defines (via a benchmark plan) the specific services that must be covered under each EHB category.

A Word From Verywell

If you buy your own health insurance or have coverage offered by a small employer, the ACA's essential health benefits rule helps to ensure that your policy won't have significant gaps in the coverage. Prior to the ACA, it was fairly common—especially in the individual/family market—to see plans that didn't cover things like maternity care, mental health care, or even prescription drugs. But thanks to EHB rules, plans like that are no longer sold in the major medical market, on-exchange or off-exchange.

It's important to understand, however, that plans that aren't regulated by the ACA can still be sold without coverage for the EHBs. So things like short-term health insurance, health care sharing ministry plans, fixed indemnity plans, etc. don't have to cover the EHBs and they generally continue to have gaps in their coverage.