Since 2014, under the Affordable Care Act, all new individual and small-group health insurance policies (including those sold in the ACA’s health insurance exchanges and off-exchange) must cover essential health benefits for all enrollees.
And there cannot be annual or lifetime caps on the amount of money the insurer will pay for the services (note that there can still be a cap on the number of covered visits; for example, an insurer might cover 20 physical therapy visits in a year, and that’s still allowed).
What are the essential benefits mandated by the ACA?
The ACA defines ten essential health benefits:
- hospitalization
- ambulatory services (visits to doctors and other healthcare professionals and outpatient hospital care)
- emergency services
- maternity and newborn care
- mental health and substance abuse treatment
- prescription drugs
- lab tests
- chronic disease management, “well” services and preventive services recommended by the U.S. Preventive Services Task Force, the Health Resources and Services Administration, and the CDC’s Advisory Committee on Immunization Practices. There is normally a waiting period of a year (after a service is newly added to the recommended preventive care list) before health plans must start to cover it at no charge, and even then, it only has to be added when the plan renews or a new policy takes effect. But an exception was made for COVID-19 vaccines: Under the terms of the CARES Act, all private non-grandfathered health plans must offer coverage for COVID-19 vaccines, with zero cost-sharing, within 15 business days of the date the CDC’s Advisory Committee on Immunization Practices voted to add it to the list of recommended vaccines (this happened on December 13, 2020).
- pediatric dental and vision care (there is some flexibility on the inclusion of pediatric dental if the plan is purchased within the exchange)
- rehabilitative and “habilitative” services
Are ACA's essential benefits the same in every state?
Those are broad categories of care, and it’s up to each state to define exactly what has to be covered under each essential health benefit category. States do this by designating a benchmark health plan (see definition 2 here). So although the ACA’s essential health benefit categories are the same in every state, the specifics of exactly what has to be covered by individual and small group health plans will vary from one state to another.
Prior to 2014, it was common for individual market plans in many states to not include maternity benefits, prescription drug coverage, or mental health/substance abuse coverage. But since 2014, all new individual major medical plans have included these benefits — along with the rest of the essential health benefits — for all enrollees.
Grandmothered and grandfathered plans are not required to cover the ACA’s essential health benefits, although grandmothered plans are required to cover recommended preventive care with no cost-sharing. Large group plans are also not required to cover essential health benefits (but if they do, they cannot impose dollar limits on the benefit), although they are required to cover recommended preventive care without any cost-sharing, unless they’re grandfathered.