California Designates Essential Health Benefits Benchmark Plan: Kaiser Small Group HMO 30 Plan

Drum roll please! California has designated as its “Essential Health Benefits” benchmark plan the Kaiser Foundation Small Group HMO 30 plan (federal identification number 40513CA035). This is specified in California Senate Bill (SB) 951, signed by Governor Brown on September 30, 2012. As of January 1, 2014, all small group and individual health insurance policies issued, amended or renewed in California must cover the health benefits covered by the benchmark Kaiser HMO 30 plan. This applies to policies sold in or outside the California Exchange. Additionally, SB 951 generally prohibits an insurer from making substitutions to the benefits required to be covered, even if those substitutions are actuarially equivalent. (See table below that summarizes benefits covered under the Kaiser HMO 30 benchmark plan.)The only plans exempt from the requirement to cover benefits that are covered under the benchmark plan are:

grandfathered plans
plans that provide excepted benefits (such as stand-alone dental or vision policies)
insured plans of large employers (more than 50 employees), and
self-insured plans of any size

Background on Essential Health Benefits and the Benchmark Plan

The Patient Protection and Affordable Care Act (PPACA) requires, as of January 1, 2014, that all non-grandfathered small group health plans and individual health insurance policies (both inside and outside the Exchanges) must provide coverage that meets certain minimum standards, including: essential health benefits (EHB), limits on cost-sharing, and provision of specific actuarial levels of coverage (the minimum is 60%). PPACA specified 10 categories of EHB, such as emergency services, hospitalization, and maternity and newborn care. A list of all 10 categories is at the end of this article.

For 2014 and 2015,each state will select a “benchmark plan” that covers all the essential health benefits. The plan should reflect the scope of services offered by a “typical small employer plan” within that state or nationally. Health insurance companies must ensure that all their small group and individual plans in that state (both within and outside the state Insurance Exchange) offer benefits that are “substantially equal” to the benchmark plan. (Note that California SB 951 is stricter than HHS guidance, because SB 951 requires that all small group and individual plans actually provide the same benefits provided by the benchmark Kaiser Small Group HMO 30 plan, not just be substantially equal or actuarially equivalent.)

Summary of Features of Benchmark Kaiser Small Group HMO 30 Plan

The following summary is from Kaiser Permanente “Copayment Plans – Plan Highlights” (at https://businessnet.kp.org/health/plans/ca/plans/smallbusiness?contentid=/html/plans/cal/small/cal_copayment_hmo.html). It lists the HMO 30 features and amounts that were effective during the first quarter of 2012

Features

Member Pays

Calendar-year deductible

Pharmacy calendar-year deductible

$250 for brand prescription

Annual out-of-pocket maximum (self-only/family)

$3,000/$6,000

Office visits unless only for preventive & maternity

$ 30 copayment

Preventive care & maternity/prenatal care

Infertility services

Not covered

Occupational, physical & speech therapy

$ 30

Most labs & imaging

$ 10

MRI/CT/PET

$ 50

Outpatient surgery

$200 per procedure

Emergency room visits (waived if admitted directly to hospital)

$100

Ambulance

$ 75

Prescriptions – generic

$ 10 (up to 100-day supply)

Prescriptions – brand-name

$ 35 (after pharmacy deductible)

Hospital care – Dr services, room & board, tests, medications, supplies, therapies

$400 per day

Hospital care – skilled nursing facility care (up to 100 days per benefit period)

Mental health services – office

$ 30 individual/ $15 group

Mental health services – inpatient (hospital)

$400 per day

Chemical dependency services – office visit

$ 30 individual

Chemical dependency services – inpatient (hospital) (detoxification only)

$400 per day

Certain durable medical equipment (DME), prosthetics, orthotics & footwear, optical (eyewear)

Not covered, but 20% off on glasses & contacts purchased from Kaiser

Vision exam

Home health care (up to 100 2-hour visits per calendar year)

Hospice care

Additional Information on the California Benchmark Plan

Any treatment limits other plans impose on covered benefits cannot exceed the corresponding limits imposed by the benchmark Kaiser Small Group HMO 30 plan.

For pediatric vision care (one of PPACA’s 10 categories of “essential health benefits”), California’s benchmark plan will include the same benefits as under the Federal Employees Dental and Vision Insurance Program with the largest national enrollment as of the first quarter of 2012.

For pediatric dental care (also one of PPACA’s 10 categories of “essential health benefits”), California’s benchmark plan will include the same benefits available to subscribers in California’s Healthy Families Program in 2011-2012.

Other insurers may substitute their prescription drug formularies for the formulary provided under the benchmark Kaiser Small Group HMO 30 plan, as long as certain requirements are met.

Additional Details (for those who want to know)

Where in the California law is the benchmark plan specified?

SB 951 adds new section 10112.27 to the California Insurance Code, and the benchmark plan is specified in section 10112.27(a)(2)(A). The Governor also signed AB 1453, which adds new section 1367.005 to the California Health and Safety Code, which includes the Knox-Keene Health Care Service Plan Act of 1975, which regulates HMOs. The benchmark plan is specified in section 1367.005(a)(2)(A).

Are all states enacting legislation to specify their benchmark plans?

No, the federal Department of Health and Human Services (HHS) noted in its February 17, 2012 FAQs that it generally expects in most states the determination will be made by the state Executive Branch (i.e., State Insurance Department), but it is also possible in some states that legislation will be necessary to select the benchmark plan. Each state will select its benchmark plan by whatever process and through whatever state entity is appropriate under state law.

From what pool of plans did California select the one to be its benchmark plan?

The plans from which each state could select its benchmark were the following: