What Essential Health Benefits Are
Essential health benefits (EHBs) are a set of health care service categories that the Affordable Care Act requires to be covered by non-grandfathered individual and small group market health insurance plans. The EHB requirement was established in Section 1302 of the ACA and implemented through regulations issued by the Department of Health and Human Services (HHS).
Before the ACA, insurance plans in the individual and small group markets could and routinely did exclude entire categories of care — mental health coverage was commonly absent, maternity coverage was frequently excluded or sold as an add-on rider, and substance use disorder treatment was rarely included as standard. The EHB requirement ended these categorical exclusions for covered plans.
Essential health benefits are the ten categories of health services that non-grandfathered individual and small group health plans must cover under the Affordable Care Act. Plans must cover services within each category and cannot impose annual or lifetime dollar limits on EHBs. The specific services covered within each category are determined by reference to a state benchmark plan — which means coverage details can vary modestly by state even though all compliant plans must cover all ten categories.
Which Plans Must Cover EHBs
The EHB requirement applies to non-grandfathered health plans sold in the individual market (including plans sold through the ACA Marketplace) and the small group market (employers with generally fewer than 50 full-time equivalent employees, though states may define small group differently).
Large group employer plans — those covering employers with 50 or more full-time equivalent employees — are not required to cover EHBs, though many do. However, large group plans that do cover a service within an EHB category are prohibited from imposing annual or lifetime dollar limits on that service under separate ACA provisions.
Plans sold before September 23, 2010 that have remained continuously in force without significant changes are grandfathered plans and are exempt from the EHB requirement. The grandfathered status can be lost if the plan makes certain changes to benefits or cost-sharing. The share of enrollees in grandfathered plans has declined significantly since 2010 as plans have changed and new plans are not eligible for grandfather status.
The Ten EHB Categories
The ACA specifies the following ten categories of essential health benefits that covered plans must include:
| Category | What It Covers |
|---|---|
| 1. Ambulatory patient services | Outpatient care — services received without being admitted to a hospital. Includes office visits, outpatient surgery, and outpatient procedures. |
| 2. Emergency services | Emergency room visits. Plans cannot require prior authorization for emergency services and must cover emergency care at in-network cost-sharing even when received out-of-network. |
| 3. Hospitalization | Inpatient care, surgery, and related hospital services. Includes overnight stays and the services provided during them. |
| 4. Maternity and newborn care | Prenatal and postnatal care, labor and delivery, and newborn care. Before the ACA, individual market plans frequently excluded maternity coverage or sold it only as a high-cost rider. |
| 5. Mental health and substance use disorder services | Behavioral health treatment, mental health inpatient and outpatient services, and substance use disorder treatment. Subject to mental health parity requirements. |
| 6. Prescription drugs | Coverage for prescribed medications. Plans must cover at least one drug in every category and class in the United States Pharmacopeia. |
| 7. Rehabilitative and habilitative services and devices | Rehabilitative services help individuals recover after injury or illness (physical therapy, speech therapy). Habilitative services help individuals acquire or maintain skills (applicable for developmental conditions). Both must be covered. |
| 8. Laboratory services | Diagnostic tests, blood work, and other laboratory services ordered by a provider. |
| 9. Preventive and wellness services and chronic disease management | Preventive care services rated A or B by the U.S. Preventive Services Task Force, ACIP-recommended immunizations, and women's preventive services required under the ACA. Must be covered at no cost-sharing when received in-network from an in-network provider. |
| 10. Pediatric services, including oral and vision care | Services for children under 19, including pediatric dental and vision coverage. Note: dental and vision coverage for adults is not an EHB requirement. |
The Benchmark Plan Standard
The ACA directed states to establish benchmark plans against which EHB coverage in their market is measured. A state's benchmark plan defines the specific services within each EHB category that plans in that state must cover. States that did not establish a benchmark plan default to the largest small group plan in the state as of a reference date.
The benchmark system is why specific covered services within the EHB categories can vary modestly by state while all states must cover all ten categories. A service that is included in one state's benchmark plan may not be explicitly covered in another state's benchmark, even though both states' plans cover the same ten EHB categories. HHS periodically issues guidance on benchmark plan standards, and CMS publishes the benchmark plans for each state.
The Prohibition on Annual and Lifetime Limits
The ACA prohibits non-grandfathered health plans from imposing annual or lifetime dollar limits on EHBs. Before the ACA, annual benefit caps (often $250,000 or $1 million) and lifetime benefit limits (often $1 to $2 million) were common features of individual and small group market plans. Enrollees with serious illnesses who reached these limits lost coverage for further treatment within the plan year or over their lifetime.
The prohibition on benefit limits applies to the dollar value of EHBs. Plans may still impose other types of limitations — visit limits, duration limits, or frequency limits on specific services — but cannot cap the total dollar value of EHB coverage in a year or over a lifetime. Separate ACA provisions also require that EHBs, when covered by large group plans, not be subject to annual or lifetime dollar limits, even though large group plans are not required to cover EHBs in the first place.
The prohibition on annual and lifetime dollar limits applies to essential health benefits. Services that fall outside the EHB categories are not protected by this prohibition. A plan may impose dollar limits on services that are not EHBs, though other federal and state laws may impose separate restrictions. Understanding which services a plan covers as EHBs versus as voluntary supplemental benefits is relevant to understanding the plan's limit structure.
Cost-Sharing on EHBs
While plans must cover EHBs, they are generally permitted to apply standard cost-sharing — deductibles, copays, and coinsurance — to most EHB services. The requirement is that the service be covered, not that it be covered without cost-sharing. The exception is the preventive care category: services in Category 9 that are required under the ACA's preventive care mandate must be covered without any cost-sharing when received from an in-network provider.
Cost-sharing on EHBs counts toward the plan's annual out-of-pocket maximum, which the ACA also limits. Once the out-of-pocket maximum is reached, the plan must cover all covered in-network EHBs at 100 percent for the remainder of the plan year. The out-of-pocket maximum limits apply to all EHB cost-sharing and prevent unlimited financial exposure for covered in-network care.
Mental Health Parity and EHBs
The mental health and substance use disorder category (Category 5) of EHBs carries additional legal requirements under the Mental Health Parity and Addiction Equity Act (MHPAEA). Federal parity law requires that the financial requirements and treatment limitations applied to mental health and substance use disorder benefits be no more restrictive than the predominant requirements applied to substantially all medical and surgical benefits in the same classification.
In practical terms, parity means that if a plan covers outpatient medical visits with a $30 copay, it generally cannot require a higher copay for outpatient mental health visits. Similarly, if prior authorization is not required for most medical procedures, a plan that requires prior authorization for mental health services may be in violation of parity requirements. The MHPAEA's parity obligations apply to the EHB mental health and substance use category and extend parity protections beyond the basic coverage mandate.
The CMS mental health parity fact sheet explains the interaction between parity law and EHB requirements in detail.
Plans Not Subject to EHB Requirements
Several plan types are not subject to the EHB requirements. Understanding which plans are exempt is important because these plans may offer lower premiums while covering significantly fewer services:
- Short-term limited duration health plans: These plans are explicitly exempt from EHB requirements and many other ACA consumer protections. They can exclude entire service categories, impose annual and lifetime benefit limits, and use health status in underwriting.
- Grandfathered plans: Plans that were in effect before the ACA's enactment date that have maintained continuous grandfathered status are exempt from EHB requirements.
- Large group employer plans: Not required to cover EHBs, though most provide broad coverage voluntarily and are still prohibited from imposing dollar limits on any EHB category they do cover.
- Excepted benefit plans: Certain products like standalone dental plans, standalone vision plans, and fixed indemnity insurance are classified as excepted benefits and are not subject to EHB requirements.
The HealthCare.gov information on exempt plans provides a consumer-oriented overview of plan types that fall outside the ACA's EHB requirements.
The ACA requires all non-grandfathered individual and small group market plans to cover ten categories of essential health benefits: ambulatory services, emergency care, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative and habilitative services, laboratory services, preventive care, and pediatric services including dental and vision for children under 19. Plans cannot impose annual or lifetime dollar limits on these benefits. Preventive care services must be covered without cost-sharing. Short-term plans, grandfathered plans, and large group employer plans are not subject to EHB requirements. The full regulatory framework is available through CMS's EHB page.