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The Benchmark Shuffle

By: Kelly Dempsey, Esq.

Sadly this is not some new dance craze (though we can make one up if you want us to).  We know that the state of the health care industry requires us to be flexible and stay on our toes, especially on the regulatory front; so instead of a traditional “dance,” we’re talking about a fun regulatory topic – benchmarks and essential health benefits (EHBs)!  While ACA repeal and replace proposals have been in debate for months now, a consensus hasn’t been reached and it’s unclear what will be coming next on health care legislation.  As mentioned in previous blogs, for now, employers and health plans should continue to comply with all applicable provisions of the ACA, including the EHB rules that were the center of focus in some of the proposed repeal/replace bills.  

The EHB rules (i.e., the prohibition on annual and lifetime dollar limits for in-network EHBs and the requirement for self-funded health plans to select a benchmark) have been around for quite some time now.  The bottom line of picking a benchmark is for the determination of which benefits are EHBs and which benefits are not EHBs, thus helping plans determine which, if any, dollar limits can be maintained.

It’s important to remember that each state is responsible for their benchmark and the original benchmarks and the rules allow changes after designated timeframes.  Revised benchmark summaries were released for 2017 that reflect updates to the benchmarks, thus requiring employers to review their health plans and make necessary changes to ensure compliance.  Just like the benchmarks changed, health plans change too.   

Benefit changes are the nature of the beast in health care – be it to maintain compliance, to better align with the needs of the employer’s employees, or in an attempt to better contain costs – which means employers have to review and revise their benefits from time to time.  It’s easy to forget all the nuances of the ACA, so when an employer makes changes to benefits, they need to take into consideration the implications of those changes, including a potential change to the benchmark selected.  Whether or not a different benchmark will work for a plan, and which benchmark best aligns, is a case by case analysis based on the benefit changes the employer is looking to make.  

If your plan, or a client’s plan, is looking to make benefit changes, remember to review the benchmark and “shuffle” as needed.