DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
Center for Medicaid and CHIP Services
 
 
  
May 22, 2012 
 
Medicaid/CHIP Affordable Care Act Implementation 
Answers to Frequently Asked Questions 
 
Benefits and Delivery Systems 
Q1:  How will Essential Health Benefits (EHB) be defined for Medicaid benchmark or 
benchmark-equivalent plans?  
A: Since 2006, State Medicaid programs have had the option to provide certain groups of 
Medicaid enrollees with an alternative benefit package known as benchmark or benchmark-
equivalent coverage, based on one of three commercial insurance products or a fourth, 
Secretary-approved coverage option.  Beginning on January 1, 2014, all Medicaid benchmark 
and benchmark-equivalent plans must include at least the ten statutory categories of Essential 
Health Benefits.  Under the Affordable Care Act, the medical assistance provided to the 
expansion population of adults who become newly eligible for Medicaid as of January 1, 2014, 
must be provided consistent with section 1937 benchmark authority. 
  
For Medicaid alternative benefit plans, three of the benchmark plans described in section 1937 
(the States largest non-Medicaid HMO, the States employee health plan, and the FEHBP BCBS 
plan) may be designated by the Secretary as EHB benchmark reference plans, as described in the 
EHB Bulletin (link below).  A State Medicaid Agency could select any of these section 1937 
benchmark plans as its EHB benchmark reference plan for Medicaid.  There would be no default 
EHB benchmark reference plan for purposes of Medicaid; each State Medicaid Agency would be 
required to identify an EHB benchmark reference plan for purposes of Medicaid as part of its 
2014-related Medicaid State Plan changes. 
  
If the EHB benchmark reference plan selected for Medicaid were to lack coverage within one or 
more of the ten statutorily-required categories of benefits, the section 1937 alternative benefit 
plan would need to be supplemented to ensure that it provides coverage in each of the ten 
statutory benefit categories. This would be in addition to any other requirements for Section 
1937 plan, including Mental Health Parity and Addition Equity Act compliance.  
 
For more information about the Essential Health Benefits, please see CCIIOs bulletin from 
December 2011 (available at 
http://cciio.cms.gov/resources/files/Files2/12162011/essential_health_benefits_bulletin.pdf) and  Page 2 
the CMCS informational bulletin from February 2012 (available at 
http://www.medicaid.gov/Federal-Policy-Guidance/downloads/CIB-02-17-12.pdf). 
 
Q2. Could a State select a different Essential Health Benefits (EHB) benchmark reference 
plan for its Medicaid section 1937 alternative benefit plans than the EHB reference plan it 
selects for the individual and small group market?  
A: Yes. A State is not required to select the same EHB benchmark reference plan for Medicaid 
section 1937 plans that it selects for the individual and small group market, and it could have 
more than one EHB benchmark reference plan for Medicaid (for example, if the State were to 
develop more than one benefit plan under section 1937).  
Q3. Could a State select its regular Medicaid benefit plan as its section 1937 alternate 
benefit plan for the new adult eligibility group?  
  
A: Yes. A State could propose its traditional Medicaid benefit package as a section 1937 
alternate benefit plan under the Secretary-approved option available under section 1937 of the 
Social Security Act.  The State would have to ensure that the ten statutory categories of EHB are 
covered, either through that benefit plan or as a supplement to that plan. (See Question 1 for 
more information)  
  
Q4.  How do the managed care rules at 42 CFR 438 apply to benchmark benefit plans? 
 
A:  The managed care regulations apply to all benefits delivered through a managed care 
delivery system, regardless of the authority under which the benefits are provided or enrollment 
is required.  Thus, any State which uses a managed care organization to deliver benefits under 
the authority of section 1937 of the Act must comply with the managed care regulations at 42 
CFR 438.  
 
Q5. Will 1915(c) waivers continue in the future? 
 
A: Yes. 1915 (c) waivers are optional programs that most States currently operate and can 
continue to operate. States interested in making changes to their 1915(c) waivers should contact 
their CMS Regional Office with specific questions.