Opinion ID: 223249
Heading Depth: 3
Heading Rank: 3

Heading: Terms and Definitions

Text: The Act regulates three aspects of health insurance: (1) markets, the outlets where consumers may purchase insurance products; (2) plans, the insurance products themselves; and (3) benefits, the health care services or items covered under an insurance plan.
Given its focus on making health insurance available to the uninsured, the Act recognizes and regulates four markets for health insurance products: (1) the individual market; (2) the small group market; (3) the large group market; and (4) the new Exchanges, to be created and run by each state. The term individual market means the market for health insurance coverage offered to individuals other than in connection with a group health plan. 42 U.S.C. §§ 300gg-91(e)(1)(A), 18024(a)(2). The term group market means the health insurance market under which individuals obtain health insurance coverage (directly or through any arrangement) on behalf of themselves (and their dependents) through a group health plan maintained by an employer. Id. § 18024(a)(1). Within the group market, the Act distinguishes between the large group market and the small group market. The term large group market refers to the market under which individuals purchase coverage through a group plan of a large employer. Id. §§ 300gg-91(e)(3), 18024(a)(3). A large employer is an employer with over 100 employees. Id. §§ 300gg-91(e)(2), 18024(b)(1). The term small group market refers to the market under which individuals purchase coverage through a group plan of a small employer, or an employer with no more than 100 employees. Id. §§ 300gg-91(e)(4), (5), 18024(a)(3), (b)(2). The term Exchanges refers to the health benefit exchanges that each state must create and operate. [32] Id. § 18031(b). Companies (profit and nonprofit) participating in the Exchanges will offer insurance for purchase by individuals and employees of small employers. See id.; id. § 18042. The uninsured can obtain significant federal tax credits and subsidies through the Exchanges. See 26 U.S.C. § 36B; 42 U.S.C. § 18071. In 2017, the states will have the option to open the Exchanges to large employers. 42 U.S.C. § 18032(f)(2)(B).
Two key terms in the Act are: (1) essential health benefits package and (2) minimum essential coverage. Although they sound similar, each has a different meaning. The term essential health benefits package refers to the comprehensive benefits package that must be provided by plans in the individual and small group markets by 2014. Id. § 300gg-6(a) (effective Jan. 1, 2014); id. § 18022(a). The Act does not impose the essential health benefits package on plans offered by large group employers to their employees. An essential health benefits package must: (1) provide coverage for the essential health benefits described in § 18022(b); (2) limit the insured's cost-sharing, as provided in § 18022(c); and (3) provide either the bronze, silver, gold, or platinum level of coverage described in § 18022(d). Id. § 18022(a). The Act leaves it to HHS to define the term essential health benefits. Id. § 18022(b). However, that definition of essential health benefits must include at least these ten services: (A) Ambulatory patient services. (B) Emergency services. (C) Hospitalization. (D) Maternity and newborn care. (E) Mental health and substance use disorder services, including behavioral health treatment. (F) Prescription drugs. (G) Rehabilitative and habilitative services and devices. (H) Laboratory services. (I) Preventive and wellness services and chronic disease management. (J) Pediatric services, including oral and vision care. Id. § 18022(b)(1). [33] The bronze, silver, gold, and platinum levels of coverage reflect the levels of cost-sharing (or actuarial value of benefits) in a plan and do not represent the level or type of services. Id. § 18022(d)(1)-(2). For example, a bronze plan covers 60% of the benefits' costs, and the insured pays 40% out of pocket; a platinum plan covers 90%, with the insured paying 10%. Id. § 18022(d)(1)(A), (D).
The Act uses a wholly different termminimum essential coveragein connection with the individual mandate. Minimum essential coverage is the type of plan needed to satisfy the individual mandate. A wide variety of health plans are considered minimum essential coverage: (1) government-sponsored programs, (2) eligible employer-sponsored health plans, (3) individual market health plans, (4) grandfathered health plans, and (5) health plans that qualify for, and are offered in, a state-run Exchange. 26 U.S.C. § 5000A(a), (f)(1). Many of these plan types will satisfy the mandate even if they do not have the essential health benefits package and regardless of the level of benefits or coverage. The requirement of the essential health benefits package is directly tied to some of the insurance product reforms, but not the individual mandate. We turn to the Act's first component: the insurance reforms.