Mandated Health Insurance Benefits Explained

Health Benefit Mandates Are Controversial

Acupuncture is a mandated benefit in only some states. Getty Images

Mandated benefits (also known as “mandated health insurance benefits” and “mandates”) are benefits that are required to cover the treatment of specific health conditions, certain types of healthcare providers, and some categories of dependents, such as children placed for adoption. A number of health care benefits are mandated by either state law, federal law — or in some cases — both. Between the federal government and the states, there are thousands of health insurance mandates.

Although mandates continue to be added as health insurance requirements, they are controversial. Patient advocates claim that mandates help to ensure adequate health insurance protection while others (especially health insurance companies) complain that mandates increase the cost of healthcare and health insurance.

Mandated Health Insurance Benefit Laws

Mandated health insurance laws passed at either the federal or state level usually fall into one of three categories:

  • A requirement that health plans cover various health care services or treatments, such as substance abuse treatment, contraception, in vitro fertilization, maternity services, prescription drugs, and smoking cessation.
  • A requirement that health plans include coverage for treatment by providers other than physicians, such as acupuncturists, chiropractors, nurse midwives, occupational therapists, and social workers.
  • A requirement that health plans cover dependents and other related individuals, such as adopted children, dependent students, grandchildren, and domestic partners.

    The mandated benefit laws most often apply to health insurance coverage offered by employers and private health insurance purchased by individuals, either through the health insurance exchanges or off-exchange. But there are also mandates that apply to Medicare and Medicaid/CHIP.

    Mandated Insurance Benefits and the Cost of Health Insurance

    Most people – whether for or against mandates – agree that mandated health benefits increase health insurance premiums.

    Depending on the mandated benefit and how that benefit is defined, the increased cost of a monthly premium can increase from less than 1% to more than 5%.

    Trying to figure out how a mandated benefit will impact an insurance premium is very complicated. The mandate laws differ from state to state and even for the same mandate, the rules and regulations may vary.

    For example, most states mandate coverage for chiropractors, but the number of allowed visits may vary from state to state. One state may limit the number of chiropractor visits to four each year while another state may allow up to 12 chiropractor visits each year. Since chiropractor services can be expensive, the impact on health insurance premiums may be greater in the state with the more generous benefit.

    Another example is infertility coverage, which is not required under federal law, but is required by several states. Across those states, there's wide variation in terms of what has to be covered in terms of infertility treatment, which means that the impact on premiums differs significantly from state to state.

    Additionally, the lack of mandates could also increase the cost of healthcare and health insurance premiums. If someone who has a medical problem goes without necessary health care because it is not covered by her insurance, she may become sicker and need more expensive services in the future.

    An example of this is the fact that adult dental care is not one of the essential health benefits mandated under the ACA, nor is adult dental care required to be covered under Medicaid (some states do include dental coverage in their Medicaid programs, while others don't). The resulting lack of access to affordable dental care can result in serious long-term complications.

    Federal Mandated Health Benefits

    Federal law includes a number of insurance-related mandates:

    ACA essential health benefits (EHBs). 
    The Affordable Care Act was a landmark change in terms of mandated health benefits, creating a universal floor in terms of the essential health benefits that must be included on every new individual and small group health plan in every state.

    The requirement to include EHBs applies to all individual and small group plans with effective dates of January 1, 2014 or later. The list of EHBs includes:

    • Ambulatory services (outpatient care)
    • Emergency services
    • Hospitalization (inpatient care)
    • Maternity and newborn care 
    • Mental health and substance use disorder services
    • Prescription drugs
    • Rehabilitative and habilitative services and devices
    • Laboratory services
    • Preventive care and chronic disease management (certain specific preventive care is free on all new plans, regardless of whether the plan member has met the deductible).
    • Pediatric services, including oral and vision care (adult dental and vision coverage aren’t required to be covered, and there's some flexibility in terms of the mandates for pediatric dental).

    With the exception of preventive care and hospitalization services, EHBs do not have to be covered by large group plans ("large group" generally means plans offered by employers with more than 50 employees, although there are four states where "small group" includes employers with up to 100 employees).

    Large group plans do tend to be fairly robust, however. And some other mandates (for example, the requirement—described below—that all plans offered by employers with 15 or more employees cover maternity care) apply to the large group market.

    COBRA continuation coverage
    COBRA provides certain former employees and their dependents the right to continue coverage for a maximum of 18 to 36 months.

    Coverage of adoptive children
    Certain health plans must provide coverage to children placed with families for adoption under the same conditions that apply to natural children, whether the adoption has become final or not.

    Mental health benefits
    If a health plan covers mental health services, the annual or lifetime dollar limits must be the same or higher than the limits for regular medical benefits.

    Minimum hospital stays for newborns and mothers
    Under The Newborns’ and Mothers’ Health Protection Act of 1996, health plans may not limit benefits for any hospital length of stay related to childbirth for the mother or newborn child.

    Reconstructive surgery after mastectomy
    A health plan must provide someone who is receiving benefits related to a mastectomy with coverage for reconstruction of the breast on which a mastectomy has been performed.

    Americans with Disabilities Act (ADA)
    Disabled and nondisabled individuals must be provided the same benefits with regard to premiums, deductibles, limits on coverage, and pre-existing condition waiting periods.

    Family and Medical Leave Act (FMLA)
    Requires an employer to maintain health coverage for the duration of a FMLA leave.

    Uniformed Services Employment and Reemployment Rights Act (USERRA)
    Gives an employee the right to continuation of health coverage under the employer’s health plans while absent from work due to service in the uniformed services.

    Pregnancy Discrimination Act
    Health plans maintained by employers who have 15 or more employees must provide the same level of coverage for pregnancy as for other conditions.

    State Mandated Health Benefits

    The states differ greatly in the number and type of mandated benefits, but across all 50 states, there are around 2,000 benefit mandates that have been put in place over the last 30 years. 

    You can find information about individual state mandates from several sources:

    Under the ACA, all new (effective since 2014) individual and small group plans in all states must include coverage for the EHBs, must have adequate provider networks, and must cover pre-existing conditions and be issued without regard for medical history.

    That's the minimum standard to which the plans must adhere, but states can go beyond the ACA's requirements. Some examples of additional state-specific benefit mandates are infertility coverage, autism coverage, and limiting out-of-pocket costs for prescriptions.

    But there are rules that require states—rather than insurers—to cover the cost of benefit mandates that go beyond the ACA's requirements, which means that some states have opted to apply new mandates only to large group plans, which aren't subject to the ACA's essential health benefit requirements (note however, that self-insured plans are regulated under federal rules rather than state oversight, so they are not subject to new requirements that states impose; the majority of very large group plans are self-insured). 

    Sources:

    Kaiser Family Foundation. State Health Facts

    National Conference of State Legislatures. Autism and Insurance Coverage, State Laws. June 7, 2017.

    National Conference of State Legislatures. 2011-2014 Health Insurance Reform Enacted State Laws Related to the Affordable Care Act. June 17, 2014.

    National Conference of State Legislatures. State Insurance Mandates and the ACA Essential Benefits Provision. March 8, 2017.

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