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Guest Article

(From the May 2, 2011 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

Health Benefits Provided Under a "Typical Employer Plan"

The Labor Department released a report on the health benefits provided under a typical employer plan. The typical benefits will provide a baseline for the Department of Health and Human Services in defining "essential health benefits" under the Patient Protection and Affordable Care Act (PPACA). The PPACA requires that the scope of "essential health benefits" be equal to the scope of benefits provided under a typical employer plan.

The April 15 report, Selected Medical Benefits: A Report from the Department of Labor to the Department of Health and Human Services, utilized information from the Bureau of Labor Statistics' National Compensation Survey for years 2008 and 2009. While the survey captures data from about 36,000 employers, including those in private industry as well as State and local governments, the data on employment-based health benefits is from a representative sample of about 3,900 private sector employers. Additional data was also extracted from approximately 3,200 plan documents from 2009. The report does not purport to identify all the health benefits in a typical employer plan, but only a subset for which data are available. Data were presented on the following medical benefits, among others that appear to be provided less typically.

Labor Department Report on Selected Medical Benefits in Private Sector Employer Plans in 2009
Medical Benefit	Percent of Participants Covered	Percent of Participants Subject to Limits	Limits
Hospital Room and Board	99% in All Plans 99% in Fee-for-Service Plans 100% in HMOs	88% in All Plans 92% in Fee-for-Service Plans 71% in HMOs	Limits include: co-payments per admission, deductibles, and coinsurance. The median copayment per admission is $250.
Surgical Procedures	Nearly Always Provided	90% in Fee-for-Service Plans 46% in HMOs for inpatient surgery 66-2/3% in HMOs for outpatient surgery	When plans subject outpatient surgery to a copayment, the median is $50 per visit in Fee-for-Service plans and $75 per visit in HMOs.
Physician Office Visits	100% in All Plans 100% in Fee-for-Service Plans 100% in HMOs	97% in All Plans 97% in Fee-for-Service Plans 98% in HMOs	The median copayment per visit is $20 (and $15 per visit for HMOs).
Alternatives to Hospital Care: Skilled Nursing Facility Home Health Hospice	70% in All Plans for Skilled Nursing 73% in All Plans for Home Health 67% in All Plan for Hospice		The median day limit for skilled nursing facility coverage is 90 days per admission; the median day limit for home health care is 100 days per year.
Preventive Care	80% in All Plans for Adult Physicals 77% in All Plans for Well- Baby Care 56% in All Plans for Adult Immunizations and Inoculations
Prescription Drugs	Nearly All Plan Participants, and 79% Have a Mail-Order Program		The median copayment for generic drugs is $10, while the median copayment for brand-name drugs is $25.
Mental Health and Substance Abuse (Note: This data predates implementation of the Mental Health Parity and Addiction Equity Act.)	Inpatient Mental Health Care: 99% in All Plans 99% in Fee-for-Service Plans 98% in MHOs		Mental health and substance abuse coverage is nearly always subject to limits. Frequently a limit is imposed on the number of days of coverage: the median limit is 30 days per year.
	Outpatient Mental Health Care: 85% in All Plans 84% in Fee-for-Service Plans 87% in MHOs
Not applicable	Inpatient Substance Abuse Detoxification: 98% in All Plans 98% in Fee-for-Service Plans 98% in MHOs
.	Inpatient Substance Abuse Rehabilitation: 78% in All Plans 80% in Fee-for-Service Plans 72% in MHOs
	Outpatient Substance Abuse Rehabilitation: 79% in All Plans 79% in Fee-for-Service Plans 79% in MHOs
Emergency Room Visits	At least: 91% in All Plans 90% in Fee-for-Service Plans 93% in MHOs	89% in All Plans 88% in Fee-for- Service Plans 92% in MHOs	Subject to Plan Limits: 75% in All Plans 80% in Fee-for-Service Plans 56% in MHOs Subject to Separate Limits: 70% in All Plans 64% in Fee-for-Service Plans 88% in MHOs Subject to a Copayment Per Visit: 68% in All Plans 62% in Fee-for-Service Plans 87% in MHOs
Ambulance Service	At least: 64% in All Plans 65% in Fee-for-Service Plans 62% in MHOs	52% in All Plans 56% in Fee-for-Service Plans 38% in MHOs	Subject to Plan Limits: 49% in All Plans 54% in Fee-for-Service Plans 30% in MHOs Subject to Separate Limits: 13% in All Plans 10% in Fee-for-Service Plans 22% in MHOs
Physical Therapy	At least: 70% in All Plans 69% in Fee-for-Service Plans 72% in MHOs	68% in All Plans 68% in Fee-for-Service Plans 69% in MHOs	Subject to Plan Limits: 56% in All Plans 59% in Fee-for-Service Plans 43% in MHOs Subject to Separate Limits: 55% in All Plans 51% in Fee-for-Service Plans 67% in MHOs Subject to a Copayment Per Visit: 29% in All Plans 22% in Fee-for-Service Plans 55% in MHOs
Durable Medical Equipment	At least: 67% in All Plans 66% in Fee-for-Service Plans 67% in MHOs	57% in All Plans 61% in Fee-for-Service Plans 45% in MHOs	Subject to Plan Limits: 51% in All Plans 56% in Fee-for-Service Plans 32% in MHOs Subject to Separate Limits: 24% in All Plans 21% in Fee-for-Service Plans 36% in MHOs
Maternity Care	At least: 66% in All Plans 66% in Fee-for-Service Plans 66% in MHOs	58% in All Plans 61% in Fee-for-Service Plans 49% in MHOs	Subject to Plan Limits: 50% in All Plans 55% in Fee-for-Service Plans 32% in MHOs Subject to Separate Limits: 36% in All Plans 34% in Fee-for-Service Plans 45% in MHOs Subject to a Copayment Per Visit: 30% in All Plans 27% in Fee-for-Service Plans 41% in MHOs
Gynecological Services	At least: 60% in All Plans 62% in Fee-for-Service Plans 52% in MHOs	56% in All Plans 58% in Fee-for-Service Plans 47% in MHOs	Subject to Plan Limits: 44% in All Plans 49% in Fee-for-Service Plans 28% in MHOs Subject to Separate Limits: 51% in All Plans 53% in Fee-for-Service Plans 45% in MHOs Subject to a Copayment Per Visit: 33% in All Plans 31% in Fee-for-Service Plans 39% in MHOs
Organ and Tissue Transplant	At least: 45% in All Plans 48% in Fee-for-Service Plans 31% in MHOs	39% in All Plans 44% in Fee-for-Service Plans 18% in MHOs	Subject to Plan Limits: 32% in All Plans 37% in Fee-for-Service Plans 11% in MHOs Subject to Separate Limits: 17% in All Plans 18% in Fee-for-Service Plans 10% in MHOs

The PPACA states that "essential health benefits" will include at least the following general categories (and the items and services covered within them):

ambulatory patient services,
emergency services,
hospitalization,
maternity and newborn care,
mental health and substance use disorder services including behavioral health treatment,
prescription drugs,
rehabilitative and habilitative services and devices,
laboratory services,
preventive and wellness services and chronic disease management, and
pediatric services, including oral and vision care.

Effective with the plan year beginning on or after September 23, 2010, group health plans are prohibited from imposing lifetime limits on "essential health benefits." Group health plans are also restricted in imposing annual limits on "essential health benefits" until the plan year beginning on and after January 1, 2014, when annual limits are prohibited altogether on "essential health benefits." Until guidance is issued on what constitutes "essential health benefits," plans need to operate in good faith compliance with a reasonable interpretation of that term.

The information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations.

If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact:

Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Mary Jones 202.378.5067, Stephen LaGarde 202.879-5608, Bart Massey 202.220.2104, Erinn Madden 202.220.2692, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Deborah Walker 202.879.4955.

BenefitsLink is an independent national employee benefits information provider, not formally affiliated with the firms and companies who kindly provide much of the content and advertisements published on this Web site, including the article shown above.