How Two States Determined Benchmark Insurance Plans

With a September 30th deadline to pick a benchmark insurance plan that will define the basic coverage requirements for many health insurance plans in the state, many states decided to choose a small employer plan as the benchmark. In these cases, many insurance plans offered through the private market and health insurance exchanges will have coverage levels that must at minimum mirror that specific small employer plan. We wrote earlier this week about the status of determining of benchmark plans in states.

However, some states have chosen a different path. A group formed to implement pieces of the Affordable Care Act in Maryland, the Health Care Reform Coordinating Council, voted recently to use to the state employee health plan. The Council in their discussions decided that the state health plan offered better coverage for a range of issues than the small employee plans. You can read more about Maryland's decision in this article.

Alabama also chose to go another route. Alabama's Governor, Robert Bentley, announced on October 1st that Alabama would not be selecting a benchmark plan, because he felt that the Department of Health and Human Services (HHS) had not offered enough guidance. Yet, even without a pro-active decision, HHS' earlier guidance did note that if a state does not choose a benchmark plan, the state's largest small group health plan would be the default choice. Thus, this will apply to Alabama. You can read more about Alabama's decision in this article.

Even though most states have chosen a benchmark plan, they are still awaiting further guidance from HHS about other specifics of essential health benefits. We'll continue to watch this issue as it progresses and keep you updated.