Definition and Overview of Essential Health Benefits (EHBs)
Essential Health Benefits (EHBs) are a federally defined set of ten healthcare service categories that all new individual and small-group health insurance plans must cover under the Affordable Care Act (ACA). Introduced in 2010 and effective for plan years starting in 2014, the EHB mandate ensures that consumers receive a baseline of comprehensive coverage—regardless of plan design or insurer. — Source: HealthCare.gov – Essential Health Benefits, Families USA – Essential Health Benefits
Who must comply:
Must: Individual and small-group market plans (on and off the Marketplace)
Exempt: Large-group, self-insured, and grandfathered plans (though many voluntarily include similar coverage)
Why EHBs exist:
Protect consumers from inadequate coverage
Standardize coverage expectations nationally
Eliminate annual or lifetime dollar caps on covered services
While the ACA defines the ten categories, each state selects a benchmark plan to determine specific services within those categories. This means the scope is nationally consistent, but service details may vary.
The Ten Essential Health Benefit Categories
| Category | Description |
|---|---|
| Ambulatory patient services | Outpatient care without hospital admission |
| Emergency services | Emergency room treatment, including out-of-network emergencies |
| Hospitalization | Inpatient care, surgeries, and overnight hospital stays |
| Maternity and newborn care | Prenatal visits, delivery, and postpartum care |
| Mental health and substance use disorder services | Behavioral health treatment, counseling, and rehabilitation |
| Prescription drugs | Coverage for a wide range of medications in all therapeutic classes |
| Rehabilitative and habilitative services and devices | Therapies and equipment to restore or develop function |
| Laboratory services | Diagnostic tests, screenings, and lab work |
| Preventive and wellness services, chronic disease management | Screenings, immunizations, and disease management programs (often without cost-sharing) |
| Pediatric services (including oral and vision care) | Dental and vision services for children |
Deep Dive: EHBs by Category
Ambulatory patient services
These cover outpatient care without requiring a hospital stay, such as primary care visits, outpatient surgery, and specialist consultations. They are essential for early intervention and ongoing health maintenance. — Source: CMS – Essential Health Benefits
Emergency services
Includes care for emergencies regardless of whether the provider is in-network. Plans cannot require prior authorization for emergency treatment. — Source: 45 CFR § 147.138
Hospitalization
Covers hospital admissions, surgeries, and overnight stays. This category is one of the highest-cost areas of care, making EHB protection critical.
Maternity and newborn care
Encompasses prenatal visits, labor and delivery, and postpartum care, along with newborn medical services. All ACA-compliant plans must include maternity coverage.
Mental health and substance use disorder services
Includes inpatient and outpatient behavioral health care. EHB rules also enforce parity between mental and physical health coverage. That means plans must impose comparable requirements--such as copayments, deductibles, and treatment limits–for mental and physical health services.
— Source: CMS – Mental Health Parity and Addiction Equity Act
Prescription drugs
Requires plans to cover at least one drug in every category and class of the U.S. Pharmacopeia. This ensures broad access to necessary medications.
Rehabilitative and habilitative services and devices
Covers therapy and devices to restore function (rehabilitative) or develop function for the first time (habilitative), such as speech therapy or mobility devices.
Laboratory services
Includes diagnostic tests, blood work, and screenings used to diagnose or monitor conditions.
Preventive and wellness services, chronic disease management
Must be provided without enrollee cost-sharing (i.e., copayments, coinsurance, or deductibles) for certain services such as immunizations, cancer screenings, and blood pressure checks. — Source: Healthcare.gov – Preventive Services
Pediatric services (including oral and vision care)
Requires plans to offer dental and vision coverage for children, even if adult dental/vision is excluded.
How EHBs Affect Employer-Sponsored Plans and ICHRAs
Large-group and self-insured plans are generally exempt from the EHB mandate, but many include similar coverage voluntarily to remain competitive.
ICHRAs (Individual Coverage Health Reimbursement Arrangements) require employees to purchase ACA-compliant individual plans to qualify for tax-free reimbursement. Because ACA-compliant plans must include all EHBs, any eligible ICHRA plan inherently covers them (26 CFR § 54.9802-4).
Why EHBs Matter for Employers Offering ICHRAs
Compliance – Offering ACA-compliant plans through ICHRAs satisfies the employer mandate for businesses with 50+ full-time employees (FTEs) when affordability standards are met.
Plan Quality – EHBs ensure a baseline of robust coverage, reducing the risk of inadequate plans.
Employee Confidence – Employees know that all eligible plans cover critical services, letting them choose based on cost and network preferences rather than worrying about missing benefits.
Frequently Asked Questions
Are large employers required to offer EHBs?
No. Large-group and self-insured plans are exempt from the EHB mandate but may choose to include them.
If my business offers an ICHRA, do I have to verify EHB coverage?
No. ACA-compliant individual plans already include all EHBs.
Do EHBs affect preventive care costs?
Yes. Many preventive services under the EHB category must be covered without cost-sharing.
Important Notice
This content is for general informational purposes only and does not constitute legal advice. Information contained herein should not be substituted for legal advice from a qualified attorney licensed in your state.
