DEFINITION of 'Essential Health Benefits'

A set of benefit requirements that must be included in certain health insurance plans. Essential health benefits comprise 10 general benefit categories, which must be covered in health insurance plans offered to individuals or through the small-group market to employers with 50 or fewer employees, under the Patient Protection and Affordable Care Act (ACA), the U.S. health reform law signed into law by President Obama in March 2010.

BREAKING DOWN 'Essential Health Benefits'

A health-care expense is “covered” if your plan benefits are applied to the item or service. For example, if chiropractic care is a covered benefit on a certain policy, plan benefits – such as a $25 copayment – would apply to chiropractic visits. In contrast, if chiropractic care is not a covered benefit, any expenses incurred through chiropractic visits would have to be paid entirely out-of-pocket, and the expenses would not count toward the policy’s deductible or out-of-pocket limit. While plans can offer more comprehensive benefits, essential health benefits constitute the minimum benefits for plans offered to individuals and through the small-group market to employers with 50 or fewer employees. The essential health benefits are:

  •  Ambulatory patient services – Care you receive without being admitted to a hospital, such as at a doctor’s office, clinic or same-day (“outpatient”) surgery center.
  •  Emergency services – Care you receive for conditions that could lead to serious disability or death if not immediately treated, such as accidents or sudden illness.
  •  Hospitalization Care you receive as a hospital patient, including care from doctors, nurses and other hospital staff, laboratory and other tests, medications you receive during your hospital stay, and room and board.
  •  Laboratory services – Testing provided to help a doctor diagnose an injury, illness or condition, and to monitor the effectiveness of a particular treatment.
  •  Maternity and newborn care – Care that women receive during pregnancy (prenatal care), throughout labor and delivery, and post-delivery; and care for newborn babies.
  •  Mental health services and addiction treatment – Inpatient and outpatient care provided to evaluate, diagnose and treat a mental health condition or substance abuse disorder.
  •  Rehabilitative services and devices – Rehabilitative and habilitative services and devices to help you gain or recover mental and physical skills lost to injury, disability or a chronic condition.
  • Pediatric services Care provided to infants and children, including well-child visits and recommended vaccines and immunizations, dental and vision care.
  •  Prescription drugs – Medications prescribed by a doctor to treat an illness or condition.
  •  Preventive and wellness services and chronic disease treatment – Physicals, immunizations and cancer screenings designed to prevent or detect certain medical conditions, and care for chronic conditions.
RELATED TERMS
  1. Health Insurance

    A type of insurance coverage that pays for medical and surgical ...
  2. Accountable Care Organizations

    Healthcare providers that take a group approach to coordinating ...
  3. Disease Management Program

    Disease management programs can help control health care expenses ...
  4. Dependent Care Benefits

    Benefits provided by an employer to an employee for use in caring ...
  5. Minimum Essential Coverage

    The type of health insurance policy an individual needs to meet ...
  6. Benefit Expense Ratio

    An operating metric used in the health insurance industry computed ...
Related Articles
  1. Insurance

    Essential Health Benefits Under The Affordable Care Act

    Under the Affordable Care Act, certain preventive health services and these 10 essential health benefits are the minimum requirements for many health insurance plans.
  2. Financial Advisor

    How to Navigate the Medicare Maze

    Medicare provides several healthcare services for retirees. Taking a closer look at Parts A and B will help you determine which part works best for you.
  3. Retirement

    Look for Quality Health Care During Retirement

    When deciding where to retire, be sure to consider the health care available in the area.
  4. Insurance

    6 Things Obamacare Plans Won’t Cover

    It handles a lot of medical conditions – but there are gaps. Here are some common things Obamacare Plans won't cover.
  5. Insurance

    The Debt Report: The Health Care Sector

    Discover how the health care industry's largest companies have greatly increased their debt exposure since the financial crisis, and why this trend matters.
  6. Insurance

    5 Alternatives to Traditional Health Insurance

    Discover five of the most popular alternatives to traditional health insurance plans, alternatives that are increasingly popular as health insurance costs rise.
RELATED FAQS
  1. What role does the agency problem play in the modern Health Care industry?

    Read about the role of the principal-agent problem in the modern American health care industry, and learn why health insurance ... Read Answer >>
  2. What is the average annual dividend yield of companies in the chemicals sector?

    Discover how operations management theory is applied across a broad spectrum of operational and management issues in the ... Read Answer >>
  3. Will Medicare pay for long-term costs?

    Long-term care refers to a variety of care services (medical and non-medical) that helps meet the needs of people who have ... Read Answer >>
  4. What is long-term care insurance?

    Long-term care insurance is an insurance policy that that helps a patient pay for long-term care. The policy usually covers ... Read Answer >>
Hot Definitions
  1. Dividend Yield

    A financial ratio that shows how much a company pays out in dividends each year relative to its share price.
  2. Fixed-Income Security

    An investment that provides a return in the form of fixed periodic payments and the eventual return of principal at maturity. ...
  3. Free Cash Flow - FCF

    A measure of financial performance calculated as operating cash flow minus capital expenditures. Free cash flow (FCF) represents ...
  4. Leverage Ratio

    Any ratio used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to ...
  5. Two And Twenty

    A type of compensation structure that hedge fund managers typically employ in which part of compensation is performance based. ...
  6. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
Trading Center