When the Affordable Care Act (ACA) became law, it reshaped the health insurance landscape by requiring most individual and small-group plans to include coverage for a set of core benefits. These “essential health benefits” ensure that people have access to a wide range of necessary care without facing large gaps in coverage.
Before 2014, many individual policies left out key services like maternity care, mental health treatment, or rehabilitation. This often forced people to pay out-of-pocket for vital care or purchase expensive add-on coverage. The ACA changed that, making comprehensive health coverage more consistent and accessible. Importantly, it also prohibited insurers from denying coverage due to preexisting conditions.
What You Should Know
- All individual and small-group ACA-compliant plans must include the 10 essential health benefits.
- Coverage levels differ depending on each state’s benchmark plan.
- Insurers cannot place annual or lifetime dollar limits on these essential services.
The 10 Essential Health Benefits
- Outpatient Services (Ambulatory Care)
Doctor visits, outpatient procedures, and same-day surgeries that don’t require an overnight hospital stay. - Emergency Care
Treatment in an emergency room must be covered, even if the hospital is out of network. Prior approval cannot be required for emergencies like heart attacks or strokes. - Hospitalization
This includes inpatient care such as surgeries, overnight stays, and other hospital services. - Pregnancy, Maternity, and Newborn Care
Coverage extends to prenatal visits, labor and delivery, postpartum care, and newborn health needs. Plans must also include contraception and breastfeeding support. - Mental Health and Substance Use Disorder Services
Behavioral health services such as counseling, therapy, and treatment for substance use disorders are covered. - Prescription Drugs
Insurers must provide a list of covered medications (a formulary) and pay a portion of the costs. Coverage may vary, but a broad range of necessary drugs must be included. - Rehabilitative and Habilitative Services and Devices
Care and equipment that help people recover or improve daily functioning, such as physical therapy, speech therapy, or mobility aids. - Laboratory Tests
Diagnostic tests and screenings that assist in detecting or managing health conditions. - Preventive and Wellness Care
Routine checkups, vaccines, and screenings such as mammograms or pap smears are covered. When done through in-network providers, many preventive services are free to the patient. - Pediatric Services
Children’s coverage must include dental and vision care, in addition to general medical services.
Do States Differ in Coverage?
Yes—but only in the details. Every state must offer all 10 essential categories, but the scope of coverage depends on that state’s chosen benchmark plan. For example, one state may allow more visits for rehabilitation than another, or have a different list of covered prescription medications. These benchmarks are modeled after typical employer-sponsored plans, so benefits are intended to reflect common healthcare needs.
States periodically update their benchmark plans, so coverage details can change. Reviewing your plan each year is important to ensure you understand what’s included.
Large Employer and Self-Funded Plans
While large employers are not required to include essential benefits, most do. However, they are not bound by the same rules as ACA marketplace or small-group plans. Employers who self-insure have flexibility to use any state’s benchmark plan as a guide, while fully insured plans must follow their state’s standards.
How Costs Are Handled
Once you reach your annual out-of-pocket maximum for essential benefits, your insurance will cover the rest of those costs for the year. This cap excludes premiums but includes deductibles, copays, and coinsurance.
Why This Matters
Knowing what counts as an essential health benefit helps you make smarter decisions about your healthcare coverage. Whether you’re buying a plan on the marketplace or reviewing an employer-sponsored option, understanding these benefits gives you a clearer picture of what’s guaranteed—and what might vary. For those purchasing through the marketplace, income-based subsidies may also help reduce monthly premiums, making coverage more affordable.
