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The Wagner Law Group Description 

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 


Established in 1996, The Wagner Law Group has 22 attorneys engaged exclusively in employee benefits, estate planning and employment law. Five of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.



Contact Info

The Wagner Law Group


Massachusetts Office 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

Florida Office 

Tel: (561) 293-3590
Fax: (561) 293-3591
7121 Fairway Drive
Suite 203
Palm Beach Gardens, FL 33418


San Francisco Office

Tel: (415) 625-0002

Fax: (415) 829-4385

315 Montgomery Street

Suite 902

San Francisco, CA 94104





December 6, 2012 

 State and Federal Law Alert


HHS Issues Guidance on Determining PPACA's Essential Health Benefits and Minimum Value 


The Department of Health and Human Services ("HHS") has issued the first major post-election guidance under the Patient Protection and Affordable Care Act ("PPACA"). The proposed regulations offer guidance on essential health benefits ("EHBs") and minimum value.


Definition of EHBs. PPACA identifies the following ten broad statutory categories of EHBs: 

  • Ambulatory patient services;
  • Emergency services;
  • Hospitalization;
  • Maternity and newborn care;
  • Mental health and substance abuse disorder services;
  • 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.

However, PPACA neither defines the specific benefits required under each category nor sets a uniform standard for EHBs. In fact, PPACA directs HHS to define the specific benefits required under each EHB category.


The proposed regulations clarify that EHBs will be defined on a state-by-state basis using a benchmark approach. Specifically, states may select one of the following plans to serve as the state's "base-benchmark" plan: 

  • The largest health plan (by enrollment) in any of the state's three largest small group insurance products;
  • Any of the three largest health benefit plan options offered to state employees in that state;
  • Any of the three largest Federal Employees Health Benefits Program plans; or
  • The largest plan offered by an HMO in the state.

After a state selects its base-benchmark plan, it must be updated, as needed, to comply with PPACA. The resulting plan will be known as the state's "EHB benchmark plan," and used to define EHBs for the state.


Multistate plans will operate under standards to be set by the U.S. Office of Personnel Management.


EHB Requirements. Beginning in 2014, all non-grandfathered health insurance coverage offered in the small group market must include the EHB package. Large self insured plans and self-insured plans are not required to offer all EHB categories or comply with EHB benchmarks.


Nevertheless, if these large and self insured plans offer EHBs, they cannot place lifetime or annual limits on EHBs provided under the plan. Accordingly, the sponsors of these plans will have to understand the EHB benchmark standards for the state in which the plan operates in order to ensure that their plan does not illegally impose lifetime and annual limits on EHBs.


Minimum Value.The proposed regulations also cover the issue of "minimum value," which is a key component in PPACA's employer shared responsibility provision (i.e., the "play or pay" penalty). In particular, to avoid a penalty, beginning in 2014, employers with 50 or more employees in the preceding calendar year must offer health plan coverage that provides "minimum value" to all full-time employees and their dependents. Employers that fail to satisfy this requirement may be subject to a $3,000 penalty for each full-time employee who receives a premium tax credit through, or cost-sharing assistance from, an Insurance Exchange.


Under PPACA, an employer-sponsored health plan fails to provide minimum value if its share of the total cost of covered benefits is less than 60%. The proposed regulations offer three methods for measuring whether a plan provides minimum value: 

  • The minimum value calculator, which will be made available by HHS and IRS for use by employer-sponsored, self-insured group health plans;
  • Any safe harbor approach approved by HHS and IRS; and
  • Certification of minimum value by an actuary where the minimum value calculator and safe harbor approaches are not appropriate.

The proposed regulations also clarify that employer HSA contributions and amounts made available under an HRA will be taken into account in calculating minimum value. 


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Pursuant to Internal Revenue Service Circular 230, we hereby inform you that any advice set forth herein with respect to US federal tax issues is not intended or written by The Wagner Law Group to be used and cannot be used, by you or any taxpayer, for the purpose of avoiding penalties that may be imposed on you or any other person under the Internal Revenue Code.


This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.