ERIC Proposes “Safe Harbor” Approach for Determining Essential Health Benefits for Purposes of Annual and Lifetime Limits

March 1, 2012


ERIC News Release

For Immediate Release:  March 1, 2012

Washington, D.C. – The ERISA Industry Committee (ERIC) on February 29 wrote to the Department of Health and Human Services (HHS) urging the agency to permit employers with group health plans to continue to apply a “good faith” interpretation of essential health benefits and adopt a “safe harbor” for purposes of implementing the prohibition on dollar limits on essential health benefits under the Affordable Care Act (ACA). 

ERIC stated that the methodology described in a bulletin issued by HHS last year, which relies on a “benchmark” approach for identifying the benefits that must be included by plans in the individual and small group market, was not appropriate for the large plans sponsored by ERIC members.      

“It would be impractical, administratively burdensome, and unduly expensive for employers that offer group health plans to employees in multiple states to use state definitions of essential health benefits to identify benefits on which employers cannot impose annual or lifetime dollar limits,” said ERIC President Mark Ugoretz and Gretchen Young, ERIC’s Senior Vice President for Health Policy.

“Moreover, the benchmark approach does not offer the type of specificity necessary to identify which benefits may be subject to dollar limits, nor does it provide the certainty necessary for employers to operate their group health plans,” they added.

ERIC proposes that HHS adopt a “safe harbor” approach under which employers that utilized specified criteria to determine whether a benefit should be considered an essential health benefit would be deemed to have applied a “good faith” interpretation.  As part of the safe harbor, ERIC offered a list of criteria -- including medically necessary, neither experimental nor investigational, and subject to reasonable medical management techniques -- that treatments or services must meet in order for them to be considered essential health benefits.

“Allowing employers to use these filters to determine essential health benefits would give employers the flexibility that they need to identify essential health benefits provided under wide-ranging plan designs and also certainty as to which benefits provided under their plans cannot be subject to annual or lifetime dollar limits under the ACA,” Ugoretz and Young contend.

The letter concludes by urging the agency to adopt ERIC’s proposed methodology, further noting that such a methodology would preserve the ability of employers to control costs, could be easily implemented, and would provide employers with certainty regarding which benefits are essential health benefits. 

ERIC Comment Letter on Essential Health Benefits


For more information:

Ted Godbout
Director, Communications
The ERISA Industry Committee
1400 L Street, NW, Suite 350
Washington, DC 20005
Phone: (202) 789-1400


The ERISA Industry Committee (ERIC) is a non-profit association committed to representing the advancement of the employee retirement, health, and compensation plans of America's largest employers.  ERIC's members provide benchmark retirement, health care coverage, compensation, and other economic security benefits directly to tens of millions of active and retired workers and their families.  ERIC has a strong interest in proposals affecting its members' ability to deliver those benefits, their cost and their effectiveness, as well as the role of those benefits in the American economy.