What Are Essential Health Benefits Under the ACA?

Essential health benefits (EHBs) are a set of ten service categories that most private insurance plans must cover under the Affordable Care Act. The law requires plans sold in the individual and small-group markets to include these benefits, but it deliberately left the job of defining exactly what counts within each category to federal regulators and, ultimately, to individual states. That design choice created a system where the broad strokes are uniform across the country while the specific details vary depending on where you live.

The Ten Categories

The ACA lists ten categories of services that qualify as essential health benefits:

Ambulatory care: outpatient services you receive without being admitted to a hospital.
Emergency services: emergency room visits, which plans must cover without requiring prior authorization or penalizing you for going out of network.
Hospitalization: inpatient care including surgery and overnight stays.
Maternity and newborn care: prenatal visits, labor and delivery, and postnatal care for both parent and child.
Mental health and substance use disorder services: therapy, counseling, inpatient behavioral health treatment, and addiction care.
Prescription drugs: at least one drug in every therapeutic category and class on the plan’s formulary.
Rehabilitative and habilitative services: physical therapy and occupational therapy for recovering abilities (rehabilitative) and for developing new ones in people with disabilities or developmental conditions (habilitative).
Laboratory services: blood work, imaging, and diagnostic testing.
Preventive and wellness services: vaccinations, screenings, and chronic disease management, often at no out-of-pocket cost.
Pediatric services: including dental and vision care for children.

Before the ACA, insurers in the individual market could sell plans that left out entire categories. A plan might exclude maternity care entirely or cap mental health visits at a handful per year. The EHB requirement made those kinds of bare-bones policies illegal for the covered markets.

How the Details Get Decided

The ACA told the Department of Health and Human Services to flesh out what each category means in practice, but HHS chose not to create a single, uniform national benefits package. Instead, each state picks a “benchmark plan,” typically one of the most popular employer-sponsored plans already sold in that state, and uses it as the template. Plans in that state’s individual and small-group markets must then cover at least what the benchmark covers in each of the ten categories.¹

The practical result is that a plan sold in California and a plan sold in Texas both have to cover mental health services and prescription drugs, but the specific drugs on the formulary, the number of therapy visits allowed, and the scope of habilitative services can differ. The framework guarantees a floor, not a ceiling, and the floor shifts from state to state.

Mental Health and Addiction Coverage

One of the most consequential pieces of the EHB requirement is its interaction with mental health and substance use disorder coverage. Before the ACA, individual-market plans routinely excluded behavioral health services or imposed severe annual limits. The EHB provision requires these plans to cover mental health and substance use disorder treatment at parity with general medical benefits. That parity language means if your plan allows 30 visits a year for physical therapy, it cannot cap therapy sessions for depression at 10.²

The parity requirement actually comes from a separate law, the Mental Health Parity and Addiction Equity Act, which originally applied mainly to large employer plans. The ACA extended its reach by making mental health an essential benefit and then requiring that coverage to comply with parity standards. The combination closed a gap that had left millions of people on individual and small-group plans without meaningful behavioral health coverage.

In practice, though, coverage does not always translate to easy access. Networks for mental health providers tend to be narrower than networks for primary care, and many therapists and psychiatrists do not accept insurance at all. The EHB mandate ensures the benefit exists on paper, but network adequacy remains a separate and persistent problem.

Prescription Drug Coverage

Prescription drug coverage is one of the ten required EHB categories, but the rules governing what that coverage looks like leave insurers significant room to maneuver. The essential health benefit standard regulates how many drugs a plan must cover, generally requiring at least one medication per therapeutic category and class in the benchmark, but it leaves other dimensions of the formulary largely unregulated. Cost-sharing tiers, prior authorization requirements, and step therapy protocols are all at the insurer’s discretion.³

Research into ACA marketplace formularies has found that some insurers use these unregulated dimensions strategically. By placing drugs needed by patients with expensive chronic conditions on high cost-sharing tiers, or by requiring burdensome prior authorization steps, a plan can discourage those patients from enrolling without technically violating the EHB requirement.⁴ A plan might cover an HIV medication, for example, but place it on a specialty tier with 40 percent coinsurance rather than a flat copay. The drug is “covered,” but the out-of-pocket cost creates a practical barrier.

The question of what counts as a “clinically appropriate” or “medically necessary” formulary remains contested, and how those standards apply to drugs administered in a hospital or doctor’s office (as opposed to pills you pick up at a pharmacy) has never been fully resolved.⁵ For you as a consumer, this means checking the formulary before you enroll is just as important as confirming a plan covers prescription drugs in general. The category is required; the specific drugs you need may or may not be affordable on a given plan.

Pediatric Services and Dental Coverage

Pediatric services are the only EHB category that explicitly includes dental and vision care. For adults, dental and vision coverage are considered separate products and are not required by the ACA’s essential health benefit rules. For children, they are baked in, which was a significant change for families buying individual-market coverage.

The inclusion of pediatric dental care as an essential benefit led to measurable changes in coverage and access. Research examining the period after the ACA’s coverage expansions took effect found increases in pediatric dental coverage tied directly to the EHB requirement.⁶ That said, the actual scope of pediatric benefits varies by state because it follows the benchmark plan framework. A review of all state benchmark plans found that no state specified a distinct “pediatric services” benefit class, and while many benchmark plans explicitly included coverage for multiple pediatric conditions, some also specifically excluded services for children with special health care needs.⁷

The result is a patchwork. In one state, a child with autism might have robust coverage for applied behavior analysis under the benchmark; in another state, that same therapy might be explicitly excluded. Parents shopping for marketplace plans should check what their state’s benchmark covers for pediatric specialty care rather than assuming the “pediatric services” label guarantees a uniform package.

Preventive Care and Its Legal Vulnerability

Preventive services occupy a unique position among essential health benefits because many of them must be covered with zero cost-sharing. Under ACA rules, services recommended by certain federal advisory bodies (like the U.S. Preventive Services Task Force) must be offered at no copay or deductible. That requirement covers a wide range of screenings, vaccinations, contraception, and HIV prevention medication, among others.

This zero-cost-sharing mandate has faced a legal challenge. A federal district court ruling called into question the ACA’s requirement that plans cover certain preventive services for free, including some vaccinations, cancer screenings, and pre-exposure prophylaxis for HIV.⁸ As of now, the case is still working its way through the courts, and most plans continue to offer these services without cost-sharing. But the legal uncertainty matters because it raises the possibility that insurers could eventually start charging you for screenings and vaccinations they currently provide for free.

It is worth noting the difference between the EHB requirement and the cost-sharing rule. Even if the zero-cost-sharing mandate were to be struck down, preventive care would still be an essential health benefit category. Plans would still have to cover it; they just might be allowed to charge you a copay or apply it to your deductible. The service would not vanish, but it could become more expensive to use.

Who Has to Offer These Benefits

The EHB requirement applies to individual-market plans (including all marketplace/exchange plans), small-group plans (employers with up to 50 employees), and Medicaid expansion plans. It does not apply to large employer plans (companies with more than 50 employees), grandfathered plans that existed before the ACA took effect, or self-insured employer plans, which make up the majority of employer-sponsored coverage in the country.

Large employer plans are not legally required to cover all ten categories, though most do in practice because they compete for workers and because many of these benefits were standard in the employer market before the ACA. The gap between “legally required” and “practically universal” matters most for smaller or less generous employer plans, and for anyone who leaves employer coverage and transitions to an individual-market plan. When you switch from a large-employer plan to a marketplace plan, the EHB rules guarantee that your new plan covers each of the ten categories, but the specifics and the network of providers may be quite different.

Short-Term Plans and Other Gaps

Not every insurance product on the market is subject to EHB rules, and the alternatives that fall outside those rules have been a source of concern. Short-term, limited-duration insurance plans are exempt from the ACA’s benefit and underwriting standards. These plans can exclude pre-existing conditions, impose annual or lifetime benefit caps, and skip entire EHB categories like maternity care or mental health coverage.

When federal rules were loosened to allow these short-term plans to last up to 36 months (rather than the previous 3-month limit), researchers found that the change was associated with higher benchmark premiums in the ACA-regulated market. People who are relatively healthy and cheap to insure were drawn to the lower-priced short-term plans, leaving the ACA risk pool older and sicker on average. Despite the availability of cheaper options, the study found no measurable reduction in the overall uninsured rate.⁹

If you are considering a short-term plan because of its lower premium, the trade-off is real. You might save on monthly costs, but you lose the guarantee that the plan covers all ten EHB categories, and you could face surprise bills for services that a marketplace plan would be required to cover. The lower premium buys less protection.

Out-of-Pocket Caps and Financial Protection

The EHB requirement works alongside another ACA provision: a cap on annual out-of-pocket spending. All private health insurance plans subject to the ACA must include a maximum limit on what you pay out of pocket in a given year for covered services. For marketplace plans, there are additional income-based cost-sharing reductions that lower deductibles and copays for people with lower incomes.¹⁰

The combination of mandatory benefit categories and spending caps was designed to address a pre-ACA problem where people technically had insurance but were still financially devastated by medical bills. Before these reforms, a plan might have no annual cap on your spending, or it might exclude the category of care you happened to need most. The ACA’s insurance market reforms made it easier for people to enroll in and maintain coverage while ensuring that insured individuals had genuine financial risk protection.¹¹

That said, the out-of-pocket cap for a standard marketplace plan can still be several thousand dollars a year. If you qualify for cost-sharing reductions (generally available at silver-tier plans for people with incomes up to about 250 percent of the federal poverty level), those caps and deductibles drop substantially. Choosing a bronze plan for its lower premium means you pay the full, unreduced out-of-pocket maximum. The benefit categories are the same across metal tiers; what changes is how much you pay when you use them.

Nondiscrimination Rules in Benefit Design

Even with ten mandatory categories, there is still room for plans to design their benefits in ways that discourage certain groups of people from enrolling. The ACA includes anti-discrimination provisions, most prominently Section 1557, which prohibits discrimination based on race, sex, age, disability, and other protected characteristics. These rules apply to insurers that receive federal financial assistance, which includes virtually all marketplace insurers.

If a plan’s benefit design appears to target a specific group, for instance by placing all HIV medications on the highest cost-sharing tier or by excluding gender-affirming care, the Office for Civil Rights at HHS can investigate. However, enforcement has limitations. The protections typically kick in only after a discriminatory plan has already been sold and a complaint has been filed, which can mean costly delays before the problem is identified and addressed.¹²

For consumers, the practical lesson is that the presence of an EHB category on your plan does not mean the benefit is designed with your needs in mind. The anti-discrimination rules are an important backstop, but they rely on enforcement after the fact rather than preventing discriminatory designs before plans reach the market.

How States Are Updating Their Benchmarks

The benchmark framework was never meant to be static. Federal rules that took effect in 2020 gave states additional flexibility to update their EHB benchmark plans, and updated rules taking effect in 2026 expand that flexibility further. Since 2020, eleven states and the District of Columbia have received federal approval to update their benchmarks.

Every state that has gone through this process has added benefits or expanded the scope of currently covered benefits. None have used the update process to reduce coverage.¹³ Common additions include expanded fertility treatment coverage, hearing aid coverage, and broader mental health and substance use disorder benefits beyond what the original benchmark required.

States have a financial incentive to use the benchmark update pathway rather than passing standalone benefit mandates. Under federal law, if a state passes a new mandate requiring insurers to cover something beyond the existing EHB benchmark, the state is generally responsible for the additional premium cost. But if the state adds the same benefit through a benchmark update, the cost is absorbed into the normal premium structure with no separate state obligation.¹³ This cost-allocation rule has led some states to avoid passing new mandates entirely and instead funnel all benefit expansions through the benchmark process.

Habilitative Services and Their Unusual History

Among the ten categories, habilitative services had perhaps the most unusual path to inclusion. Before the ACA, habilitative care — services that help people with disabilities or developmental conditions gain new skills, as opposed to rehabilitative care that helps people recover lost abilities — was rarely covered by individual-market plans. When HHS chose the benchmark plan approach, a complication emerged: most benchmark plans did not include habilitative services at all, because they had never been a standard feature of employer-sponsored coverage.

States had to figure out how to define a benefit that essentially did not exist in the plans they were using as templates. Some states adopted definitions from their Medicaid programs. Others set minimum visit thresholds or dollar amounts. The result is that habilitative coverage, more than any other EHB category, varies dramatically from state to state. For families of children with conditions like cerebral palsy or autism who rely on habilitative therapies, checking the specific benefit limits in your state’s benchmark is especially important. The category is guaranteed; the generosity is not.¹

This variability in habilitative coverage is one of the clearest illustrations of a broader tension in the EHB framework. The ACA created a floor that is genuinely meaningful: no plan in the regulated market can skip maternity care or refuse to cover mental health treatment. But within each category, the specifics depend on state decisions, benchmark plan choices, and insurer design. Knowing that your plan covers “habilitative services” tells you less than you might expect until you read the fine print about visit limits, covered conditions, and provider requirements.

1
PubMed Central. Essential health benefits and the Affordable Care Act: law and process
2
PubMed. How the affordable care act and mental health parity and addiction equity act greatly expand coverage of behavioral health care
3
PubMed. Constraints on Formulary Design Under the Affordable Care Act
4
American Economic Journal: Economic Policy. Screening in Contract Design: Evidence from the ACA Health Insurance Exchanges
5
PubMed Central. Differing views on ‘essential health benefits’ extend to drug coverage: composition of formularies is a point of contention
6
PubMed Central. Changes in pediatric dental coverage and visits following the implementation of the affordable care act
7
PubMed Central. The ACA’s pediatric essential health benefit has resulted in a state-by-state patchwork of coverage with exclusions
8
PubMed. Cost-Free Preventive Care Under the ACA Faces Legal Challenge
9
PubMed Central. Effect of Eased Restrictions for Aca-Exempt Short-Term Health Plans on Marketplace Premiums and Uninsured Rate: A Difference in Differences Analysis
10
PubMed Central. Impact of out-of-pocket spending caps on financial burden of those with group health insurance
11
PubMed. Did The ACA Lower Americans’ Financial Barriers To Health Care?
12
PubMed Central. Eliminating Coverage Discrimination Through the Essential Health Benefit’s Anti-Discrimination Provisions
13
The Commonwealth Fund. Enhancing Essential Health Benefits: How States Are Updating Benchmark Plans to Improve Coverage