Small group plans set the tone

As each state is making the final decisions on what essential benefits will be provided to workers through the mandated health insurance exchanges, many trends are becoming apparent.

Each state is tasked with establishing an online store where individuals and employers can shop for insurance plans and seek answers to insurance-related questions. While creating an outline for how the exchanges will operate and what will be offered, each state is determining benchmark insurance plans that will set the example for all other policies offered by insurance providers through the exchange. The benchmark identifies what coverage and benefits must be offered by all policies, as providers start to rework their plans to meet new demands.

The American Medical Association reported nearly half the states have yet to select a plan option to serve as the benchmark for benefits. Of the states that have selected their benchmarks, however, a popular and cost-effective option seems to be small group plans. When selecting a benchmark to start with, states are looking at small-group, federal employee, state employee or commercial HMO policies. Most of the states finalizing their benchmarks are opting for small-group plans to set the tone for the exchange.

The Institute of Medicine agrees with what many states are selecting, arguing that small-group plans are good examples of what types of benefits should be guaranteed and how insurance should be offered through the exchange. The IOM recommended the U.S. Department of Health and Human Services review small group plans across the country, taking note of how successful examples are not too generous with coverage but also do not skimp on important benefits.