T he Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended) includes reforms of the health insurance market that impose requirements on private health insurance plans. It then describes the market reforms included in the ACA. The Appendix provides additional information about how the ACA market reforms apply to different market segments and types of health plans. Background

		Health Insurance Markets

The private health insurance market is often characterized as having three segments—the large-group, small-group, and individual markets. ACA Market Reforms

The ACA establishes federal requirements that apply to private health insurance. The reforms affect insurance offered to groups and individuals; impose requirements on sponsors of coverage; and, collectively, establish a federal floor with respect to access to coverage, premiums, benefits, cost sharing, and consumer protections. Although such market reforms may be new at the federal level, many of the ACA's reforms had already been enacted in some form in several states, with great variation in scope and specificity across the states. In general, all ACA market reforms are currently effective. The reforms do not apply uniformly to all types of plans. Often, reforms apply differently to health plans according to the market segment in which the plan is offered and whether the plan has grandfathered status. Furthermore, the reforms do not apply to certain types of plans (this is true of other federal health reforms as well). For example, retiree-only health plans are not required to comply with federal health insurance requirements, including the ACA's market reforms. Descriptions of the market reforms are grouped under the following categories: obtaining coverage, keeping coverage, cost of purchasing coverage, covered services, cost-sharing limits, consumer assistance and other health care protections, and plan requirements related to health care providers. In general, guaranteed issue in health insurance is the requirement that a plan accept every applicant for health coverage, as long as the applicant agrees to the terms and conditions of the insurance offer (e.g., the premium). With regard to plans offered in the group market, guaranteed issue generally means that a plan sponsor (e.g., an employer) must be able to purchase a group health plan any time during a year. Plans that otherwise would be required to offer coverage on a guaranteed-issue basis are allowed to deny coverage to individuals and employers in certain circumstances. As of the date of this report, regulations have not been issued. Covered Services

			Coverage of Essential Health Benefits

Plans must cover the essential health benefits (EHB). In general, plans that are required to offer the EHB must model their benefits package after the state's selected benchmark plan. The limits apply only to in-network coverage of the EHB. The portal is required to provide, at minimum, information on the following coverage options: health plans offered in the private insurance market, Medicaid and the State Children's Health Insurance Program (CHIP), high-risk pools, and small-group health plans. Applicability of Market Reforms to Health Plans
The Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) establishes federal requirements that apply to private health insurance. Its market reforms affect insurance offered to groups and individuals and impose requirements on sponsors of coverage (e.g., employers). In general, all of the ACA's market reforms are currently effective; some became effective shortly after the ACA was passed in 2010, and others became effective for plan years beginning in 2014.
Although some of the market reforms had previously been enacted in some states, many of the reforms are new at the federal level. Collectively, the reforms create federal minimum requirements with respect to access to coverage, premiums, benefits, cost sharing, and consumer protections. For example, the requirement to offer health plans on a guaranteed-issue basis generally means that insurers must accept every applicant for health coverage, as long as the applicant agrees to the terms and conditions of the coverage (e.g., the premium). The ACA's requirement to offer the essential health benefits means that certain plans must cover a specified package of benefits.
The market reforms do not apply uniformly to all types of plans. Some reforms apply to all three segments of the private insurance market—individual, small group, and large group—whereas others may apply only to plans offered in the individual and small-group markets. In the group market, the reforms do not always apply to both fully insured plans (plans offered by state-licensed carriers that are purchased by employers or other sponsors) and self-insured entities (groups that set aside funds to pay for health benefits directly). The reforms' applicability also depends on whether a plan has grandfathered status. Under the ACA, an existing health plan in which a person was enrolled on the date of ACA enactment was grandfathered; the plan can maintain its grandfathered status as long as it meets certain requirements. Grandfathered health plans are exempt from the majority of ACA market reforms.
Although the market reforms' applicability is not necessarily uniform across plan types, it is uniform for plans offered inside and outside health insurance exchanges. Every state has an exchange, and individuals and small employers can use the exchanges to shop for and obtain health insurance coverage. The same market reforms apply to an individual plan offered through an exchange and to an individual plan offered in the market outside of an exchange. Some types of plans do not have to comply with any of the market reforms. For example, retiree-only health plans are not required to comply with federal health insurance requirements, including the ACA's market reforms.
This report provides background information about the private health insurance market, including market segments and regulation. It then describes each ACA market reform. The reforms are grouped under the following categories: obtaining coverage, keeping coverage, cost of purchasing coverage, covered services, cost-sharing limits, consumer assistance and other health care protections, and plan requirements related to health care providers. The Appendix provides details about the types of plans that are required to comply with the different reforms.