Essential Health Benefits (EHB): A Small Practice Guide to What Must Be Covered (45 CFR § 156.110)

Essential health benefits are at the heart of how many individual and small group health plans must cover care, and they directly shape whether a claim for a visit or procedure should be paid at all. Under 45 CFR 156.110, an EHB benchmark plan must cover at least ten categories of benefits, including ambulatory, emergency, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative and habilitative services, laboratory services, preventive services and chronic disease management, and pediatric services including oral and vision care.  Those categories are grounded in 42 United States Code 18022, which defines essential health benefits and binds issuers that must offer an EHB package. 

For small practices, EHB rules do not change what you may clinically recommend. They do, however, change how plans must evaluate coverage in the individual and small group markets, and therefore how you should document visits, structure denials follow up, and talk with patients about expected benefits. EHB is no longer a theoretical concept for regulators and actuaries; it is a daily operational reality for front desk staff and billers trying to navigate complex plan designs.

Understanding how 45 CFR 156.110 interacts with 45 CFR 156.115 and state EHB benchmark plans allows small practices to reduce avoidable denials, push back effectively when plans misapply coverage rules, and protect patients from surprise non coverage for services that must be included as essential benefits.

Every day, small clinics see the downstream effects of benefit design in ways that statutes never show. A physical therapist’s plan of care is cut short because the plan says “habilitation not covered.” A child’s glasses are denied because the plan treats pediatric vision care as cosmetic. A patient is told their mental health visit is out of network, even though the plan must cover mental health services as essential health benefits.

The Affordable Care Act tried to standardize and strengthen coverage in the individual and small group markets by creating essential health benefits. The statute and implementing rules require plans that must cover EHB to include items and services within at least ten categories and to avoid discriminatory benefit designs that undermine those protections.  Under 45 CFR 156.110, each state selects or has assigned an EHB benchmark plan, which serves as the template for what counts as EHB in that state’s individual and small group markets. 

Small practices are not responsible for designing EHB benchmark plans. But you are directly affected when plans interpret those benchmarks. This article focuses on what clinicians and revenue cycle staff can control: mapping common services to EHB categories, recognizing when a plan must cover a service, designing documentation to support coverage, and building a basic appeal toolkit aligned with 45 CFR 156.110 and 156.115.

Understanding Legal Framework & Scope Under 45 CFR 156.110

The statutory foundation for essential health benefits resides in 42 United States Code 18022. The law requires the Secretary of Health and Human Services to define EHB, subject to the condition that the package must include at least ten general categories of items and services, ranging from ambulatory and emergency services to pediatric oral and vision care. 

HHS implemented this framework for the individual and small group markets in 45 CFR Part 156 Subpart B. Under 45 CFR 156.110, an EHB benchmark plan must provide coverage in at least the ten categories of benefits described above.  The specifics within each category are defined by the state’s benchmark plan, selected from among certain plan types such as small group products, state employee plans, federal employee plans, or certain HMO options. 

Issuers that are required to offer EHB in the individual and small group markets must then design plans that are substantially equal to the state benchmark and meet additional federal standards in 45 CFR 156.115. These include:

• Covering the ten EHB categories without discrimination based on age, disability, or other health conditions.

• Applying substitution rules only within or, in some cases under recent flexibility, between categories, while maintaining actuarial equivalence and respecting state limits.

• Recognizing that some benefits, such as adult routine dental, adult routine vision exams, custodial nursing home care, and non medically necessary orthodontia, are excluded from EHB even if the benchmark plan incidentally covers them.

States retain flexibility. They can require additional state mandated benefits beyond the federal floor and can update their EHB benchmark plan within federal constraints, as reflected in CMS benchmark plan resources and guidance.  Not every plan is subject to EHB, however. Large group plans, many self insured plans, and grandfathered plans do not have to offer an EHB package, even though they may voluntarily cover many of the same services. 

For a small clinic, the key is not to master every benchmark document. Instead, you must be able to answer three questions for each patient:

1. Is this an individual or small group non grandfathered plan that must provide EHB?

2. If yes, which EHB category does this ordered service belong in under 45 CFR 156.110 and the state benchmark?

3. Has the plan applied any non-allowed limits or exclusions that conflict with 45 CFR 156.115 or the underlying statute?

Being able to connect a specific denial back to these rules is what transforms EHB from a regulatory phrase into a practical coverage tool.

Oversight of essential health benefits in the commercial market is a shared function between federal and state regulators. At the federal level, CMS and the Center for Consumer Information and Insurance Oversight are responsible for administering EHB related regulations in 45 CFR Part 156, enforcing compliance for plans offered through the marketplaces, and implementing the annual Notice of Benefit and Payment Parameters that often tweaks EHB policy. 

State insurance departments regulate qualified health plan issuers and other carriers in the individual and small group markets, reviewing form filings, monitoring adherence to state and federal mandates, and conducting market conduct exams. State level EHB materials, such as benchmark summaries, often originate from or are curated by these agencies. 

From a small practice perspective, enforcement sometimes arrives indirectly:

• A pattern of denials for services that clearly fall into one of the ten EHB categories can trigger state inquiries or litigation if consumer advocates or providers complain.

• Improper benefit design or implementation inconsistent with 45 CFR 156.115, such as discriminatory limits on habilitative services or mental health treatment, may surface in federal or state reviews.

• Recent ACA implementation FAQs highlight how EHB policies continue to evolve, especially in areas like prescription drug coverage and substitution flexibilities, which can trigger additional oversight when misapplied.

While enforcement targets plans, not small practices, your documentation and appeal letters often help regulators understand whether beneficiaries are being denied services that should be covered as EHB. Being able to reference 45 CFR 156.110, 156.115, and 42 United States Code 18022 in a clear, fact based way strengthens your position when claims disputes escalate.

EHB compliance is technically a plan obligation, but its impact is felt in your scheduling, documentation, and billing workflows. The following controls are designed so a small practice can show, during a HIPAA or revenue cycle style review, that it understands and works within the EHB framework. Each control ties back to 45 CFR 156.110, 156.115, and the EHB statute.

1. Build an EHB coverage map for your top plans

• How to implement: Identify your five to ten most common commercial plans. For each, determine whether it is a non grandfathered individual or small group plan subject to EHB. Then, using publicly available summaries of benefits, categorize your highest volume services (for example, routine office visits, imaging, therapies, pediatric vision, or mental health visits) into the ten EHB categories defined by statute and reflected in 45 CFR 156.110.

• Evidence to retain: A simple matrix showing plan type, EHB status, and which CPT or HCPCS codes you have mapped to each category. Attach references to the relevant EHB benchmark descriptions if available for your state.

• Low cost method: Use a spreadsheet stored on your shared drive and update it annually or when you add a major new payer.

2. Add an “EHB check” step to denial management

• How to implement: When a claim is denied as “not covered” or “benefit excluded,” staff should ask a structured question: is this service likely part of an EHB category and is the plan subject to EHB requirements under 45 CFR 156.110 and 156.115. If yes, the denial is flagged for appeal with specific references to the applicable EHB category and statutory authority.

• Evidence to retain: Denial logs with a column showing whether an EHB check was performed and, if appealed, the citation used. Keep copies of appeal letters that reference the appropriate EHB category and cite 42 United States Code 18022 and 45 CFR Part 156 Subpart B.

• Low cost method: Add one or two fields to your existing denial tracking tool; no new software is required.

3. Document EHB relevant clinical details in the chart

• How to implement: For services sitting in EHB sensitive categories, such as habilitative therapy, pediatric vision care, or mental health and substance use disorder treatment, ensure progress notes include clear statements of functional impairment, goals, and expected outcomes that align with the EHB definitions in 45 CFR 156.115 and guidance from HHS.

• Evidence to retain: Sample charts showing that documentation for EHB category services includes functional assessments and medical necessity rationales consistent with benchmark coverage descriptions.

• Low cost method: Modify existing note templates or EHR smart phrases to prompt for a few extra fields, rather than creating entirely new forms.

4. Maintain a basic EHB appeal template library

• How to implement: Draft short, reusable letters for each EHB category your clinic frequently touches. Each template should identify the category, quote or summarize the relevant portion of 42 United States Code 18022 and 45 CFR 156.110, and highlight any state benchmark features that reinforce coverage.

• Evidence to retain: A small folder of templates and copies of successful appeals that led to overturned denials on EHB grounds.

• Low cost method: Use your existing word processing software and save templates in a shared folder; no external tools needed.

5. Track EHB sensitive denials as a distinct category

• How to implement: Within your denial tracking system, tag denials that involve EHB categories, such as habilitative services, pediatric oral and vision care, or preventive services and chronic disease management. This allows you to see patterns where plans may be misapplying EHB rules.

• Evidence to retain: Trend reports showing numbers and outcomes of EHB tagged denials, including appeal success rates.

• Low cost method: Add a simple drop down field to your denial log and review trends quarterly.

By integrating these controls into normal operations, your small practice can credibly show that it understands how essential health benefits work and uses that understanding to protect patients and sustain revenue, without needing a dedicated legal team.

Case Study

A pediatric therapy clinic provides both rehabilitative and habilitative services to children with developmental delays. Many of the families obtain coverage through marketplace plans or small employer policies. Over the course of a year, the clinic notices that one particular plan regularly denies habilitative therapy visits as “not a covered benefit,” citing policy language that excludes “developmental delay services.”

Initially, the clinic writes off many of these denials as a cost of doing business and occasionally bills families directly, creating financial strain. Over time, parents begin to question why other clinics in the region report better coverage experiences. One parent files a complaint with the state insurance department after being told that habilitative therapies are supposed to be essential health benefits.

In response, the clinic’s practice manager reviews federal EHB materials and discovers that habilitative services are explicitly included among the ten essential health benefit categories in statute and are referenced in 45 CFR 156.115, which describes how issuers must cover habilitative services and may not design benefits in a discriminatory manner.  The manager also confirms that the plan in question is a non grandfathered small group product that must offer EHB and that the state benchmark plan includes robust coverage for pediatric habilitative therapy. 

Using an EHB appeal template, the clinic begins contesting the denials. Appeal letters reference 42 United States Code 18022, the EHB categories, 45 CFR 156.110 and 156.115, and the state’s benchmark plan summary, arguing that blanket exclusions for “developmental delay services” conflict with EHB requirements. They attach clinical notes that detail functional goals, progress measurements, and the habilitative nature of the interventions.

After several appeals and an inquiry from the state regulator, the plan revises its policy, clarifies coverage criteria for habilitative therapy, and reprocesses past claims. The clinic recoups significant revenue and stops sending balances to families for services that should have been covered as EHB. Internally, the clinic formalizes an EHB coverage map and trains staff to flag similar denials quickly, reducing the lag between initial denials and effective appeals.

This scenario shows how a small practice, by understanding EHB law and tying it to its documentation, can drive both better patient protection and more stable revenue without becoming a regulatory expert.

This table is designed for small clinics to test whether EHB concepts have been integrated into day to day operations in a way that aligns with 45 CFR 156.110, 45 CFR 156.115, and 42 United States Code 18022.

Completing this checklist regularly helps you show that EHB rules are not just theoretical. They are driving your denial management strategy and your patient communication practices.

Common Audit Pitfalls to Avoid Under 45 CFR 156.110

Audits and consumer complaints often reveal the same patterns when it comes to essential health benefits. By focusing on these pitfalls, small practices can avoid unnecessary friction with plans and frustration for patients.

• Assuming all commercial plans must cover EHB, without distinguishing individual and small group plans from large group and self insured products, leading to misplaced expectations and weak appeal arguments. Legal reference: 42 United States Code 18022 and implementing guidance limit EHB package requirements primarily to the individual and small group markets. Practical consequence: time wasted on appeals that cannot succeed and patient confusion when plans lawfully deny non EHB services.

• Treating all therapies or visits as equivalent without mapping them to EHB categories, which makes it harder to argue that a service fits squarely within, for example, rehabilitative or habilitative services and devices under 45 CFR 156.115. Legal reference: 45 CFR 156.110 and 156.115 require coverage at the category level, but plans may misclassify services when clinics provide vague documentation. Practical consequence: avoidable denials and increased out-of-pocket costs for patients.

• Ignoring state benchmark nuances, such as more generous pediatric dental or vision benefits or state mandated infertility coverage, even though those features become part of the EHB for that state’s individual and small group markets. Legal reference: 45 CFR 156.110 and related guidance tie EHB specifics to the state benchmark plan. Practical consequence: clinics may under appeal or incorrectly tell patients that services are “never covered” when the benchmark suggests otherwise.

• Failing to recognize discriminatory limitations, like lower visit caps or more restrictive prior authorization rules for mental health or habilitative services compared to medical or rehabilitative services, which can conflict with nondiscrimination standards in 45 CFR 156.115. Practical consequence: regulators may later determine that plan benefit design violated EHB rules, but in the meantime patients lose access and clinics lose revenue.

• Not updating internal tools and expectations when federal EHB policy changes, such as revisions reflected in recent Notices of Benefit and Payment Parameters and ACA implementation FAQs. Legal reference: these documents clarify how 45 CFR 156.110 and 156.115 are applied over time. Practical consequence: continued reliance on outdated assumptions causes recurring disputes and missed opportunities to secure coverage under updated standards.

By addressing these pitfalls, clinics can align more closely with how regulators and plans interpret EHB and reduce the likelihood that a pattern of denials will draw negative attention.

Making EHB part of your compliance culture does not require a new department. It does require clear ownership and simple routines. Start by assigning an “EHB coverage lead” who understands the basics of 45 CFR 156.110, 156.115, and your state’s benchmark plan, and who can translate them into tools that staff actually use. 

Training should be short and scenario based. Rather than walking through regulations line by line, use realistic cases such as a denied pediatric vision claim or a limit on habilitative therapy and show staff how EHB categories and state benchmarks affect those outcomes. Annual refreshers can highlight any changes in EHB policy signaled by CMS or ACA implementation FAQs. 

For monitoring, track a few key indicators: the number of denials tagged as EHB sensitive, the appeal success rate for those denials, and the most frequently implicated EHB categories. Review these metrics with leadership at least once a year, and adjust your EHB coverage map, scripts, and templates based on what you learn. This keeps EHB compliance tied to concrete operational results rather than abstract legal discussions.

Essential health benefits are one of the most powerful, and sometimes underused, protections in modern commercial coverage. For small practices, 45 CFR 156.110 and its companion provisions do not require you to become a plan designer. They do require you to understand which plans must cover the ten EHB categories, how your most common services fit into those categories, and how to respond when coverage decisions do not match those obligations. 

In the next few months, a small clinic can make meaningful progress with a few focused steps:

1. Build a basic EHB coverage map for your top plans, identifying which are subject to EHB and how your main services align with the ten categories under 45 CFR 156.110 and 42 United States Code 18022.

2. Add an EHB check step to your denial management process so that staff routinely ask whether a denied service should have been covered as part of an essential health benefits package.

3. Develop one or two strong appeal templates that reference the EHB statute, 45 CFR 156.110, 45 CFR 156.115, and your state benchmark for the categories you use most.

4. Train staff with a handful of real world examples where EHB coverage made the difference between a paid claim and a patient facing bill.

5. Schedule a short self audit in six to twelve months using the checklist above, and refine your tools based on what you find.

Recommended compliance tool:

A shared EHB toolkit that includes your coverage map, denial tags, appeal templates, and a quick summary of the ten EHB categories with state specific notes.

Advice: Choose one high impact category, such as mental health or habilitative services, and align your documentation, denial review, and appeal letters around EHB rules for that category before expanding to others.

• 45 CFR 156.110 – EHB Benchmark Plan Standards

• 45 CFR 156.115 – Provision of Essential Health Benefits

• 45 CFR Part 156 Subpart B – Essential Health Benefits

• 42 United States Code 18022 – Essential Health Benefits Requirements