Michigan’s Essential Health Benefits Benchmark Plan: Executive Report Michigan’s 2017 Essential Health Benefits Benchmark Plan: Executive Report July 1, 2015 2017 . Michigan’s Essential Health Benefits Benchmark Plan: Executive Report 2017 TABLE OF CONTENTS EXECUTIVE SUMMARY .................................................................................................................................................. 1 OVERVIEW OF ESSENTIAL HEALTH BENEFITS ................................................................................................................ 2 THE BASE-BENCHMARK PLAN SELECTION PROCESS ...................................................................................................... 4 COMPARING MICHIGAN’S BASE-BENCHMARK PLANS ..................................................................................................

6 SUPPLEMENTING THE BASE-BENCHMARK PLAN ........................................................................................................... 7 MISSING OR DEFICIENT CATEGORIES AND BENEFITS ....................................................................................................................7 PREVENTIVE SERVICES............................................................................................................................................................7 PEDIATRIC BENEFITS OTHER THAN VISION AND DENTAL ..............................................................................................................8 REHABILITATIVE AND HABILITATIVE SERVICES AND DEVICES .........................................................................................................8 PEDIATRIC VISION AND DENTAL BENEFITS .................................................................................................................................9 MENTAL HEALTH PARITY........................................................................................................................................................9 PRESCRIPTION DRUG BENEFITS ...............................................................................................................................................9 PUBLIC COMMENTS .................................................................................................................................................... 10 DIFS’ RECOMMENDATIONS ........................................................................................................................................

13 BENCHMARK PLAN RECOMMENDATION ..................................................................................................................................13 PEDIATRIC DENTAL BENEFITS RECOMMENDATION ....................................................................................................................13 PEDIATRIC VISION BENEFITS RECOMMENDATION .....................................................................................................................14 APPENDIX A ................................................................................................................................................................ 15 APPENDIX B ................................................................................................................................................................ 17 .

Michigan’s Essential Health Benefits Benchmark Plan: Executive Report 2017 Executive Summary The Michigan Department of Insurance and Financial Services (DIFS) presents this Executive Report on Michigan’s Essential Health Benefits Benchmark Plan. This report contains a summary of the essential health benefits (EHB) requirements as well as information regarding the selection and supplementation of an EHB benchmark plan. As in the EHB benchmark selection in 2012, DIFS’ benchmark plan recommendation for 2017 reflects the need to provide Michigan consumers with a benchmark plan that offers comprehensive coverage and affordable rates. DIFS recommends that the Priority Health HMO plan be selected as Michigan’s base-benchmark plan. In making this recommendation, DIFS adhered to certain guidelines; namely, that the recommended plan should: • Include coverage for all Michigan-mandated services; and • Provide comprehensive coverage while maintaining affordability. In addition, DIFS took into consideration the following: • Public comments; • Scope and duration limitations for covered benefits; and • Consistency with the current benchmark plan. The Priority Health HMO plan offers a wide range of benefits and will provide an excellent framework for all individual and small group plans offered in Michigan for plan year 2017. In addition, DIFS recommends that the Federal Employee Dental and Vision Insurance Program (FEDVIP) pediatric vision plan and the MIChild dental plan again be selected to supplement the Priority Health HMO base-benchmark plan. Next: Overview of Essential Health Benefits  1 .

Michigan’s Essential Health Benefits Benchmark Plan: Executive Report 2017 Overview of Essential Health Benefits The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (ACA) was enacted on March 23, 2010. The ACA requires that all nongrandfathered 1 health insurance plans offered in the small group and individual markets2, both on and off the Exchange, provide benefits in ten required EHB categories. The ten EHB categories are: • ambulatory patient services, • emergency services, • hospitalization, • maternity and newborn care, • mental health and substance use disorder services (including behavioral health treatment), • prescription drugs, • rehabilitative and habilitative services and devices, • laboratory services, • preventive and wellness services and chronic disease management, and • pediatric services (including oral and vision care). 3 Each State is required to select an EHB “base-benchmark plan”: a plan that will serve as a reference plan, reflecting both the scope of services and any quantitative limits on those services by a “typical employer plan” in the State.

4 As of January 1, 2014, any small group or individual market plan offered in the State must be “substantially equivalent” to the benchmark plan in both the scope of benefits offered and any limitations on those benefits, such as visit or duration limits. A base-benchmark plan must be supplemented in any categories in which it is deficient. In general, a base-benchmark plan must be supplemented if it is deficient in any of the following circumstances: • it completely lacks any benefit in any of the ten EHB categories; • it lacks certain women’s wellness benefits; • it does not provide coverage for all current U.S. Preventive Services Task Force Recommendations (categories A and B); 5 • it does not provide all required pediatric preventive services; 1 A grandfathered plan is one that was in existence on March 23, 2010. Grandfathered plans, large group plans, and self-insured employer plans are not required to offer EHBs, although many large group and self-insured plans already offer services in most, if not all, EHB categories.

Although the plans are not required to offer EHBs, any EHBs they do offer may not have annual or lifetime dollar limits. 3 42 USC § 18022(b)(1)(A)-(J). 4 42 USC § 18022(b)(2)(A). 5 Current USPSTF recommendations may be viewed at: http://www.uspreventiveservicestaskforce.org/Page/Name/uspstf-a-and-b-recommendations 2 2 . Michigan’s Essential Health Benefits Benchmark Plan: Executive Report • • • • • 2017 it does not cover habilitative services and devices pursuant to the definition adopted by the state; it lacks pediatric oral and vision services; it fails to meet certain drug formulary requirements; its benefit design violates the ACA’s prohibition on discrimination; it does not comply with mental health parity requirements as set forth in the federal Mental Health Parity and Addiction Equity Act (MHPAEA) and implementing regulations. A more detailed explanation of the supplementation process is on pages 7-10 of this report. Next: The Base-Benchmark Plan Selection Process  3 . Michigan’s Essential Health Benefits Benchmark Plan: Executive Report 2017 The Base-Benchmark Plan Selection Process Federal regulations require each State to select its EHB base-benchmark plan from among the following ten options: • the largest plan in each of the three largest small group products in the State by enrollment; • the three largest State employee health plans by enrollment; • the three largest federal government employee options by enrollment; and • the largest HMO plan offered in the State’s commercial non-Medicaid market by enrollment.6 In order to identify the largest small group plans by enrollment, the largest state employee plan, and the largest insured commercial non-Medicaid HMO, DIFS obtained enrollment data from issuers for the first quarter of 2014. From this data, DIFS identified the largest plans in each of the three State categories. The federal Center for Consumer Information and Insurance Oversight (CCIIO) provided information regarding the federal government employee plans. In addition, CCIIO provided DIFS with its determination of the largest three small group products in Michigan. Based on the enrollment data provided by the federal government and by issuers, Michigan’s ten benchmark plan candidates for plan year 2017 are: • The largest plan in any of the three largest small group products in the State by enrollment: BCBSM Community Blue PPO, BCBSM Simply Blue 7, Priority Health HMO.

8 • The three largest State employee health plans by enrollment: BCBSM (self-insured); PHP (HMO); Priority Health (HMO). • The three largest Federal Employees Health Benefit Program (FEHBP) options by enrollment: FEHBP BCBS Standard Option; FEHBP BCBS Basic Option; FEHB GEHA Standard Option. • The largest HMO plan offered in the State’s commercial market by enrollment: Priority Health HMO. It is important to note that the three small group products and the HMO plan are all “transitional” or “early renewal” plans. In 2013, DIFS allowed certain plans to remain in force 6 45 CFR § 156.100(a). See “Essential Health Benefits: List of the Largest Three Small Group Products By State—Revised,” (May 19, 2015). There is one discrepancy between CCIIO’s list and DIFS’ list: CCIIO reported that the BCBSM “Simply Blue HSA with Drug” product was the second largest small group product.

However, the actual second largest small group product is BCBSM’s Simply Blue. The discrepancy is due to a transposed digit in the two plans’ identification numbers, but does not affect the base-benchmark plan analysis because the two plans’ benefits are identical. 8 The Priority Health HMO plan occurs twice in Michigan’s list because it is both the largest HMO plan and one of the three largest small group products. This Priority Health HMO plan is not the same Priority Health HMO plan that was selected as the EHB benchmark plan in 2012, although the plans are substantially similar.

See p. 14, n. 32, below. 7 4 .

Michigan’s Essential Health Benefits Benchmark Plan: Executive Report 2017 or to renew early for a limited period of time in order to provide issuers and consumers a transitional period to comply with ACA-related reforms. In response to this flexibility, a significant number of non-ACA-compliant plans remained in force during 2014. As a result, the three largest small group plans and the largest commercial HMO plan during the first quarter of 2014 were all “transitional” or “early renewal” plans, and thus not fully ACA-compliant. This is why, for example, several plans impose visit limits on mental health services—a practice that is no longer permissible as of 2014. DIFS obtained plan documents from the issuers for each of the above-listed base-benchmark plan candidates.

DIFS staff reviewed the plan documents and compiled the information into a chart to allow for a comparison of benefits and any scope or duration limitations. This chart is included in this report at Appendix B. The chart does not include information on medical management techniques, provider networks, cost-sharing, or similar items because those plan features are not part of the EHB definition and are not required to be incorporated by other plans adopting the EHB benchmark benefits.

9 Next, DIFS provided advance copies of the charts to the issuers whose plans were listed in the chart. These issuers provided comments and additional information, which were incorporated into the final version of the chart. The final chart, with links to plan documents, was posted on DIFS’s website for public comment on May 15, 2015. From May 15, 2015 through June 5, 2015, DIFS accepted and reviewed public comments on the EHB chart through a dedicated email address accessible via DIFS’s website. Next: Comparing Michigan’s Base-Benchmark Plans  9 Non-quantitative limitations (e.g., pre-authorizations, medical case management) are not part of the benchmark plan.

77 Fed. Reg. 42658, 42660 (July 20, 2012). 5 .

Michigan’s Essential Health Benefits Benchmark Plan: Executive Report 2017 Comparing Michigan’s Base-Benchmark Plans Except in certain limited circumstances, a State must take its chosen base-benchmark plan “as is.” In other words, all of the base-benchmark plan’s covered services, quantitative limitations, and exclusions become the benchmark for all individual and small group health plans offered both on and off the Exchange. It is important to note that the base-benchmark plan is a “floor,” and does not prohibit issuers from adding benefits or altering certain benefit limitations, so long as those changes do not result in fewer benefits being offered. As described above, DIFS compared the benefits covered by each of the ten benchmark plan options. In analyzing the potential costs associated with certain benefits, DIFS relied on the report provided in 2012 by Wakely Consulting Group, an actuarial and health care consulting firm, which provided estimates of the premium impact of certain benefits. DIFS also considered the differences between the previous base-benchmark plan and the new base-benchmark plan candidates. The Wakely study identified premium differences for certain benefit categories.10 DIFS staff compared the plans in the context of these cost estimates and, as was the case in 2012, determined that the Priority Health HMO plan would likely be the least costly, particularly in the high-cost categories of adult dental, infertility, and physical therapy/occupational therapy/speech therapy. DIFS’ analysis resulted in the following conclusions: • All plans (including the federal FEHBP plans) include all Michigan-mandated benefits. • All plans would require supplementation in at least one area (most commonly, pediatric dental and vision care and habilitative services and devices). • Notable variations in particular covered services included: visit limits for rehabilitative services; hearing aids; infertility treatments; adult dental; private duty nursing; chiropractic care; and non-emergency care when traveling outside of the United States. • Many base-benchmark plan candidates, because they were issued prior to 2014, did not provide mental health benefits at parity with medical/surgical benefits.

However, because all plans would have to be supplemented to comply with the MHPAEA, lack of parity was not a factor weighing against the selection of any particular plan. Similarly, the fact that a particular plan had combined limits for rehabilitative and habilitative services was not considered to weigh against that plan because the selected plan will not be permitted to have combined limits. Next: Supplementing the Base-Benchmark Plan  10 See p. 12 of the Wakely study, which may be viewed here. 6 .

Michigan’s Essential Health Benefits Benchmark Plan: Executive Report 2017 Supplementing the Base-Benchmark Plan The ACA requires certain benefits to be included as part of the EHB for all plans: • benefits in all ten EHB categories; • current U.S. Preventive Services Task Force (USPSTF) Recommendations (categories A and B); 11 • routine immunizations; 12 • other evidence-informed preventive care and screenings for women set forth in guidelines supported by the Health Resources and Services Administration; 13 • evidence-informed pediatric preventive care and screenings for provided for in guidelines supported by the Health Resources and Services Administration; 14 • habilitative services and devices; 15 • pediatric oral and vision services; 16 • mental health parity requirements as set forth in the MHPAEA 17; and • prescription drug benefits. 18 As a result, if the selected base-benchmark plan does not include any of these benefits, the State must supplement the base-benchmark plan accordingly. Missing or Deficient Categories and Benefits If a selected base-benchmark plan does not contain any benefits whatsoever in any one or more of the EHB categories, the State is required to supplement the benchmark by “borrowing” missing benefits from one or more of the other benchmark plan options. An exception to this rule is that a plan may choose not to offer pediatric oral services if a stand-alone dental plan that covers those services as defined by EHB is offered through the same Exchange. Preventive Services A plan must cover, without cost-sharing, all evidence-based items and services that have a rating of “A” or “B” in the current USPSTF recommendations with respect to the individual involved, except in the case of the USPSTF recommendations regarding breast cancer screening, mammography, and prevention issued in or around November 2009.

If the base-benchmark plan does not cover all recommended services and items, it must be supplemented to do so. 11 42 USC § 300gg–13(a)(1); 45 CFR 147.130(a)(1)(i). See http://www.uspreventiveservicestaskforce.org/BrowseRec/Index for a list of current USPSTF A and B recommendations. 12 42 USC § 300gg–13(a)(2); 45 CFR 147.130(a)(1)(ii). 13 42 USC § 300gg–13(a)(4); 45 CFR 147.130(a)(1)(iv). 14 42 USC § 300gg–13(a)(3); 45 CFR 147.130(a)(1)(iii). 15 42 USC § 18022(b)(1)(G). 16 42 USC § 18022(b)(1)(J). 17 42 USC § 18031(j); 45 CFR 147.160. 18 42 USC § 18022(b)(1)(F); 45 CFR 156.122. 7 . Michigan’s Essential Health Benefits Benchmark Plan: Executive Report 2017 HHS has recently issued new guidance on preventive services. 19 This guidance includes, among other things, certain requirements regarding contraceptive coverage, as follows: • Issuers and plans must cover, without cost-sharing, at least one form of contraception in each of the methods (currently 18) that the FDA has identified for women in its current Birth Control Guide. 20 • Within each of the 18 methods, issuers may utilize reasonable medical management techniques. However, issuers must have an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome on the individual or a provider (or other individual acting as a patient’s authorized representative). • If an individual’s attending provider recommends a particular service or FDA-approved item based on a determination of medical necessity with respect to that individual, the issuer must cover that service or item without cost-sharing. Pediatric Benefits Other Than Vision and Dental The Health Resources and Services Administration supports the guidelines issued by Bright Futures/American Academy of Pediatrics.

EHB-compliant plans are required to cover these evidence-informed pediatric preventive care and screening guidelines.21 Rehabilitative and Habilitative Services and Devices Like pediatric dental and vision services, habilitative services and devices are often insufficiently covered by the base-benchmark plan candidates and must be supplemented. Beginning in plan year 2017, issuers must, with respect to habilitative services and devices, “cover health care services and devices that help a person keep, learn, or improve skills and functioning for daily living (habilitative services). Examples include therapy for a child who is not walking or talking at the expected age.

These services may include physical and occupational therapy (PT/OT) speech-language pathology (ST) and other services for people with disabilities in a variety of inpatient and/or outpatient settings.” 22 Issuers may not impose “limits on coverage of habilitative services and devices that are less favorable than any such limits imposed on coverage of rehabilitative services and devices,” and may not impose combined limits on habilitative and rehabilitative services and devices. 23 For pediatric habilitative services and devices, coverage must be provided until at least the end of the month in which the enrollee turns 19 years old.24 19 See FAQs About Affordable Care Act Implementation (Part XXVI) (May 11, 2015). See http://www.fda.gov/downloads/ForConsumers/ByAudience/ForWomen/FreePublications/UCM356 451.pdf. 21 The current guidelines can be viewed here: https://www.aap.org/en-us/professionalresources/practice-support/Periodicity/Periodicity%20Schedule_FINAL.pdf. 22 45 CFR 156.115(a)(5)(i). 23 45 CFR 156.115(a)(5)(ii), (iii). 24 45 CFR 156.115(a)(6). 20 8 . Michigan’s Essential Health Benefits Benchmark Plan: Executive Report 2017 With regard to the recommended Priority Health HMO plan, this would mean that issuers must cover at least the following: 30 OT/PT visits for rehabilitative services; 30 ST visits for rehabilitative services; 30 OT/PT visits for habilitative services; 30 ST visits for habilitative services; rehabilitative devices; and habilitative devices. Pediatric Vision and Dental Benefits Most base-benchmark plan candidates do not provide pediatric dental or pediatric vision services. Plans that do not already include coverage for pediatric vision services must be supplemented with benefits from the FEDVIP vision plan with the largest enrollment. According to federal guidance, the only option to supplement vision benefits is the FEP BlueVision—High Option. Benefits included in this plan include eye exams, lenses, frames, and contact lenses, subject to certain frequency and maximum benefit limitations. Similarly, the State must supplement pediatric dental benefits from either the federal MetLife Federal Dental Plan—High Option, or Michigan’s CHIP program (MIChild). Mental Health Parity All of the base-benchmark plan candidates offer some mental health, behavioral health, and substance abuse services.

Some of the base-benchmark plan candidates, because they were issued prior to 2014, impose limitations on these services. However, many of these limitations are no longer permitted under the MHPAEA. The ACA requires all base-benchmark plans to be supplemented to be compliant with the MHPAEA.

Under the MHPAEA, cost-sharing (e.g., deductibles and copayments) and treatment limitations (e.g., visit or day limits) applicable to mental health/substance use disorder benefits can be no more restrictive than the cost-sharing and treatment limitations applicable to medical/surgical benefits covered by the plan. In addition, the plan may not impose separate cost-sharing requirements or treatment limitations that apply only with respect to mental health/ substance use disorder benefits. Accordingly, in any instance in which the base-benchmark plan does not comply with the MHPAEA, DIFS will modify the plan so that its coverage for mental health, behavioral health, and substance abuse services complies with the MHPAEA. Prescription Drug Benefits Federal regulations require issuers to cover the greater of: 1) one drug in every United States Pharmacopeia category and class; or 2) the same number of prescription drugs in each category and class as the EHB base-benchmark plan. The issuer must also have in place an “exceptions process” in which an enrollee may request and gain access to clinically appropriate drugs not otherwise covered by the plan.

25 In addition, as of 2017, issuers will be required to use a pharmacy and therapeutics committee that meets certain federal standards. 26 Next: Public Comments  25 26 45 CFR 156.122(c). 45 CFR 156.122(a)(3). 9 . Michigan’s Essential Health Benefits Benchmark Plan: Executive Report 2017 Public Comments DIFS received 19 comments from various organizations and Michigan citizens on the ten basebenchmark plan candidates. This section of the report addresses and responds to every topic raised in the public comments. Numerous commenters asked that transgender health care, including but not limited to hormone replacement therapy and surgery, be included as an essential health benefit. Of the ten benchmark plan candidates, only two offer limited coverage for transgender services: BCBSM Community Blue PPO Plan 4 and BCBSM Simply Blue 2500 (for reconstructive procedures of the genitalia only). None of the lowest-cost plans (small group and HMO plans) cover transgender services.

In its efforts to choose a lower-cost plan, DIFS was unable to select a plan that included coverage for transgender services. DIFS notes that while Section 1557 of the ACA prohibits discrimination on the basis of gender identity and sex stereotyping, HHS has stated that this section does not require issuers to cover transition-related surgery. 27 Similarly, DIFS notes that, in the absence of a legislative mandate, DIFS cannot require issuers to provide benefits other than in the areas specifically identified for supplementation (see pp. 7-10, above).

However, Section 1557 of the ACA 28 does prohibit issuers from discriminating on the basis of gender identity for services that are already covered by a plan. For example, recent guidance issued by HHS notes that it is impermissible for a plan or issuer to limit sex-specific recommended preventive services (e.g., mammograms, pap smears, contraceptives) based on an individual’s sex assigned at birth, gender identity, or recorded gender.29 To ensure compliance with federal and state law, DIFS will review policy forms for similar types of impermissible exclusions. DIFS will continue to monitor this issue closely. One commenter requested that the selected base-benchmark provide benefits for cardiac rehabilitation.

All of the base-benchmark plan candidates provide coverage for some degree of cardiac rehabilitation, pursuant to the terms of the particular plan document. Where specific visit limits are not noted on the chart (see Appendix B), cardiac rehabilitation is provided without visit limits, but may still be subject to other limitations within the policy. Non-visit limits (such as the requirement that cardiac rehabilitation services must require intensive monitoring or supervision) are not part of the EHB package and may be omitted or altered by issuers. Some commenters noted that the base-benchmark plan would be required to comply with the newly-adopted federal standard for habilitative services and devices.

As noted above, DIFS intends to apply this standard beginning with plan year 2017, as well as the requirement that habilitative services and devices be provided at parity with rehabilitative services and devices 27 See Office for Civil Rights, Questions and Answers on Section 1557 of the Affordable Care Act, Question #5, August 6, 2012 (no longer accessible via the HHS website). 28 42 USC § 18116. 29 See FAQs About Affordable Care Act Implementation (Part XXVI), FAQ #5 (May 11, 2015). 10 . Michigan’s Essential Health Benefits Benchmark Plan: Executive Report 2017 and not in combination. DIFS also notes that applied behavior analysis for autism spectrum disorder is mandated by state law, 30 and is considered to be a required component of Michigan’s habilitative services and devices EHB category. Several commenters requested clarification on the requirements for tobacco cessation coverage. Tobacco cessation counseling and interventions are a USPSTF category “A” recommendation and thus are required to be covered by EHB-compliant plans. The USPSTF is currently in the process of adopting updated guidelines.

Accordingly, beginning with plan year 2017, DIFS will use the most current USPSTF recommendations to establish a standard for tobacco cessation coverage in EHB-compliant plans. One commenter recommended that the base-benchmark plan candidates’ prescription drug formularies be available for review. Prescription drug formularies change frequently and were not available from all of the benchmark plan candidates. In addition, as noted above, federal regulations require issuers to cover the greater of: 1) one drug in every United States Pharmacopeia category and class; or 2) the same number of prescription drugs in each category and class as the EHB base-benchmark plan.

As a result, if the base-benchmark plan has fewer drugs than one in every USP category and class, it will have to be supplemented to comply with the USP standard. It should be noted that plans are not required to cover exactly the same drugs as the base-benchmark plan; they must simply cover the same number of drugs, or at least one of each drug in each USP category and class. One commenter recommended that Michigan select a base-benchmark plan that included a pediatric yearly comprehensive eye examination as well as eyeglass/contact benefits. The only option for supplementing the pediatric vision EHB is the federal FEDVIP BlueVision High Option plan.

This plan provides coverage for an annual eye examination for adults and dependent children, as well as eyeglass and contact benefits. The benefits contained in this plan will become part of Michigan’s EHB benchmark plan. The full range of benefits under this plan is available by clicking on the link to the plan in the chart at Appendix B. With regard to devices, all base-benchmark plan candidates provide some durable medical equipment benefits.

The specific devices covered will vary among plans. Some commenters requested that a plan with hearing aid coverage be selected. Although hearing aids are generally a low-cost item, none of the lower-cost plans (the small group and HMO plans) provide hearing aid coverage.

In its efforts to choose a lower-cost plan, DIFS was unable to select a plan that provided hearing aid coverage and affordability. DIFS notes that issuers are permitted to add additional benefits beyond those offered in the benchmark plan. Several commenters advocated for the selection of a particular plan, including some commenters who recommended that Priority Health HMO plan be chosen again as the basebenchmark plan in order to maintain consistency. As noted above, the Priority Health HMO 30 MCL 500.3406s. 11 .

Michigan’s Essential Health Benefits Benchmark Plan: Executive Report 2017 plan that is included in this year’s array of base-benchmark candidates differs in certain respects from the 2014 Priority Health HMO benchmark. Accordingly, the selection of the Priority Health HMO plan will not be exactly equivalent to the base-benchmark plan in place for 2014 through 2016, although it will be similar. One commenter suggested that one of the state employee plans be chosen because these plans provide fewer limitations on mental and behavioral health services. DIFS notes that any non-quantitative exclusions in the base-benchmark plan candidates are not part of the EHB package and may or may not be adopted by other issuers. Accordingly, any exclusions present in the selected plan will not necessarily become part of other EHB-compliant plans; and selecting a plan with fewer non-quantitative exclusions would not mandate the elimination of exclusions in other plans. Two commenters recommended that the “leanest” health plan option be chosen, in order to maintain affordability. Next: DIFS’ Recommendations  12 .

Michigan’s Essential Health Benefits Benchmark Plan: Executive Report 2017 DIFS’ Recommendations Benchmark Plan Recommendation DIFS recommends that the Priority Health HMO plan be selected as Michigan’s benchmark plan for plan year 2017. This plan is substantially similar to Michigan’s previous benchmark plan. 31 DIFS adhered to certain guidelines in developing a benchmark plan recommendation; namely, that the recommended benchmark plan should: • Include coverage for all Michigan-mandated services; and • Provide comprehensive coverage while maintaining affordability. In addition, DIFS took into consideration the following: • Public comments; • Scope and duration limitations for covered benefits; and • Consistency with current benchmark plan. With regard to plan cost differences, DIFS staff examined the variations in benefits among the various benchmark plans to assess the potential cost differences. Because HHS permitted an extension of the transitional plans for small group, most of the benchmark options were consistent with the 2012 Wakely study.

Therefore, DIFS relied upon the Wakely study in its evaluation of the plans. The Wakely study identified premium differences for certain benefit categories. 32 DIFS staff compared the plans in the context of these cost estimates and, as was the case in 2012, determined that the Priority Health HMO plan would likely be the least costly, particularly in the high-cost categories of adult dental, infertility, and physical therapy/occupational therapy/speech therapy. As in 2012, in developing the benchmark recommendation, DIFS focused on achieving a balance between ensuring that all EHB requirements are met and mitigating rate increases. DIFS believes that the selection of the Priority Health HMO plan achieves the best balance between comprehensiveness and cost-effectiveness for Michigan consumers.

DIFS also believes that, given the substantial similarity between the 2012 benchmark plan and the 2017 benchmark plan, this selection will promote continuity in the individual and small group markets. Pediatric Dental Benefits Recommendation As in 2012, DIFS recommends that the pediatric dental benefits category be supplemented using benefits from the MIChild dental program. This program is comprehensive and has a 31 The 2017 Priority Health HMO plan differs from the 2012 Priority Health HMO plan in the following respects: 1) it clarifies coverage for autism spectrum disorder treatments; 2) it clarifies coverage for women’s preventive services; 3) it eliminates coverage for men’s contraceptives; 4) it changes the formulary from closed to open; 5) it clarifies coverage exclusions for developmental delays and cognitive disorders. 32 See p. 12 of the Wakely study, which may be viewed here. 13 .

Michigan’s Essential Health Benefits Benchmark Plan: Executive Report 2017 proven record of meeting the pediatric dental needs of Michigan children. In addition, the continued use of the MIChild plan will ensure consistency and avoid disruptions between plan years 2016 and 2017. Pediatric Vision Benefits Recommendation As noted above, benchmark plans that do not already include coverage for pediatric vision services must be supplemented with benefits from the FEDVIP vision plan with the largest enrollment. According to federal guidance, the only option to supplement vision benefits is the FEDVIP BlueVision—High Option plan. Accordingly, DIFS recommends the selection of this plan to supplement the benchmark plan. 14 .

Michigan’s Essential Health Benefits Benchmark Plan: Executive Report Appendix A State of Michigan Essential Health Benefits Selection Notification Letter to Secretary Burwell 15 2017 . . Michigan’s Essential Health Benefits Benchmark Plan: Executive Report Appendix B Michigan Base-Benchmark Plan Options Comparison Chart 17 2017 . 2017 Benchmark MICHIGAN ESSENTIAL HEALTH BENEFITS COMPARISON Benefits provided by potential benchmark major medical plans - data as of 3/31/14 Grouped in the 10 categories of Essential Health Benefits required by the ACA. http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/ehb-2-20-2013.html Small Group BCBSM Community Blue PPO Plan 4 Benefits 1. Ambulatory patient services - EHB Category Primary Care Visit to Treat an Injury or Yes Illness Specialist Visit Yes State Employee Plans HMO Priority Health BCBSM Simply Priority Health BCBSM (HMO) Blue 2500 (HMO) (Self-insured) Federal Employee Plans PHP (HMO) Priority Health (HMO) FEHBP BCBS Standard Option FEHBP BCBS Basic Option FEHB GEHA Standard Option Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Michigan Mandate Yes 500.3519(3) 500.3519(3) Other Practitioner Office Visit (Nurse, Physician Assistant) Outpatient Surgery Physician/Surgical Services Outpatient Facility Fee (e.g., Ambulatory Surgery Center) Home Health Care Services Hospice Services - home Breast Cancer Outpatient Treatment Services Abortion for Which Public Funding is Prohibited Chemotherapy (Antineoplastic) Radiation Dialysis Infusion Therapy 2. Emergency Services - EHB Category Emergency Room Services Emergency Transportation/Ambulance June 16, 2015 Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes limited to 60 visits per calendar year Yes Yes Yes Yes - 50 visit limit Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes - $15,000 limit Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No No No No No No No No No No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 18 500.3519(3) 500.3406c 500.3406d Act 182 of 2013 500.3406e 500.3406k 500.3406l 500.3519(3) . 2017 Benchmark MICHIGAN ESSENTIAL HEALTH BENEFITS COMPARISON Small Group BCBSM Community Blue PPO Plan 4 Benefits Urgent Care Centers or Facilities 3. Hospitalization - EHB Category Inpatient Hospital Services (e.g., Hospital Stay) Inpatient Hospice Inpatient Physician and Surgical Services Transplants State Employee Plans HMO Priority Health BCBSM Simply Priority Health BCBSM (HMO) Blue 2500 (HMO) (Self-insured) PHP (HMO) Priority Health (HMO) FEHBP BCBS Standard Option FEHBP BCBS Basic Option FEHB GEHA Standard Option Michigan Mandate Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes maximum of 45 days per contract year, combined with inpatient rehab facility, subacute facility, and skilled nursing facility Yes Yes maximum of 45 days per contract year, combined with inpatient rehab facility, subacute facility, and skilled nursing facility Yes Yes Yes - maximum of 120 days per confinement, combined with inpatient rehab facility, subacute facility, and skilled nursing facility Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes - Plan pays $700/day Yes Yes Yes Yes 500.3519(3) Yes Yes Yes Yes 500.3519(3) Yes Yes Yes Yes 500.3406b Yes Yes maximum of 45 maximum of 45 Yes days per days per maximum of 120 contract year, contract year, days for each Yes - nonYes - up to a Yes - up to a combined with combined with benefit period, network maximum of 120 maximum of 120 inpatient rehab in a SNF for benefits are Skilled Nursing Facility inpatient rehab days per days per member facility, general limited to 100 facility, member per year per year subacute conditions. days per year subacute facility, and Period renews facility, and inpatient after 90 days inpatient hospice facility hospice facility 4. Maternity and newborn care - EHB Category Prenatal and Postnatal Care Yes Yes Yes Yes Yes Yes Delivery and All Inpatient Services for Yes Yes Yes Yes Yes Yes Maternity Care 5. Mental health and substance use disorder services, including behavioral health treatment - EHB Category Yes - 20 days Yes - 20 days Yes - 60 days per per contract per contract Mental/Behavioral Health Inpatient year Yes year year Yes Yes Services Must be Must be Must be supplemented supplemented supplemented June 16, 2015 Federal Employee Plans 19 Yes - maximum of 120 days per confinement, combined with inpatient rehab facility, subacute facility, and inpatient hospice facility 500.3519(3) 500.3519(3) 500.3519(3) .

2017 Benchmark MICHIGAN ESSENTIAL HEALTH BENEFITS COMPARISON Small Group BCBSM Community Blue PPO Plan 4 Benefits Mental/Behavioral Health Outpatient Services Yes Substance Abuse Disorder Inpatient Services Yes Substance Abuse Disorder Outpatient Services Yes 6. Prescription drugs - EHB Category Generic Drugs Preferred Brand Drugs Non-Preferred Brand Drugs Specialty Drugs Preferred Tobacco Cessation Products must be prescribed by a Physician and obtained from a Network Retail Pharmacy Growth Hormone Therapy Infertility Treatment Prescription Drugs State Employee Plans HMO Priority Health BCBSM Simply Priority Health BCBSM (HMO) Blue 2500 (HMO) (Self-insured) Yes - 20 days per contract year Must be supplemented Yes - 10 days per contract year Must be supplemented Yes - 30 days per contract year Must be supplemented Yes 50 visits per year/ 120 visits lifetime maximum Must be supplemented Yes - 60 days per year Must be supplemented Yes Yes - 20 days per contract year Must be supplemented Yes - 10 days per contract year Must be supplemented Yes - 30 days per contract year Must be supplemented Yes Federal Employee Plans PHP (HMO) Priority Health (HMO) FEHBP BCBS Standard Option FEHBP BCBS Basic Option FEHB GEHA Standard Option Yes Yes Yes Yes Yes 500.3519(3) Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes - 75 Visits per Year/All therapies combined Yes - 60 visits/all therapies combined 7. Rehabilitative and habilitative services and devices - EHB Category Rehabilitative Services Habilitative Services & Devices June 16, 2015 Yes 30 Yes - 30 Yes - 30 Yes - 60 combined visits combined visits combined visits combined visits w/chiro per per contract per contract year per contract year contract year year No Must be supplemented Yes - 30 combined visits per contract year No Must be supplemented Yes - 30 combined visits per contract year Michigan Mandate Yes 90 Visits per member, per calendar year Yes Yes - 60 Yes - 75 Visits 90 OT/PT/St combined visits per Year/All Combined visits per contract therapies per contract year combined year No Must be supplemented Only for Autism 20 No Must be supplemented No No Must be Must be supplemented supplemented Yes 500.3425 500.3519(3) . 2017 Benchmark MICHIGAN ESSENTIAL HEALTH BENEFITS COMPARISON Small Group BCBSM Community Blue PPO Plan 4 Benefits State Employee Plans HMO Priority Health BCBSM Simply Priority Health BCBSM (HMO) Blue 2500 (HMO) (Self-insured) Federal Employee Plans PHP (HMO) Priority Health (HMO) FEHBP BCBS Standard Option Physical, Physical, Occupational, Occupational, Speech Speech No 500.3406s Therapies - No Therapies - No Must be Order 14-017-M ABA ABA supplemented Must be Must be supplemented supplemented FEHBP BCBS Basic Option FEHB GEHA Standard Option Michigan Mandate Yes Yes - ABA limited to annual maximum $50,000 Must be supplemented Yes Yes Yes Yes with 135 days per contract for ABA therapy Must be supplemented Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 500.3406a Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 500.3519(3) Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Imaging (CT and PET Scans, MRIs) Yes Yes Yes Breast Cancer Diagnostic Services Yes Yes Yes 9. Preventive and wellness services and chronic disease management - EHB Category Preferred Tobacco Cessation Products must be prescribed by a Yes Yes Yes Physician and obtained from a Network Retail Pharmacy Preventive Yes Yes Yes Care/Screening/Immunization Routine Foot Care No No No Yes Yes Yes Allergy Testing Yes Yes Yes Diabetes Education Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes No Yes Yes No Yes Yes No Yes Yes Yes - six visits per contract year Yes Yes Yes Yes Yes Yes Autism Therapy Durable Medical Equipment Prosthetic Devices including Mastectomy Prosthetics 8. Laboratory services - EHB Category X-Rays & Diagnostic Imaging Laboratory Outpatient and Professional Services Nutritional Counseling Yes - ABA limited to annual maximum $50,000 Must be supplemented Yes - nutritional therapy in Autism Yes - six visits per contract year 10. Pediatric services, including oral and vision care - EHB Category No No Basic Dental Care (Child) Must be Must be supplemented supplemented Routine Eye Exam (Child) June 16, 2015 No Must be supplemented Screening only as part of physical exam No Yes Yes No No Yes Yes Yes Yes Yes - this is listed under weight Yes - 3 sessions loss with per year inlifetime network only maximum of $300 Yes - nutritional therapy in Autism Yes - six visits per contract year No Must be supplemented No Must be supplemented Yes No Must be supplemented Yes No Must be supplemented Screening only as part of physical exam Yes No Must be supplemented No Must be supplemented 21 No No Must be Must be supplemented supplemented Yes 500.3519(3) 500.3406d 500.3406p .

2017 Benchmark MICHIGAN ESSENTIAL HEALTH BENEFITS COMPARISON Small Group BCBSM Community Blue PPO Plan 4 Benefits State Employee Plans HMO Priority Health BCBSM Simply Priority Health BCBSM (HMO) Blue 2500 (HMO) (Self-insured) Federal Employee Plans PHP (HMO) Priority Health (HMO) FEHBP BCBS Standard Option No No No Must be Must be Must be supplemented supplemented supplemented FEHBP BCBS Basic Option FEHB GEHA Standard Option No Must be supplemented No Must be supplemented No Must be supplemented No Must be supplemented Yes No Must be supplemented No Must be supplemented No No No No Yes No No No Must be supplemented No Must be supplemented No Must be supplemented No Must be supplemented Yes No Must be supplemented No Must be supplemented General Pediatric Care Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Well Baby Visits and Care Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Miscellaneous Accidental Dental Routine/Basic Dental Care (Adult) Yes No No No Yes No No No Yes Yes Yes No No No Yes Yes Yes Yes Yes Yes Yes - 20 visits per year Yes- 30 combined visits per contract year Yes Yes Yes - 12 visits per year No No No No Yes Yes Yes Yes Major Dental Care (Child) Orthodontia (Child) Eye Glasses for Children Chiropractic Care Cosmetic Surgery Diagnosis and treatment of infertility, e.g. endometriosis, blockage of fallopian tubes, varicocele June 16, 2015 Yes - spinal Yes- 30 Yes- 30 Yes - 24 visits per manipulation combined visits Yes - limited to 12 combined visits member per limited 24 visits per contract visits per member per contract calendar year reduced to 12 year with rehab per calendar year year with rehab combined in & visits with OT/PT out of network OT/PT optional rider Yes No Yes No Yes Yes - limited infertility services Yes Yes - limited infertility services Yes No - excluded under what is not covered 22 No Yes - 5 office visits & 3 diagnositic/ surgical procedures annual benefit limit per covered person artificial insemination included No No Michigan Mandate No No No No Must be Must be Must be supplemented supplemented supplemented 500.3406n 500.3519(3) . 2017 Benchmark MICHIGAN ESSENTIAL HEALTH BENEFITS COMPARISON Small Group BCBSM Community Blue PPO Plan 4 Benefits Hearing Aids State Employee Plans HMO Priority Health BCBSM Simply Priority Health BCBSM (HMO) Blue 2500 (HMO) (Self-insured) PHP (HMO) Federal Employee Plans Priority Health (HMO) Yes - includes one hearing Yes - includes exam, one hearing aids audiometric Yes limited to $880 exam, and one standard or for monaural or basic hearing binaural once $1600 binaural aid per ear every 36 months once every 36 every 36 months months; hearing aid is limited to $500 per aid FEHBP BCBS Standard Option FEHBP BCBS Basic Option FEHB GEHA Standard Option Yes Yes Yes No No No No No No No No No No No No No No No No No No Yes No No Yes Yes No Yes No Yes No No No No Yes Yes Yes No No No No Yes No No No No No Yes No Yes No Yes No Yes No No No Routine Eye Exam (Adult) No Screening only No Screening only Covered under Blue Vision cert Yes Screening only No No No Weight Loss Programs No Yes No Yes Yes - $300 lifetime maximum Yes Yes No No No Yes Yes Yes Yes Yes Yes - $350 lifetime maximum Yes Yes - 20 treatments per year Long Term/Custodial Nursing Home Care Major Dental Care (Adult) Non-Emergency Care When Traveling Outside the U.S. Orthodontia (Adult) Private-Duty Nursing Bariatric Surgery Yes in-network only, medically Yes - once per Yes - if medically Yes - once per necessary, order lifetime lifetime necessary by primary care physician; one per lifetime Yes - if medically necessary Yes - once per lifetime Yes - if medically necessary Acupuncture No No No No Yes - 20 treatments per calendar year No No Wigs and supplies (cancer or alopecia only) No No No No Yes - lifetime maximum $300 No No Genetic Testing Evaluation and treatment of chronic pain Reconstructive Surgery No Yes No Yes Yes Yes Yes Yes - $350 lifetime maximum Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes June 16, 2015 23 No Yes Michigan Mandate . 2017 Benchmark MICHIGAN ESSENTIAL HEALTH BENEFITS COMPARISON Small Group Benefits Blepharoplasty of upper lids BCBSM Community Blue PPO Plan 4 State Employee Plans HMO Priority Health BCBSM Simply Priority Health BCBSM (HMO) Blue 2500 (HMO) (Self-insured) Federal Employee Plans PHP (HMO) Priority Health (HMO) FEHBP BCBS Standard Option FEHBP BCBS Basic Option FEHB GEHA Standard Option Treatment for Temporomandibular Joint Disorders Orthognathic Surgery Yes Yes Yes Yes Yes Yes No No Yes Yes Yes Yes Yes Yes Yes Yes No No Yes Yes Yes Yes Yes Yes Yes Yes No No Yes Yes Yes Yes Yes Yes Yes Yes No No Yes Yes Yes Yes Yes Yes Yes Yes No No Yes Yes Yes Yes Yes Yes Yes Yes No No Yes Yes Breast Reduction Surgical Treatment of Male Gynecomastia Rhinoplasty and Septorhinoplasty (sleep apnea treatment) Panniculectomy Yes Yes Yes Yes Yes Yes Yes No No Michigan Mandate Yes No No only only Behavioral Transgender/gender Reassisgnment No reconstructive reconstructive No No No Health Services Services procedures of procedures of the genitalia the genitalia Abbreviations: BCBSM = Blue Cross Blue Shield of Michigan; PHP = Physicians Health Plan; CT = computed tomography; GEHA = Government Employees Health Association; MRI = magnetic resonance imaging; PET = positron emission tomography; PT = physical therapy; OT = occupational therapy; ST = speech therapy Any covered services may be subject to medical management techniques, cost sharing, etc. The data provided in this chart is not legal advice and is intended for informational purposes only.  This chart has been compiled by the Michigan Department of Insurance and Financial Services based on presently available enrollment data and benefit design, utilizing the essential health benefit (EHB) definitions and categories as delineated in the most recent guidance provided by the federal government.  The U.S. Department of Health and Human Services (HHS) has directed states to choose the EHB benchmark from certain enumerated plans, including the largest HMO and small group plans in the state, identified by enrollment data as reported to HHS for the first quarter of 2014.  The data provided in this chart is subject to change as additional federal guidance is provided with regard to EHB. June 16, 2015 24 . MICHIGAN ESSENTIAL HEALTH BENEFITS COMPARISON DENTAL AND VISION DENTAL State of MI Federal Employee Plans MIChild BCBSM FEDVIP Dental MetLife Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes under age 14 Yes under age 14 Yes Yes Yes up to age 22 Yes No No Yes Yes Yes Yes No No Yes Yes Yes Periodontics Periodontal scaling and root planing Gingivectomy or gingivoplasty No No Yes Yes Prosthodontics (removable) Maxillary dentures No Yes Benefits Diagnostic Initial exam Routine checkup Bitewing X-rays Diagnostic tests Preventive Cleanings Flouride treatments Space maintainers Dental sealants on first and second permanent molars Restorative Fillings of amalgam, plastic composite or similar materials and stainless steel crowns Metallic onlays Porcelain or ceramic crown substrate Endodontics Pulpotomy for primary teeth Anterior, bicuspid and molar root canal Anterior, bicuspid and molar root canal therapy June 16, 2015 25 Yes Yes . State of MI MIChild BCBSM Benefits Prosthodontics (fixed) Federal Employee Plans FEDVIP Dental MetLife Porcelain, ceramic and cast metal retainers for resin bonded fixed prosthesis Oral & Maxillofacial Surgery Simple extractions No Yes Yes Yes Adjunctive General Services Consultation by a second dentist not providing treatment Yes Yes Exams and treatment for an emergency condition Emergency treatment for temporary relief of pain Yes Yes Yes Yes VISION Federal Employee Plans FEDVIP Vision FEP BlueVision Benefits Yes Glaucoma test is not specifically included or excluded Yes Yes Yes Vision exam and glaucoma test Eyeglass frames (wire, plastic or metal) Eyeglass lenses Medically necessary contact lenses June 16, 2015 26 .