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Alternative Benefit Plan Coverage

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States have the option to provide alternative benefits specifically tailored to meet the needs of certain Medicaid population groups, target residents in certain areas of the state, or provide services through specific delivery systems instead of following the traditional Medicaid benefit plan.

Alternative Benefit Plan Final Rule

A final rule, published on July 15, 2013, entitled, “Medicaid and Children's Health Insurance Programs: Essential Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes, and Premiums and Cost Sharing; Exchanges: Eligibility and Enrollment” (CMS-2334-F) made major changes in the Medicaid Benchmark and Benchmark-Equivalent Requirements.

Key Requirements of the Rule Include:

  • The term 1937 Medicaid Benchmark or Benchmark Equivalent Plan has been retitled to Alternative Benefit Plans.
  • Alternative Benefit Plans (ABP) must cover the 10 Essential Health Benefits (EHB) as described in section 1302(b) of the Affordable Care Act whether the state uses an ABP for Medicaid expansion or coverage of any other groups of individuals.
  • Individuals in the adult VIII eligibility group will receive benefits through an ABP.

Mental Health Parity and ABPs

On March 30, 2016 CMS issued final rule “Medicaid and Children’s Health Insurance Programs; Mental Health Parity and Addiction Equity Act of 2008; the Application of Mental Health Parity Requirements to Coverage Offered by Medicaid Managed Care Organizations, the Children’s Health Insurance Program (CHIP), and Alternative Benefit Plans” (CMS–2333–F; RIN 0938–AS24)(81 FR 18390).The final rule amended the Medicaid and CHIP regulations to apply the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) to Medicaid non-managed care benchmark and benchmark-equivalent plans as described in section 1937 of the Social Security Act (referred to in this rule as Alternative Benefit Plans, or ABPs), the Children’s Health Insurance Programs (CHIP) under title XXI of the Act, and Medicaid managed care organizations (MCOs) as described in section 1903(m) of the Act. The detailed federal regulatory requirements related to mental health parity may be found at 42 CFR Part 438, Subpart K for Medicaid managed care; at 42 CFR § 440.395 for Medicaid ABPs; and 42 CFR § 457.496 for CHIPs.  CMS also published resources on Parity requirements and guidance to remind States of their responsibility to comply with parity requirements.

Mental Health Parity Reporting Templates, Guidance and Resources 

CMS developed reporting templates and accompanying instructional guides to assist states and health plans (i.e., managed care plans) with ensuring compliance with these parity requirements, and to support consistent and transparent information to CMS documenting this compliance. CMS strongly encourages all states and plans to utilize these resources for current submissions; we believe optional use will allow users to become familiar with the content and functionality of these workbooks. CMS anticipates requiring use of these templates in the future.

CMS published guidance and resources on Parity requirements, including the reporting templates. 

Additional Guidance