Health care coverage: essential health benefits.

Assembly Member Bonta, with Senator Menjivar as the principal coauthor, anchors a proposal to review California’s essential health benefits benchmark and, contingent on federal approval, establish a new benchmark for health insurers for the 2027 plan year. The bill’s findings state the Legislature intends to review the benchmark and set a new plan for 2027, while the current framework would continue to anchor essential health benefits to the federal categories and the Kaiser benchmark described in existing law.

Beginning January 1, 2027, if the federal government approves a new California essential health benefits benchmark plan, the state’s benchmark would add a defined package of fertility services, certain durable medical equipment, and related hearing services to the essential health benefits for individual and small-group policies. The baseline remains tied to the federal PPACA categories and to the Kaiser plan currently used as the reference benchmark. The measure preserves alignment with PPACA, allows limited formulary substitutions only under PPACA rules, and requires compliance enforcement consistent with existing Insurance Code provisions, with the exchange-agnostic scope (applying to policies inside or outside the state exchange).

To implement these changes, the bill details a phased approach: it preserves the current structure of EHB, but creates a conditional expansion path—triggered only if HHS approves a new California EHB benchmark plan—arranged to take effect at the start of 2027. The commissioner could issue guidance before 2027 (not subject to the Administrative Procedure Act) and may adopt regulations thereafter under the Administrative Procedure Act, with coordination from the Department of Managed Health Care. The measure also reiterates that the state’s EHB obligations do not guarantee funding for non-EHB benefits and that grandfathered plans and excepted benefits remain exempt from the new requirements.

The proposed changes have implications for insurers, consumers, and employers in the individual and small-group markets, as well as for state oversight agencies. Insurers would be subject to the enhanced benchmark if federal approval is obtained, with enforcement anchored in existing provisions and with ongoing regulatory guidance and rulemaking involving the Department of Managed Health Care. The policy context centers on calibrating California’s EHB framework to federal rules while providing a formal, federal-approval–dependent pathway to expand coverage to fertility services, specific durable medical equipment, and hearing-related benefits for the 2027 plan year.