The complexity around health plan out-of-pocket limits will increase in 2016 due to some recent regulations from HHS and recent FAQs from Health and Human Services, Treasury and the Department of Labor for the Affordable Care Act.
The ACA requirements include an out-of-pocket maximum for health plans subject to market reform provisions. This is found under §2707(b) of the ACA. This requirement is similar to the requirements under the Health Savings Account (HSA) rules but follow a different adjustments for inflation. See prior blog post dated 5/13/14 for more details for these rules.
Until recently, many people thought you must follow either a single level maximum (for single coverage) or a family level maximum (for anything above single coverage). HHS proposed rules discussed "clarifying" this standard. The new guidance, in the form of final rules, points out that the self-only maximum applies to each individual, regardless of whether the individual is enrolled in single coverage or family coverage. This new clarification will apply to plan or policy years in 2016. See final HHS Notice of Benefit and Payment Parameters for 2016 (2016 Payment Notice) (80 FR at 10824) and FAQs on the ACA Part XXVII.
This now means health plans subject to market reform will need to apply two different out-of-pocket maximums depending on the coverage level. To make matters worse, health plans also subject to the HSA tax rules for eligibility (commonly referred to as High Deductible Health Plans or HDHP) will need to apply different maximums than health plans just subject only to the ACA market reform rules. To illustrate this further, please see the attachment below. [2017 limits were just announced in late November as part of the HHS Notice of Benefit and Payment Parameters for 2017. This new guidance will require the following cost-sharing limits for plans subject to ACA market reform provisions: the 2017 maximum annual limitation on cost sharing would be $7,150 for individual coverage and $14,300 cumulative for family coverage.]
If you need assistance understanding these plan design rules, and which plans these rules apply to, please contact Kinney & Larson LLP.