Earlier this month, the Departments of Treasury, Labor and Health and Human Services (Agencies) jointly issued additional guidance on the application of the cost-sharing limitations imposed under the Affordable Care Act. It is helpful that the guidance was issued early enough in the year to allow plan sponsors an opportunity to review their alternatives in making design decisions for 2015.
Under the Affordable Care Act, non-grandfathered group health plans may not impose out-of-pocket (OOP) maximums in excess of prescribed limitations. The annual limit applies to all non-grandfathered plans (whether small, large, insured or self-insured). The applicable limits for 2014 are set forth in the table below.
Maximum annual out-of-pocket
$6,350 for self-only coverage$12,700 for family coverage
The Agencies previously issued guidance on how to apply the annual OOP limit where a plan utilizes more than one service provider (i.e. separate medical and prescription drug administrators) to administer benefits under the plan. That guidance generally provided that, for the first plan year beginning on or after January 1, 2014 only, a plan will satisfy the limitation if (a) the plan complies with the limitation with respect to its major medical coverage; and (b) to the extent that the plan includes an OOP maximum on coverage that does not consist solely of major medical coverage, that the OOP maximum for such benefit does not exceed the dollar limits set forth above.
Additional guidance issued by the Agencies on January 9, 2014 confirms that, with respect to plan years beginning on or after January 1, 2015, non-grandfathered group health plans must apply the OOP maximum to all essential health benefits (EHB) provided under the plan. Certain expenses, however, are not required to be counted toward the OOP maximum.
If the plan uses a network of providers, the expenses for out-of-network items and services need not be included.
The cost of items or services that do not constitute EHBs need not be included. For a list of authorized plans to determine EHB for large insured plans and self-insured plans, see www.cms.gov/CCIIO/Resources/Files/Downloads/ehb-faq-508.pdf.
The costs for items or services not covered by the plan need not be included.
Notwithstanding the foregoing, the Agencies indicated that plans with separate service providers may apply separate OOP maximums to such benefits, provided that the aggregate OOP maximum applicable to all EHBs under the plan does not exceed the annual limitation then in effect.