The agencies have jointly issued an FAQ that sets the §1302(c) out-of-pocket limits for 2016. Those limits will be $6,850 for single-only coverage and $13,700 for family coverage. The 2015 limits are of course $6,600/$13,200 respectively. More noteworthy in this announcement is that beginning in 2016 for all non-grandfathered plans – insured and self-insured – HHS confirms an earlier and somewhat controversial position that the self-only out-of-pocket limit should apply to each individual regardless of whether that person is enrolled in self-only coverage or family coverage.
The announcement offers this example of how the out-of-pockets will be applied in 2016 and thereafter. A plan has maximum family out-of -pocket of $13,000. The following claims have accrued within an enrolled family unit:
- Family Member A$10,000
- Family Member B$ 3,000
- Family Member C$ 3,000
- Family Member D$ 3,000
First, the single-only §1302(c) limit of $6,850 applies to each person irrespective of family enrollment. Since “A” had $10,000 in claims, he/she would come out of pocket for $6,850 and the plan is responsible for the balance – $3,150. Now, the other three family members – with $3,000 each – are out of pocket those amounts since none of them have reached the individual $6,850 ceiling; but the plan’s family aggregate now comes into play. The family has come out of pocket for $15,850 – the sum of each member’s out-of-pocket — $6,850 + $3,000+$3,000+$3,000. Since the plan’s family aggregate is $13,000, the plan will have to cover another $2,850 ($15,800 – $13,000).
JSL Comment: The agencies’ interpretation of health care reform’s annual cost-sharing limitation effectively embeds an individual out-of-pocket limit in all family group health plans with a higher family deductible—whether or not the high-deductible coverage is meant to make employees HSA-eligible. While this methodology does not take effect until 2016, self-funded plans and insurers will have to begin work now in order to re-tool systems to adjudicate claims under this protocol.
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