ACA Compliance for Employers: When will annual limits and out-of-pocket maximums be eliminated?

Beginning 2014, nongrandfathered group health plans cannot have annual out-of-pocket maximums…

Beginning in 2014, employers must eliminate annual limits on Essential Health Benefits. After the passage of the ACA in 2010, the administration allowed for employers to file annual waivers to allow for a transitional period for annual limits on health plans. The last year for annual plan year maximums was 2013. What is not clear is whether day limits are still allowed. Since many employers relied on these waivers, and it is strictly prohibited to make changes to a plan year in order to extend an annual limit, it is important that plan sponsors work with their consultants to determine the cost impact and make necessary changes in a timely fashion. In order to mitigate any cost impact, plan sponsors may want to consider stop loss insurance. As with other plan changes, this must be communicated in the Summary of Benefits and Coverage (SBC) and provided 60 days in advance of the change.

In 2014, nongrandfathered group health plans may not have annual out-of-pocket maximums on essential health benefits that are greater than the applicable limit for health savings accounts (HAS) qualifying high-deductible plans. The limit for 2014 is $6,350 per individual and $12,700 per family. This restriction applies to the out- of-pocket maximums in-network benefits only; however, this still is considered an open question under the proposed rules. There is transitional relief in place for 2014, which allows multiple out-of-pocket maximums if each separate out-of-pocket maximum provided by separate service providers does not exceed the limit.

Beginning in 2015, however, this transition relief goes away and all separate out-of-pocket maximums in place for a plan’s different benefits (medical, prescription drug, etc.) must be aggregated and together must not exceed the limit. The HSA limits will be communicated annually in the fall.

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