Second Opinions

SECOND OPINIONS: Maxing Out: Guidance on Out-of-Pocket Maximums

August 12, 2014 (PLANSPONSOR.com) - Starting in 2014, the Patient Protection and Affordable Care Act (ACA) prohibits group health plans from imposing an out-of-pocket maximum (OOP max) that exceeds statutory limits.

By PS | August 12, 2014
Page 1 of 2 View Full Article

Once an individual has met the plan’s OOP max, the plan must pay 100% of covered benefits. This requirement applied for plan years starting on or after January 1, 2014, except with respect to grandfathered plans.

The Department of Health and Human Services has issued regulations in the context of Exchange-qualified health plans, but these regulations do not apply directly to other group health plans, such as Employee Retirement Income Security Act (ERISA) plans (although can be viewed as analogous guidance). The agencies have not issued regulations applicable to group health plans, but have issued several Q&As. The most recent Q&As were issued in January and May of this year and can be found at www.dol.gov/ebsa/faqs (see Parts XVIII & XIX).

Below we answer several questions group health plans may have that have been addressed in the agency Q&As.

What is the OOP Max amount? 

  • For the 2014 plan year, the allowed OOP Max amount is $6,350 self / $12,700 family.
  • For the 2015 plan year, the allowed OOP Max amount is $6,600 self / $13,200 family.   

 

What expenses count toward the OOP max? 

The ACA provides that cost-sharing amounts that must be counted toward the OOP max include deductibles, co-insurance, and copayments. The statute provides that such cost-sharing does not have to include premiums, balance billing amounts for non-network providers, or spending for noncovered services. 

The Q&As further clarify that:

  • Plans are not required to count cost-sharing with respect to non-network providers toward the OOP max.
  • Plans are not required to count cost-sharing for noncovered services toward the OOP max.
  • Plans are not required to count amounts charged above the usual, customary and reasonable (UCR) amount toward the OOP max.
  • Plans only are required to count cost-sharing for essential health benefits toward the OOP max (the same group of benefits to which the annual and lifetime limit rules apply).
  • Plans can limit the costs of prescription drugs that are counted toward the OOP max to generic only and are not required to count the cost of brand prescription drugs if a generic is available and medically appropriate. Note that the determination as to whether a generic drug is “medically appropriate” is to be made by the individual's personal physician.

SPONSORED MESSAGES