Annual Limitations on Cost-sharing


        HHS Issues Final Notice of Benefit
        and Payment Parameters for 2016


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Effective for plan years beginning on or after Jan. 1, 2014, the ACA requires non-grandfathered health plans to comply with an overall annual limit—or an out-of-pocket maximum—on essential health benefits.

The ACA requires that the out-of-pocket maximum be updated annually, based on the percent increase in average premiums per person for health insurance coverage.

     • For 2015, the out-of-pocket maximum is $6,600 for self-only coverage
     and $13,200 for family coverage.

     • Under the final rule, the out-of-pocket maximum increased for 2016
     to $6,850 for self-only coverage and $13,700 for family coverage.

HHS also clarified in the final rule that the out-of-pocket maximum applies for the plan year, and not the calendar year, for non-calendar year plans. Also, plans and issuers may, but are not required to, count out-of-network cost-sharing against the annual out-of-pocket maximum.

Finally, HHS clarified in the final rule that the annual limitation on cost-sharing for self-only coverage applies to all individuals, regardless of whether the individual is covered by a self-only plan or family coverage. In both of these cases, an individual’s cost sharing for essential health benefits may never exceed the self-only annual limitation on cost-sharing.

For example, if a family plan has an annual limitation on cost-sharing of $10,000, and one individual in the family plan incurs $20,000 in expenses from a hospital stay, that particular individual would only be responsible for paying the cost-sharing related to the costs of the hospital stay covered as essential health benefits, up to the annual limit on cost-sharing for self-only coverage (assuming an annual limitation of $6,850 for 2016, the maximum for that year).

On Feb. 27, 2015, the Department of Health and Human Services (HHS) published its final Notice of Benefit and Payment Parameters for 2016. This final rule describes benefit and payment parameters applicable to the 2016 benefit year, including standards relating to:

     • The reinsurance program’s annual contribution rate for 2016.

     • The 2016 open enrollment period.

     • The 2016 annual limitations on cost-sharing.


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