HHS has released final
regulations and a Q&A that provide clarification of the
application of the annual cost-sharing limits implemented by the
Affordable Care Act ("ACA"). Notably, the final regulations
indicate that the ACA's annual cost-sharing limit for self-only
coverage applies to all individuals, including each individual who
has family coverage. That is, the final regulations require group
health plans to embed an individual cost sharing limit within the
The ACA requires that all non-grandfathered group health plans have
an annual cost sharing limit for covered, in-network essential health
benefits that, for 2016, does not exceed $6,850 for self-only
coverage and $13,700 for family coverage. Prior to HHS' release of the
final regulations, many group health plan administrators had applied
a single limitation depending on whether the employee enrolled in
self-only or family coverage. Typically, if an employee enrolled in
family coverage, the higher limit applied to the family as a whole,
regardless of the expenses incurred by any single covered individual.
Regulations. For 2016, the HHS
requires group health plans to have a self-only cost-sharing limit
within the family limit.
Using the 2016 limits, if a family plan has an annual out-of-pocket
limit of $13,700 and one family member incurs a $20,000 expense, that
family member would be responsible for $6,850 (i.e., the
self-only limit) and the remaining $13,150 would be paid by the plan.
The other family members would remain responsible for the remaining
$6,850 of the total family deductible.
Deductible Health Plans.
Sponsors of High Deductible Health Plans ("HDHPs") that are
intended to be compatible with Health Savings Accounts ("HSAs")
should note that the out-of-pocket limits set for HSA-compatible
HDHPs are lower than the ACA limits. For 2015, the HDHP limits are
$6,450 for self-only coverage and $12,900 for family coverage whereas
the ACA limits for 2015 are $6,600 for self-only coverage and $13,200
for family coverage.
these recent HHS rules for the ACA, the rules for HDHPs currently do
not require that family HDHPs embed a self-only cost-sharing limit.
Nevertheless, a family HDHP would satisfy both the HDHP and ACA limits
only by including the new HHS' self-only cost-sharing limit
Steps for Plan Sponsors. The
preamble to the final regulations indicates that "2016 plans
must comply with this policy," thereby implying that compliance
with the embedded self-only cost-sharing limit is not required until
2016 plan or policy years. Plan sponsors must be cognizant of this
rule when working on 2016 plan designs and when pricing their plans.