United Benefit Advisors Insight and Analysis Blog

Out-of-Pocket Limits: Inclusions/Exclusions, Multiple Out-of-Pocket Limits, EHBs for Large Group/Self-Insured Plans

By Bill Olson, VP, Marketing & Communications at United Benefit Advisors
  Mar 13, 2014 1:00:00 PM

PPACA RegulationsOn January 9, 2014, the Department of Health and Human Services (HHS), the Department of Labor (DOL) and the Department of the Treasury/IRS issued Frequently Asked Questions - Part XVIII. This document provides additional information about requirements in several areas. In this second of a three-part series, we will break down the details related to out-of-pocket limits.

The FAQ clarifies that, for non-grandfathered plans, the out-of-pocket maximum:

  • Must include deductibles, coinsurance and copayments for essential health benefits (EHBs). A plan may exclude benefits that are not EHBs from the out-of-pocket maximum if it wishes.
  • Need not include premiums, costs for non-covered services, or costs for out-of-network services in the out-of-pocket limit, although it may if it wishes.
  • May be separated into different out-of-pocket maximums for different categories of services, but the total of all the separate out-of-pocket maximums cannot exceed the out-of-pocket maximum allowed by the Patient Protection and Affordable Care Act (PPACA), which is $6,350 for self-only coverage or $12,700 for family coverage for 2014.

-This option may be helpful for plans with multiple vendors.

-This technique may not be used to create a separate out-of-pocket maximum for mental health services because that would violate the Mental Health Parity Act (MHPA).

The FAQ also verifies that, to the extent a large group insured plan or a self-funded plan must consider EHBs, it may use any state’s EHB benchmark plan. A list of the state EHB benchmark plans for 2014 and 2015 is available from the Centers for Medicare & Medicaid Services. (Large group insured plans and self-funded plans do not have to offer coverage for the 10 EHBs, but they cannot impose lifetime or annual dollar limits on EHBs. It will be difficult for these plans to meet minimum value standards unless most EHBs are covered, however.)

For more information about compliance with health care reform, download "The Employer's Guide to 'Play or Pay'" which covers PPACA penalties, and how to make "Play or Pay" decisions taking into account factors such as location, compensation, subsidies, Medicaid, family size and income.

Topics: private insurance exchange, employee wellness, benefit communication, benefit consultants, benefit management, compliance with health care reform, employee health, group health insurance, healthcare consumerism, health plan compliance, health reimbursement account, insurance solutions, medical plan, self funded health plans, HRA administration