Cost Sharing Limits Changing for 2016 | NY Benefits Broker
By Danielle Capilla, Chief Compliance Officer at United Benefit Advisors
In Benefit and Payment Parameters for 2016 Final Rule issued in February 2015, federal agencies included a clarification that the annual cost-sharing limitations for self coverage apply to individuals, regardless of individual is covered by self-only plan or is covered by another kind of plan. Cost sharing refers to out-of-pocket expenses and deductibles are paid by beneficiary. In both self-only and other plans, individual’s cost sharing for essential health benefits (EHBs) may never exceed at self annual limitation. The information was included the preamble of Final Rule, and was not included in regulatory language. As result, the benefits industry was left unsure of implications.
On March 10, 2015, a “Cost-Sharing FAQ” was released, confirming that self-only limitations will apply each individual regardless of individual is enrolled in self-only plan or plan that not self-only. It appears this requirement will apply both high-deductible health plans (HDHPs) and non-high-deductible plans, and is response to consumer complaints the high deductibles and of pocket limits. This means at limits are applicable to health plans beginning in 2016. The FAQ includes example of HDHP with $10,000 family deductible, and state the plan must apply of pocket limitation on cost sharing at individual level, even if the amount is below the $10,000 family deductible limit.
Going forward, the family’s cost sharing to the deductible limit can continue to be offered under the HDHP policy, as long as the self-only annual out-of-pocket limitation is applied to each individual on the plan. The annual self-only out-of-pocket limit for 2016 will $6,850. In addition, an annual out-of-pocket limit will apply to HDHPs associated with health savings accounts (HSAs), but that limit has not yet been released.
For practical purposes, these new limitation acts as embedded limit, and will apply to plans starting in 2016 plan year. The cost-sharing limitation only applies to EHBs, employers might find it administratively difficult to parse out EHB costs and non-EHB costs.
For more information on EHBs, download UBA’s PPACA Advisor, “Essential Health Benefits, Minimum Essential Coverage, Minimum Value Coverage: What’s the Difference?”