Question: Has the Centers for Medicare & Medicaid Services (CMS) clarified the rules for cost sharing for high deductible health plans (HDHP), disallowing cost sharing for any individual covered by the HDHP that exceeds the individual cost-sharing limits established under the Affordable Care Act? Do you have any more documentation or information regarding this ruling?
Answer: In recent weeks, the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) that is part of HHS has issued regulatory guidance on two different issues both related to out-of-pocket maximums.
On February 27, 2015, the HHS released its “Notice of Benefit and Payment Parameters for 2016, Final Rule,” which included setting forth the cost-sharing limits (out-of-pocket maximums) taking effect for plan years beginning in 2016. This rule is not specific to high deductible health plans (HDHPs), but rather applies to all non-grandfathered health plans under the Affordable Care Act (ACA). The limits on out-of-pocket maximums are dollar amounts subject to change each plan year. For the 2016 plan year, the limits will increase to $6,850 for self-only coverage and $13,700 for non-self-only coverage. The preamble included language “clarifying” that each family member would be responsible for only $6,850 of out-of-pocket expenses regardless of whether the plan was self-only coverage or family coverage. (This often is referred to as “embedded out-of-pocket maximums.”) Although the language is not as clear as it could be, the guidelines do state that 2015 plans are not affected. The HHS clarification applies starting with 2016 plan years. For a copy, see www.gpo.gov/fdsys/pkg/FR-2015-02-27/pdf/2015-03751.pdf; the pertinent text in the preamble begins on page 10824, halfway down in the right-hand column.
Next, on March 10, 2015, CMS posted a “Family of One Maximum Out-of-Pocket Policy” FAQ providing further clarification regarding application of out-of-pocket maximums in health plans. The material includes an example of a qualifying high deductible health plan (also called a HSA-compatible HDHP). Qualifying HDHPs, in order to qualify as permissible coverage in connection with a health savings account (HSA), must also comply with IRS rules for minimum annual deductible amounts and maximum annual out-of-pocket amounts. Those dollar amounts also are subject to change each plan year. The required indexing formulas for qualifying HDHPs are different than those for other health plans, though, so the maximum allowable out-of-pocket amounts for qualifying HDHPs are slightly less than the out-of-pocket maximums allowed for other health plans. For instance, for the 2015 plan year, the qualifying HDHP limits are $6,450/$12,900 while the limits for other health plans are $6,600/$13,200. The IRS is expect to announce the 2016 qualifying HDHP limits in May 2015.
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