On March 1, 2016, the Department of Health and Human Services (HHS) announced the finalized 2017 health plan out-of-pocket (OOP) maximums. Applicable to non-grandfathered health plans, the OOP limits for plan years beginning on or after January 1, 2017 are $7,150 for single coverage and $14,300 for family coverage, up from $6,850 single/$13,700 family in 2016. The OOP maximum includes the annual deductible and any in-network cost-sharing obligations members have after the deductible is met. Premiums, pre-authorization penalties, and OOP expenses associated with out-of-network benefits are not required to be included in the OOP maximums.
In addition to the new OOP maximum limits, employers offering high deductible health plans need to be particularly mindful of the embedded OOP maximum requirement. Beginning in 2016, all non-grandfathered health plans, whether self-funded or fully insured, must apply an embedded OOP maximum to each individual enrolled in family coverage if the plan’s family OOP maximum exceeds the ACA’s OOP limit for self-only coverage ($7,150 for 2017). The ACA-required embedded OOP maximum is a new and often confusing concept for employers offering a high deductible health plan (HDHP). Prior to ACA, HDHPs commonly imposed one overall family OOP limit on family coverage (called an aggregate OOP) without an underlying individual OOP maximum for each covered family member. Now, HDHPs must comply with the IRS deductible and OOP parameters for self-only and family coverage in addition to ACA’s OOP embedded single limit requirement.
The IRS is expected to announce the 2017 HDHP deductible and OOP limits in May 2016.