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Friday, March 22 , 2019, 8:15 am | Fair 44º


Cost Sharing Limits for Family Health Insurance Plans Changing for 2016

The Patient Protection and Affordable Care Act (PPACA) requires limits for consumer spending on in-network essential health benefits covered on most health plans.

These benefits are known as out-of-pocket (OOP) maximum limits. The out-of-pocket limits apply to all non-grandfathered plans, regardless of size or funding type, including all plans sold through a public exchange/Marketplace.

A new rule impacting all non-grandfathered family health plans took effect Jan. 1, 2016. Family health plans that begin in 2016 have an embedded individual out-of-pocket maximum.

This means that family health plans cannot allow any individual to spend more than the ACA individual OOP maximum, which is $6,850 in 2016. In past years, family plans have normally only had a family OOP maximum, and not an embedded individual OOP maximum.

The rules on OOP expenses are specific to all covered in-network expenses and include the dollars spent on deductibles, co-pays and coinsurance.

This new rule is designed to limit the amount of out-of-pocket health expenses an individual or family could be responsible for paying in a given year.

Beginning with 2016 plans, once an individual within a family plan meets his or her individual OOP maximum, the plan must pay 100 percent of all covered expenses for that individual, even if the family OOP maximum has not been met.

Once the family OOP maximum is reached, the plan must pay 100 percent of all covered expenses regardless of whether each person covered has reached the individual OOP maximum.

The embedded individual OOP rule could impact overall family health care expenses, depending on a variety of factors. Customers with health plans that have lower family out-of-pocket spending limits will be less impacted by this new rule.

While customers of health plans with a family OOP limit less than $6,850 will not be impacted at all, customers of health plans with family OOP limits closer to the ACA family OOP maximum, $13,700 in 2016, could see a large difference in their OOP expenses, which is especially true if only one family member experiences high medical expenses.

Beneflex Insurance Services is a full service employee benefits advisory firm with offices in Santa Barbara and Thousand Oaks, Calif. It specializes in helping employers control costs via prudent plan design and implementation of employee benefit plans with proprietary and mostly unheard of strategies.  

Beneflex makes employer plans work for both employer and employees and their covered family members.

— Michelle Meissner is a compliance specialist with Beneflex Insurance Services.


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