HHS Announces New Health Plan Out of Pocket Limits for 2017

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.

Grandfathered Health Plans – What Are They?

You may have heard a lot about how the Affordable Care Act (ACA) is going to change health insurance in the next year, but does it all apply to you? If you get your insurance from your employer, there may be a chance that you may be enrolled in a “grandfathered plan” and some of these changes may not affect you – yet.

 

Some health plans were allowed to be exempt from some of the ACA’s rules and protections in the interest of a smooth transition and to allow employers and individuals to keep their current policies in force without having to make substantial changes. Almost half of all Americans who get insurance through their jobs are enrolled in such plans, however that number is expected to continue to decline every year.

 

Consumers should know the status of their plans since that may determine whether they are eligible for certain protections and benefits created by ACA. For example, an employee at a large company may wonder why his employer provided coverage does not included the free preventative services that he has heard about on the news. In order to understand this, you must understand the status of your current medical plan and how grandfathering works.

 

What is a grandfathered plan?

 

Most health insurance plans that existed on March 23, 2013 are eligible for grandfathered status and therefore do not have to meet all of the requirements of the health care law. But if an insurer or employer makes significant changes to a plan’s benefits or how much members pay through premiums, copays, or deductibles, then the plan loses that status.

 

Both individual and group plans can be grandfathered. If you get coverage through an employer and they currently offer employees a grandfathered plan as part of their benefits package, you can enroll in this plan even if you were not enrolled on March 23, 2010.

 

What Rules Does a Grandfathered Plan Have to Follow?

 

A grandfathered plan has to follow some of the same rules other plans so under the ACA. For example, the plans can not impose lifetime limits on how much health care coverage an individual can receive, and they must offer dependent coverage for young adults until age 26.

 

There are many rules, however, that grandfather plans do not have to follow. For example, they are not required to provide preventative care without cost-sharing. In addition, they do not have to offer a package of “essential health benefits” that individual and small group plans must offer beginning 2014. Grandfathered individual plans can still impose annual dollar limits (such as capping key benefits at $750,000 in a given year) and they can deny coverage for children under age 19 if they have pre-existing conditions.

 

How Many People Are Enrolled in Grandfathered Plans?

 

In 2013, 36% of those who get coverage through their employer are enrolled in a grandfathered health plan. This number is down from 48% in 2012 and 56% in 2011, according to the Kaiser Family Foundation Employer Health Benefits Survey. Most plans are expected to lose grandfather status over time though.

 

How Do I Find Out If I’m Enrolled in a Grandfathered Plan?

 

If you want to know more about your coverage, it is best ask your insurance company or your employer’s human resource department about the status of your plan. If your employer is currently offering a grandfather plan, they are required to release a notice to you annually if they are offering benefits through a grandfathered medical plan.

 

Please contact our office for more information regarding if your current plan is considered “grandfathered” or for more information on ACA.