Law Eliminates Deductible Limits For Employer-Sponsored Plans In Small Group Market

The Protecting Access to Medicare Act of 2014 (P.L. 113-93) eliminates the deductible limits for employer-sponsored health plans in the small group market. Specifically, Sec. 213 of the law repeals Section 1302(c)(2) of the Patient Protection and Affordable Care Act, which had placed limits on deductibles in employer-sponsored health plans in the small group market, subject to the law’s actuarial value requirements. These limits on deductibles are not in effect for the 2014 and 2015 plan years.

The new law, which President Barack Obama signed on April 1, 2014, provides that the amendment will be effective as if included in the enactment of the ACA.

Original ACA provision. ACA Sec. 1302(c)(2) had provided that, generally, deductibles under a plan offered in the small employer group market could not exceed $2,000 for self-only coverage ($4,000 for other coverage). These amounts could be increased by the maximum amount of reimbursement reasonably available to a flexible spending account participant. In addition, these amounts were to be indexed annually, using the premium adjustment percentage used to adjust cost-sharing limits.

Industry reaction. One organization, The Employers Council on Flexible Compensation (ECFC), had joined forces with several other organizations to get the deductible limit provision repealed. “This is a real victory for consumer-based health care and consumer-based benefit accounts,” explained Natasha Rankin, executive director at ECFC. “It allows small employers to continue to provide affordable medical insurance to their employees, including flexible compensation options such as FSAs, HRAs, and HSAs. And it allows employees to set aside tax advantaged dollars to help pay for their health care out-of-pocket and deductible expenses.”

Visit our News Library to read more news stories.