Self-insured, large group health plans don’t escape from annual limitation rule

All non-grandfathered group health plans, including non-grandfathered self-insured and large group health plans, must comply with the maximum annual limitation on cost-sharing under Section 1302(c)(1) of the Patient Protection and Affordable Care Act (ACA), according to the latest set of frequently asked questions (FAQs) from the Departments of Labor, Health and Human Services and the Treasury (the Departments). This clarification also applies to non-grandfathered high-deductible health plans (HDHP). The Departments will apply this clarification only for plan or policy years that begin in or after 2016

Limitations on cost-sharing. Public Health Service (PHS) Act Sec. 2707(b), as added by the ACA, provides that a non-grandfathered group health plan must ensure that any annual cost sharing imposed under the plan does not exceed the limitations provided for under ACA Sec. 1302(c)(1). For 2015, the maximum annual limitation on cost-sharing is $6,600 for self-only coverage and $13,200 for coverage other than self-only coverage. For 2016, the maximum annual limitation is $6,850 for self-only coverage and $13,700 for other than self-only coverage.

Limitation applies to each individual. In the final HHS Notice of Benefit and Payment Parameters for 2016 (2016 Payment Notice) (80 FR 10750), HHS clarified that under ACA Sec. 1302(c)(1), the self-only maximum annual limitation on cost-sharing applies to each individual, regardless of whether the individual is enrolled in self-only coverage or in coverage other than self-only. In response to this clarification, the Departments received questions regarding the application of the clarification to self-funded and large group health plans.

To address these questions, the Departments issued these FAQs, which confirm that PHS Act Sec. 2707(b) applies the limitation requirement to all non-grandfathered group health plans, including non-grandfathered self-insured and large group health plans. Accordingly, the self-only maximum annual limitation on cost-sharing applies to an individual who is enrolled in family coverage or other coverage that is not self-only coverage under a group health plan.

Provider non-discrimination. The FAQs also address provider non-discrimination requirements under PHS Act Sec. 2706(a), as added by the ACA. Until further guidance is issued, the Departments will not take any enforcement action against a group health plan, or health insurance issuer offering group or individual coverage, with respect to implementing the requirements of PHS Act Sec. 2706(a) as long as the plan or issuer is using a good faith, reasonable interpretation of the statutory provision. Thus, Q2 in FAQs about Affordable Care Act Implementation Part XV is superseded by this FAQ and notation will be made on the Departments’ websites to reflect this modification.

For more information, visit http://www.dol.gov/ebsa/faqs/faq-aca27.html.

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