New rules further limits health plan’s out-of-pocket expenses

Under the Affordable Care Act, non-grandfathered health plans are required to cap the amounts that participants must pay out-of-pocket for incurred medical expenses. Just recently, the federal government further clarified its position on how those out-of-pocket maximums should be calculated beginning in 2016, and the result is a benefit to participants covered under any type of a family plan. McAfee & Taft employee benefits attorney Jim Prince was interviewed by The Oklahoman about the new rule and how it will affect both plan sponsors and covered participants.

Under the new rule, employer group health plans must implement individual out-of-pocket maximums at all tiers of coverage beginning in 2016, said Prince. “What this means is that if one member of a family incurs covered medical costs that exceed the individual out-of-pocket limit, the group plan will have to pay 100 percent of that family member’s expenses in excess of the out-of-pocket maximum, even if family coverage was elected and the out-of-pocket maximum for family coverage hasn’t yet been reached.”

Prince advised employer-sponsors of non-grandfathered plans to evaluate their plan designs to determine how to implement this new rule, amend plan documents and summary plan descriptions as necessary, and then determine the impact of this new rule on plan costs and, therefore, premiums.