Clients of 50 to 100 or more employees have an opportunity to consider in planning their medical offerings for 2015. The Affordable Care Act stated that plans must have a point at which “cost-sharing” ie deductibles, copays, coinsurance is limited. The out-of-pocket maximum is the point at which the plan pays 100% for covered expenses during the twelve months of either the calendar or of the contract year.
In ACA FAQ XIX (the one with the new Cobra Notices and attached) a section was included: Limitations on Cost-Sharing that states:
For plan or policy years beginning in 2014, the annual limitation on out-of-pocket costs in effect under Affordable Care Act section 1302(c)(1) is $6,350 for self-only coverage and $12,700 for coverage other than self-only coverage. Beginning with the 2015 plan or policy year and for plan or policy years thereafter, the annual limitation on out-of-pocket costs is increased by the premium adjustment percentage described under Affordable Care Act section 1302(c)(4). HHS has proposed that after applying the premium adjustment percentage, the annual limitation on out-of-pocket costs for 2015 would be $6,600 for self-only coverage and $13,200 for coverage other than self-only coverage. (NOTE: Health Savings Account Plans have slightly lower maximum out of pocket limits!) Click here to view the FAQ: http://www.dol.gov/ebsa/faqs/faq-aca19.html.
The FAQ stated that out-of-network benefits and amounts paid for a brand name drug when a generic drug is available (provided it is a medically appropriate substitute) do not have to count toward the annual out of pocket limit.
The FAQ surprised us by stating that plan sponsors may have separate out-of-pocket limits on different categories of benefits, like medical and prescription drugs, as long as the combined amount of all such limits does not exceed the maximum allowed amount. For many of our clients, the combined limit to include prescription drug in 2015 (it was delayed in 2014 if the Plan used a separate Pharmacy Benefit Manager) will potentially result in higher premiums. It may be advantageous for these clients to consider a separate out-of-pocket maximum for prescription drugs.
In many markets, the 2014 standardly available plans have out of pocket limits that are lower than the maximums stated above. Superior clients may want to take advantage of the lower rates/risk inherent in the allowed higher out-of-pocket limits.
Superior Benefit Plans does a great job of tailoring plan design elements to reduce renewal costs. Contact us today to consider how to negotiate your renewal.
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