New 2016 HHS Regulations on Embedded Out of Pocket Maximum, Will it Pose Problems for Some Fully Insured Plans?
March 20, 2015
On February 27, 2015, the department of Health and Human Services (HHS) released the final regulations for their Notice of Benefit and Payment Parameters for 2016 (http://www.gpo.gov/fdsys/pkg/FR-2015-02-27/pdf/2015-03751.pdf). Of note in the regulations is a clarification that starting with plan years beginning on or after January 1, 2016, certain group health plans* must embed an individual cost sharing limit (otherwise known as an out of pocket maximum) that would apply even to those who enrolled with dependent coverage. In practical terms this would mean that for any individual family member covered under the plan, their out of pocket maximum would be equal to the single cost sharing limit.
Currently Independence Blue Cross (IBC), the largest insurer in the Southeastern Pennsylvania marketplace, revamped all their small group and mid-market plans in 2015 to include aggregated out of pocket maximum whereby:
Family deductible and out-of-pocket maximum apply when an individual and one or more dependents are enrolled. Once an individual meets the individual deductible amount, claims for that individual will pay. Once family deductible is met, claims for all individuals will pay. Single deductible and out-of-pocket maximum apply only when an individual is enrolled without dependents.
With the new regulations will IBC, forced to comply, revamp their plans once again in 2016? What anticipated rate impact will that have for groups in 2016 with the average renewal in 2015 was an increase of 9-11% across the board?
* The 2016 Benefit and Payment Parameters are for group and individual insured markets, thus, it’s possible that self-insured plans will not be required to comply—expect additional guidance on that to come.
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