The U.S. Department of Health and Human Services (HHS) just released the final regs on 2016 out-of-pocket maximums under the Affordable Care Act.
But the information the agency tucked away in the reg’s preamble is something employers are really going to want to take note of.

Each covered family member

For 2016, the out-of-pocket maximum for self-only coverage will be $6,850; and for non-self-only (family) coverage it will be $13,700.

Despite the clear distinction between self-only and family coverage, HHS said that all plans will now have to have “embedded” out-of-pocket limits for each individual covered under a family plan.

In other words, each member in the family plan would only be subject to the individual cost-sharing limit for his or her expenses instead of the higher family limit of $13,700.

With the 2016 limits in mind, here’s an example of how the embedding rule would apply to family plan with a $10,000 out-of-pocket maximum, courtesy of at Bryan Cave Benefits and Executive Compensation Blog: If one person in the plan racked up $20,000 in medical expenses, that individual could only be asked to pay the self-only $6,850 max – and the plan would be responsible for the other $13,150.

Because the family max in this example is $10,000, other family members should be responsible for the remaining $3,150 under the family cap but this wasn’t spelled out in the HHS preamble.

In terms of compliance, the HHS said that “2016 plans must comply with this policy” – although the final regs take effect on April 28, 2015. So it’s not entirely clear whether plans have to comply with the embedding clarification for the 2015 plan year.

Different high-deductible limits

Firms should also keep in mind the different limits agencies have for HDHPs. For 2015, the HHS’ limits under Obamacare are $6,600 for self-only coverage and $13,200 for family coverage, whereas the IRS’ 2015 high-deductible limits are $6,450 self and $12,900 family.

Currently, the IRS don’t require family plans to apply the embedded out-of-pocket limit approach, and it hasn’t released its 2016 limits.

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