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The Affordable Care Act requires non-grandfathered group health plans to limit out-of-pocket (OOP) expenses participants pay for in-network essential health benefits-- inclusive of money spent on deductibles, co-insurance and co-payments for in-network providers. For 2015, the limits are $6,600 individual and $13,200 family; for 2016, these limits increase to $6,850 individual and $13,700 family.
A significant additional change in 2016 is that non-grandfathered group health plans must apply an embedded self-only out-of-pocket maximum (OOPM) to each individual enrolled in family coverage if the plan's family OOPM exceeds the ACA's OOP limit for self-only coverage ($6,850 in 2016).
So, if one family member incurs costs that exceed the statutorily required OOPM for self-only coverage, the plan pays 100% of that family member's remaining expenses, even if the aggregate out-of-pocket expenses of all family members have not reached the OOPM for family coverage.
The example below illustrates the mechanics of an embedded individual OOPM, assuming $13,700 OOPM for family coverage:
- Employee "Adam" incurs $8,000 in cost-sharing expenses (deductibles, copays and coinsurance). Adam pays the OOPM capped at $6,850, then benefit coverage without cost sharing starts for Adam and the plan pays the remaining $1,150.
- Adam's spouse incurs $4,000 in cost-sharing expenses. Adam pays $4,000-- a total of $10,850 ($6,850 + $4,000) has now been satisfied toward the family OOPM-- and the plan pays $0.
- Adam's child incurs $3,000 in cost-sharing expenses. Adam pays $2,850-- the family OOPM of $13,700 ($6,850 + $4,000 + $2,850) is now satisfied-- and the plan pays the remaining $150.
- All additional in-network claims incurred during the rest of the plan year by Adam, his spouse, or child would be paid by the plan without any cost-sharing, because the family OOPM has been reached.
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